What are digital products and product management?

As I mentioned in my article about The role of the Product VP/Head, I’m writing an entire book about the many different aspects and skills needed to be head of product.

The book will be divided into 3 mains sections, Concepts, Principles and Tools.

I’ll publish its chapters as articles so I can collect feedback. The first chapter is a review of the digital product and product management concepts.

What are digital products and product management?

In this chapter, I will review some basic concepts of product management, concepts that are necessary for the next chapters, where I will define concepts more linked to product development leadership.

Let’s start from the beginning:

Digital Product

Digital product is any software that has users.

A common way to classify digital products is by the type of audience it serves. There are products for end consumers (Netflix, Spotify, etc.) known as B2C (business to consumer), for companies (Locaweb, Conta Azul, SAP, etc.) known as B2B (business to business) and mixed products, which serve both end consumers and companies (Instagram, Mercado Livre, etc.)

Another way to classify a digital product is by looking at how the product is delivered to users (such as online, not online and embedded), or according to what it does: email, e-commerce, payment, email marketing, content management, education, communication, collaboration, reporting, entertainment, operating system, ERP, CRM, etc.

These different ways of classifying are not exclusive. For example, Netflix is ​​a digital product for end-users, but it is also an online entertainment product.

Digital or traditional?

In addition to understanding what a digital product is and how to classify it, we also need to understand the nature of the company that owns this digital product.

  • Digital: The product sold by the company is the software or technology developed by the product development team. Product Management is the company’s “core”, responsible for the company’s future vision and strategy. The product head will have a central role in defining and executing the company’s strategy. Examples: Zendesk, Instagram, Google Search, etc.
  • Traditional: The product sold by the company existed, probably for many years, without the technology, but the company begins to understand how technology can enhance the product. Product Management is an enabler, but it is not core. It is seen as the “digital area”. The head of products will have to gain her space in the company, showing the benefits that technology can bring. Examples: New York Times, Bank of America, American Airlines, etc.
  • Traditional born-digital: The product sold by the company could exist without the technology, but the technology greatly enhances the product. Product management is also an enabler, but it is not core. The head of product will play a very important role in defining and executing the company’s strategy, but it will not be central. Examples: Netflix, Airbnb, Uber, Gympass, etc.


Platforms are products that deliver more value the more users use the platform. It is the famous network effect, based on the number of possible interactions between its users, which is governed by the formula n * (n-1) / 2 where n is the number of users. Platforms have been around for many years in the offline world. A good example is the old markets. They are a two-sided platform, with buyers on one side and sellers on the other. The more sellers you have, the more useful the market is for buyers. And the more buyers you have, the more attractive the market will be for sellers.

There are single-sided platforms (Facebook, Instagram, WhatsApp, etc.) and multi-sided platforms, which can be of 3 types:

  • Exchange: with buyers on one side and sellers on the other side. In this type of platform, it is common for a person to enter on the buyer side and be invited to participate on the seller side. Who has never been invited to drive for Uber? Examples, besides Uber, are Airbnb, eBay, etc.
  • Content: brings together content producers, consumers, and advertisers. Content is the focus and monetization is usually done through ad serving. Examples are Facebook, Google, and news portals.
  • Technical: work as an operating system where, on the one hand, there are specialists and, on the other, users. Android and iOS are a good example, with app developers on one side and users on the other. Xero, an online accounting company from New Zealand, is another good example, on one hand, small business owners and on the other side, accountants.

On platforms, it is customary to develop a product for each platform participant, plus one or more products that take care of the interaction between those participants.

Digital product management

We have already seen the definition of a digital product, the importance of understanding whether the company that owns the product is a digital, traditional, or traditional company that was born digital and we understand what platforms are. Now let’s understand what is product management.

Product Management

Digital product management is the function responsible for all aspects of a software product, throughout the lifecycle of that product, from its conception to the end of its life.

It is the function responsible for making the connection between the company strategy and the problems and needs of customers through the digital product. This should, at the same time, help the company to achieve its strategic objectives while solving problems and meeting the needs of customers.

To know more

There, we have already seen, in a very summarized form, the main concepts of digital product management and we are ready to understand more about how to lead digital products.

In case you want to know more about the concepts I presented above, you can read my book Product management: How to increase the chances of success of your software. In it I talk in detail about these and other concepts related to digital product management, as well as about the life cycle of a software product, the relationship of the product manager with the other areas and functions of the company, product portfolio management, and where use software product management.

Missing something?

So, did you miss something in this chapter? What else would like me to cover?

4 thoughts on “What are digital products and product management?

  1. Nice introduction …
    Some suggestions:
    1) It would be nice mention IoT as a strategy to mix Digital and traditional.
    2) In platform you mention “exchange”. I like the word “marketplace”, so it is a suggestion mention this in the exchange description topic.

  2. How would you differentiate products VS channels?
    Take Netflix for example, would you argue that product would be the application allowing you to streams and channels are the medium in which they are streamed, almost making the product a synonym to the channel?
    Also given a portfolio of digital products (where the products have a shared service setup) – where would you draw the line between separate products VS context adaption (e.g. app VS smartwatch). I find it easier with products that have completely separate use cases, however when there’s a lot of shared use cases the lines become much fuzzier..

  3. Hi Drtbrd,

    That’s a very good question. In some cases, a digital product can work as a channel. For instance, here at Lopes, a Real Estate Agency, the digital products either play a role as channels or as tools to improve operational efficiency.

    Re where to draw the line between separate products vs context adaption, I have a similar case here at Lopes, the CRM used by agents. We have a web and a mobile version, but the team taking care of it is the same, since many of the use cases are the same. and when a use case doesn’t make sense in mobile, they implement only in the web version and vice-versa.

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