In recent articles on keys to product success and the alternative to roadmaps I have highlighted that if you want the benefits of product team empowerment and autonomy, then you need to provide each team with the necessary context in which to make good decisions. I’ve explained that the context typically needs to be the product vision, and a specific set of outcome-based objectives for each team (OKR’s are an effective way to do that).
I’ve already written about outcome-based objectives, and in this article I want to talk more about product vision, and especially how important the role of product strategy is in delivering on the product vision.
The product vision describes the future we are trying to create, typically somewhere between 2 and 5 years out. For hardware or device-centric companies it’s usually 5-10 years out. This is not in any sense a spec; it’s really a persuasive piece. It might be in the form of a story board, or a narrative like a white paper, or a prototype (referred to as a “visiontype”). It’s primary purpose is to communicate this vision and inspire the teams (and investors and partners) to want to help make this vision a reality.
When done well, the product vision is one of our most effective recruiting tools, and it serves to motivate the people on your teams to come to work every day. Strong technology people are drawn to an inspiring vision; they want to work on something meaningful.
You can do some validation of the vision, but it’s not the same as the validation of specific solutions we do in product discovery. In truth, buying into a vision is a bit of a leap of faith. You very likely don’t know how, or even if, you’ll be able to deliver on the vision, but remember you have several years to discover the solutions. At this stage, you should believe it’s a worthwhile pursuit. As Jeff Bezos says, you want to be “stubborn on the vision, and flexible on the details.”
One of the most basic of all product lessons learned is that trying to please everybody will almost certainly please nobody. So the last thing we should do is embark on a ginormous, multi-year effort to create a release that tries to deliver on the product vision. That would truly be the antithesis of the concept of minimum viable product.
The product strategy is our sequence of products we plan to deliver on the path to realizing the vision. I’m using “products” here loosely. It might be different versions of the same product, it might be a series of different or related products, or it could be some other set of meaningful milestones. Normally I encourage teams to construct a product strategy around a series of product-market fits.
There are many variations on this (the strategy for the product strategy, if you will):
For many B2B SaaS companies, each product-market fit focuses on a different vertical market (e.g. financial services, manufacturing, telco, etc.).
For consumer companies, we often structure each product-market fit around a different customer or user persona.
Sometimes the product strategy is based on geography, where we tackle different regions of the world in sequence.
And sometimes the product strategy is based more on achieving a set of key deliverable milestones in some sort of logical and important order (e.g. “first deliver critical rating and reviews functionality to developers building e-commerce applications, then leverage the data that is generated from this use to create a database of consumer product sentiment, then leverage this data for advanced product recommendations”).
There’s no one approach to product strategy that is ideal for everyone, and you can never know how things might have gone if you ordered your product-market fits differently, but I tell teams that the most important benefit is just that you decided to focus your product work on a single market at a time. So all teams know we’re tackling the manufacturing market now, and that’s the type of customers we are obsessing on, and our goal is to come up with the smallest actual deliverable product that makes these customers successful. Ideas that pertain to other markets are saved for future consideration.
Besides significantly increasing your chance of delivering something that can power your business, the product strategy now gives you a tool to align your product work with your sales and marketing organization. We want the sales organization to be selling in the markets that we’ve demonstrated product-market fit. As soon as we demonstrate product-market fit for a new market (usually by developing an initial set of reference customers, the sales force can go out and find more customers in that market.
Why are Product Vision and Product Strategy so important?
So back to the concept of providing context to the product teams.
In order for a product team to actually be empowered and act with any meaningful degree of autonomy, the team must have a deep understanding of the broader context. This starts with a clear and compelling product vision, and the path to achieving that vision: the product strategy.
The more product teams you have, the more essential it is to have this unifying vision and strategy in order for each team to be able to make good choices.
I was with a startup recently and describing the value and importance of vision and strategy, and it occurred to me that it’s very analogous to the difference between leadership and management. Leadership inspires and sets the direction, and management helps us get there.
Most importantly, the product vision should be inspiring, and the product strategy should be very intentional.
As you might expect, there are many nuances to product strategy. I want to speak to some of the most important points here:
NOTE 1: In terms of prioritizing markets, all I really said above was to prioritize your markets and focus on one at a time. I didn’t say how to prioritize them. There is no one right way to do this, but there are two critical inputs to your decision. The first is market sizing (usually referred to as “TAM” – total addressable market). All things considered equal, we like big markets rather than small markets. But of course they’re not equal. If the largest TAM market would require 2 years of product work, yet several of the somewhat smaller but still significant markets are much closer in terms of time-to-market (“TTM”), most likely everyone in your company from the CEO and head of sales on down would prefer you deliver on a smaller market sooner. These are typically the two dominant factors but others can be important also. I typically suggest that the head of product, head of technology and head of marketing sit down together to work out your product strategy, balancing these various factors.
NOTE 2: Some people refer to the product strategy as the “vision roadmap.” No real problem with that other than the use of the term “roadmap” can be confusing to the company. Note also that this vision roadmap is very different from a product roadmap (a prioritized set of features and projects intended to deliver on a specific product-market fit in the product strategy).
NOTE 3: Normally when we create the product vision and product strategy, we also create a set of product principles(aka “product manifesto”). The three components are often lumped together and just referred to as “the product vision.”
NOTE 4: Just because we achieve product-market fit for a specific market does not mean that we are done with work for that market. It just means that we’ve got that minimal actual product we can sell that is proven to meet the needs of the initial set of reference customers. We continue to improve the product for other customers in the market. We typically do that work in parallel with tackling the next market in our strategy.