Creating a successful product requires attention to the details, from getting the user interaction and the visual design right to providing the right functionality and using the right technologies. With so much focus on the nitty-gritty, it’s easy to no longer see the wood for the trees. This is where the product strategy comes in. It helps you manage your product proactively and it prevents you from getting lost in the details. This post discusses what an effective product strategy is and how it benefits you.
The Three Elements of an Effective Strategy
Product strategy is about imagining the future of your product: What offering will it become? Who will it benefit? How will it create value? It’s a high-level plan that helps you realise your vision or overarching goal. More specifically, the product strategy should describe who the product is for and why people would want to use and buy it; what the product is and what makes it stand out; and what the business goals are and why it is worthwhile for your company to invest in it, as the following picture shows.
In the picture above, the market describes the target customers and users of your product, the people who are likely to buy and to use it. The needs comprise the main problem your product solves or the primary benefit it provides. Think of a product like Google Search or Bing that solves the problem of finding information on the Internet. Compare it to a product like Facebook that allows you to stay in touch with family and friends.
The key features and the differentiators are those aspects of your product that are crucial to address the main problem or create the primary benefit and that make make it stand out from the crowd. Don’t make the mistake of creating a mini product backlog or a wish list. Instead focus on the three to five key aspects that make people choose it over competing offers. Take, for example, the first iPhone with mobile Internet, iPod-like digital music player, and touch screen as its key features; or the Google Chrome browser with its focus on speed, safety, and simplicity.
The business goals capture how your product is going to benefit your company. Is it going to generate revenue, help sell another product or service, reduce cost, or increase the brand equity? Being clear on the business goals helps you to select the right key performance indicators (KPIs) and measure your product’s performance.
Take the iPhone and the Google Chrome browser mentioned earlier. While the iPhone currently generates the largest portion of Apple’s revenue at the time of writing, the Chrome browser does not earn any money for Google. But it allows the company to control the way people access the Internet and it has reduced Google’s dependency on third-party browsers such as Mozilla Firefox and Microsoft Edge. Both are important business benefits.
A handy tool to capture your product strategy is my Product Vision Board, shown in the picture below. You can download it from romanpichler.com/tools/vision-board or by clicking on the image.
The Product Vision Board above captures the vision at the top. The four sections underneath it describe the product strategy. You can find more information on how to use the tool in my aptly named article “The Product Vision Board.”
Strategy Focus and Inflection Points
The product strategy is not a static, fixed statement or document that you create for a new product. It changes as your product grows and matures. The following picture shows the product life cycle with four key events: launch, product-market fit, life cycle extension, and end of life.
The strategy for a new product should first help you get to launch, then achieve product-market fit (PMF), and finally sustain the growth of your product. Think, for instance, of the changes Apple has made to the iPhone since its launch in 2007 to keep it attractive and preserve its growth, from adding apps to changing the its size and offering variants.
Once the growth starts to stagnate you have reached another strategic inflection point: You can either extend your product’s life cycle, for instance, by rejuvenating it or taking it to a new market, or you let it mature and eventually decline and die.
As your product evolves and changes, you should review and adjust the product strategy on a regular basis–at least once a quarter as a rule of thumb. This will help you proactively manage your product, guide the work of the stakeholders and development teams, and maximise the chances of achieving product success.
The Product Strategy in Context
If the product strategy describes the key elements required to develop a success product as I suggested above, then where are the vision and the product roadmap? The following picture shows how I relate the three artefacts.
I view the vision as the ultimate reason for creating the product that describes the positive change your product should bring about as I describe in more detail in my post “8 Tips for Creating A Compelling Product Vision”. If you think of the strategy as a path to the vision, then the vision guides the strategy.
Say I want to create an app that helps people become aware of what and how much they eat. The vision could be to help people eat healthily, and the strategy might be to create an app that reduces the risk of developing type-2 diabetes. But that’s not the only way to attain my vision. If it turns out that the app is not a great idea, I could pivot and write a book on healthy eating, for instance, while still following my vision.
As the picture above shows, the product strategy provides an input for the product roadmap. The roadmap states how the strategy is implemented and describes how the product is likely to grow. The two work in tandem: The roadmap states how you intend to implement the product strategy and the specific and measurable goals or outcomes your product should create in the coming months.
For example, I might derive the following product goals from product strategy of my healthy-eating app and capture it on the product roadmap: Help the users understand their eating habits and acquire an initial user base; help the users improve their eating habits and grow the user base; and help the users get fitter and generate revenue in form of in-app purchases. These goals show how the product is likely to grow and the specific outcomes it will provide.