The Startup
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The Startup

Gorilla thinking about strategic insights
Photo by Rob Schreckhise on Unsplash

A Framework for Strategic Insights

A Quick Example of the Impact of Lack of Strategy

What exactly are these insights?

Why Are They Important?

Myths About Insights

  • Myth 1: Insights come from inspirational moments, like taking a shower or sitting under an apple tree. We can use processes and tools to identify the right ones for our products.
  • Myth 2: You will have a meeting to define the strategy and insights would magically materialize. With the right discovery and analysis processes, the identification of opportunities should be continuous. It would be naive to expect that great ideas will spark from a one-hour meeting of executives.
  • Myth 3: There is someone responsible for coming up with insights. Whether you think this person is the CEO, the CPO, or the product manager, that would be shortsighted. Good ideas can come from any source, but especially from product teams doing discovery work. Any team member should bring options to the table.
  • Myth 4: Insights come from intuition. I value intuition, and certainly, someone experienced in a particular industry would probably be prone to finding trends and opportunities faster. But there are two big caveats: 1) Sometimes a higher knowledge gives us extra confidence in our ideas without having enough supporting evidence and falling into confirmation bias. 2) Innovation requires doing things differently. Often, the more used we are to how things are done, the more resistance we have to even think about new ways.

The Insights Matrix

  • The Internal versus External axis divides the insights by the source of information.
  • External may be related to facts detected in third-party sources.
  • Internal focuses on what we found in data generated in our company.
  • The Business centered versus Customer-centered axis differentiates between changes in our business model or customer behavior.
  • Internal-Business insight: The learning will be related to information about how the company is using a particular resource and the impact it has. For example, we may have seen a critical business process that requires several people to execute manual operations, and it takes many days for users to see results. The automation opportunity may have significant cost savings and improve speed and consistency to provide a better experience to customers.
  • Another interesting example in this category is the repositioning of an internal capability to create a new business. Consider the opposite case, when internal information tells us that we are doing something far better than the market. Amazon Web Services is an example of this type of insight. The company had developed an internal capability to provision infrastructure resources for internal teams quickly, and it had unused infrastructure resources. By repositioning the use of these tools, they created one of the most significant sources of revenue for the company.
  • Internal-Customer insight: in this case, we identify possibilities related to the customer’s behavior with our product. An excellent example of such a discovery is in the initial days of Facebook. The team detected that users who reached seven friends in the first few days had a churn rate significantly lower than those who hadn’t. Armed with this insight, Facebook considerably modified the experience of the initial days in the platform to help users add those friends, skyrocketing retention and growth.
  • External-Business insight: external tendencies are not only related to changes in user behavior. Sometimes there is a change in an industry’s ecosystem, or a radical change in a part of the supply change, or something that triggers the opportunity to create a new business model. Consider low-cost airlines. Customers want to travel from point A to point B, and the most valued aspects usually are price and punctuality. By reducing non-required features of the service, budget airlines reinvented the business model, offering customers a lower fare while preserving the most valued aspects of the experience.
  • External-Customer insight: the most notorious examples came from companies that caught a trend of new behavior. In the digital world, many times, those changes are also related to a technological change that enabled it. For example, the trends in streaming services became available by the improvement of internet bandwidth.

Sources of Innovation

  1. The Unexpected: what has been a surprise success or failure? Is the result of a new opportunity emerging?
  2. Incongruities: what are the pains customers still have with the current solution?
  3. Process Needs: what company processes can be improved?
  4. Shifts In Industry and Market Structure: disruptions or trends in the ecosystem.
  1. Demographic Changes: are our customers changing, or is there a variation in the segment’s size?
  2. Changes In Perception: are people perceiving our field differently? How can we leverage that change?
  3. New Knowledge: breakthroughs in technological, science, or other fields that can be implemented in our business.
  • The Configuration of the business model and operation.
  • The Offering, the value the product provides.
  • The Experience the customer receives from the company.

Conclusion

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Nacho Bassino

Working on online products, currently as Director of Product at XING. Passionate about technology and amazing web/mobile products.