Product Strategy

Introduction

So you’ve been elevated to a degree of seniority or possibly joined a new organization as a Senior Product Manager. One key task you’d be assigned to do is defining strategy. Nervous? Confused? Lost? It is bound to happen because up until now, you’ve followed a direction and strategy set by someone senior or maybe even your boss. But now it’s for you to own it. Oh yes, you may have contributed previously in making one but no never really owned it. So how do you go about it? Let’s start from the beginning.

In this chapter, we will learn everything that goes into making a product strategy to build and deliver a great product. To do this we’ll first understand, 

• What is Product Vision?
• What is Product Mission?
• How does the vision and mission lead to building a product vision that aligns with the company’s direction and credo?
• Understand how to build a Product Strategy
• Components of Product Strategy and its essentials

And much more. Let’s start.

What is Product Vision ?

It is a statement that depicts the aspirational state of your product for the long term. The vision statement should concisely communicate where the product hopes to go and what it aims to achieve in the long term.

The vision statement should serve as a guide & reminder to all the stakeholders involved in the product’s development about the shared objective they’re trying to solve.

The vision  statement should primarily answer the question of why you are creating a product and what your company hopes to accomplish with it in the future.

Let us now understand Product Mission.

What is a Product Mission?

A Product Mission explains the product’s highest level purpose. It clarifies who the product serves and what it does for them. It identifies what makes the product unique and answers the question ‘what difference do you hope your product will make in the world?’

But why do we need to understand Product Vision and Product Mission for building a Product Strategy ?

Well, product vision and product mission are guiding pillars built by organization’s leadership to show the organization a path to walk on. Both the statements by themselves though cannot be used to drive execution. In order to have a structured approach, backed by data & quantitative measures, product organizations need a plan to achieve what the organization aims to with vision and mission statements. That’s where we need Product Strategy.

What is Product Strategy ?

A Product Strategy is a structured plan, rational choices, a plan you make to achieve Product Vision.

A Product Strategy should therefore be aligned to the vision and mission of the company to achieve business objectives.

But what is a good product strategy?

A good product strategy is the one which has a clear purpose, a one which helps set clear direction, addresses customer pain points and above all, it is audacious.

Building a Product Strategy

Before we build a product strategy we need to understand that Product Strategy should be conveniently rigid and flexible. Product Strategy once devised, apply for at least 2-3 years. During this period as a good product manager, you should be firm enough to not alter it based on internal problems with a high degree of complexity, which can be technological limitations or changes, pacifying a high impact stakeholder, etc while being flexible if the product strategy fails to meet business objectives at consistent intervals. These are a few considerations one needs to understand.

Hence to build a product strategy which is strong and can withstand such pressures, you need to perform: –

1. Thorough Research
2. Data Driven Analysis
3. Market Survey

Let’s understand what needs to be done in each.

Research:-

• Understand who are your potential and target customers, if you’re building a product strategy for a new product.
• For an existing product, start by understanding why customers use or don’t use your product.
• Then try segmenting the users based on your offerings and customers’ value (actual or perceived) and try understanding do different audiences have different needs?

Analysis: –

• Understand which audience is most valuable?
• Then understand which audience is growing and which isn’t.
• Perform funnel analysis to understand points of abandonment to improve workflow and eventually conversion rate.

Market Survey: –

• Understand the current market trends in your product’s domain.
• Understand are customer behaviour or interests changing?
• What are your key competitors doing?
• How is the economy doing? Are your customers impacted?

WIth the research ready, we now move towards writing one. 

A good product strategy has following attributes: –

• Key Business Problems
• Key Users
• Focus Area
• Value Proposition
• Solutions
• Right Success Matrix
• Change Impact/Assessment
• Product Health Analytics 

Framework to Build Product Strategy: –

In order to encapsulate all the above attributes in the product strategy, 

First, define the problem your product will be solving. Doing this helps clearing out what your product features and eventually strategy is aiming to solve.

Second, ask & answer why your product should solve it? Use your research work along with analysis to showcase why your product and its features stand out across the market to solve the problem. Depict how it will be beneficial in every sense to customers upon launch.

Third, take it ahead and show how your product or features will solve the problem . Articulate the approach and workflow that’ll be taken to solve the problem.
Lastly, articulate what is in it for your business and how and what business goals and objectives will be achieved. Eventually, everything boils down to growth and money. So clearly define and depict what your product is going to achieve and give it back to the business.

Exercise Time

Let’s build a product strategy for our Product, Ironman

Product Vision: 

To make laundry service convenient for everyone.

Product Mission:

To build an application to help anyone avail of laundry services at reasonable prices.

To come with a product strategy for Ironman, let’s start by using our framework and a few considerations for building a product strategy.

Defining the Problem:

• There are very few online laundry servicing platforms in India. 
• These platforms offer laundry services at a price where consumers feel it’s better to go to the nearest laundromats or dry cleaners in their vicinity and get their laundry needs.
• Second, due to a high value conscious outlook, consumers are not willing to let their clothes to representatives(delivery agents) of such platforms who’d treat their clothes at a place possibly far away from their reach.
• From the supplier end, there are laundromats and dry cleaners seeking growth and reach.

Ask and answer “Why should your product solve it?”

• Ironman should solve this problem because laundry service is a boring business and no one really looks up to doing laundry as opposed to ordering food or getting a playstation delivered in 10 minutes.
• Ironman should solve the problem of convenient and quality driven laundry service in order to save people time, money and effort needed to do their laundry.

Ask and answer “How will your product solve it?”

• Ironman will solve it by partnering with laundromats and dry cleaners to come up with a reasonable price for every laundry service.
• Users will be able to avail themselves of these services through the Ironman website.

With the rational ready, let’s put together our product strategy.

1. Product Vision:

To make laundry service convenient for everyone.

2. Insights:

• India has a very small online market.
• Only 3 major laundry service businesses: –
  • 1.The Laundry Basket
  • 2.LaundroKart
  • 3.Uclean
• Limited active users/consumers due to price sensitivity.

3. Challenges: –

• Limited number of online laundry serving platforms. None providing laundry service at a reasonable price.
• Lack of trust.
• Value delivery to customers.
• For laundromats, they’re seeking avenues to grow their business.

4. Approach: –

1. Front End of this Ecosystem:
   1. To build a website where all the laundry services targeted are listed for users to avail of.
   2. Delivery agents would carefully collect and deliver customer’s belongings (clothes, shoes,etc)
   3. For each service, there will be a minimum order value cap below which the system will not accept the order.
2. Back End of this Ecosystem:
   1. Ironman team will partner with as many manageable laundromats and dry cleaners and set a price which accounts for sustainability and profitability of business.
   2. The laundromats’ and dry cleaners’ delivery agent will collect and deliver to the customers
   3. Ironman team will route and assign orders to laundromats based on pin codes for faster and easy pick up and delivery.

    5. Success: –

• Average Order Value.
  • Since our orders are capped for a minimum value and quantity, it will be crucial to have a high order value for having a sustained growth.
• Average Revenue Per User.
  • Since laundry is a recurring activity, by delivering quality to the users, we should expect more recurring orders which should reflect in increased average revenue per user over a period of time.

That’s it.

A simple product strategy for Ironman.

Takeaways

Product Strategy is a structure plan to achieve Product Vision by providing a direction for execution. We covered what is product strategy and how it comes to life. What the forces that influence product strategies and what considerations one must take to build a compelling one. Product Strategies are for a year or more and hence must withstand any influence while also be flexible enough to rectify poor judgement.

So before we move to creating roadmap, we need to actually paint a picture of the product. That’s where we need Product Discovery. In the next blog, we will look at what is product discovery and how can you come up with a product through structure product mindset.