Understanding Product Management and the Value of Protocols

Understanding Product Management and the Value of Protocols

Product management is a crucial role in any organization, and yet it is often misunderstood. There are several misconceptions about what product management entails, and it is important to clarify these misconceptions to fully grasp the importance of this role.

Firstly, product management is not simply about defining the business case. While the business case is certainly an important aspect of product management, it is not the sole focus. Product managers need to go beyond the business case and understand the needs and requirements of the market. Markets do not have requirements; it is the people within these markets who have requirements. Therefore, product managers must directly engage with the target audience to gain insights and understand their needs.

Similarly, product management is not just about gathering requirements. While gathering requirements is an essential part of the product management process, it is not the end goal. Product managers must also consider the feasibility and usability of the product. They need to ensure that the product is not only useful to the target audience but also feasible for the organization to develop and launch.

Another misconception is that product management is the same as project management. However, these two roles require different skill sets and mindsets. Product management focuses on the discovery phase, understanding the market and the needs of the users. Project management, on the other hand, is about the delivery phase, ensuring that the product is developed and launched successfully. It is rare to find individuals who excel in both product management and project management, as these roles require different approaches and ways of thinking.

Furthermore, product management should not be confused with product marketing. While product marketing is an important aspect of the overall product strategy, it is not the core responsibility of a product manager. Product management is about creating a product that is useful, usable, and feasible. It is about understanding the market, gathering requirements, and ensuring that the product meets the needs of the users. Product marketing, on the other hand, focuses on pricing, promotions, positioning, messaging, and product launch activities.

Now, let's shift our focus to the value of protocols in the blockchain application stack. In traditional internet applications, value is primarily concentrated in the application layer. However, in the blockchain application stack, value is concentrated at the shared protocol layer. This shift in value distribution is significant as it opens up opportunities for new players and creates a more vibrant and competitive ecosystem of products and services.

The combination of shared open data with an incentive system, such as tokenization, is key to promoting adoption and driving growth. The protocol token, which is used to access the service provided by the network, fills the gap between an open network and a shared data layer. It incentivizes early adopters to build products and services around the protocol, further increasing its value.

This feedback loop of speculation, growth, and innovation is a driving force behind the adoption of new technologies. Speculation often leads to rapid growth, attracting financial capital and reinvestment in innovation. While there may be periods of market volatility and busts, the long-term adoption of the technology is supported by stakeholders looking to create value and promote the success of the protocol.

It is worth noting that the market cap of the protocol layer always outpaces the combined value of the applications built on top. This is because the success of the application layer drives further speculation and investment at the protocol layer. This combination of shared open data and an incentive system fundamentally changes the business models at the protocol layer, creating a new category of companies.

In conclusion, product management is not simply about defining the business case or gathering requirements. It is a multifaceted role that requires understanding the market, engaging with users, and ensuring the feasibility and usability of the product. Similarly, the value of protocols in the blockchain application stack lies in the combination of shared open data and an incentive system. This creates opportunities for new players, promotes adoption, and drives growth. To succeed in product management and leverage the value of protocols, here are three actionable pieces of advice:

1. Engage directly with the market and target audience to understand their needs and requirements. Don't rely solely on business cases or market research.

2. Foster collaboration between product management and project management teams to ensure seamless transition from discovery to delivery.

3. Embrace the potential of blockchain technology and consider how protocols and tokenization can create new business models and opportunities in your industry.

By following these actionable advice and understanding the true nature of product management and the value of protocols, organizations can unlock new possibilities and drive innovation in their products and services.