If a product has different types of customers, a common structure is to separate product teams by the customers they build for:

• in marketplaces that have supply and demand teams, or
• In subscription companies that have self-serve and enterprise, or free customers and paid customers.

There can be issues with this model as great products are things that benefit both supply and demand, or free and paid users. It’s hard to build a great product if you only know one side well.

If a product has different value propositions, a common structure is to separate product teams by those different value props. For example, at Pinterest, the value props were Discover, Save, and Do, and had different product pillars for each of those value props. This makes it easy to align OKRs or goals to the value you’re trying to provide your users.

If not handled correctly, this structure can lead to an under-investment in important maintenance, scaling, or growth work as the desire is always for new features that aid in delivering this value prop.

Companies tend to have strategic initiatives that emerge from annual planning, so a common organizational structure is to align product and engineering around those initiatives. The initiative structure allows PM’s and engineers to flex between innovation, growth, scaling, etc. as needed to support the ultimate outcome for the business. This requires product folks to be more agile in their planning and in the skill sets they are leveraging.

This organizational structure tends to be the least stable because initiatives change frequently or at least on an annual basis.