To be honest, whenever I used to hear someone talk about "Product Strategy" I felt a bit confused. Thankfully, I recently watched a Q&A with the Basecamp team that helped me simplify the previously highfalutin idea of product strategy.
Product strategy is about decisions. Specifically, it is about three main kinds of decisions.
The target decision
The first strategy decision is about the customer. It breaks down into a basic but fundamental question.
Who is your customer?
The only more detail here is to note that this customer may change overtime. They may be a different person in a different situation altogether or they may evolve as the product evolves.
Its also important to note that your customer cannot be be everyone. The best way to think about this is a character in a movie. Your strategy can only be targeted to one character, not the whole cast.
The problem decision
After you know the target, the next decision is the problem decision. Once you get to know your customer, you realize that they have problems that they want solved. This, in business parlance, is the creation of economic value.
When you talk to your customers, you will realize they have lots of problems. But not all problems are created equal, some are more valuable than others. This is where techniques like Jobs To Be Done fall short. They help you identify the problems (struggling moments) that customers have, but it is still up to you prioritize.
Said differently, you still have to determine the cost versus the value trade off of solving the problem. This, in some sense, is the essence of product strategy. Its about consciously choosing what problems to focus on, and which to ignore.
Here there are a couple of basic questions that can help guide us:
How often do they have the problem?
How intense is the problem?
The value decision
Up until now, we have not spoken about solutions. We have been purely focused on problems and prioritization.
But of course, the solution matters. The solution is a delicate balance between value creation (solving a problem for a customer) and value capture (earning a sustainable profit from solution you have created).
An important insight I got from the Basecamp Product Strategy Q&A was the notion of epicenter design . I believe this is extremely important from the value creation area of a solution, but we also need to take into account the area of the solution that captures value. We need to conduct a set of activities that repels competition.
I call this the seasaw of value creation vs capture. Below are some illustrations.
Here there are a couple of basic questions that can help guide us:
What is the most important parts of a solution that solve a customers problem?
What’s the absolute essential bit of functionality that must exist before anything else can exist?
What elements to solution can we add to lock customers in or reduce the threat of new entrants to our problem space?
Thanks for reading! Please comment below with any feedback as my thoughts are still evolving on product strategy.