The Product Strategy Manifesto (part 1)
What the F*ck is Product Strategy?
The short answer
It’s all the product decisions that aren’t tactical: Analytics, Onboarding, Retention modules, Virality features and even Monetization models.
The simple answer
Working as a product consultant representing a top-notch firm, when called upon, my colleagues and I would usually ‘swoop in to the rescue’ with precise, surgical solutions. Upon implementing our instructions the product would time after time show a significant spike in the selected goals’ metrics. But our job was easy. 95% of the time we came up with tactical tricks that most PMs are not familiar with. Don’t get me wrong. We weren’t fooling anyone. These tricks work and they have that “why didn’t I think of that?” taste to them. So the clients were happy as well.
So what’s wrong with that you might ask? Why not implement tactics that would raise onboarding conversions by 20%-30% or day 7 retention rates by 10%?! Because most growing startups must grow an X-times factor and not +XX%. That’s usually just not enough.
If your PM is focusing on pushing onboarding conversion from %30 to %60 (even if they succeed), while your average user acquisition cost is 10 times your average Lifetime Value (and from what I’ve seen those are the typical numbers for an early stage product), then your problem is not the PM. It’s the Product Strategist that needs to take a walk… Oh, you never hired (or heard of) one… Well I guess that’s on you.
Why do over 90% of startups fail?
- It’s not because their onboarding wasn’t perfect (believe me, they probably improved the heck out of it).
- It’s not because their Call-To-Action buttons weren’t rigorously A/B tested.
- It’s not because they didn’t have the best optimized and automated push notification module.
- It’s not because their ‘invite a friend’ bonus was not big enough.
- And you know what? It’s not even their in-app purchase or store model not being a perfect fit.
Product-oriented startups fail because they were unable to achieve Product / Market Fit fast enough.
It doesn’t necessarily mean these products had no chance from the get go. It just means they ran out of time and money too soon. All too often the reason for that is that these startups dedicated too much time and efforts to tactics (the “it’s not because…” list from above) before reaching Product / Market Fit. Meaning, they’ve neglected their Product Strategy and instead focused on product tactics, tricks and easy fixes.
Well, nothing is actually easy at a startup, but maybe that’s the problem. It seems that startup CEOs, especially those coming from technical backgrounds, are too obsessed with work output and ‘progress’ that they often forget to check their course. As ironic as it sounds these guys who often grew up hacking, when they it is their turn to become company leaders, decide that it is time to work in a proper organized way (like a corporate?!). They tell everyone they are building an MVP, but take 3 times as long because they “don’t feel comfortable” with the design. The minute they stop looking for ways to hack the system (and that includes the product) they enter the big boys game, only they have neither the tools nor the $ to win.
A product consultant’s confession
I was an entrepreneur, still am. I’ve walked in these guys’ shoes. More than once. But when you become a consultant and you give great advice, increase conversions and any other metrics by nearly 100%, and yet still see the company shut down 6 months later. It is only then that you realize you missed out big time.
You took the easy path where you knew all of the answers. You got great results at minimal risk and the client loved you. But you also should have known that the tactical approach would have never gotten them the x10 increase they actually needed to really have a chance to succeed.
If they’d gotten to the point they acknowledge they need you, chances are they are far from product / market fit. The likeliest scenario is that their product strategy (probably existing only in their subconscious) is very much off. Fixing that requires some very innovative thinking.
To be continued…