Do you have a Product Strategy?

The word ‘Strategy’ in the business world has become almost synonymous with ‘Religion’ in general. Everyone claims they have one, everyone says their one is the right one, but very few understand what it is and a lot keep defining it in the most complex and contradictory ways.

One of our professors at IIMA used to say, Strategy is the most used and least understood word in the business world. Just try to recall, how many times were you hurt to see this poor word, being beaten to death in those coveted meeting rooms.

There is a tendency of Product teams to enact themselves as the entire business (PMs love to call themselves mini CEOs). And there's no reason they would stay away from enacting this behavior as well, and that did happen. It didn’t take long before ‘Product Strategy’ became a buzzword and just like in business, it stayed grossly overused and tremendously less understood.

What Strategy is not and what it is?

In the overall Business sense, there is a tendency to confuse Operational excellence as Strategy. Operational effectiveness is not a strategy. The plan to reduce inefficiencies in your business is not a strategy.

Similarly, in a product sense, A Roadmap is not a Product Strategy. Having a sequence of tasks to deliver is not a strategy. More into that later, let us begin from the basics. What is Strategy?

Strategy = A set of choices

That’s how Roger Martin defines it in the book, Playing to Win: How Strategy really works, and that’s it; it's that simple. Strategies are choices to do something, to be something, etc. What we fail to comprehend is that every time we make a choice to do or be something, we are also making a decision NOT to be or do something. If we are not saying NO to a choice, it's not a strategy, it's just obvious.

A very simple litmus test to check if we have a strategy is to ask ourselves, did we say NO to an alternative while choosing the other?

"The essence of strategy is choosing what not to do." — Michael E. Porter

Strategy by examples

It’s very difficult to comprehend such a widely overused word. So let’s put our bet on examples.

Disclaimer: It’s not true that if you have a strategy, i.e, you have made certain choices, you will definitely succeed. More often than not, you will fail (That's what the data says, About 90% of Businesses fail, and they all had a strategy)

Let's have a look at both sides. First, two success stories

1. Tesla: Conventional business logic is that when you're starting something new, you create a 'Minimal Viable Product' or MVP and sell it at a reasonably low starting price, or go freemium to get the initial growth. But Tesla decided not to do that and play the long-term game. Instead, Tesla created the most luxurious, expensive, fully-featured sports car they could afford. That car was the Tesla Roadster, and for context, the newest generation of the Roadster will retail from upwards of US$200,000 for the base model. This was the first car they ever produced - knowing that they couldn't achieve the necessary scale or efficiency to turn a profit (even at such a high price). However, such a car was in-line with Tesla’s vision statement where they aim “to create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles.”
2. AirBnB: They Chose to improve the quality of every listing and said no to the volume of the listing. In a more basic sense, it opposes one of the most commonly stated principles of building a tech startup - “everything must be scalable”. The co-founders grabbed their cameras and visited every one of their NYC listings. They persuaded the owners to let them take a ton of photographs of their places. This is anything but scalable. Later, they did scale their initial solution by hiring young photographers in major locations and paying them to take professional photos of owners’ listings (at no charge to the owner). And in contrast to Tesla, Airbnb's story shows that business strategies don’t have to be grand and super long-term affairs.

Now two failure stories.

1. Kodak: It is well-known and well-quoted how Kodak invented the Digital camera, but decided not to launch it. This was their strategy, though a failed one. Kodak chose to NOT hurt the selling of single-use rolls of films by launching a Digital. Even when they were told that they had at most, 10 years until digital would completely displace film - they continued to resist in order to ensure that they met their own short term financial KPIs. It was a tough decision to take. Sabotaging own product takes courage, and they didn’t choose to do that
2. Blackberry: Blackberry's revenues were firmly entrenched in the B2B business model. They sold to corporations who then issued phones to their users. Blackberry's entire pitch was geared towards corporations and they resisted user trends such as touch screens and mobile games because businesses didn't seem to want these things. They chose to cater to the corporations and not the end users. That’s the choice they made, and that was their strategy. And when Apple came in, they were thrown out of the market.

Circling back to where we started. If you think you have a strategy, just ask, did you say NO to an alternative or you are just doing everything that's coming your way?

Product Roadmap is not Product Strategy

The most common mistake that product managers often do is to confuse Product Strategy with a product roadmap, or a product plan. Strategy plays in the realm of the unknown, plans on the other hand, try to bring certainty and order to the chaos.

Confusing the two, ‘strategy’ and ‘planning’ is a common mistake. A plan is quite simple. It is the detailed steps of how you are going to achieve something. Your roadmap is a form of plan. Your sprint plan, the way you intend to perform a release, etc are all plans.

As Mike Tyson famously said, “Everybody has a plan until they get punched in the mouth”…

Think about strategy as how you’re going to deal with being punched in the mouth — are you going to punch back, kick, protect yourself, run away? What are the set of key choices that will guide future decisions? Are you a fighter or no? Do you want to be known as one or no?

Who makes the Strategy?

There is no magical line in the org where strategy begins. The “decision-makers” and “executors” dichotomy is a fallacy. Strategy is more of a spectrum. Everyone in the organization makes a set of choices, just at varying levels. The problem is, we treat bigger choices as strategies and smaller choices as not. 

For example, making a decision on whether the company should acquire another company - that’s a pretty big choice. As opposed to making a decision to write a line of code a certain way or to put a button in a specific spot on the screen. These are still choices. Just strategies on a smaller scale with a smaller impact.

So the notion, that as you become senior you become more strategic, is not entirely true. Rather as a senior, you are now responsible to make bigger decisions, with bigger impact and hence tougher choices. You’re just operating at a different scale — like going from playing the guitar at home alone to playing at a professional level in front of a live audience as part of the symphony orchestra.

How to Build your Product Strategy:

There are a lot of frameworks lying around the internet, the Amazon 6 pager, the Lean Canvas, Netflix DHM model. It’s very tempting to pick up a framework to build a strategy, but just like the same strategy doesn’t work for all, the same framework won’t work for all.

(Personal Opinion) It’s always better to craft your own strategy framework, because your case is different from all other business cases. If it had already been done by someone else, why would you even do it?

Let's try to decode and conquer the 4 basic steps of making a strategy. 

1. What do you want to achieve?
2. What’s stopping you from achieving them?
3. What are your choices?
4. Which choice are you going to make?

Step 1: What do you want to achieve? - The Vision

Before jumping to the strategy you need a Product Vision. This is often guided by the business vision. Let's assume that the business has already made a choice to be something and NOT to be something, and a desired state for the Product is defined. Thereafter, it comes down to the Product to have their strategy around it.

Examples of product vision:

1. In 10 years, Uber will be, the cheaper alternative to owning a car or to taking public transport

2. In 5 years Google Workspace will be the default choice to create, communicate, and collaborate where work is more flexible, time is more precious, and enabling stronger human

3. In 4 years, Amazon will be a place where people can come to find and discover anything they might want to buy online.

It's often beneficial to attach some metric to the product vision, which makes it easier to define the problem space. That being said, there might be cases when you are too far away from defining metric, in those cases, forcefully superimposing a metric just for the sake of it is not recommended.

Step 2: What’s stopping us from achieving the Vision- The Problem Space.

Once you have the vision in place, the next part is to examine what major challenges are there in the way to achieving them. The challenge can be anything and in any space, for Uber, it can be the waiting time, the cost, and the availability of cars/drivers. For Google Workspace, it can be their competitor (Microsoft). For Amazon, it can be traffic, listing spread and quality, and availability of sellers.

The Problem spaces can be multifold. You do not need to focus on just one here. You can, and most probably you will, have to prioritize; which one will you be solving first. That being said but you do need to know and be mindful of the entire problem space.

Step 3: What are my choices?

Making choices are difficult. So we should start from the basics. Just like you need to know all your problem statements, you need to know all the alternative choices that may help to solve the problem spaces. And then you make a set of choices from them.

How to list down the choices? A basic set of exploration in all your control areas can help you get the list of choices.

Disclaimer: This can be either relevant or irrelevant for individual cases, these are just examples and not a framework.

1. State of the product: At what stage the product is currently at? Can I continue like this to achieve the vision or do I need a revamp? If I need a revamp, do I need to do it now, or can I delay it, and by how much?
2. What the data says: What are my metrics? Are my metrics aligned with my vision? If not, what do I need to change? Are the current data points directing that we can achieve the vision? Which data points should I focus on and which data points should I not? Which features will help me set the data right and which feature should will not?
3. What the customers say: Do the customer feedbacks resonate with my vision? Am I providing the Product which will make customers spell out the Vision by themselves? If not which feature should I build and which feature should I NOT build? 
4. What the Stakeholders want: Do the features resonate with both stakeholders and the vision? If not, which should I discontinue and which should I choose to prioritize? 
5. What the competitors are doing: Is my strategy the same as my competitors? If my vision is different from my competitor, then how can I have the same strategy in the same market? What should I NOT do that is currently aligning with my competitors' vision and not my vision?

Step 4: Making the choice

This is the most difficult part. Unlike what most people claim, there’s no right or wrong, there’s no framework or formula for success. If there would have been, then all business would have succeeded. Business history is full of examples where a similar strategy has been a success for one org and a disaster for another. It’s completely up to the concerned people’s acumens, experiences, biases, passions, business and logical senses, knowledge etc, to take the decision. 

"The real challenge in crafting strategy, lies in detecting subtle discontinuities that may undermine a business in the future. And for that there is no technique, no program, just a sharp mind in touch with the situation." — Henry Mintzberg

In Closing

It’s important to have a strategy, that is to have a set of choices, chosen from a list of alternatives. Having a strategy doesn’t guarantee success, but not having a strategy almost always guarantees failure, and sometimes it’s delayed. A delayed failure is worse than a quick failure. In case of a quick failure, we will still have the chance to change the strategy.

However, making a strategy takes a tremendous amount of courage; Courage to say NO, Courage to be held accountable for the outcome, and that’s not easy. The best Product Leaders are the ones who made choices.

(Just to drive my point) Let's have a look at an example, A strategy that Sundar Pichai (In my opinion one of the greatest Product Leaders) undertook took when he started at Google.

Pichai started at Google, leading product management for the Google toolbar, a critically strategic product (as per the management at that time) that enabled default search queries on different web browsers to go through Google and allow them to track browsing behavior to power the AdWords targeting engine. At the time, Internet Explorer was the “installed by default” incumbent for many users, while Firefox was the alternative browser of choice.

In 2006, Pichai recognized that having to add a toolbar to your browser to perform a basic function like ‘search’ might NOT be the best strategy. The first time Pichai pitched the idea for Chrome, it was shot down for being 'too expensive'. It was only after Pichai compiled data and bid his case to the stakeholders, that the project was greenlit. Now, Chrome is the most popular search engine across platforms and devices (not safe and secure, but the most popular)

Pichai identified a weakness in Google’s strategy, and Chrome began as a defensive play against the established browsers to protect and grow Google’s search business (which still generates much of the company’s revenue). There was no guarantee other browsers would continue making it easy for toolbars like Google’s to be installed by users, particularly Microsoft, who was still hoping they could establish their own inroads in the search market with Bing.

Chrome wasn’t just another alternative web browser, it was a foothold on the desktop extending Google’s reach into the consumer web experience. Google was no longer just the homepage when you launched your browser or the results that came up when you entered a search query; it was now an end-to-end browsing experience.

Now that is a Product Strategy, that quarterly/half-yearly roadmap on a slide deck is not.