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: https://ProductTalk.org
• Follow Petra Wille: https://Petra-Wille.com

Mentioned in the episode:

• Product vs. Project Operating Models - Teresa and Petra reference their past episode on this foundational concept.
• Felix Fichtl: Profitability Unplugged: Navigating Data Gaps While Delivering Financial Insights (Felix is a CFO who spoke at Product at Heart 2024 on bridging finance and product (check out his talk if you can find it).
• David Bland, in a conversation with Barry O'Reilly about his book Testing Business Ideas: A Field Guide for Rapid Experimentation, contrasts traditional annual project budgeting with an “internal VC-style” funding approach.
• Tristan Kromer discussed alternative funding models that move away from traditional annual project budgeting in his Four Must-Haves in Your Innovation Process