Product Strategy Guide 2.0
How to simplify decision making while creating room to drive value
Hi everyone,
How’s your 2024 starting? I hope you had lovely end-of-the-year celebrations. Are you ready to rock the product world? Let me equip you for that.
I decided to start 2024 by reviewing my previous Product Strategy Guide. Why? I want to provide more guidance and clarity on how to rock the product world. So, before jumping into content, let’s set expectations:
Free: Access to the overall strategy points and why they matter. Reading time: 7 minutes.
Premium: Access to examples, hands-on techniques, and common traps. Reading time: 25 minutes.
Alright. Time to clarify what it takes to craft a sound product strategy.
The Four Elements of Sound Product Strategy
Setting a relevant product strategy is one of the critical aspects of successful product teams, yet it can be overwhelming. You’ll find dozens, if not hundreds, of ways to set your product strategy. How do you find the best-fitting option for you?
It’s not my intention to give you the advantages and disadvantages of each method. First, because I don’t know all. Second, I don’t think it matters.
Product strategy is vast and is a topic for a whole book. I don’t dare to promise a silver bullet. And I don’t want you to perceive it as a recipe for success but as a means to simplify decisions and bring focus to your teams.
I must warn you that product strategy isn’t a document you craft and forget. For me, it’s a combination of different pieces that solve the puzzle, leave one out, and confusion takes over.
The following image shows the four key elements to solve the product strategy puzzle:
Before we examine the product strategy elements, we need to discuss who you serve and clarify the product lifecycle. You need to know that to craft a guiding strategy.
Identifying Who You Serve
Products exist to improve people's lives.
iPhone is one of my favorite products because it makes me more productive, equips me to take eye-catching pictures, and seamlessly integrates with my other devices. I had my first iPhone in 2013; that was the iPhone 5. Something is curious about that. iPhone has been on the market since 2007. I got my first one six years later.
I’m not an early adopter. I’m more like the early majority. What does that mean? I read reviews before buying a new product because I want to know that someone has used and benefited from it. Is that right? That’s the point. There’s no right or wrong. But there’s a lesson you can take from it.
You need to know your target audience and product stage (we will cover it briefly). Not everyone is the same. For example, when bringing a new product to the market, you should identify the audience willing to use it, even if it’s not perfect. Failure is unavoidable if you try getting your initial product to an audience that expects a stable version.
In 1962, Everett M. Rogers wrote his book, “Diffusion of Innovations,” where he created a theory aiming to explain how, why, and at what rate new ideas and technology spread. Although that was long ago, it’s still applicable in the context of digital products.
The following image represents the typical adoption curve for technology and new ideas.
Innovators care about new technology and long for access to early-stage products nobody else has. They are okay with a broken experience because they are primarily interested in the new.
Early adopters want to be ahead of the curve. They seek to experiment with new products and services. These people waited in line at the Apple Store to buy the first-ever iPhone.
Early majority only accepts products with solid recommendations. They are open to trying something different only after many people have tried it and expressed their approval. Getting to them generally takes a couple of years. That’s me with the iPhone.
Late majority only want to use bulletproof services. They’ll only consider a product or service if it has solid support from beginning to end. Convenience is king.
Laggards are change-averse. They only start using something if there are no alternatives. In most cases, when current options are deprecated, they move on. That’s my mom using smartphones from 2020.
Product managers' common mistake is targeting the early majority without satisfying early adopters. You cannot thrive with the early majority without early adopters falling in love with your product.
Here’s the key lesson: find your early adopters, get your product in their hands, learn, adapt, and get positive reviews. Then, and only then, are you ready to target the early majority.
If you already have a running product, understand your target audience. When targeting the late majority, the game differs from the early majority.
I recommend reading “Crossing the Chasm” by Geoffrey Moore to learn more about it. He addressed in detail how to treat each audience and move further. The book is from 1991, but the concept is still valid. The latest review happened in 2014.
How to Understand Your Product Stage
Which stage is your product? To answer this question, you need to understand the product lifecycle. Thanks to the economist Raymond Vernon, that’s a piece of cake.
In the 1960s, he wrote the product lifecycle theory, defining the four stages of products. Although that’s before our digital era, it’s still applicable to our reality. The following image shows how the lifecycle develops.
Let’s clarify the meaning of each phase:
Introduction: You’re still figuring out how to penetrate the market. You need to craft a solid go-to-market strategy. The chances of pivoting are high as you don’t know how the market will react. Your strategy should get your product to innovators and early adopters.
Growth: The market has accepted your product, and demand is increasing. The strategy should enable you to increase your market share. It’s paramount you understand your adoption cycle and adapt your strategy according to your audience. What works for an early adopter won’t work for the early majority.
Maturity: Once your product reaches a certain sales level, you struggle to increase your user base. A sound strategy will address retention to ensure you don’t lose customers. You may consider introducing a new product to keep your customers. Sometimes, it means disrupting yourself before somebody else does it.
Decline: Inevitably, your product will become less relevant due to new options in the market or other aspects. The meaning is that your product is losing customers. When you address the maturity phase adequately, the decline won’t scare you. It will be a transition from one product you offer to another. But if it’s too late, your competitors will be happier than you.
Failing to recognize your product stage and audience will lead to the wrong strategy.
Product strategy doesn’t have anything similar to one size fits all. That’s why you must understand your situation before reflecting on the strategy.
Now, let’s explore the elements of a sound product strategy, know what they solve, and how you can combine them to guide your teams.
Product Vision: Knowing Where to Land
A compelling vision will put your team on a mission by inspiring and motivating them. Without that, teams get lost because they don’t know what they are fighting for.
Setting a product vision is daunting because it requires alignment, collaboration, and decisions on where to land and what to leave out. A great vision is memorable, audacious, achievable, and inspiring.
One of my favorite visions comes from J.F. Kennedy. On May 25th, 1961, he stood before Congress and said, “This nation should commit itself to achieve the goal, before this decade is out, of landing a man on the Moon and returning him safely to the Earth.”
Why is this vision so compelling? Let’s evaluate the attributes: