Having had the pleasure of working with companies across different technology vertical industries and across different types of products (hardware, software, services, intellectual property), here are some of the lessons learned for creating or refreshing product strategy.
- It is very seldom that an existing strategy is in place at the product or segment level.
- Sales targets usually exist, but they are more driven by increases imposed by year-on-year growth rather than any methodical analysis of TAM/SAM/SOM.
- Product vision does not exist. This can typically be reverse-engineered or inferred from USP messaging in the client presentations.
- Focus is on piling on new features upon new features to make ours the product with the most bells and whistles on the market.
Strategy creation might sound like a high-browed exercise that requires highly paid consultants to work on it day and night over the weekends. However, it can be distilled to answering a few simple questions and documenting these. The complexity and effort levels then increase with the level of detail you want to invest in answering each question, as well as the breadth of topics you want your strategy to cover.
For a single product for a single specific market niche, it's actually not that hard. And remember, success feeds success. Once you've done this the first time and ironed out the process and the way you want this to be presented, it's easy to replicate for the next and the next and the next product, portfolio, segment, division, etc.
So, it seems we're starting from a bit of a mess. Here are questions a Strategy document should be answering and how to relate them to business language:
- What problem are we addressing? Product vision
- Whom are we solving it? Market analysis
- What are the existing solutions, and why are they inadequate? Competitive analysis
- Why are we solving it? What is our organizational expertise/strength?
- What is our solution? Description of the product/service
- How is our solution going to be different? Key differentiators/unique selling points
- How are we going to build our solution? What resources are needed and how long will it take?
- What is the alternative? Opportunity cost
- What are the adjoining problems that we can also solve? Growth strategy
- How are we going to make money? Business case/profit and loss/cash flow
- What could go wrong? Risks and mitigations
- How are we going to sell and deliver our solution? GTM, sales channel, focus countries, etc.
- What is the bare minimum needed? MVP and validations steps to ensure the strategy is working
- How do I get everybody onboard? Stakeholder buy-in
- Take stock of what you have at the moment: Who are your customers that actually buy your product at the moment?
- Do the market analysis: Include specific use cases and client segmentation. Typically, you'd be looking at something along the lines of price/performance/feature richness axes, e.g., clients who want most features and the best performance are the ones who will pay the top dollar for the suitable product versus low-spending customers who have lower expectations.
- Engage in the product: Learn what are the engineering strengths of your existing product and engineering team.
- Create the product vision: Read more here
- Play scenarios: This is where I am at the moment, this is where I want to be, and this is what I need to get there versus this is what I have at the moment, and this is where I think I can get with them in the future to help quantify and justify your investment ask.
- Conduct competitive analysis: Who are your main competitors, what use cases are they addressing, and what are the USPs that they promote?
- Determine how you're going to differentiate in this market: Not just the product, but covering the entire customer engagement journey.
- Forecast the future: What are the current technology trends looking like? How are the key performance indicators changing over time?
- Create a step-wise plan for the future: A single product variant can seldom be everything to everybody.
- Keep it real: What will be the true appetite of your organization to invest? Can the engineering deliver against your aggressive timelines? Will sales be able to identify and engage with your target customers?
- Involve stakeholders: Seek their knowledge, critique, and buy-in.
Keep iterating but not endlessly until you're satisfied. Also keep communicating to everybody at all levels as the biggest hurdle of any strategy is the execution of it.
Remember that even though strategy sets the guiding principles for work over a longer period, it's not set in stone. Annual reviews are needed to make necessary changes as markets move, new disruptive technologies are created.
