Product debt is when promises made about functionality exceed what the product can actually do. When this happens there is only two things that can be done: 1) make up for it with manual work or 2) commit to building the functionality. If you stop doing 1) the customer will be disappointed. If you keep adding product debt and never do 2), the product will never keep up and you’ve inadvertently ended up building a services business.
The ideal amount of product debt, like tech debt, is greater than zero. It can be helpful to over promise when you doing customer development and figuring out what is going to sell. However, keeping in mind product debt (specifically that it must be paid down) means knowing a technical solution is possible and what’s promised stays within scope of what the technology and team are capable of.
One of the ways product debt increases without you realizing is in support and operations. As customers come across challenges, it is in the best interest of the team to help. Through the course of helping they may do things that the product is not capable of, working around an edge case here, handling something on behalf of the customer, etc. For this reason, product and engineering should spend time with support and operations to see how they are making up for shortcomings in the product—you might not be happy with the product debt you are incurring without knowing it.
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A products is not just collection of features, but a promise to solve a problem or enhance the customer’s life in some material way. Faithfully delivering on a promise makes for a great product. Failing to deliver on a promise makes for a flimsy product.