Who Is Product Operating Model For?

Marty Cagan addresses a common objection from non-tech companies: that the product operating model doesn't apply to them. He argues that being a 'tech company' is about how a business chooses to power its offering with technology, not about what it sells. Using examples from Tesla to Netflix and everyday blended experiences like ride-hailing and fitness tracking, he shows that most products mix digital and physical elements. He warns that legacy firms drawing artificial lines around where technology applies are exposed to disruption. His practical heuristic is that any organization with engineers building technology to power its business would benefit from the product model.

01Key takeaways

• Judge whether you are a 'tech company' by how you power your offering, not by what you sell.
• Apply the product model to all products, not only the digital ones, since most offerings blend both worlds.
• Look for artificial boundaries that restrict where technology is applied, as they create openings for disruptors.
• If your engineers are building technology that powers the business, the product operating model is likely relevant to you.

02Key sections

The misconception about 'tech companies'

The question of whether non-tech companies need the product model stems from confusing what a company sells with how it powers its business. Being a tech company describes the approach, not the industry.

Why the digital versus non-digital split is a trap

Many legacy organizations limit the product model to 'digital products,' missing its full value when applied to all products. Cagan argues almost every product is a blend of digital and physical experiences.

Blended experiences in everyday life

Examples such as ride requests, banking transfers, package tracking, menu translation, fitness workouts, veterinary advice, and traffic routing show how technology and physical interactions combine into single experiences.

Disruption risk for legacy companies

Companies that draw artificial lines around technology application are vulnerable, while new entrants in many industries apply the product model holistically to disrupt them.

A simple heuristic

If engineers are building technology that helps power the business, the organization would likely benefit from the product model, and Cagan finds it hard to imagine companies that wouldn't.

03From the post

“A partnership dedicated to teaching best practices to product teams and product leaders”

04Frameworks mentioned

Summary and takeaways written by PM Atlas; quotes are short excerpts. © the original author.