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Saved February 14, 2026
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This article explores two key types of ROI discussions between product leaders and CEOs. It emphasizes the necessity for products to earn significantly more than their costs to support overall company operations and highlights the challenges of calculating precise ROI for individual features or decisions.
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CPOs and product leaders frequently engage with CEOs about Return On Investment (ROI), but these discussions often fall into two distinct categories. The first, "Is your product earning its keep?", focuses on the overall health and revenue potential of entire products or lines. This conversation is strategic and assesses whether continued investment is justified based on the product's ability to generate sufficient revenue to support company operations. A product generally needs to earn six times its cost to cover the broader organizational expenses, which typically include salaries from Finance, HR, Sales, and other departments.
The second conversation centers on calculating ROI at a granular level, often pushed by finance teams seeking detailed metrics on individual features or tickets. This approach is flawed, as accurately linking each minor decision to revenue is unrealistic. Instead, product leaders should focus on the broader financial implications when evaluating their work. By simplifying the math behind the "earning our keep" ratio—total revenue divided by total costs—product leaders can present a clear financial picture. For instance, if a product generates €18 million with a team costing €2.1 million, that results in a favorable 9x ratio, well above the required 6x target.
The article emphasizes that product performance must be scrutinized, rewarding successful products while addressing underperformers. Leaders need to confidently justify their products' worth to avoid unnecessary micromanagement or potential cancellation. Major investments, like a core architecture overhaul, should be evaluated against their potential revenue impact. Without a strong financial rationale, projects risk being sidelined in favor of initiatives that promise quicker returns. Understanding these dynamics is critical for maintaining trust and securing resources in product development.
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