Product risk is commonly referred to as technology risk. It is the likelihood that a startup will fail to produce the product it sets out to create. Or put another way, can the product be built?
Are you trying to send a rover to the moon or making a simple web app? A highly complex software application that involves things such as applied cryptography, artificial intelligence, cognitive computing, machine learning, natural language processing, or semantics involves a much higher degree of product risk than a simple based web app like Twitter.
If your potential product is a highly complex
piece of software that has not yet been developed it carries a great deal of product risk. This risk can be reduced by assembling a team that has built a like product in the past and getting them going down the road of building it. A prototype has less risk than a concept. An alpha less risk than a prototype. A beta less risk than an alpha.
Build the product to reduce product risk.