Understanding Product Strategy

A startup's product strategy defines the product vision, product goals, and the product development process that is required to achieve both. The product strategy is not a company vision or mission statement, it is focused entirely on the product itself.

One of the most important parts of developing a quality strategy is identifying your target market and how the product will benefit and serve that target audience.

Product strategies are typically coupled with a product roadmap. The product roadmap is essentially the concrete steps that will be taken to achieve the product vision. You can think of this as the "how" whereas the product strategy is the "why" behind the product.

A product roadmap maps out, step-by-step, the development process including milestones, timelines, priorities, and dependencies. Essentially, the product strategy outlines the vision, and the product roadmap is the guide to make that vision a reality.

There are five common types of product strategies. Before you begin creating your strategy, you need to decide if the product strategy works for your startup's goals and target market.

Cost Strategy

A cost strategy in product strategy involves minimizing production and operational costs to offer products at a lower price point than competitors, aiming to attract price-sensitive customers and gain market share.

Focus Strategy

A focus strategy means picking a specific group of customers and making products just for them. This way, a company can become the best choice for that particular group by understanding and meeting their unique needs and preferences.

Service Strategy

A service strategy is about deciding how to make customers happy with great service. This strategy focuses on providing excellent customer support and personalized services and making every interaction with the company a positive, memorable experience.

Differentiation Strategy

A differentiation strategy is about making your product stand out by offering something unique. This approach involves adding special features, innovative design, or exceptional service that makes your product different and more attractive than what competitors offer.

Quality Strategy

A quality strategy focuses on making products that are better in terms of reliability, durability, and performance. The goal is to attract customers who value excellence and are willing to pay more for products that exceed standard expectations in quality.

Successful product strategies can help your company (and its product team) in several ways from prioritization to providing clarity to allow for thoughtful planning.

A successful product strategy provides product managers with the goals, vision, and initiatives required to plan and execute the actions necessary. Without high-level guidance, teams can sometimes fail to prioritize effectively, leading to longer development times.

Product strategies provide a clear direction they can refer back to as they build the product, helping them to prioritize the most important tasks required to bring the product to life.

The product strategy does more than simply provide direction for product teams, however. An effective product strategy also aligns stakeholders from throughout your company such as sales teams, marketing teams, and customer support teams on one central vision.

While your product team is the intended audience for a product strategy, aligning the entire organization around the goals, vision, and intricacies of the product will help them be more effective in their roles as well.

Finally, without an initial strategy, you can't create your product roadmap. One of the key elements of a solid product strategy is setting the roadmap for product development, launch, and ongoing evolution to ensure it meets market demands and company goals.

Without a product roadmap, teams will work less efficiently and may even have difficulty meeting the goals set for them. A product strategy, and product roadmap, ensures teams have the tools they need to succeed in building the right product to meet customer needs.

Your product strategy serves as the foundation for your company's product. But, what should be included? When you're drafting your product strategy you will need to include market research, product vision, product goals, and product initiatives. Here's what each of those factors looks like in the context of product strategy and examples of each:

Market research should include both target audience research and competitive analysis. As mentioned above, a strong understanding of your target market is a crucial element of a well-defined product strategy. To deliver the most value to your target audience, you need to understand multiple things about them:

• Their pain points or challenges
• Their needs
• Their desires

Your market research will dictate the opportunity for your product, how to position your product to consumers, and how it measures up against the competitive landscape.

Your product vision, also called a product vision statement or positioning statement, is the long-term mission driving your product strategy. This is typically an aspirational, actionable phrase that relates, in part, to the overarching company vision as well.

Here are some early product vision examples from major companies:

• Amazon: 'To be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online.’
• Apple: 'To make the best products on earth and to leave the world better than we found it.’
• Google: 'Organize the world’s information and make it universally accessible and useful.'
• Disney: 'To be one of the world’s leading producers and providers of entertainment and information.'

To write your first product vision statement, using a statement template can be helpful. However, this is just a jumping-off point. As you can see from the examples above, not all product vision statements follow this format.

A standard product vision template is as follows:

For (the target customer), who (the need), the (your product's name) is a (your product's category) that (your unique value proposition). Unlike (your top competitor), our product (what makes your product different).

From here, you can ideate and adjust your statement to match your product strategy and vision accurately.

Product goals are tangible and measurable objectives that are set to achieve the product vision. During this stage, these should be high-level goals that will be prioritized and executed by your product manager and team.

A few examples of product goals may include:

• Increase new customers by [X]
• Reduce churn rate by [X]
• Generate [X] of revenue in Q4

Using the goals you've established for your product, you can determine initiatives. These are essentially high-level, big-picture objectives that will help your team meet the product goals. While goals are typically measurable objectives, product initiatives are more like complex themes.

A few examples of product initiatives may include:

• Run more targeted ads in Q1
• Improve the current UX/UI
• Add new features by [X]