Everything as a Contract

Determining where a project’s scope starts and stops, especially with software development, can be difficult. That’s why it’s so important for product managers to understand and define the full scope of their problem space. The issue is broader then one person knowing what their job entails, however. Defining one’s own role allows that person to set better expectations with others so each member of a team knows what they’re responsible for, as well as avoid redundancy of responsibilities.

This concept is also utilized by developers for the technology that they build. When applied to technology, these agreements, or “handshakes” as they’re sometimes referred to, are called service contracts. They define what an individual technology, platform, or service can be utilized for by defining the specific inputs, inherent functionality, and outputs for that system. A well-written service contract can set expectations for what outputs will be received when the technology is utilized with the given set of inputs.

There are similar expectations gaps that exist between businesses and their customers as well. Consider the “Paperclip Maximizer” thought experiment outlined by Swedish philosopher, Nick Bostrom. In this experiment, a computer with the seemingly harmless goal of making as many paperclips as possible winds up using up all available resources on Earth to achieve its goal. This is an extreme example, of course, where the computer is not in competition over use of limited available resources. On a basic level, however, for-profit companies behave very similarly to this computer. The only difference is instead of paperclips, companies try to maximize profits.

That’s great for the company, but what do the customers that the company is gaining its profits from get out of this deal? Companies that set clear, concise, and consistent expectations for their customers will create sustainable services that their customers will actually use. Creating human-centric service contracts help to ensure that the customer is always in mind when a company attempts to identify a new product-market gap and problem space.