Product Strategy
What exactly is Product Strategy? If you work for a company that creates products, you're probably curious about why these products are being built. Regardless of your role, you must be asking yourself: Why are we making these products? The answer lies in the company's product strategy, which involves deciding what products to build in order to achieve the company’s business goals. All companies have business goals, such as increasing revenue, enhancing customer satisfaction, or expanding business in specific areas. In product-centric tech companies, these business goals are accomplished with the help of great products. While other activities are important for the business model, the product still plays a crucial role. A well-crafted product strategy is more than just a plan; it's a tool that aligns the product and business goals and teams, and guides resource allocation. Most importantly, it provides a framework for focusing the team’s efforts on high-value tasks or features and filtering out the rest.
Now, let’s look at the critical components of a product strategy. Products typically solve a problem or an unfulfilled need. Therefore, the first step is to thoroughly understand the problem and its context. To create truly impactful products, we must address significant problems that are costly and/or affect many people. We identify these problems through market research and by speaking with customers. Quantifying these problems is essential for effective prioritization. Most problems, such as a bad reputation, inefficient operations, and low-quality products, can be quantified in terms of their financial impact. By addressing these problems, we can significantly improve the lives of those affected.
It's also important to consider who is affected by the problem. While we may focus on just one type of user, multiple users often interact with our products. Organizations usually involve multiple people trying to get their jobs done in the best possible way. Understanding these various user types and their specific needs is critical to building impactful products. This understanding is also essential for adoption and in delivering value to everyone involved. Among different types of users, some are affected more by the problem than others, and this understanding can help prioritize product capabilities.
Next, let’s discuss the competition. The ultimate goal of a product strategy is to prioritize problems or opportunities that affect a large number of people and for which they would be willing to pay. Evaluating competitors' products to understand their strengths and weaknesses helps to maintain differentiation and guides marketing and sales messaging. Any shortcomings of competitor products can be an opportunity for others who can excel in those areas.
A well-thought-out product strategy leads to strategic market positioning, bringing clarity and focus to the entire organization. Whether your role involves building or selling, you know exactly what your company’s products do and who they do it for, allowing you to channel all your energy into building products that serve your target user segment.
Next up: "Product Roadmaps"…
