Unveiling "Internet Product": A Deeper Dive into its Essence

Beyond the Surface: A Deeper Look at "Internet Products" (Part 1)

By Product Manager Chongsheng

June 14, 2024

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This article revisits a classic question: what exactly is an internet product? By taking a step back and looking at it from a different angle, we can gain a deeper understanding than ever before.

"What is an internet product?" You might think this is a fundamental question. After all, you're reading this very article on your "internet product" right now. Or perhaps you just finished work on a product you manage and are planning optimization strategies. In the vast world of the internet, "products" are things we use daily, even constantly.

But what is a product? As someone in the internet industry, or aspiring to be, can you truly articulate what an internet product is? You might say it's a tool that helps users achieve certain functions; perhaps it’s a bridge connecting the virtual and real worlds; or maybe it's a service built with code to meet user needs and create value.

However, functionality, connection, and service are just different manifestations of what an internet product truly is. For many years, I held similar beliefs. But this understanding only took us so far – "focus on user needs and deliver a great product experience." It felt incomplete as a foundational concept.

Reading Yu Min's "Product Management Methodology" later provided a breakthrough. By approaching the concept of products from an economic standpoint, focusing on "transactions," I started to see things differently.

Looking back now, I have a deeper understanding than ever before. First, let's discuss what constitutes a "product."

The Core Essence of a Product:

"Internet product" is a combination concept. So we need to break down "product" and "internet" separately. Considering the length of this article, I'll divide it into two parts: "Product" and "Internet." Let’s start with what constitutes a "product."

A product is a medium for businesses and users (in traditional industries, "consumers") to engage in value transactions.

When I read this, I felt like a veil had been lifted, revealing the true essence. Compared to the common understanding of "software products, hardware products, or services centered around meeting user needs and creating value," this definition emphasizes its role as a "transactional medium." Why is this nature important? Because it highlights the core essence of a product: transactions only occur when both parties believe the exchange is worthwhile.

• Users believe their returns/benefits outweigh the costs they invest. From a user's perspective, they incur various costs like time, money, and effort to use a product, hoping to gain certain returns or benefits from its functionalities and services. These costs include purchase price, learning curve, and usage costs, etc. Users also seek various rewards, such as solving practical problems, improving efficiency, entertainment, fulfilling needs, etc. Users evaluate the cost they invest in using a product against the potential benefits they expect to receive (this evaluation is largely subjective, which we'll delve deeper into later). Only when the perceived benefits exceed the costs will users choose to use that product.

• Businesses believe the transaction remains profitable from an overall and long-term perspective. For businesses, their goal is profitability. Therefore, all business activities revolve around maximizing returns from offered products, exceeding the research and maintenance costs, thus achieving profit. Of course, businesses often employ strategies like offering discounts or even free services to gain market share and attract users. This doesn't contradict the principle of a worthwhile transaction as long as businesses believe that from an overall and long-term perspective, it remains profitable (a typical internet business model is to initially acquire a large user base at scale and then monetize them later).

Therefore, both users and businesses need to find value and benefit within a product. Only when a product simultaneously meets the needs of both parties can this value exchange occur successfully. This is where the role of a product manager comes in – they navigate the demands and expectations of both sides, facilitating a mutually beneficial value exchange.

In Part 1 of our journey to redefine "internet products," we focused on the "value transaction" aspect inherent in the concept of "products." In Part 2, we'll delve into what constitutes an "internet product" itself.

Stay tuned!