A Beginner's Guide to Product Strategy: 3 Steps to Capture & Defend Your Market

Product strategy is not complicated.

Yet because Product Managers & Leaders?think?it is complicated, they usually do not think about, or try to craft, a product strategy.

This is a grave error.

Why?

If your organisation does not have a product strategy - i.e. it does not have a clear?focus?in terms of what?unique value?it will deliver (and what it will?not?deliver) - your product has a 72% chance of failure.

In this article, I will break down the 3 stages of product strategy, using a simple analogy of capturing & holding a castle to make my point. For each stage, I will provide real-world examples & actionable steps to help you put this into practice to dramatically increase your chances of product success.

The 3 Stages of Capturing & Defending Your Castle

Imagine there is a nice big castle near where your tribe (you & your team) live. The castle has a thriving population of people who trade within its walls.

Think of the castle as your target market.

The current owner of the castle (the current incumbent company) keeps its gate closed to keep other tribes like you out (startups & other companies).

They want exclusive access to the target market.

Your goal is to achieve the following:

1. Find a way into that castle:?First, we need to gain access to the market. This requires doing things differently. Trying a?unique?approach to get in that no-one else has tried, as the defenders have successfully stopped all previous attempts
2. Exploit the gap: Once your tribe finds a gap in the walls, they need to commit everything to breaking in & capturing the castle. Without a laser-focus on exploiting the gap, you won’t be able to capture enough of your market before the defenders react to what you are doing
3. Build a defensive moat: Once you’ve captured the castle, your tribe needs to work quickly to adapt & build defences to protect from the other tribes. This means adapting your product strategy to build a long-term defensive moat

1.?Finding a Gap In The Castle Walls

The first step is to gain access to your target market.

This means identifying a specific, unique value that your product can provide for your market.

When we differentiate our product like this (i.e. offer something that is both?unique?AND?valuable), we are able to build enough awareness & to activate enough of our target market to start building a user & customer base.

How to find a gap in the castle walls with a differentiated product?

Keep it simple.

Focus on one specific area of value you can deliver that the existing competitors are not delivering on.

Superhuman, for example, focuses on?speed. Despite competing against Gmail, they manage to charge $30/month & have a waiting list of over 1m users (!) because they are laser-focused on providing the “fastest?email experience ever”.

Zappos, a company that simply sells shoes on a standard online shop, was able to dominate their market by focusing on world-class customer support, for example. They were so obsessed with customer service that they even had all new employees, regardless of role, take a 3-week training to handle customers effectively!

Or take?Loom, which questioned convention by questioning whether work communication would in fact be better when you send a video to each other, rather than an email or Slack message. They’ve since seen exponential user & revenue growth by creating a new paradigm of how we communicate at work.

How to Put This Into Practice

?? Read these?7 tactics for differentiating your product?for inspiration

?? Follow?this workshop to craft your own Minimal Viable Offer

2.?Exploiting The Gap

Once you’ve found a way to access your market & gain users or customers, it’s time to exploit the gap.

It is not enough to simply craft a product strategy & share it with your team in a nice Powerpoint presentation.

Instead, you need to commit to that product strategy.

Firstly, that means actually validating the product strategy.

The core of product strategy is being clear on what you will - and will not - focus on. If you’re going to commit to just being “the fastest”, for example, you want to be pretty sure that is, in fact, something the market really values! If not, everything you build will be a waste of time.

For existing products, send out a simple survey with a list of things you believe your market values (e.g. speed, reliability, etc.) & ask them to rank in order. For new products, write a unique value proposition on a landing page & send it to your target market.

Once you have validated that your differentiated product offer is in fact something your market values, you must be laser-focused on delivering that value.

That means saying no to any idea or initiative which does not perfectly align with the unique value you want to deliver.

That means re-crafting any existing roadmap to align with your new product strategy.

It’s not that complicated on paper.

The hard part?

The psychological challenge of commitment:

One where we tend to associate focus with?greater?risk. It feels like saying “no” to things means we are closing doors -?reducing our options. In fact, the far greater risk is building a generic product that tries to build everything & please everyone. That’s a guaranteed path to failure.

How to Put This Into Practice

?? Use?this template to create a lean, strategic roadmap

?? Remember that focus is a?prerequisite?for product success!

3. Build A Defensive Moat

Once you’ve captured the castle, have access to your market & are growing your user & customer base, it’s time to prepare the defences.

Other tribes - your competitors - will have taken notice.

Some will try to copy exactly what you did to break into the castle & capture the market.

Some will try something new - come up with their own unique, valuable way to capture the market.

Regardless, you need to make sure you can retain & grow your market, despite their efforts.

To do so, do not simply forget your product strategy! This is still the reason why your market uses & pays for your product! However, you need to supplement that product strategy by also focusing on one of the following tactics to maintain market dominance:

1. Owning your own, growing data source:?In a world where access to data is becoming far easier (think ChatGPT), everyone has access to data. Instead, you can try to source & grow your own data. Take my Apple Watch. It has unique access to my heart rate, calories, exercise, etc. It can therefore provide a better overview of my health overtime, as well as to provide better, custom suggestions over time, or even launch new products based on that data
2. Unlock network effects:?Try to focus on ideas that provide more value the more users there are on that product.?Miro?is a great example of network effects in action: Sure, I can use Miro by myself to write some ideas down. However, Miro is far more valuable for me if I invite my team to a Miro board, as we can then?collaborate. This means I - and my team - will keep inviting others to the product in a virtuous cycle of growth. Even if somebody launched the same product, it wouldn’t be as valuable, as it wouldn’t have all my work boards & my team members on there.
3. Find underserved markets: You might focus on targeting other more specific, more niche markets in the future in order to discover something different to offer. For example, rather than just focusing on a product for “engineers”, you might decide to customise your existing product, or launch new products, providing something?uniquely?valuable for the needs of a “first year engineering student” specifically
4. Allow customers to leverage their own data:?You may even want to empower consumers or business customers to access their own data, in order to personalise that data as they use your product, or to use that data to create their own products in future

Whether adapting how you deliver on your unique value proposition, or decide to supplement it with adding different, unique value, it’s essential to prepare your defences.

In a world with?16x more products today than just 10 years ago, you cannot afford to relax.

Conclusion

See?

Product strategy is simple.

The hard part is actually committing to crafting a product strategy, focusing on delivering that product strategy, then adapting as you gain market share.

However,?if you want to shape the future - to build products that really matter, to become a product leader that really matters - it is?essential?that you follow these steps.

Without them, your product will fail.

So remember those 3 steps:

1. Find a unique, valuable product offer to gain access to the castle.
2. Commit to exploiting the gap & focusing your efforts to delivering on that unique value.
3. Adapt to build a defensive moat once you’ve captured the market.