Strategize: Product Strategy and Product Roadmap Practices for the Digital Age

by Roman Pichler

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Business Model Canvas (Osterwalder and Pigneur 2010)

business case, which forecasts the product’s financial performance, typically over the next two to three years.

For adjacent and particularly disruptive products, you should consider using the business model to justify the investment, together with the inaction risk—

Using KPIs and collecting the right data helps you balance opinions, beliefs, and gut feelings with empirical evidence, which increases the chances of making the right decisions and providing a successful product.

work with ratios and ranges (Croll and Yoskovitz 2013).

the longer you work with your product and the more stable it becomes, the easier it gets to come up with measurable goals that can actually be met.

Avoid vanity metrics, which are measures that make your product look good but don’t add value (Ries 2009).

Whenever you select an indicator, check if the indicator actually measures performance or just makes your product look good.

use the business goals to choose a small number of metrics that truly help you understand how your product performs.

quantitative indicators, such as daily active users or revenue, measure the quantity of something rather than its quality.

Qualitative indicators, such as user feedback, help you understand why something has happened—

the most important success factor: the people behind the numbers—

Lagging indicators, such as revenue, profit, and cost, are backward-focused and tell you about the outcome of past actions.

Leading indicators, in contrast, help you understand how likely it is that your product will meet a goal in the future.

Financial indicators, such as revenue and profit, and customer metrics, like engagement and referral rates, are the two most common indicator types

Trends allow you to better understand what’s happening and to take the right actions.

David Norton and Robert Kaplan’s

While KPIs are great for measuring the overall product performance, they are usually not enough. You should consider using additional metrics that complement the KPIs and help you understand how well you are meeting specific product goals—

I recommend capturing these goals on the product roadmap together with the relevant metrics for measuring when a goal is met

In an agile context, product goals are delivered in a stepwise fashion by a number of sprints, which should have their own goals and success criteria.

A stakeholder is anyone who has a stake in your product—anyone who is affected by it or shows an interest in it.

Power-Interest Grid, described in Eden and Ackermann (2011).

four stakeholder groups: players, subjects, context setters, and the crowd,

Stakeholders with high interest and high power are called players. These individuals are important partners for you; they help you create, validate, and review the product strategy and ideally continue to work with you on the product roadmap.

collaboration requires leadership.

Subjects are individuals with high interest but low power—

Subjects can make great allies who can help you secure understanding and buy-in for your product across the business. Keep them involved by inviting them to bigger strategy-review meetings, for instance, or by sharing ideas with them and asking for their feedback.

People with low interest but high power are called context setters. They affect the product’s context, but they take little interest in the product itself. Context setters are often powerful senior and executive managers who can make your life difficult if they are not on your side.

Everyone else is part of the crowd. As these individuals are not particularly interested in your product and don’t have the power to influence the product strategy or other product decisions, it’s usually sufficient to keep them informed;

Running a collaborative strategy workshop is a great way to create an initial product strategy—

Winston Churchill put it: “However beautiful the strategy, you should occasionally look at the results.”

four factors to be useful to take into account when reviewing the product strategy: the product performance, the competition, the trends, and the company goals and capabilities.

For younger products and dynamic markets, I recommend reviewing the product strategy once per month; for more mature products and markets, perform a strategy check every quarter.

four growth strategies: market penetration, product development, market development, and diversification. Market penetration means incrementally enhancing an existing product to increase its market share. Product development involves creating a new product for an existing market—a market you already serve. Market development refers to entering a market that’s new to your company with an existing product. Diversification implies developing a new product for a new market

Segmenting the market means dividing the potential customers and users into distinct groups.

segmentation is not only beneficial for developing new products; it also helps you derive variants from an existing product.

The segments not only define who the customers and users are, but they also influence many product decisions.

Common customer properties include •demographics such as age, gender, marital status, occupation, education, and income; •psychographics, including lifestyle, social class, and personality; •behavioral attributes like usage patterns, attitudes, and brand loyalty; •geographic regions such as Europe, Middle East and Africa (EMEA), and Asia-Pacific (APAC); •industries or verticals—for instance, automotive, education, finance, and health care for business markets, also called business-to-business or B2B; and •company size, such as small and medium-size enterprises (SMEs) for B2B products.

Whenever you create an adjacent or disruptive product, segment first by benefit. Once you have created your initial benefit-based segments, you can refine them by using appropriate customer properties.

GE/McKinsey matrix (Coyne 2008).

“Markets that don’t exist can’t be analyzed,” as Clayton Christensen

Personas are fictional characters that usually consist of a name and a picture; relevant characteristics, behaviors, and attitudes; and a goal.

Once you have created a cast of characters, select a primary persona.

If you find it difficult to choose one primary persona, this may indicate that your target market is too large and heterogeneous, or that your product has become too big and complex.

Make sure you describe the goal from the persona’s perspective.

identify the main or primary reason for the persona to buy or use your product and state it at the top of the section.

To create a successful product, you must understand why people would want to buy and use it. You must know which problem it solves, which pain or discomfort it removes, and which benefit or gain it provides.