Saying yes to numerous individual client features creates a 'complexity tax'. This hidden cost manifests as a bloated codebase, increased bugs, and high maintenance overhead, consuming engineering capacity and crippling the ability to innovate on the core product.
In an organization still running in project mode, the 'Product Manager' title is misleading. The role is often relegated to organizing work and scheduling tasks for engineering. A true product model requires empowering these roles with the mandate, skills, and market access to make strategic decisions.
In a project-based company, salespeople are heroes for closing large, complex, custom projects. This incentive structure is directly opposed to a product model that requires standardization. The transition to product will fail unless sales compensation and culture are realigned to favor standard product sales.
Many B2B companies begin by customizing software for one client, then stacking new custom projects for subsequent clients. They believe they are building a product, but are actually creating a complex, unscalable monolith that is difficult to maintain and evolve.
Product leaders often try to implement agile best practices within their team, but fail because the surrounding organization still operates on a project-based model. The rest of the company treats the product team like a feature factory, handing over requests and demanding deadlines, creating immense internal friction.
When teams constantly struggle with prioritization, the root cause isn't poor backlog management. It's a failure of upstream strategic filters like market segmentation, pricing, and product discovery. Without these filters, the feature list becomes an unmanageable mess of competing demands.
Project-based companies operate on a cash flow mindset, accepting any custom work that brings in immediate revenue. A true product company uses an investment mindset, strategically saying 'no' to short-term revenue to invest in building a scalable asset that can win a market long-term.