Product-led organization
What does it look like, how to build it, and why it matters
Product-led organizations are built around their products. This means that everything that a company does — branding, marketing, distribution, sales, retail, unit economics — speaks to product features: design, fit, signature details, quality, durability, performance, symbolism.
This model is these days exceedingly rare in retail, where companies churn a great number of unremarkable products differentiated only by their brand. Brand-driven product differentiation is a useful scaling mechanism — a brand is an umbrella for the countless product categories and SKUs — but is increasingly inefficient in online marketplaces. Even brands with loyal customers are not immune to commodification.
On the Internet, price and convenience win — along with the innately recognizable products. Product recognizability is a guarantee of differentiation, and a signifier of identity. L.L Bean Tote, Alpha Industries MA-1, Birkenstocks, Levi’s 501, Crocs, IKEA blue shopping bags, Rimowa luggage, or Hermès Birkin can be counterfeited and copied, but still retain their differentiation and identity.
A product-led organization preserves and enforces this product differentiation. At its core is the clear product segmentation, often in the form of product pyramid, which defines the product universe. Like Marvel Cinematic Universe, product universe has its heroes that can operate individually or together, as well as supporting characters.
Product design focuses on keeping the iconic products — like MA-1 bomber, Birkenstock Arizona or Levi’s 501 — simultaneously classic and fresh. The icons are always in stock, and demand is spurred by archive reissues, product reboots and sequels, special editions, collaborations, and capsules, along with innovation in materials. “Supporting” characters have to be clearly categorized and reflect novelty of the icons. All products need to be part of the same annual narrative.
Read the rest of this analysis on The Sociology of Business.
