**Summary**
What is a product? At first glance, it seems straightforward. As a consumer, everything you eat, wear, use, or play with can be considered a product. But from a management perspective, we need a more structured definition. A product can be defined as an object or intangible offering that satisfies people’s needs and desires. In short, anything that can be offered to the market, used, consumed, and meets specific human needs—whether tangible items, services, organizations, ideas, or combinations of these.
This definition is comprehensive, but it reflects the mindset of the industrial age. While it mentions users and consumers, they still appear passive, lacking strong agency. In today’s digital era, we must reframe the role of the user, making them central to the product experience. This shift can be achieved through two main additions: information and communication.
**Product as Information**
Big data is currently a hot topic, with many companies focusing on using analytics to boost revenue and market share. However, fewer consider how to embed more data into their products, enhancing not just the product itself, but also the development process.
Thomas Lederman, in a Harvard Business Review blog, introduced the concept of “informatization.†It refers to the deep integration of information resources into business operations, improving efficiency, decision-making, and competitiveness. In terms of product design, it means adding value by embedding more data and insights into existing offerings.
For example, cars equipped with GPS provide added value by helping drivers reach destinations faster, saving time and fuel. GPS is just one type of sensor. Modern vehicles are filled with sensors that not only improve performance but also allow manufacturers to collect usage data, which can then be used to refine future designs and enhance the user experience.
Informatization addresses two fundamental human needs: the endless pursuit of better products and the desire for relevant, timely, and accurate information. It was inspired by futurist Stan Davis, who proposed several formulas in his 1992 book *Vision 2020*, such as:
- Informatization = personalized product + rapid response
- Informatization = manufactured at the place of delivery
- Informatization = reduced costs, inventory, and working capital
- Informatization + direct entry = higher service standards
- Informatization = internal organizational link
- Informatization + Logistics = Globalization
While big data analysis gets much attention, the informatization of products is equally important. Companies should focus on transforming big data into big products, which can offer greater benefits and competitive advantage.
**From Single Value to Interactive Value**
Traditional products and services may deliver value, but it's often one-way and limited. After informatization, products become interactive, creating new value through user engagement.
I once proposed a formula based on Haier’s transformation: **Interaction Value = Information Volume / Scale**. The more information a product contains, the more value it provides. Standardization helps mass production, but it dilutes individual value. Information, however, adds real value.
In the future, with 3D printing and flexible automation, companies will be able to produce customized goods at scale, meeting diverse consumer needs. Each product can carry unique information tailored to the user, increasing its value.
The same applies to services. Poor customer experiences often stem from slow responses, errors, or lack of personalization. By focusing on fast, accurate information, companies can create better experiences than traditional competitors.
Today’s consumers no longer want to be seen as “walking wallets.†Businesses must go beyond transactions and build meaningful relationships. Real leaders understand that success depends on personal connections, not just sales.
To avoid commoditization, companies must deliver seamless, convenient experiences. Personal contact, supported by information, is key. Only brands that surprise and delight customers will thrive.
**Product as Spread**
Information is the first addition to a product, but the second is communication. Adding communication means building a sharing mechanism within the product, enabling it to spread organically. Products that go viral grow through user recommendations, where each user brings in more users.
A successful viral product typically has five characteristics:
1. Its core value increases through interaction. Users are more likely to share if the product becomes more valuable when used with others.
2. Users form a network around the product. Viral growth requires a large, engaged community. Niche products struggle to spread due to limited reach.
3. The product leverages existing social connections. For example, Skype thrived because it connected real people, not just random users. WeChat’s success came from linking phone numbers to real identities.
4. The product retains users effectively. If users don’t fully trust or enjoy the product, they won’t recommend it. High retention leads to stronger referrals.
5. The product is easy to use and recognizable. People need to quickly understand the value of a recommendation. Ease of use drives conversion, which in turn fuels more virality.
With more information and communication, traditional products evolve into "big products."
*Author: Hu Yong*
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