Why Re‑Reading Yu Jun’s ‘Product Methodology’ Is a Game‑Changer for Product Managers

01 What Does a Product Manager Do?

1.1 Four Core Responsibilities of a Product Manager

A product is a user‑driven, tradable good or service that passes through three stages: demand, production, and sales. The product manager must oversee each stage and coordinate cross‑functional teams to achieve market outcomes.

Demand (Define the product) : Demand originates from users and cannot be invented out of thin air. The manager must identify which user needs the product satisfies.

Production : After clarifying demand, the manager designs the product and ensures efficient production.

Sales : Sales is the act of completing a transaction with the user.

Coordination : The manager aligns different functional groups within the company, ranging from simple communication to complex cross‑departmental organization.

1.2 User Model

A user model describes the preferences and behavioral responses of current and potential users. Mastering a domain’s user model means being able to predict post‑iteration user behavior with high accuracy, using heterogeneous, contextual, plastic, self‑interested, and bounded‑rational behavior as basic units and analyzing large samples of real user actions.

Product managers must study users to ensure the enterprise builds products that meet genuine user needs.

1.3 Transaction Model

The transaction model treats a product as a unit of exchange and aims to create a sustainable, mutually beneficial transaction ecosystem. Beyond user models, it requires understanding the value judgments and behavior patterns of all stakeholders, as well as the various frictions that affect product implementation.

02 Enterprise, User, Product?

The enterprise uses the product as a medium to exchange user value for commercial value. The exchange is not about the product itself but about the underlying user value it carries.

2.2 Understanding Users

From a product‑manager perspective, a user is a set of demands rather than a natural person. If a user has 100 ride‑hailing requests in a month and uses Didi for all 100, the user is a full Didi user; if only 50 are fulfilled by Didi, the user is half a Didi user. Thus a single person can be many users across different products.

2.3 Understanding Products

A good product should be useful, profitable, and sustainable. Utility means delivering value to users; profit ensures the enterprise earns (directly or indirectly); sustainability aligns user and business interests over the long term.

2.4 Understanding Enterprises

Enterprises exist to discover market profit opportunities and to achieve production efficiency higher than the market’s. Their sustainability depends on higher internal production efficiency, shared goals, shared knowledge, and effective organizational mechanisms.

Discover market profit opportunities : insight, information completeness, serendipity.

Enterprise sustainability : internal production efficiency must exceed market efficiency to offset transaction costs.

Organizational efficiency : common goals, shared philosophy, shared knowledge, operating mechanisms.

Enterprise output : financial performance, cognition, team, intangible assets.

03 Transaction

Products are transactions from the user’s viewpoint; each user action is a transaction with the world. Both parties benefit, but transaction costs are inevitable.

3.1 Why Product Managers Should Care About Transactions

Facilitating user actions (transactions) without coercion or fraud increases utility for both sides. Enterprises should continuously discover, create, and lower the cost of exchangeable user value, prioritizing actions by ROI on user exchange.

Continuously discover and add profitable user value.

Create and improve these user values efficiently.

Continuously reduce production and transaction costs.

Rank enterprise actions by their impact on user exchange ROI.

3.2 Utility

For product managers, mastering utility, marginal concepts, cost, and supply‑demand law is the basic economic literacy needed.

3.3 Marginal

Marginal concepts include marginal utility, diminishing marginal utility, marginal cost, and marginal profit.

3.4 Marginal Utility and Diminishing Returns

Marginal utility is the extra satisfaction gained from consuming one additional unit of a good. For example, eating a sixth apple yields less additional pleasure than the first apple, illustrating diminishing marginal utility.

3.5 Marginal Cost

Marginal cost may decrease with scale (economies of scale) but can rise after a certain threshold.

3.6 Marginal Profit

Marginal profit is the extra profit from one additional transaction under given constraints. In ride‑hailing, each additional order yields a marginal cost of 17‑18 CNY to the driver and a marginal profit of about 3 CNY to the platform.

3.7 Cost

Costs can be categorized as opportunity, transaction, marginal, fixed, variable, sunk, average, and accounting costs. The article focuses on transaction cost.

3.8 Opportunity Cost

Opportunity cost is the forgone benefit of the best alternative activity when resources are allocated to a particular use.

3.9 What Is Transaction Cost

Transaction cost comprises all costs incurred before and after a trade, including direct monetary/time costs and implicit costs such as search, negotiation, and enforcement. Users gain utility minus cost; enterprises gain revenue minus cost.

Examples of reducing transaction cost include standardization, smartphone penetration reducing queue time, digitalization of data and services, and platforms like Lianjia’s verified listings.

04 Decision

Product‑manager decisions range from “Should we do it?” to “How should we do it?” Good decisions rely on scientific methods and rational judgment rather than pure intuition.

Rational decision‑making consists of three elements: rational belief, rational goal, and rational action. The ultimate goal is value maximization, expressed as:

User value = New experience – Old experience – Switching cost

Maximize new experience.

Minimize old experience.

Minimize switching cost.

Common decision methods:

Data‑driven decisions: data is the cheapest tool for consensus and correctness.

Logical decisions: behavior science shows ~5 % of daily actions are non‑habitual.

Subjective judgments: rely on user and transaction models when data or logic is insufficient, often requiring personal influence.

Typical decision pitfalls include cognitive biases (anchoring, attribution, etc.) and methodological individualism (only real individuals, not organizations, should decide).

05 Selecting and Growing Product Managers

5.1 Selection

Product‑manager talent is classified into three categories:

A‑type : Deep thinking or extraordinary empathy (rare).

B‑type : Clear logic and a genuine product passion; low entry barrier.

C‑type : Unsuitable due to unclear logic, weak empathy, or excessive utilitarian motives.

To cultivate good product managers:

Find a high‑potential individual.

Place them in a growth‑oriented product role; otherwise development stalls.

Interview focus areas:

Management ability: interpersonal skills, coordination, decision‑making.

Professional ability: critical thinking, empathy, user‑model expertise, product‑skill proficiency.

Personal potential: self‑reflection, learning willingness, high achievement motivation.

5.2 Growth

Growth standards are viewed from three angles: user/transaction models, scientific‑humanistic‑practical balance, and critical thinking.

Typical five‑year trajectory:

First years: iterate many products, validate ideas.

Later years: choose a professional path (decision‑making, transaction models), a management path (planning, leadership), a business path (B‑to‑B expertise), entrepreneurship, or overseas opportunities.

Key growth factors: logic, experience, empathy, dissent, and data.

06 Final Thoughts

Reading and summarizing a book solidifies knowledge, but sharing forces the author to articulate complex logic in simple language, deepening personal methodology.

Recommendation: finish reading, then summarize, and finally share to turn knowledge into lasting capability.