By Marty Cagan · svpg.com · LinkedIn
Marty Cagan argues that project-based funding, where companies approve discrete projects with business cases, is a poor model for building strong products. Teams cannot know early whether a project is worth pursuing or what it will cost, so ROI estimates are largely meaningless. Products improve through continuous learning, which requires sustained investment and a stable team, and project funding also discourages the pivots that often unlock major revenue. Cagan presents the dedicated product team model as the alternative: fund teams accountable for business KPIs, letting them choose which work will deliver results. He claims this improves speed to market, innovation, and business outcomes.
01Key takeaways
- Be skeptical of ROI estimates for projects proposed before you know what will be built or whether customers want it.
- Keep teams together and funded over time so they can learn from customers and improve the product continuously.
- Make room for pivots, since changing direction is often where major new revenue sources are found.
- Hold product teams accountable for business KPIs rather than for delivering a fixed list of features or projects.
- Adjust team staffing up or down as business needs change, rather than funding a new project each time.
02Key sections
- Why project funding fails
- Business cases for projects are built before anyone knows the customer reaction or the true build cost, so the ROI figures are unreliable.
- The need for continuity
- Strong products come from ongoing customer learning, which requires steady funding and a consistent team rather than short bursts of work.
- Pivots get discouraged
- Project funding makes changing direction hard, even though pivots often reveal major new revenue sources.
- The financial case against it
- Flawed business cases, lost velocity from team churn, and unclear accountability mean the money yields less value.
- The dedicated product team alternative
- Teams are funded long-term and held accountable for business KPIs, deciding for themselves which features or projects will deliver results.
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.