What is Product Strategy?

This is Part 2 of Product Management 101 Series, where we will talk about what is Product Strategy and How do we create one?

In Part 1 of this series we talk about What is Product Management? See below Article.

Let's start.

Eric Ries, the author of one of the bestselling book “The Lean Startup” wrote

“Startups also have a true north, a destination in mind: creating a thriving and world-changing business. I call that a startup’s?vision.?To achieve that vision, startups employ a?strategy,?which includes a business model, a product road map, a point of view about partners and competitors, and ideas about who the customer will be. The?Product?is the end results of this strategy

The Product change constantly through the process of optimization, what I call?turning the engine.?Less frequently, the strategy may have to change (called a?pivot). However the overarching vision rarely changes.”

Product Strategy is the high-level plan to achieve the vision, why high-level, because it does not contain the actionable steps required to successfully execute the plan, which is also known as tactics. Tactics are the specific actionable steps required to execute the plan.

The difference between strategy and tactics is that the strategy is the action plan that takes you where you want to go, and the tactics are the individual steps and actions that will get you there.

As explained by Eric Ries, the important components of Product Strategy includes;

1. A Business Model
2. A Product Roadmap
3. A point of view about Partners and Competitors
4. Ideas about who the Customer will be

Let understand all of these components in detail;

1. Business Model

Business Model is a document that explain how an organization creates and deliver value to its customers. A Business model list down who the key partners are for the business, what key activities the business will do, what is the value the business creates, what are key resource required to create the value, how will be the customer relationship, what channels the business will use to reach to its customer, what customer segments the business will target, what are the cost involve and how the business will make money.

There are ready-made format available you can use to create a Business Model, such as Business Model Canvas or Lean Business Model Canvas.

https://en.wikipedia.org/wiki/Business_Model_Canvas

2.?Product Roadmap

A Product Roadmap is a communication tool that communicates the direction of the product over time to the stakeholders. It is not to be confused with Backlogs. Backlogs store all the stories, current as well as future stories and validated as well as non-validated stories, whereas roadmap contains only the validated stories. Validated stories are those stories which are validated for its usability, viability and feasibility.

What are stories?

Following agile, we breakdown the vision of the product into Epics, Epics into Features and Features into smaller Stories. To know more about this, here is an article on Agile?https://www.bikashjoshi.com/blogs/what-is-agile

Here is an example of how the roadmap looks like

3. Point of view about Partners and Competitors

Though the Business Model provides a brief about the Partners and Competitors, the product strategy should hold a detail view of all the Partners and the Competitors. It should clearly explain with whom the business should partner and with whom to compete.

Who are Partners?

A Business partner can be another business or an individual such as influencers. Both the party focuses on creation a relationship which will creates exposure, publicity and revenue for both of them.

Example, In 2014, Uber partnered with Spotify to allow Spotify Premium users to DJ their Uber rides. This created an incentive for Spotify users to upgrade to a premium account while enhancing the user experience created by Uber.

Who are Competitors?

Competitors are the business or product that are solving the same or similar pain points. They mostly fall in the same industry and deals with similar customer like yours.

Sun Tzu, the author “The Art of War” wrote

Know the enemy and know yourself in a hundred battles you will never be in peril. When you are ignorant of the enemy but know yourself, your chances of winning or losing are equal. If ignorant both of your enemy and of yourself, you are certain in every battle to be in peril

Here is the simplified version of the quote; When you know both yourself as well as your competition, you are never in danger. To know yourself and not others, gives you a half a chance of winning. Knowing neither yourself or your competition puts you in a position to lose.

The above quote clearly explain the importance of knowing your competition. Further, it is not enough to just know your competitors but you will have to be in the Competitors CEO’s shoe. You will need to understand which direction they are moving, how loyal their customers are and why, etc.

To get the most out of your competition insights you can do a competitive research following frameworks such as Porter's 5 Forces, SWOT Analysis. Additionally you can also conduct Competitor’s User Interview to understand why the customer are paying, how is the product helping the customer solving the pain points, etc.

One of the other best method I use to get insights from the competition is by become their customer. When you become their customer, your competitors will explain you about all the awesome features and functionalities they have as well as will also share some glimpses of what are they planning for in future, with much of the efforts.

4. Ideas about who the Customer will be

This is the most important part of the strategy. This part will contain detail about the users; who the user will be, where can we find them, what are their behaviours, what would be the user’s journey in the product, their goals and motivations, etc.

You will need to do extensive user research to get the answer of all these questions as well as to learn more about the users. Methods such as User Interview, Contextual Interview, Surveys, etc. will help you conduct user research

Artifacts such as Personas, User Journey Mapping, User Empathy Mapping, etc. will help you define your user’s behaviours and their goals and motivations.

Good Strategy vs. Bad Strategy

There is difference between a good strategy and a bad strategy; bad strategy will derail your product whereas good strategy will make your product successful. Good strategy will get the alignment done with all the stakeholders, bad strategy will create confusion and there will be conflicts every now and then between the stakeholders due to lack of clarity.

A Good Product Strategy is half the battle won.

Hope this brings in the clarity as to What is Product Strategy. I am going to post some more article soon on Product Management core elements such as Vision, Strategy and other important topics as well as on Product Design, so stay tune.