What is a Digital Product?
What is a product?
Before getting into details on a concept of ‘digital product’, let’s try to define what is a product. If you type ‘ definition: product ‘ into Google, you’ll find a definition given by Wikipedia. The definition comes from marketing. It’s short, sweet, and understandable.
It’s anything that can be offered to a market to satisfy the desire or need of a customer.
In other words, a product solves a certain problem of a specific group of people by delivering certain value to it. A product is valuable for both buyers and sellers. Buyers are customers and users while sellers are companies that create and deliver a product. The former receive value in the form of a solution to their problem while the latter get revenues.
Before a product is developed and introduced to the market, creators need to make sure that potential customers are willing to buy it. Otherwise, a product ends up being not needed since customers don’t buy it and producers don’t make money. Product companies need to aspire to create those products which offer the best possible solution targeted at the clearly defined group of people.
What makes a product digital?
Products can be broken into two groups: tangible and intangible. All the physical products can be considered as tangible. For example, a laptop, tablet, or mobile phone. The intangible products can be perceived indirectly. Nowadays most of them are digital products. They include features; a technology that powers these features; and a user interface that presents these features. These ‘ingredients’ of a product should generate value by working together.
For example, let’s consider some everyday digital product to which most of us are used. Google Search is the most popular web search engine. Its main feature is to search relevant information, offered by web servers, upon request. There is software that enables this feature to run. The product has a user interface that allows users to type the text. The success of Google Search is unquestionable. It receives over 3 billion search queries per day! It creates a vigorous marketplace for the advertisers by retaining so huge number of users. As long as Google Search solves a problem of its users and customers and remains profitable, it is valuable.
A distinctive attribute of digital products is that they can be highly customized and targeted in terms of configuration, functional changes, and pricing. A digital product can be discovered and delivered continuously. The continuous improvements allow adjusting dynamically to fulfil market needs better or achieve new business objectives. There is no need to replace an obsolete digital product physically. What needed is delivery of a new version of software. It enables creators to iterate digital products. At this point, a method which is used to deliver releases becomes as important as the product itself. Thus, there are a number of different methods such as Agile, feature-driven development, Scrum, Lean, etc. A digital product is iterated until it achieves the defined business objective by running rapid experiments and learning from the results.
