A lot of words get thrown around in the tech industry, and they mean different things to different people. When I tell people I’m aiming to work in product, they ask,
What is “product”, exactly?
It’s a term that’s thrown around so often we don’t feel the need to define it. Here’s my understanding:
What should we make?
How should it work?
How do we make it?
In practice, the lines can be blurry, especially for product and design. I’d like to illustrate the difference between them by examining a classic tech rivalry.
Venmo vs. Square Cash
Venmo is the undisputed king of P2P payments, which is a fancy way to say “sending money to your friends”. Since its release in 2009, Venmo has spread from phone-to-phone into a startup success story, attaining what is perhaps the most coveted status in tech: verb.
Square Cash came onto the scene 4 years later, backed by Jack Dorsey’s payments company Square. The only competitors at the time were Venmo and Google Wallet, and with its sleek design, Square seemed ready to take over.
Yet, it never did¹. Why?
Square Cash has great design
Square Cash is one of the most beautiful apps I’ve ever used. From the warm color scheme, crystal-clear UX, subtle-yet-delightful animations, and even the onboarding, it’s an absolute delight to use.
When you’re done, Square Cash doesn’t ask you to stay. It’s here to get the job done and nothing more.
Venmo is a great product
Venmo isn’t as pretty as Square Cash. It doesn’t have a cool modern font — just plain Helvetica — and it hides its screens behind a clunky hamburger menu.
But Venmo’s strength isn’t design—it’s product strategy. Venmo is a payments app, but it’s also a social media app.
- The social feed shows your friends’ Venmo transactions. Transactions are public by default, which most users don’t bother to change.
- You’re not allowed to send money without a caption. You don’t have to make it playful, but it’s definitely encouraged; both through social proof (i.e. other people’s captions) and Venmo itself.
Venmo captions often take on a performative nature. Who can craft the cleverest caption? The most risqué? At the heart of Venmo’s appeal is its ability to inject playfulness into things like bill-splitting, which can be annoying at best and contentious at worst.
Doing your job isn’t enough
Venmo and Square Cash solve the same problem, but they take fundamentally different approaches.
Q: What’s the first thing you see when you open Venmo?
A: A social feed.
Q: What’s the first thing you see when you open Square Cash?
A: A number pad.
They’re both utilities for sending money. The difference is that Venmo strives to be an experience, while Square Cash is content as is.
Being “just” a utility is the norm in B2B, which is Square’s home base. But in a consumer-facing market, utilities need to develop relationships with their users or risk being commoditized². It’s safe to say that in 2017, P2P payments became a commodity.
Apple Pay, Android Pay, Zelle, Facebook Messenger, Snapcash³
Product vs. Design
Product takes a broader view than design. While design dives into specific problems, product has the murkier task of translating business objectives into product strategy.
They often overlap, because both involve understanding user needs. At some companies, designers may even take on product responsibilities (or vice versa). But they’re distinct parts of the product development process, and one necessarily takes precedence over the other.
Going beyond design
Until recently, my goal was solely to become a great designer. I wanted to be the digital Dieter Rams, and to that me, Square Cash was the greatest thing ever. But as my perspective has broadened to other areas like business and product, I’ve realized design is just one piece of the puzzle.
Good design doesn’t matter if your product strategy isn’t there. Good product strategy doesn’t matter if your business strategy isn’t there (though that’s debatable in tech). Companies have their own hierarchy of needs, and understanding it is crucial to making the right investments.
While this analysis focused on the products themselves, we can’t ignore the other factors at play.
- Venmo was first-to-market, and benefitted greatly from network effects. If you were on Facebook at the time, you’ll remember Venmo spamming your friends’ walls with “X paid Y with Venmo” posts.
- Venmo’s mobile-first approach came at a time when mobile phones were becoming more common, especially among younger demographics. Teens and young adults (key Venmo early adopters) are typically more open to new technology, even scary things like sending money over the Internet.
¹ I can’t prove anything because Square doesn’t release stats about Square Cash. But Venmo had no problem announcing $9 billion in processed payments in Q3 2017…draw your own conclusions.
² VSCO recognized this early on and built a community, and now it’s the #1 branded hashtag on Instagram.
³ Yes, I know Snapcash is powered by Square Cash. It doesn’t change my point.