Product Strategy: A Guide With Examples and Best Practices

“What should we work on next?”

The question hangs in the air, laden with the heaviness that’s been growing inside you since you took on your new role as a product manager.

“It’ll be fun,” they said. “This is what you’ve been waiting for,” they said. And you believed them. Now you’re not so sure. You feel like you’re being pulled in every direction without anything to hang on to.

“Uh, Peter?” A voice cuts through your thoughts.

“Our product strategy,” you answer. “We should work on our product strategy,” you repeat with more conviction.

You’re right. You can’t manage a product without a strategy. When you finish this post, you’ll know what a product strategy is, why it’s important, and how to create one that’s perfect for you. And you’ll also get a few pointers for the execution of your strategy so you’ll have more insight about and control over your product delivery.

What Is a Product Strategy?

According to Wikipedia, a strategy is “a general plan to achieve one or more long-term or overall goals under conditions of uncertainty.”

That last part is essential.

Without uncertainty, you don’t need a strategy. You can go straight to a detailed plan.

In uncertain circumstances, you have to rely on a high-level, general plan. One that says what you want to achieve, but leaves the how well enough alone. It gives direction without specifying speed or means of motion. It guides everyone’s actions and decisions without telling them exactly what to do.

A product strategy, then, is a strategy to create and further develop a product to achieve one or more business goals.

Why Is a Product Strategy Important?

In an uncertain environment, it’s hard to know whether what you plan to do will pay off. But you still need to make decisions and produce results in line with your business goals.

It’s like navigating a ship.

You can’t get from A to B without a voyage plan and regularly checking where you are. And you’ll have to adjust along the way. You’ll have to avoid other ships (you’d be surprised how many you encounter at full sea), and adjust for currents and wind. You may even have to adjust your entire voyage plan to steer clear of a hurricane.

Your product strategy is the voyage plan for your product.

Staying Focused

A product strategy is important because it helps you to focus. To stay on course and resist the lure of that nice tropical island along the way.

Many people think focus is about saying “yes” to something and ignoring the rest. It isn’t. Focus is about saying “no” to everything that sounds good but doesn’t fit your overall idea and planning.

Saying “no” is hard enough as it is. Everyone with an idea has good reasons why you should do it.

Having a product strategy will make it far easier to say “no” and stay on course. Because a product strategy doesn’t only tell you what you will do. It also tells you what you won’t do. Explicitly, or by omission.

Staying Aligned and Agile

Having and communicating a clear product strategy serves as the voyage plan, the initial course.

Knowing where you want to go and what you’re aiming for is essential for making quick, confident decisions. This allows you to respond and adjust more quickly to changes in your business environment, without veering too far off course.

For example, consider a developer who faces a dilemma between spending more time to polish the user experience of a task in your product or inventing a new way to calculate some metrics. If part of your strategy is to have the easiest-to-use product, the dilemma is off the table: the developer knows to focus on the user experience.

Clarity on what you’re aiming for means you no longer have to spell out what employees need to do.

What’s more, a product strategy works not just in your own product and development teams, but also in marketing, support, operations, and…well, actually, all departments in your organization.

So you no longer have to be involved in decision-making processes throughout your organization. Everyone can figure it out for themselves. And because of their knowledge and expertise in their own areas, they’ll come up with better solutions to contribute to those aims than someone outside their department ever could.

Charting the Way Forward

A product strategy is a high-level, general plan. It doesn’t yet tell you exactly what to do.

But it’s essential in creating those more detailed plans. Your product strategy guides the process of creating a product road map, including the decisions on what needs to be done first and what can wait until later. Exactly like it guided the developer in deciding what to spend time on.

And it serves the same purpose for other departments that work on or for the product.

4 Types of Product Strategy

Now that you know how a product strategy can benefit you, let’s talk about the different types of product strategies you can have.

Being the Alpha

This strategy, aka Leader, is to be the market leader, creating innovative products that’ll leave your competition lagging behind. It’s expensive, it’s risky, but the rewards can be huge.

Giving the Alpha a Run for Its Money

This strategy, aka Challenger, is to challenge the market leader by beating them at their own game.

Piggybacking

This strategy, aka Follower, is to piggyback on the innovations by the leaders and their challengers. You don’t create any innovative products yourself, but use them to create cheaper, derivative products.

Dominating a Corner

This strategy, aka Niche, is to create a product for very specific types of people in an otherwise large market. This allows you to work with limited resources because you don’t cater to everyone in the larger market.

The Elements of a Product Strategy

The most quoted elements that need to be in a product strategy are your vision for what the product will do, the business goals it’s meant to contribute to, and the initiatives to achieve those goals.

That, however, leaves out two essential topics.

What you also need is a description of who you’ll be serving (in other words, your ideal customer or customers), and how your product will solve their problems.

And you also need to include how your product is unique. The key features and differentiators that’ll set you apart from your competitors and attract your ideal customers.

Pro tip: include what your product will not do. The features that it won’t include. The bright shiny objects that you already know will be a distraction and that you’ll say “no” to from the outset.

5 Steps to Create a Product Strategy Perfect for You (With Examples)

Salute Simon Sinek

According to Simon Sinek, in the TEDx talk that put him on everyone’s radar, you have to start with why.

Why you go to the trouble of creating your product. What impact you want to have. Whose lives you intend to change.

The vision for your product is essential. Without an inspiring reason to create your product, and for your customers to buy it, everything falls flat.

Examples of Product Visions

• Google for its search engine: “Provide access to the world’s information in one click.”
• Nike for its Nike Free shoe: “A shoe which mimics barefoot running in order to strengthen runners’ feet and legs, giving them more power and speed while reducing the risk of injury.”

Paint Your People

The second step is to describe your ideal customer. Who they are, what they do, the problems they face, and how your product will solve their problems.

Understanding your ideal customer, your target audience, is key in creating a product that’ll appeal to them.

You need to understand what they want-and more importantly, what they need. The difference between wants and needs is the difference between shrugging and paying.

And you need to be specific. Large audiences-for example, parents-fall into different groups with different needs.

Examples of Target Audiences

• Parents with young children who need an educational app, as opposed to parents with teenage children.
• Amateur photographers using their smartphones to take pictures who need a picture enhancement app, as opposed to professional photographers.

Stand Out From the Crowd

The third step is to identify which key features you need and how to differentiate common features in similar products to stand out from the pack.

This speaks to the characteristics of your product: features, usability, quality, cost, customizability, robustness, and so on.

Examples of Key Features and Differentiators

• Tax software with the specific forms for expatriates.
• Content marketing with a CMS feature and step-by-step wizards for small business owners.
• Word processing software specifically designed for users that rely on voice control.

Ready, Aim…and Keep Score

To know how you’re doing on your journey to contribute to the business goals of your organizations, you need four things.

• Your current state.
• Your goals-your desired state or target condition.
• The metrics that describe your current and desired state.
• Measuring regularly to check you’re still on course.

Examples of Goals and Their Metrics

Business goals:

• Increase number of new sign-ups per month by 30% by the end of Q3.
• Reduce time to market by an average of 20 days by year end.

Customer goals:

• Increase the number of clients that create a full profile by 20% by the end of Q2.
• Decrease time between sign-up and first valuable action by 50% by year end.

Blaze a Trail

Finally, then, you get to make a plan. At least, a very high-level plan. With your business and customer goals in mind, you identify the initiatives you’ll use to achieve the goals you’ve set.

Initiatives are more technical than goals. You can think of them as the grand themes of the actions you’ll take to bring your vision to life.

Examples of Initiatives

• Attract customers from a new industry.
• Launch a Wimbledon site for your tennis stats app.
• Improve accessibility across your website and apps.

4 Best Practices for a Perfect Product Strategy

Problems Are Good

Focus on problems, not solutions. When setting a strategy, talking about solutions is a form of premature optimization. It blinkers you to other solutions that may be better, easier, more cost effective, more relevant.

While you’re still discussing what strategy to take, the focus should be on understanding the problem you’re trying to solve and the challenges you face in reaching your business goals.

Only when that’s clear can you start generating possible solutions and initiatives to make them happen.

Options Are Even Better

When you start generating solutions to the challenges you face, don’t lean back when you’ve found the first. That’s only your start. Ask questions about how this solution helps you meet the business goals for your product. And how it doesn’t.

Ask yourself how else your product can meet the challenges you face.

It doesn’t matter how far out the challenges are. Feasibility is not the point at this moment. Creative thinking is. And far-out ideas can spark other ideas that are (more) feasible.

Plus, you’ll have plenty of time to cull any infeasible ideas before you start executing them.

That takes far less time and effort than prematurely picking a solution and realizing, halfway into executing it, that it doesn’t live up to expectations. U-turns and other sharp deviations of a set course are very expensive.

The More, the Merrier

Don’t sit in an ivory tower thinking up a product strategy for others to follow. Collaborate. Use the benefits of back-and-forth conversations between people with different perspectives and cognitive styles. Recruit from departments across your organization. And organize conversations both to understand the landscape of the challenges you face, and to get a plethora of solutions to pick from.

Facilitation Is Not Everybody’s Cup of Tea

Find a good facilitator and don’t get in their way.

Good facilitation isn’t easy. It takes skill and experience to guide a diverse group through problem solving. And it’s essential to ensure that everyone gets to contribute their best ideas.

You don’t want to jeopardize something as important as your product strategy with groupthink, loudmouths, shyness, HiPPOs (highest paid person’s opinion), and other group dynamics that discourage people from participating.

Pro tip: Hire an outside facilitator. Someone whose only interest is to ensure the quality of the process and has no interest whatsoever in the outcome of the conversation.

3 Tools for Effective Product Strategizing

When you’re working on your product strategy, you want to be concrete-but don’t get bogged down by details yet. Three tools, or rather worksheets, can help you do just that.

Product Strategy Canvas

Melissa Perri, CEO of Produx Labs and Product Institute, developed the product strategy canvas. It’s simple and straightforward, using a fill-in-the-blanks approach that doesn’t allow you to dig into details prematurely.

This canvas differs slightly in terminology from the standard vision-goal-initiatives template. It talks of your big business goals as the challenges you face. And instead of initiatives, it talks about your target condition-your desired state-and current state.

The product strategy canvas lets you focus on a single challenge-target condition combination at a time.

A complete product strategy will use more than one of these canvases. The vision will be the same for all, but the challenge can be different for each of your products. The target conditions and current states will vary across teams working on a product.

Including the current state in your product strategy is a smart move. It helps teams set the course to reach the target condition from where you are now. After all, if you don’t know where you’re starting out, you can’t set a good course to your destination.

And it brings another benefit. It helps you see how far you’ve come and celebrate your progress.

Finally, the language of the canvas helps you set SMART challenges, and measurable objectives to reach them.

Here’s an example of a filled-out product strategy canvas, from Melissa Perri’s blog:

Product Vision Board

Roman Pichler, founder of Pichler Consulting and author of several books on product management, developed the product vision board.

It too is simple and straightforward. It has your vision at the top, overarching the four areas you need in your strategy to make that vision happen.

The product vision board (“The Product Vision Board” © by Roman Pichler, licensed under CC BY-SA-3.0 US) gives a broad view of the product and keeps all business goals together in one place. You can use it in a collaborative discussion across the organization. It guides these conversations with pertinent questions for each part.

To download a blank copy, go here.

Strategy Kernel Canvas

Chris Butler, member of the UX Collective and author of uxdesign.cc on Medium, proposed the strategy kernel canvas.

Like the product vision board, it takes a broad view on product strategy and can be used in a collaborative discussion across your organization. And it too has prompts in each area of the canvas to direct the conversation.

Like the product strategy canvas, it makes your current state explicit by prompting you to analyze how you got where you are and what you’re going to bet on to get you where you want to go.

You can find a discussion of the strategy kernel canvas by Chris Butler himself, here.

To download a blank copy, go here.

Execution: Moving From Product Strategy to Product Delivery

Just as knowledge is useless without action, a product strategy is useless without execution.

Execution is what brings your product to life (when you’re creating a new one) and what keeps it relevant (when you’re refining an existing one) and contributing to your business goals.

In a world that’s changing faster than ever before, you’ll need to act and respond quickly. That creates two challenges for you as the product manager:

• reducing the time it takes the teams to delivery value to your customers, and
• having visibility of and controlling the software delivery process across the whole product.

As you can’t do everything yourself, you’ll want help.

To reduce the time to value in developing your product, value stream mapping is a valuable technique to have in your toolbox, especially when you use a value stream mapping tool that integrates with your teams’ delivery toolchain. It will then provide you continuously with up-to-date metrics linked to the goals in your product strategy.

Product Strategy for the Win

You now have everything you need to create a perfect product strategy for your product. And you know where and how to get the help you need to execute it and be confident along the way that you’re on course.

So take the plunge and start work on an inspiring product vision. It’ll be your North Star that’ll guide your decisions, help you say “no,” and keep you from feeling like you’re being pulled in every direction.

For more related content about how to successfully manage your products and value stream, please visit our blog: https://www.plutora.com/blog