Funding Projects Vs. Teams

What we talk about:

• Why project funding clashes with discovery work

• What CFOs look for in project-based funding

• The benefits of shifting to funding teams instead

• Step one: Fund the team, step two: Assign an outcome

• Helping finance teams make the shift

• Role of product ICs vs. product leaders in finance conversations

• Translating between product and finance language

• Naming conventions and how to make them finance-friendly

• VC-style funding for teams: Fund based on learning and outcomes

• Case study: Agency using per-iteration funding

• Product teams understanding their cost and return

• The mismatch between incremental thinking and ROI

• Why product teams must aim for exponential outcomes

Key Takeaways:

• Funding teams instead of projects supports flexibility, learning, and continuous discovery.

• Assigning clear outcomes to teams helps maintain accountability and aligns with finance goals.

• Product people (especially ICs!) can be powerful allies in helping finance understand value creation.

• Understanding team costs—and expected return—is critical for sustainable product development.

• Bridging the language and mindset gap between product and finance is a core leadership skill.

Resources & Links:

• Follow Teresa Torres: ProductTalk.org

• Follow Petra Wille: Petra-Wille.com

Mentioned in the episode:

• Product vs. Project Operating Models (youtube.com/watch?v=eBHndpnC0j4) - Teresa and Petra reference their past episode on this foundational concept.

• Felix Fichtl: Profitability Unplugged: Navigating Data Gaps While Delivering Financial Insights (vimeo.com/1013524405) (Felix (linkedin.com/in/felix-fichtl) is a CFO who spoke at Product at Heart 2024 (productatheart.com/blog/from-growth-to-profit-…) on bridging finance and product (check out his talk if you can find it).

• David Bland (davidjbland.com), in a conversation with Barry O'Reilly (barryoreilly.com/explore/podcast/testing-busin…) about his book Testing Business Ideas: A Field Guide for Rapid Experimentation (davidjbland.com/my-book), contrasts traditional annual project budgeting with an “internal VC-style” funding approach.

• Tristan Kromer (x.com/TriKro) discussed alternative funding models that move away from traditional annual project budgeting in his Four Must-Haves in Your Innovation Process (kromatic.com/blog/four-must-haves-in-your-inno…)