Strategize

Whether our strategy is a few sentences summary or a fully-fledged business model, it’s just a hypothesis until verified. Thus, we should approach strategy work the way we approach product work. Treat it as a series of assumptions and devise experiments to test the hypothesis.

At any given moment, we should be aware what’s the riskiest assumption we are making about our strategy and have a plan to test that assumption.

A good tactic is to use timeboxes for strategy validation. Set a limited timeframe, up to 4 weeks, and devise an experiment to test the most critical assumptions. After the timebox, make one of three decisions:

1. Plan next timebox, and validate new assumptions.
2. Pivot the strategy (and then plan the timebox).
3. Kill the idea.

A good practice is to hold regular strategy review meetings to ensure it’s still relevant and the risk associated with it are acceptable.

The best way to ensure the strategy isn’t just another document gathering dust is to visualise it and keep it in the centre of team activities.

One of the techniques to do so is to use [extended] product vision board.

Depending on the maturity of the strategy and individual needs, we can easily adjust the board to reflect what’s the most important for us.

We should also track metrics relevant to our strategy to evaluate its overall health. It’s surprisingly easy to get carried away by day-to-day priorities and detach from the strategy. Reviewing strategy metrics frequently can help us stay grounded.

One of the ways to choose which market segments to target is to use the GE/McKinsey matrix. It takes into account two main drivers.

Segment attractiveness

• Need: how strong is the need, and how powerful is the benefit?
• Size: how big is the segment?
• Growth: is it growing?
• Competitors: what are competitors in this segment?
• Entry barriers: setup costs, switching costs.

Business strength

• Do we have skills, knowledge and expertise?
• Can we use existing channels?
• How expensive would the entry be?

• A product strategy is a high-level plan that helps us realise our vision.
• The product roadmap should facilitate collaboration and create a shared understanding of how the product might evolve.
• ‘Roadmapping means making product decisions’.
• When planning releases on a roadmap, have clear success factors. Is it staying within budget? Within timeframe? Within scope?
• Each customer segment should be homogenous. People in the segment should react similarly to the product, price, marketing, etc.
• If we have problems selecting a primary persona for the segment, then the segment is probably too heterogeneous.
• Business model vs business case. The business model explains how the product is monetised but does not quantify the revenue generated or the cost incurred. That’s done by a business case, which forecasts the product’s financial performance.
• The vision is the ultimate reason for creating our product. It describes the positive change the product should bring about. A compelling vision has four qualities: big, shared, inspiring and concise.
• Avoid speculations. If we are early in your product development lifecycle, don’t plan a roadmap too much ahead just for the sake of road mapping. It’s a quick way to lose credibility.
• Steady, speedy release cadence provides three benefits: Simplifies and improves the planning process, allows customers to see the product is regularly improved and gives us a competitive advantage over new entrants — they have to match our speed.
• Conway’s Law: Our product’s architecture matches our organisation’s architecture. Complex organisations build complex products.
• If we create a product that users and customers don’t associate with the brand, it might be best to create a new brand. Take Lexus as an example. It would be hard for Toyota to sell the premium brand under the already established and positioned ‘Toyota’ umbrella.

Unbundling pros & cons

Pros:

• Reduce product complexity.
• Allow serving specific segments better.
• Increase monetisation potential.
• Allow better responsiveness to the market changes.

Cons:

• Can confuse customers.
• Can lead to a paradox of choice.
• Products can cannibalise each other.
• Creates a need for portfolio management.