Product Strategy

Product Strategy: A Guide to Core Concepts and Processes

Being a seasoned designer means having the frameworks and skills to tackle most design problems with ease. Be it your expert-level UI talent or UX guru status, you’ve likely had great success creating beautiful digital products for your company or clients.

But in this age of lean startups and entrepreneurship, designers often find themselves in stretch roles where they are not only in charge of a product’s design but also in charge of coming up with the type of product to build.

Whether working in a small product team or taking the leap of building out their own mobile or web app, designers may find it necessary to add the skill of product strategy to their toolkit.

What Is Product Strategy?

The purpose of a product strategy is to successfully achieve an overall vision and particular business goals and to keep everyone involved in developing the product focused and on track. Both new and existing products need a plan for ultimate success.

Product strategy is essentially the roadmap a product team will use to make sure they work on products that add real value to users and have product/market fit. Renowned product strategist and author of StrategizeRoman Pichler puts it this way:

“It’s a high-level plan that helps you realise your vision or overarching goal. More specifically, the product strategy should describe who the product is for and why people would want to buy and to use it; what the product is and why it stands out; and what the business goals are and why it is worthwhile for your company to invest in it.”

To come up with a good product strategy, a product team will need to:

  • Have a clear, high-level vision of why they want to build a product in the first place.
  • Identify a problem the product can solve that aligns with the vision.
  • Identify a set of target users to focus on solving the problem for.
  • Determine how to differentiate from the competition.
  • Set business goals.
  • Tune or pivot the strategy based on feedback.

Why is a good product strategy so important? In a report by CB Insights “The Top 20 Reasons Start-Ups Fail,” the chief reason given by CEOs for why their businesses failed was that there was no market need for what they were building (40%). Other reasons in the top 20 include getting out-competed (19%), poor product(17%), and losing focus (13%).

Each of these problems can be avoided by thinking through and validating a solid product strategy.

Creating a product strategy is a team effort.

A good product strategy minimizes the risk of your app flopping!

Pre-Gaming: The Product Vision

The product vision is the answer to the question “why” a product is being built or improved. In Roman Pichler’s article “8 Tips for Creating a Product Vision,” he makes a clear distinction between product vision and product strategy, writing, “Be clear on the difference between the product vision and the product [strategy] and don’t confuse the two. The former is the motivation for developing the product; the latter is a means to achieve the overarching goal.”

Whether the design team is tasked with creating the product vision or is handed one that they must plan around, it should be a statement crafted purely as the reason to build something, not an outline of what should be built.

Pichler clarifies: “Say that I want to create a computer game that allows children to choose and interact with characters, select different music tracks and worlds, choreograph their own dances, and play together with friends. This might be a nice idea, but it is not the actual vision… A vision for the game would be ‘Help children enjoy music and dancing’.”

This is the launching point of a product strategy and is open-ended enough to allow the product strategy to define what exactly to build in order to achieve the vision. Pichler also points out that “This enables [you] to change your strategy while staying grounded in your vision. (This is called to pivot in Lean Startup.)”

 

The product vision is WHY you are making a product in the first place.

Discover Problems to Solve and What People Need

With the product vision to fulfill, next up is understanding what to build in order to achieve it. Given that almost half of the startups that fail to blame poor product-market fit for turning belly-up, it’s smart to have a deep understanding of what people really want to use or buy before building anything.

Taking the example from Pichler, if the goal is to “help children enjoy music and dancing,” find out how children currently experience music and dancing, and what problems stand in the way of them enjoying those things. The insights are clues to how a product can transform their current experience of music and dancing into an amplified, amazing, can’t-live-without-it experience through your product.

The Nielsen Norman Group has put together a handy overview of research steps in product strategy in this UX Research Cheat Sheet. To make an assessment of what users really need, you can follow the discovery phase of user research, which involves:

  • Field studies/user interviews
  • Diary studies
  • Stakeholder interviews
  • Hunt for data sources
  • Sales and support interviews

The combination of these activities will help identify common threads in responses from, and observations of people, as well as in the statistical data. Product teams need to empathize with people and learn about their habits, beliefs, desires, current behaviors, and the problems they experience.

With a deep dive into understanding people, teams will be well-positioned to synthesize and connect the dots between the findings. This discovery phase will reveal opportunities that could be pursued with the product.

Often the discovery process reveals previously unimagined problems, which would not be on anyone’s radar without a deep understanding of their users. This is why it is key to invest time and resources into research, and avoid acting on assumptions.

Developing a product strategy requires understanding user needs.

Dig deep to understand what problems people need to be solved.

Create User Personas to Clarify Who Your Target Users Are

Once you’ve identified the problem and the needs people want to be fulfilled, your next step is to articulate who the target users are. User personas leverage the user insights gathered from the discovery UX research phase by transferring the identified common needs, mental models, lifestyles, and behaviors into a set of imaginary, archetypal models.

User personas are easily shareable documents that depict the most critical information about your target users. These do not need to be heavy or complex artifacts—they simply need to achieve the goal of clarifying who your product intends to serve.

By amalgamating all of the qualitative and quantitative user data into a neat package of a few representative user profiles, you can communicate the needs of your key users to stakeholders and others on the product team. Personas also help the team build empathy toward the product’s users.

Determine Your Differentiation Strategy

It’s very important to have some basic intelligence around the competitive landscape for the product being built. Get a clear lay of the land to determine whether the product idea is unique and what benefits it can offer that are not being provided for currently.

Are there products attempting to solve the same problems but failing to do so? What products are the target users using and loyal to right now? Is there an emerging technology that could be incorporated into your product?

A classic framework to use is Porter’s Five Forces Model, as it is what most MBAs are accustomed to (so most CEOs and investors will be familiar). It asks teams to look into the impact of consumer buying power, the bargaining power of suppliers, the threat of new entrants to the market, the threat of substitute products in the market, and the rivalry among existing competitors.

Another approach is the classic spreadsheet consisting of a list of competitor names and a comparison list of features provided to users. Both of these approaches are textbook and look at features and business realities rather than how and why a competitor either resonates with people or misses the mark of loyalty and usefulness.

A more human-centered competitive analysis is outlined in Product Strategist Chris Butler’s Real competitive analysis is about learning to love your competitor. Butler writes that understanding a competitor’s own philosophies and strategies will help a business create their own.

“When doing real competitive analysis you are diving deep into the real problems their customers have, how you can brand yourself differently/similarly to them, and generally evolve your product context in how to view the world at large.”

Butler suggests the following process:

  1. Talk to customers.
  2. Use the competition’s solutions.
  3. Read press about them, especially interviews.
  4. Synthesize their strategy.

“At the end of this process, you should have a great understanding of your competitors for the right reasons rather than doing busy work.” This understanding will help inform the ways you can differentiate from the crowd and where to deliver extra value and benefits to your target market.

The elevator pitch should summarize your product strategy in two sentences.

Photo  on Unsplash

“We look for opportunities where we can offer something better, fresher and more valuable and we seize them. We often move areas where the customer received a poor deal and where the competition is complacent. And with our growing e-commerce activities, we also look to deliver old products in new ways. We are proactive and quick to act, often leaving bigger and more cumbersome organizations in our wake.”
– Richard Branson

Bringing It All Together: The Elevator Pitch

Communicating the product strategy is critical for company-wide and team buy-in, or in the case of a startup, to get the ear of investors. Everyone on the product team should be able to articulate the strategy in an extremely concise fashion, demonstrating clarity and making it easy for anyone listening to understand and remember.

One very helpful framework to use here is the elevator pitch, which forces the product strategy to be distilled into two sentences:

A product differentiation strategy is key to successful product design and development.

Understanding your competitors’ strategies can help inform your own.

Validating the Strategy: Bark up the Right Tree!

Now is the time to put the team’s design chops to work. Start planning the features and designing early prototypes. Getting these concepts in front of people in the target user groups early in order to test assumptions will help gather valuable feedback to fold back into the designs.

Create low-cost prototypes with whatever tools are available: pen and paper, interactive mockup tools, or quickly-coded prototypes. All are great ways to stress test a product idea with real people.

Be prepared to make multiple iterations on initial prototypes. Received feedback will inform tweaks to the strategy and might even cause some rethinking of the overall approach altogether. Be open to learning from miscalculations (no matter how big) and mistakes early on.

Digital product design takes careful planning, time, and resources.

The time and resources it takes to make sure you are on the right path are well worth it.

Time to Build

Whether the product strategy is quickly validated or you discover a need to pivot at this point, congratulations! A strong product strategy will reduce the risk of building a product nobody will use, and ultimately help avoid sinking time and money into a failing venture.