Creating your product strategy is hard work. You have to identify insights, clarify goals and assumptions, and align with multiple stakeholders.
While all steps are vital, I have often seen that successful strategies come to life in a moment of truth: when you select those insights, that will truly make the difference.
While I have written about all steps in the past, I would like to dive a bit deeper today into how to make this winning selection.
Focus and Positioning: A different type of prioritization
Selecting is not about prioritization frameworks or ROI calculations. It’s about focusing on the most promising strategic drivers and understanding the necessary tradeoffs of pursuing them.
In the book Playing to Win, the authors argue that if you do not decide on a strategy for winning, you will fail to make the resource investments and commitments required to become the leader in your segment.
They use the example of the Saturn car created by General Motors as a separate brand in the 80s. GM’s goal was to preserve some of the low-end markets that Japanese brands were gaining, but they never considered the Saturn a winning move to dominate that segment. Since they were not planning to win, they were always only half-hearted with their commitment, resulting in a mediocre product and low market share.
A winning mindset is crucial during the selection step. You do not need to become a world leader brand or have the largest share in an entire industry. But you do need to select a strategy that differentiates and enables you to dominate a niche market and compete based on key attributes that customers value highly.
Furthermore, that differentiation needs to be defendable. In essence, we are trying to build a competitive advantage that we can sustain over time. We want to strengthen that position we are creating through our value proposition, making it even more valuable for the customer and harder for competitors to replicate.
Strengthening the core
That sounds great, but how do I find that defendable competitive advantage?
One way to think about it is the strengthen the core tool. Write your core product offering in the middle of a whiteboard. Take the most
valuable insights (or insights categories) and place them around the center. Draw a line from each insight to the center describing how it improves your primary offering. Likewise, draw a line back from the center toward the insight, explaining how your core value makes this opportunity more attractive and likely to succeed.
A clear example is the Apple ecosystem. When Apple created services like Apple Music, Apple Books, iCloud, and so on, it leveraged its vast number of devices to sell them. Still, it also strengthened the sales of their devices and their use (in 2019, Apple was generating more revenue in services than in Mac, iPad, or wearables). For example, by automatically storing your iPhone photos in iCloud, Apple made the phone more valuable to their users by enabling automatic backups, the ability to share with other iPhone users easily, and syncing their photo library with other devices like their iPad.
Reflecting on your strengths and assets
Finally, there are very practical questions you can ask yourself to identify potential strategic advantages.
1. Why are people choosing you over competitors? How can you make that stronger?
Example of core attributes for transportation
If you have satisfied users, the chances are that they are choosing you over competitors for concrete reasons. Understand the core attributes of your value proposition and build on top of the ones your competitors can’t beat you.
2. What assets do you have that competitors don’t, and how can you build an advantage around that?
Going back to Apple’s example, it seems easy to think about how to combine a new opportunity with your core value proposition. But many times, we already have multiple existing assets that we can use to differentiate.
It may be an obvious example but think about the tremendous growth of Disney+. Of course, they wouldn’t have been able to achieve it if they were a new streaming service entering the market. They leveraged the vast collection of existing Disney content.
Conclusion
As said, all steps are essential. But during selection, you go from just another list of cool opportunities to truly building a winning and defendable strategic advantage. To do so, you must:
a) Select the very few essential elements. Otherwise, you are just making a laundry list of how the future might look if you pursue everything. Most likely, you will be beaten by a more focused competitor.
b) Select the ones that strengthen your value proposition and differentiation. If not, you may end up trying to be everything to everyone with mediocre results rather than building an unbeatable product that expands over time.