What’s a product strategy? How to develop one that sets you apart?
Far too many companies think product strategy means having a prioritized backlog and spewing features every other week.
But gone are the days when you could solve a problem by developing features and build a successful product out of it.
Your potential customers have a ton of options at their disposal today. If a market has enough demand, it will quickly get flooded with products attempting to sell with similar features.
Today, the job of every product is three folds:
- Solve a large problem for a user.
- Be defensible to time and market conditions.
- Establish as a leader in the market.
With increasing costs to acquire new customers, your product not only has to stand out, but it must be good enough to retain these customers. And you have to do all this while ensuring your product doesn’t get bloated or become yet another “me-too product”.
You develop a good product strategy when you take your users’ needs into account.
But you’ll make a difference and move the needle when you take holistic approach.
And this crisp guide is all about helping you achieve just that — develop a sound product strategy.
What’s a product strategy?
A product strategy is often defined by what features are prioritized in the roadmap. This, however, must not be mistaken to mean that a roadmap is the product strategy. Because in reality, a product strategy is so much more than that.
A clear product strategy outlines the steps needed to achieve the vision. It challenges long-held assumptions in the market by taking into account several variables such as:
- Customer needs
- Customer behaviour
- Current market conditions
“Good product managers know the market, the product, the product line and the competition extremely well and operate from a strong basis of knowledge and confidence.”
~ Ben Horowitz, A16Z
Look at all the great companies.
- Netflix went from renting DVDs, to online streaming, to producing interactive shows.
- Amazon went from selling books online, to becoming an online retail store, to selling smart devices that can talk to you.
These companies that we all love and admire weren’t built by following the trends of yesterday. They challenged the status quo and created an inflection point in the market.
When developing a product strategy, product managers must learn to not just worry about what customers want today. If you want to build a product strategy that sets your product apart, you’ll have to lead with market conditions and customer behaviour.
So, how do you develop a product strategy that gives you the competitive edge? Let’s jump in and find out.
How to develop a product strategy?
1. Develop a product vision to guide your strategy
Every step you take to develop a product strategy will be based on one thing sitting at its core — product vision.
A product vision isn’t just a random statement that talks about the future. It sets the direction for where the product is heading and talks about what the product will accomplish for its target users in the future.
A product vision achieves five things:
- It describes the motivation behind the product.
- Keeps the target user in mind.
- Looks beyond the product.
- Employs a shared vision.
- Guides key decisions.
A good product vision leads with the needs of the market.
It captures the ultimate purpose of your product and describe the positive change it should bring about. It acts as a way to get members from every team aligned on a common goal and get them excited about what they’re doing.
And since the product vision sits at the foundation of everything you do, without it in place, you will end up becoming a bloated software that nobody will understand or know how to use.
Because it is a lot easier to give in to every request your customer throws at you when you don’t stand for something.
Once your product vision is developed, every action your team takes during the product development process will be guided by your vision. At every phase. In every step.
2. Use data to set an actionable goal for your product
Once your vision is in place, it’s time to break it down into an actionable goal that you and your team can execute on in the coming quarter or year.
Every actionable goal is based on data which you either want to improve or form a hypothesis to validate.
To do this, you’ll first have to determine how your current users use your product. Provided you are actively tracking your feature metrics, a simple query into an analytics tool like Mixpanel or Amplitude should give you a good indication.
What you should be looking for is the frequency of usage for each feature in your product. That means, looking at functionalities that ties to your product’s core selling points and eliminating basic, administrative features.
When going through this data, it’s normal to see certain features having more usage than others. But that in itself is only half as useful as plain numbers in a random spreadsheet.
You need to combine your product metrics with your customers’ expected behaviour to see if they make any sense. Because data, at the end of the day, is only useful if it gives you clarity and leads you to an outcome.
And best product goals are tied to outcomes.
Armed with this information, you can do two things:
- If your feature adoption and usage are as expected, you can choose to set a new goal that will take your product vision further.
- If the adoption and usage aren’t as expected, you’d be better off on understanding why they aren’t performing as expected and improving them.
For example: For an app like Instagram, if you see more people scrolling through their feeds and liking others’ photos, but aren’t uploading more photos themselves, you know there’s engagement within the product. But on the flip side, not uploading more pictures isn’t the expected behaviour. It will lead to eventual to drop in engagement within the product.
Once a mismatch in behaviour is identified, it is important to articulate how it will impact the business and derive a goal from it. A product goal should be at a fundamental level.
In the example above, it is easy to settle down on a goal of increasing the number of photos people post. That only describes what you are going to do.
But when you connect it to an outcome of improving network effects, it will open up a wide array of possibilities that your team can then prioritize and execute on.
3. Prioritize features to reflect your product goal
With a product goal that will inch you closer to your vision, it is time to break your goal down to things you’ll be working on to execute your product strategy.
Depending on the goal you articulated in the previous step, you might have to implement make improvements to existing features, develop new features, or even do a combination of both. Not to forget the technical debts that you’ll have to take care of.
To ensure you aren’t spending time building something that barely has an impact, you need a process in place that lets you tie your decisions about what you build back to your product goals.
When prioritizing features, it is important to keep in mind the complexity, effort, and the impact it’ll have. But it is equally important to understand where the majority of your users are in their lifecycle and if your goal aligns to these users.
Because not every user will need the feature you are currently building. And the goal you set in the previous step will help you identify which part of your users’ lifecycle you are building you are trying to improve and optimize for.
We’ve written in detail about how to prioritize features before. The process we’ve written in detail should help you through this step.
If you’re using Zepel, you can prioritize features within a project effortlessly using drag-and-drop cards, assign owner to ensure someone is responsible for the quality of the feature, and track the progress of the entire feature across disciplines.
4. Go beyond aligning members on the product strategy
The norm today is to align team members on a common goal, usually the product strategy. It’s a step in the right direction, but that’s rarely enough.
Product development is a multi-disciplinary effort. When you have members from multiple disciplines collaborating cross-functionally, you need to peel the onion and break goals down to team-specific goals.
From the moment features are prioritized all the way till they are pushed to production, members from multiple disciplines get involved — design, development, QA. Features will get broken down to work items that will then be collaborated within and across disciplines. And there will be changes that’ll be made as new information and questions arise.
To handle this non-linear process in product development, you need to have a system in place that aligns members from every discipline on two levels:
- On a common goal.
- On a goal specific to their discipline.
Because when you align everyone on a product strategy, you only align them on what you are going to do.
But when you go a step further and break your product strategy down to a goal specific to their discipline, you align them on how you are going to execute the product strategy.
And the difference between knowing “what you are going to do” and “how you are going to execute” is the difference between just shipping features and shipping features that customers will love and use.
If you are loosing sleep over planning the right features, conceptualizing them, and keeping track of its progress across disciplines, you should give Zepel a try already.
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