Author: Rahul

In this article, I’ll only discuss product strategy. Other disciplines, such as pricing strategy, finance strategy, or marketing strategy are out of scope.

The dictionary defines “strategy” as “a plan of action or policy designed to achieve a major or overall aim.” A team, division, or company’s strategy is the plan by which the organization will achieve its long-term objectives. I would also amend this definition slightly, to the following:

A strategy is a plan of action designed to achieve the organization’s overall objective using the finite resources available to the organization.

Plan of action. A strategy delineates what the organization will actually do on a week-to-week, quarter-to-quarter, or year-to-year basis.

Overall objective. A strategy is the plan to achieve the organization’s top-level objectives. This naturally implies a long-term plan. It does not make sense to talk about a strategy for “next quarter” or “next sprint”. Short-term plans are tactics, not strategy.

Finite resources. A coherent strategy operates within the resource constraints of the organization. Certainly, it is reasonable for an organization to require incremental resources to execute on a strategy, but these are still finite, not unbounded.

Note that this definition does not make mention of competitors. Strategies arose from military contexts, where the objective is usually to defeat an enemy. I think this is the reason why people over-index on competitors when developing a strategy. A sound strategy should certainly take competitors into account. In particular, a strategy should be resilient to the actions of competitors. If a company reacts to every move made by a competitor, then I’d say that company does not really have a strategy it believes in. But a strategy’s raison d’être is not about competitors, it’s about achieving the organization’s top-line goal.

If you crack open a textbook on competitive strategy from business school programs, you’ll find the classical frameworks on corporate strategy, such as “Porter’s Five Forces”, “Strengths-Weakness-Opportunities-Threats (SWOT)”, game theoretic analyses and so on. These frameworks are useful checklists when sketching out a high level understanding of the dynamics in an industry. They are less useful when you need to construct your own strategic plan.

Another trap that I see PMs fall into when thinking about strategy is constructing grand medieval cities full of “castles” and “moats” (or “flywheels” and “networks”). All of this stuff is valuable and worth thinking deeply about, but it comes after achieving your product goal. Your strategic goal is not to win a three-dimensional chess game with your competitors. Your strategic goal is to serve your customers in the best possible way.

The purpose of a strategy is to achieve your product goals for your customers.

How do you craft your strategy?

Your strategy will be different depending on whether you are building a zero-to-one product, your version 1 entry into existing product category, or a version N of your product line. In each case, your fundamental goal is to build something that your customers will adopt, but the approach will differ.

There is a large body of best practices in the startup literature on approaches to finding product/market fit for zero-to-one product categories. Ultimately, you want to get contact with real customers as soon as possible in order to learn and iterate.

1. For on-device or cloud-based apps, build a minimally viable product and get it out in the market.
2. For systems software (operating systems, infrastructure, etc), start fishfooding or dogfooding with internal customers via toy applications.
3. For hardware products, rapidly build looks-like, feels-like, and works-like prototypes and proofs-of-experiences that you can test internally or with focus groups.

There are no standard best strategic practices for Version 1 entries into an existing category. Every situation is unique and likely requires a uniquely crafted strategy. However, some examples:

1. Invest in feature parity or feature superiority with existing products, and leverage other advantages you may have, such as better distribution.
2. Perfectly serve a subset of the market that is not being fully addressed by incumbents and grow from there.
3. Build a product that is simply 10x or 100x better than what exists already, as measured on a dimension such as speed, quality, convenience, etc.

If you are building version N of your already successful product, then you have a lot of data and feedback from your customers. Leverage that information into your product roadmap.

1. Deeply observe your customers (who agree to participate in focus groups) and learn their pain points. Leverage diary studies, lab observations, etc.
2. Ask them what they want (but take their answers with a grain of salt, they will likely want a faster horse, not a car). A good approach here is to understand their needs and “jobs-to-be-done”, rather than asking them for feature requests.
3. Product analytics and instrumentation can teach you a lot. Slice and dice your data using hypotheses-driven techniques to extract insights that may not be immediately obvious from focus groups and interviews.

Revisiting medieval cities

Once you have a successful product in market (“economic castle”), it is worth building defenses around your product (“moats”). Ideally, the moats you build also improve the experience and value for your customers. For example, same-side or cross-side network effects result in the product delivering more value for everyone, the more users it has. Economies of scale give you cost structure advantages that only you can pass on to your customers. Tight integration across a suite of products can deliver a more seamless user experience, but also reduces incentives for your customers to substitute your product with that of a competitor.

Setting a vision for the team is one of the most important responsibilities of the product manager. Setting a vision is not the same thing as being a “visionary”. When I first read that a PM sets the vision for a product, I thought, “How on earth does one develop the skill to be a Steve Jobs or Elon Musk? If it were that easy, everyone would do it!” The thing is that every PM owns the vision for their feature, product, portfolio of products, or company. The VP of product or head of product for a company probably needs to be a visionary, at least for the space in which that division or company operates. Being a vision owner does not mean defining the next computing platform for a billion people or making humans a multi-planetary species. It can be as “simple” as defining the future of videoconferencing, the future of online commerce, or the future of photo taking. For a junior PM who owns a feature or a set of features in a product, defining the vision would mean the future state of that set of features.

What is a vision?

A vision is a description of a future state of the world, more specifically, the slice of the world that is impacted by the product. What should the world be like? How should a user need be met in the ideal state? A vision does not need to consist of whiz-bang features or zero-to-one technology development. For example, Zoom’s vision is “Video communications empowering people to accomplish more”.

A vision should be aspirational and difficult to achieve. An ambitious vision might take many years or even decades to achieve. At the same time, a vision should be attainable with sufficient time, talent, and investment. It might require the development of technologies that don’t exist today or massive levels of investment, but a product vision must be achievable within the known laws of physics. For example, “colonizing Mars” is achievable within the laws of physics, with sufficient investment. “Colonizing the planet orbiting the star Gliese 581” is not achievable within the known laws of physics, even with infinite dollars. The best product managers are able to articulate a vision that is compelling, impactful if achieved, yet just outside the realm of what the engineering team believes is possible.

It should be possible to articulate a product vision in just 2-3 short sentences. This is known as the vision statement. This is the version that everyone on the team should know. It should be punchy, easy to remember, and paint a picture in the reader’s mind. This vision statement is what the individual contributors on a team will remember. It is what the team will describe as their purpose to customers, partners, and future employees.

The vision statement can be unpacked into long form artifacts. This might take the form of a 2-4 page narrative document, a visual slide deck, or a vision video. Each of these forms serve different purposes and audiences. The narrative document serves as a “double-click” on the vision statement. The audience is the team. The team will not remember nor necessarily internalize the details of the narrative document, but will need to see the detailed user scenarios, user problems, and solutions that the product will deliver. On the other hand, upcoming leaders on the team will analyze the long-form narrative in-depth and will rightfully ask tough questions about the vision. Spend time with these people. They will help you sharpen your vision.

A vision deck should be heavy on visuals. A PM will craft a vision deck with heavy input and collaboration with the design teams (User Experience team for software products, Industrial Design and User Experience for hardware products). A vision deck will take significant time and effort to craft. The PM should describe the user scenarios and product solutions verbally or as short written sketches, and work closely with the design teams to translate these into visuals. A vision deck is useful to rally the team at all-hands (pictures truly are worth a thousand words), drive pitches and kickoffs with partner companies (and partner organizations within the same company), and recruit new employees to the team. Many concepts are also much easier to convey visually, especially for zero-to-one products.

A vision video is often created with the help of an external agency. The PM and design teams will work with a creative agency to translate a vision deck into a short “sizzle reel”. There are two traps that PMs fall into when working on vision videos. First, they must strike a careful balance between venturing too far into science-fiction territory and not being sufficiently ambitious. I call this the “Star Trek” trap. For example, modern day iPads are sleeker, faster, and more useful than the “pads” used in Star Trek (both The Original Series or The Next Generation). On the other hand, transporter rooms and warp drive are impossible within our known laws of physics.

Second, vision videos often end up demonstrating visually “cool” flows and experiences that actually make for terrible products. For example, the “hand gestures” user interface in the movie Minority Report looks cool on film, but is an incredibly poor ergonomic interface because most people cannot keep their arms at shoulder height for more than a few seconds before getting fatigued.

How do you come up with a vision?

This is one of the hardest skills for a PM to pick up. I don’t have this figured out myself, but can offer a few tips.

Think like a startup founder

Paul Graham has written extensively on the topic of good startup ideas, and it’s worth reading some of his essays on this topic. Good startup ideas are intellectually equivalent to good product visions. Some of the mind hacks described by Paul to find good startup ideas can also be used to define compelling visions for your product or feature.

10x your product

What would your product look like if it were “10X’ed” on some dimension? What would it look like if it were 10 times faster? 10 times smaller? Served 10 times the users it serves now? Extrapolating your product features along some dimension can elicit insights on a compelling vision.

Go deep on user needs

Think deeply about your customers’ needs. Get super specific. What jobs do they need to get done? How well does your product (or competitor products) serve those needs? What would the perfect solution look like? Go through the user flows in excruciating detail, optimizing, pruning, streamlining.

Creative thinking tools

Edward de Bono coined the term “lateral thinking” in the 1960s and is a leading thinker about thinking. Consider leveraging his tools about thinking, such as the Six Thinking Hats, Random Entry Idea Generating Tool, Provocation Idea Generating Tool, and Challenge Idea Generating Tool.

What next?

Keep writing because writing is thinking. Write down your ideas, observations, insights. This practice will build your visionary muscles. You’ll begin to question assumptions of how the world is, and develop points of view on how the world should be. Once you have done this, you will be able to generate ideas on products and services to build that will realize this world.