Becoming a Product Company Is Not About the Product
By Stephan Engelen ยท 2026-09-01
For many project-based technology companies, becoming a product company looks like the logical next step.
The reasoning is understandable. Project work is difficult to scale. Growth requires more people, customers have different requirements and much of the knowledge sits with individuals. A product promises something different: repeatability, recurring revenues and the possibility of growing without increasing the organisation at the same pace.
But I think the transition is much more difficult than it first appears.
The obvious part is the product, the less obvious part is the company
The obvious part is building the product. The less obvious part is changing the company around it.
A successful project organisation has learned to listen closely to customers and adapt to what they need. A customer asks for something specific and the organisation finds a way to deliver it. Good people become very good at solving problems, often under pressure and with a great deal of creativity.
There is nothing wrong with that. Quite the opposite. It may be exactly what made the company successful.
But when that same company wants to become a product business, some of those instincts start working against it.
You can no longer say yes to every customer. Sales cannot keep closing deals by promising exceptions. Engineering cannot allow the roadmap to become the sum of requests from the largest customers. And management has to accept that some attractive revenue may actually take the company further away from the business it is trying to build.
That is a difficult change, because it affects much more than sales or product development.
It affects people
Some people thrive in a project environment precisely because every situation is different. They enjoy solving the problem in front of them and working closely with individual customers. A product organisation asks for a different kind of discipline: looking for patterns, standardising what works and sometimes accepting a solution that is right for the market rather than perfect for one customer.
It affects processes as well
Onboarding has to become repeatable. Support has to work without constantly involving development. Product decisions need a logic beyond the next sales opportunity. Pricing has to reflect a model that can scale. Customer success increasingly becomes about adoption and value rather than managing another implementation project.
Do you actually have product-market fit?
And underneath all of that sits a question that is easy to overlook: do we actually have product-market fit?
Having customers does not necessarily mean that you do.
A project company can serve a fairly broad range of customers because it adapts its solution to each of them. A product company has much less room to do that. It needs a clearer understanding of which problem it solves, for whom, and why enough similar customers are prepared to buy essentially the same solution.
That is why I become cautious when I see companies trying to accelerate the move to products before those questions have been answered.
You can build a product, put subscription pricing around it and call yourself SaaS. But if every significant customer still requires different functionality, a different implementation and a considerable amount of individual attention, very little has fundamentally changed.
You may have productised part of the offer without yet becoming a product company.
The uncomfortable period in between
There is also an uncomfortable period in between, and I think this is where many management teams underestimate the transition.
The project business is still paying the bills while the product business is being built. Turning off project revenue too quickly can be dangerous. Holding on to every project opportunity can be equally dangerous because the organisation never really changes.
There is no simple formula for navigating that period. It requires judgement.
Some project work may finance the transition or help the company learn. Other projects are simply attractive revenue that keeps pulling people back into the old model. Knowing the difference is probably one of the more important leadership decisions during the transition.
It is a change in how an organisation thinks and behaves
Which is why I no longer see the move from projects to products primarily as a change in business model.
It is a change in how an organisation thinks and behaves.
The product matters, obviously. But so do the people, the processes, the customer choices and the willingness of leadership to make decisions that may hurt in the short term.
Building a product is one thing.
Building a company capable of repeatedly selling, delivering and supporting that product is something else entirely.
And that second transition is, in my experience, the much harder one.