Product strategy is simple
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Product Strategy is Simple.
Ignore The Consultants & Product Leaders That Say Otherwise Apply These 3 Easy Steps to Capture & Defend Your Market
Product strategy is not complicated.
Yet because Product Managers & Leaders think it is complicated, they usually do not think about, or try to craft, a product strategy.
This is a dangerous mistake.
Why?
If your organisation does not have a product strategy - i.e. it does not have a clear focus in terms of what unique value it will deliver (and what it will not deliver) - your product has a 72% chance of failure.
Furthermore, we live in a world with 16x more competition than just a decade ago. You therefore cannot afford to just bumble along building generic products your customers don’t care that much about.
In the following article, I will break down the three stages of product strategy, using a simple analogy of capturing and holding a castle. Along the way, I’ll provide real-world examples and actionable steps to help you put this into practice—and dramatically increase your chances of product success in the process.
The three phases of seizing and safeguarding your castle
Picture a big, old castle situated close to where your tribe (you and your team) resides. Within its walls, the castle hosts a thriving market, packed full of people.
Envision the castle as your target market.
The existing king of the castle (the current incumbent company) jealously guards his fortress, warding off other tribes like yours (startups and other companies).
If he keeps them out, the king is happy, as it means exclusive access to the target market.
Your mission is as follows:
- Discover an entry point into the castle: Initially, gaining access to the market demands a unique approach. Trying an approach that is different from previous attempts is crucial, as you’ll discover below
- Exploit the opening: Once your tribe identifies a weakness in the walls, dedicated efforts are required to breach and seize the castle. Without a meticulous focus on exploiting the opening, you may not capture enough market share before the defenders respond to your actions
- Construct a protective moat: After capturing the castle, your tribe must swiftly adapt and construct defences to shield against other tribes. This involves adjusting your product strategy to build a long-term defensive moat
Step one: Identifying a weakness in the castle walls
The initial step is gaining entry into your target market.
This entails pinpointing a specific, unique value that your product can offer to the market.
When you differentiate your product in this manner (i.e. provide something both unique and valuable), you can generate enough awareness and engage sufficient portions of your target market to start building a user/customer base.
But how to find a weakness in the castle walls with a differentiated product?
Keep it straightforward.
Concentrate on a particular area of value that you can deliver, which existing competitors are neglecting.
For instance, Superhuman focuses on speed, managing to charge $30/month and accumulating a waiting list of over one million users despite competing against Gmail. They laser-focus on providing the "fastest email experience ever."
Zappos, a company simply selling shoes online, dominated its market by prioritizing world-class customer support. They were so dedicated to customer service that every new employee, regardless of role, underwent a three-week training to handle customers effectively. They sold to Amazon for $1.2 billion in 2009.
Consider Loom, challenging conventional communication methods by advocating for video over emails or Slack messages. They have witnessed exponential user and revenue growth by reshaping how we communicate at work.
How to Implement This
👉 Explore these 7 tactics for differentiating your product for inspiration
Step 2: Exploit The Gap
Once you've found a way to enter your market and gain users or customers, it's time to exploit the gap.
Merely formulating a product strategy and presenting it in a PowerPoint is insufficient.
Instead, you must wholeheartedly commit to that product strategy.
To start, this involves validating the product strategy.
The essence of a product strategy lies in being clear about what you will focus on and what you won't. If you commit to being "the fastest," for instance, you must be reasonably sure that this is indeed something the market highly values! Otherwise, everything you build will be futile.
For existing products, distribute a simple survey listing things you believe your market values (e.g., speed, reliability, etc.) and ask them to rank in order. For new products, create a unique value proposition on a landing page and present it to your target market.
Once you've confirmed that your differentiated product offer is genuinely valued by the market, you must maintain an unwavering focus on delivering that value.
This entails rejecting any idea or initiative that does not perfectly align with the unique value you aim to deliver.
It requires reshaping any existing roadmap to reflect your new product strategy.
On paper, it may not seem overly complex.
The real challenge?
The psychological hurdle of commitment:
One where we often associate focus with increased risk. It feels like saying "no" to things implies closing doors and limiting options. In reality, the far greater risk is constructing a generic product attempting to please everyone. In the end, that pleases no one—a certain path to failure.
How to implement this
👉 Remember that focus is a prerequisite for product success!
Step three: Build a defensive moat
Once you've captured the castle, secured access to your market, and are expanding your user and customer base, it's time to fortify your defences.
Other tribes, your competitors, will take notice.
Some will attempt to replicate precisely what you did to breach the castle and seize the market.
Others will innovate, devising their unique, valuable methods to capture the market.
Regardless, you must ensure you can retain and expand your market despite their attempts.
To achieve this, don't discard your product strategy! It remains the reason why your market uses and pays for your product. However, you may need to complement that product strategy by concentrating on one of the following tactics to uphold market dominance:
- Owning your growing data source: In a world where data access is increasingly prevalent (consider ChatGPT), obtaining and cultivating your data source can be a differentiating factor. For instance, my Apple Watch has exclusive access to my heart rate, calories, exercise, etc. This allows it to offer a comprehensive overview of my health over time, provide better, personalized suggestions, and potentially launch new products based on that data
- Unlocking network effects: Concentrate on concepts that deliver more value as more users join the product. Miro exemplifies network effects in action: While I can use Miro individually to jot down ideas, its value multiplies when I invite my team to a Miro board for collaboration. This leads to a continual cycle of growth as I, and my team, keep inviting others. Even if someone were to launch a similar product, it wouldn't be as valuable without all my work boards and team members.
- Identifying underserved markets: Consider targeting more specific, niche markets in the future to discover unique offerings. Instead of focusing on a product for "engineers," tailor your existing product or launch new ones catering specifically to the needs of a "first-year engineering student," for instance.
- Empowering customers to leverage their own data: You may empower consumers or business customers to access their own data, allowing them to personalize their data use within your product or create their own products in the future.
Whether adjusting how you deliver your unique value proposition or opting to supplement it with additional, unique value, preparing your defences is essential.
In a world with 16x more products today than just a decade ago, relaxation is not an option.
Conclusion
See?
Product strategy is simple.
The challenge lies in committing to formulate a product strategy, dedicating efforts to delivering that strategy, and adapting as you gain market share.
However, if you aspire to shape the future—to develop products that truly matter, to become a product leader of significance—following these steps is essential.
Without them, your product is destined to fail.
So, recall these three steps:
Identify a unique, valuable product offering to gain entry to the fortress.
Commit to exploiting the opening and channeling efforts toward delivering that unique value.
Adapt to construct a protective moat once you've captured the market."
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