How to simplify product strategy

Deeper dive on how to simplify product strategy - Part 7 in "Building a product saga"

TL;DR

Building a product strategy isn’t as daunting or challenging as it might seem. There is a simple and logical process to build a strategy that differentiates you from the market to increase adoption and revenue while maintaining your margin. The process starts with

1. Framing the problems shared by your buyers and users,

2. Review your competitors’ core and differentiating values relevant to your buyers and users to find what is missing, then cross-reference it with your capabilities (current and future) to define your differentiation or uniqueness your buyers/users would care about. This is what you want to specialize and be, as they say, 10x at,

3. Define your overall solution,

4. Rank your buyers and users based on addressability, need, and size,

5. Define what are things you have to do, but it’s okay to be a 7 at,

6. Determine your resources, activities, and partner needs,

7. Outline your cost and revenue model to ensure you understand the levers for profitability and margins

Then, document it, share it with your team, and start executing.

Story So Far…

In the last post (How to build a product strategy), I outlined the basic Strategy Position Document and how it can help simplify product strategy documentation and sharing. In this section, we’ll go through the process of actually building a product strategy and how to think through the process. We’ve done simple buyer and user research and a simplified competitive analysis. Now, we’ll simplify how to build a product strategy to help you stand out from the competition.

Photo by Randy Fath on Unsplash

We do this by first…

Defining the problem

To understand and solve the market problem, we need to define the problem. We start by reviewing the buyer and user personas. After reviewing the personas, we see that many leaders feel frustrated with their products because the outcome is not aligned with their expectations. Either because their products lack the differentiation that creates pricing power, they lack the internal control or expertise to align the team to the strategy and priority or missing a culture that allows for continuous review and adjustment to stay in tune with the market.

In short, they lack the tools and knowledge to fully control their product’s destiny, especially in today’s complex market and organizational structures.

Finding Differentiation

Now that we have a sense of the problem we want to solve. Then, we reviewed the competitive analysis and the “Gaps” column. It is easy to see that current solutions take a long time to see results or are cumbersome with many processes that may not apply to their business, often focusing on building and launching new products rather than supporting and growing existing ones. If they are customized to their specific needs, it takes a long time, and they don’t always stay around to support the recommendation execution.

Based on this information, a need exists to provide customized and actionable recommendations with immediate and lasting support.

Now we know where the opportunities are. We next examine our current and potential capabilities to see if we can exploit them. (Note: you can reverse this process as well by focusing on the capability first, then looking at what addressable opportunities exist)

Given my experience in helping companies revive lagging products, successfully make market pivots, and launch new products, all the while building product organizations and culture from scratch and meeting aggressive and immediate revenue or profit goals. I developed insights to quickly identify short-term and long-term issues that hold a product back. I also distilled many diverse product, leadership, and process concepts into a single, simple, and cohesive set of processes, guides, and templates to quickly train and align the teams into an effective organization. Also, having gone through the transformations firsthand, I am familiar with the cascading issues that emerge over time and how to solve them.

Combined, we can easily see that the differentiation should be Speed (what is missing from the alternatives and what we can offer). The speed in helping them to figure out what is wrong, helping them fix it, and then enhancing that by staying with them while they go through the changes with additional recommendations.

Defining the Solution

Based on the identified market problem and differentiation, the solution is fairly straightforward and can be broken down into three parts:

1. A diagnostic process that identifies current challenges within the organization that are preventing them from creating a successful product for the long haul.

2. Actionable recommendations on addressing the challenges and “How-To” guides that are easy to follow and can be used immediately depending on the challenges they face in building a successful product.

3. Monthly workshops and check-ins to support ongoing efforts and track progress.

4. (Bonus) Tools to document and share their decisions include strategy, buyer/user persona, competitive analysis, roadmaps, journeys, etc.

Ranking the buyers

Given the limited number of buyer personas and how similar their challenges and goals are, one may feel that it’s not relevant to rank the buyers. However, ranking them helps with tie-breaking easier, so we will rank the buyers and sub-segment them to narrow the focus.

1. SaaS and tech-oriented SMB company leaders

2. SaaS and tech-oriented Product Leaders at SMB companies

3. Non-SaaS or tech-oriented SMB companies

4. SaaS and tech-oriented Product Leaders at SMB companies

5. Product leaders at large enterprise companies

6. C-leaders at larger enterprise companies

There is a large population of SaaS and tech-oriented companies and products, and more are in the mid-cap or SMB range than larger enterprise companies. Also, larger companies have higher support needs and expectations, which will be difficult to support out of the gate. Lastly, the recent interest rate hikes have reduced SMB’s margin for error, making their product-led performance even more critical.

Now that we know which buyer personas we want to target initially, we can rank the user personas based on them.

Ranking the users

Since we’re focusing just on the Tech SMBs, the users will be the company and product leaders, along with the usual supporting cast, like product managers, tech managers, sales and support managers, and marketing managers.

1. Product managers

2. Sales team lead and senior contributor

3. Marketing Manager

4. Support team lead and senior contributor

5. Tech managers and Sr. engineers/testers

Next, we’ll quickly review to ensure we know the tablestake values we must deliver.

Tablestake values

Now that we initially know who we are targeting, we find the most common alternatives from persons and competitive analysis to see what tablestakes we need to deliver.

These are boutique consulting, management and business books, and professional training in traditional classroom settings or online.

This means, at minimum, we need to provide:

• A way to outline and inform their issues with specific evidence and recommendations.

• Instructions on how to perform actions to fill in any knowledge gaps.

• Templates and forms tied to the recommendation.

Knowing the tablestakes will let me know what minimum values I must provide and some guidance on the format customers expect.

Next, we’ll see what activities and resources/partners we need to deliver the tablestake and differentiation values.

Key Resources, Activities, and Partners

Based on the solution, differentiation, and tablestake we have defined, we can quickly identify we need the following, in no specific order:

• Expertise in building, launching, growing, and pivoting a product (Resources)

• Analyzing and diagnosing organizational challenges related to creating a sustainable and growing product (Activities)

• Creating and building how-to materials (Activities)

• Creating and building tools to support the process (Activities)

• Hosting services and other tools to support marketing/lead gen activities (Partners)

This helps us understand what we need to do, what relationships we need to cultivate, and any capabilities we need to acquire, either by training, hiring, or contracting. For example, it’s clear we need to increase our skills in building how-to materials through training, hiring a freelancer, or outsourcing the production completely to a partner.

The activities around tools can be further broken down into something low-tech, such as templates, or high-tech, like a SaaS app. This gives us some flexibility and freedom on how quickly we want to go to market and the amount of capital we need to start.

Putting it all together

You can find the final strategy position document here. I also filled in the cost and revenue sections so we can see the levers to pull for margins and scaling in the future.

If you want to learn how to use this approach to review or refresh your product strategy, I have a free guide to walk you through the process. (Free Simplifying Strategy Guide). Generally, once you complete the initial research, building an effective strategy takes about 10 minutes.

Next, we turn the strategy into action!

If you are frustrated with your current product-led growth efforts and want to see what’s holding your products back, check out simplifying.work. We are here to help you know what’s wrong, how to fix it, and make it last regardless of what the market throws at them.

Also, I’d love some feedback on what you think of the strategy. Do you think it’s differentiated enough? Do you think buyers and users will care? Where am I wrong?