Product Strategy Discovery
The product strategy is probably the most important artefact in product management. But how do you come up with an effective strategy in the first place? How can you minimise the risk of offering an unsuccessful product and instead maximise the chances of achieving success? In this article, I introduce product strategy discovery as a systematic, disciplined approach to help you develop a winning strategy for your product.
🎧 Listen to the audio version of this article on my podcast: https://www.romanpichler.com/podcast/
Product Strategy Discovery Explained
What is product strategy discovery? In a nutshell, it’s about finding a problem worth solving. More precisely, it is the process of developing a product strategy whose implementation will likely create the desired value and impact. It applies to a brand-new product as well as an existing one whose current strategy is no longer valid, for example, as market conditions change. This means that strategy discovery is crucial not only to developing an initial offering (MVP) but also to achieving product-market fit and sustaining growth.
Unlike product discovery, it is not primarily concerned with determining the right solution, finding the right features, and creating the right user experience. Instead, strategy discovery focuses on the problem space. It explores if a large enough group of people has a big enough problem that can and should be addressed. Strategy discovery therefore sets the scene for product discovery, as Figure 1 shows.
Now that we’ve clarified what product strategy discovery is, let’s get more concrete and discuss how you can practise it by following the three steps below.
Step 1: Formulate an Initial Product Strategy
Start by capturing the approach, which — you believe — will help you achieve product success. Describe the target customers and users, the needs you want to address, the value you want to create for the business, and the features that will set the product apart from competing offerings. A handy tool to formulate the strategy is my Product Vision Board, shown in Figure 2.
You can download it for free together with a helpful checklist from my website and you can learn more about applying it by watching the following video:
An effective way to create the initial strategy is to adopt a collaborative approach and invite the extended product team to a workshop. This helps you leverage the expertise of the team members, create alignment, and secure strong buy-in. It assumes, though, that the product team is empowered to make strategic product decisions, a topic I discuss in more detail in the article Building High-Performing Product Teams.
While the initial strategy does not have to be perfect by any means, it has to be sufficiently specific so that you can uncover the assumptions and risks it contains. Apply the checklist I have created for the Product Vision Board to ensure that your strategy is detailed enough. For example, use relevant qualities like demographics and behavioural attributes to characterise the target group so you can tell if somebody is included or not. Capture the main reason why people would want to use the product when describing the customer and user needs. Clearly state the problem the target group wants to have solved, the benefit they want to attain, or the job they want to get done.
If you struggle to detail the initial strategy, you may lack the necessary knowledge, or you might be mixing up the portfolio and product strategy. In the first case, pause the strategy discovery work and carry out just enough market discovery. This may include conducting surveys, interviewing users and customers, mapping the consumption chain, and performing competitor research and analysis. In the second case, clearly distinguish between a strategy for a single product and a portfolio, as I explain in the articles The Strategy Stack and Everything You Need to Know About Product Portfolio Strategy.
Step 2: Correct and Refine the Product Strategy
With an initial, good-enough strategy in place, you are ready to take the next step. While your strategy might sound compelling, chances are that it contains assumptions and risks. For example, the market you’ve chosen might be too small or too diverse, the need for the product might not be strong enough, or the technologies required might not be available. To maximise the chances of offering a successful product, you should systematically address these risks and correct and refine the product strategy before committing to it. To put it differently, you should validate the strategy.
A great way to achieve this is to follow an iterative, risk-driven approach. Start by selecting the biggest risk contained in the strategy — the uncertainty that must be addressed now so that you don’t make the wrong decisions and take the product down the wrong path. Strategy risks are related to desirability, feasibility, viability, and ethicality.[1]
- Desirability risks: Not enough people have the need you’ve identified, the target group is too large and heterogeneous, the need is not strong enough, and the standout features are not compelling.
- Feasibility risks: The right technologies are difficult to apply, and there are not enough people with the right skills to effectively implement the strategy.
- Viability risks: An effective business model is difficult to find and implement.
- Ethicality risks: Providing the product can harm the users, society, or the planet.
Next, determine how you can best address the risk you’ve chosen, for instance, by observing target users, interviewing customers, building throwaway prototypes, carrying out competitor research, or investigating the viability of using existing sales channels. Carry out the necessary work and collect the relevant data. However, don’t do this on your own. Follow a collaborative approach instead and involve the product team members. The sales rep, for example, might be the right person to explore sales channel options, an architect/programmer may be able to create a throwaway prototype, and a UX designer might be a great partner to interview customers.
Once you’ve collected the relevant data, analyse the results and use the newly gained insights to decide what to do. Should you pivot, persevere, or stop? Should you stick with your strategy, significantly modify it, or no longer pursue your overarching vision? If you decide to pivot, change the strategy, and restart the validation process. If you persevere, update the product strategy, and select the next key risk. Figure 3 illustrates this process.
As you continue to correct and refine the strategy, you should see its uncertainty decrease; fewer and fewer risks should be present, and its statements should become clearer and more detailed. You have successfully validated the product strategy when it no longer contains any significant risks, and you have the right empirical evidence to support the decisions it contains.
A challenge of iteratively reworking and refining the strategy is allocating the right amount of time. To address it, I recommend timeboxing the strategy work. How large the timebox should be depends on the amount of innovation present.[3] Say you are creating a new strategy for an existing product using established technologies. You may then only require a week or two to de-risk and correct the strategy.
However, if you develop a new product for a new market using new technologies, you might have to allocate two to three months to complete the strategy discovery work. If you use a larger timebox, schedule weekly meetings with the product team and sponsor to review the work. This allows you to align everyone, determine the progress made, and decide how to best continue.
Step 3: Implement and Update the Strategy
While strategy discovery focuses on finding a new strategy, the strategy work itself is never done. To proactively guide the development effort and maximise the chances of achieving the desired benefits, the product strategy has to change.
To achieve this, establish a continuous strategizing process. Think of the strategizing work as a firm part of the product team’s job, a workflow that needs to be attended to on an ongoing basis — much like continuous product discovery and product delivery.
Therefore, check if the strategy is working as soon as you have released the new product or product version. Continue to do so by scheduling collaborative quarterly strategy reviews and carrying some strategy work every week, as I discuss in more detail in the article Continuous Strategizing.
Learn More
Learn more about product strategy discovery by attending my Product Strategy and Roadmap training course and reading my book Strategize.
Notes
[1] For a more detailed discussion of the four factors and how they help you identify strategy risks, please refer to my article The Four Product Success Factors and my book Strategize, 2nd ed.
[2] The process described builds on Eric Ries’ work.
[3] For a more detailed explanation, refer to my book Strategize.
