What is Product Strategy ?
Internet is full of experienced professionals who share their knowledge and perspectives.I remember one of my b-school professors saying “(even) HBR articles are not research(peer-reviewed evidence based research output)”. I still rely on articles from thought leaders in product management. But I do recommend readers to have the maturity to apply insights and frameworks that make sense to their own context.
With that disclaimer, let’s dive into product vision and strategy.
Starting with Paweł Huryn’s definitions
“Product Vision (Why): Product Vision is the long-term aspiration of your product. It motivates your team to wake up every morning and go to work. For example, “Send humans to the Moon” or “Help tour operators focus on doing what they love.” Effective vision needs to be inspiring and emotional. It becomes much more memorable when it speaks to people’s hearts. My favorite example is the JFK Moon speech”— Source: Paweł Huryn
“Product Strategy (Where & How): It’s a cohesive set of choices that you believe will allow you to win (achieve your Vision) at the playing field of your choice:
- market and its constraints (e.g., geography)
- value proposition
- relative costs
- tradeoffs
- growth
The strategy should pass the “can’t / won’t test” so that competitors can’t copy it without sacrificing their existing businesses.” Source: Paweł Huryn
“Objectives (What) I encourage you to use the OKR framework. It’s a simple, incredibly effective approach for setting, monitoring, and achieving your goals. While following the SMART goals principle (Specific, Measurable, Achievable, Relevant, and Time-Bound), OKRs add an additional, inspirational aspect to the Objective.” Source: Paweł Huryn
“Product Roadmap (So What & When) Product Roadmap is a communication tool that allows you to align everyone in the organization. It creates focus on what’s important right now. It should also explain the reasoning behind it.
- Focus on outcomes, not features” Source: Paweł Huryn
Let’s try to compare this with Gibson Biddie’s framework for product strategy — The DHM Model
Product strategy answers the question, “How will your product delight customers, in hard-to-copy, margin-enhancing ways?”
“Think of product strategy as hypotheses about how you hope to delight customers in hard to copy, margin-enhancing ways. The strategies in green accomplished all three. Those in yellow accomplished 1 or 2 of the objectives. The strategies in red failed to delight and consequently did not deliver either hard to copy advantage or margin….” Source — Gibson Biddie
Gibson’s definition of product strategy is a list of high level hypotheses about how you hope to delight customers in hard to copy, margin-enhancing ways. He also identified metrics that could measure the success of each strategy and further tactics/initiatives/experiments for each.
Exceptions: There are cases where margin-enhancing and hard-to-copy does not make sense. For example, not-for-profit foundations or certain public sector organisations that only care about social impact.
If we move on to Elon Musk and Tesla,
“The strategy of Tesla is to enter at the high end of the market, where customers are prepared to pay a premium, and then drive down market as fast as possible to higher unit volume and lower prices with each successive model…
…the master plan is:
- Build sports car
- Use that money to build an affordable car
- Use that money to build an even more affordable car
- While doing above, also provide zero emission electric power generation options” Source
To summarise
- Product strategy is about how you win (achieve your Vision)
- It takes market/user/customer needs into account. Products have to delight their users to stay relevant
- It also takes into account the entire ecosystem of suppliers, alternatives, competitors and distribution channels
- There is an element of building moats (with exceptions)
- It has to consider revenue, profitability and growth(with exceptions)
Connecting vision to a set of OKR-s requires this bridge called product strategy. And the starting point for product strategy is understanding our users deeply!
