How to Create a Product Strategy
7+1 steps to get you started.
Are you a Product Manager struggling with your product strategy? Or did you recently start as a Product Leader and now need to build a strategy to align the team?
Here is a quick step-by-step guide to get you started.
🔭Step 1:
Understand the purpose & vision of the company.
Why do they exist? What will the world look like after they have succeeded?
✅Do: Envision the changed behavior of customers.
❌Don’t: Think about internal goals, such as revenue or becoming the leader.
🎯Step 2:
Define the product mission to serve that vision.
Specifically in B2B, other departments, such as Customer Success, Marketing, and Sales are important too. So what exactly is the product’s contribution?
✅Do: Define the category and key aspects of the future product. Be bold.
❌Don’t: Include empty slogans such as “great UX” or “best tool”.
🧭Step 3:
Derive the product strategy as a rough plan to achieve the vision & mission.
Be specific about what you want to do — and what not. Explain how you differentiate and why you win. To do that, conduct thorough customer research and competitor analysis. Gather valuable insights to identify opportunities in the market that your product can address uniquely.
✅Do: Be sharp about your ICP, market segments, industries, and geographies.
❌Don’t: Try to be everybody’s darling.
📈Step 4:
Define measurable product goals.
Think about how to measure the success of customers. Have a catchy claim for these success factors but also try to find metrics that will indicate that they get value out of your product.
✅Do: Identify a North Star Metric and potentially some other leading metrics that feed into the North Star.
❌Don’t: Fiddle around with financial KPIs, such as ARR or LTV — rarely can they be influenced directly by product initiatives.
🗺️Step 5:
Structure your roadmap with strategic intents.
Identify key work streams to address in order to deliver on the above goals. Use them, e.g., as swimlanes to organize your roadmap.
✅Do: Shape each strategic intent so that it has a compelling mission and dependencies between those areas are minimized.
❌Don’t: Accept too many different work streams if you don’t have the capacity for them.
💎Step 6:
Fill the roadmap with product initiatives.
Only now think about specific opportunities and product initiatives following the strategic intents. Consider them as hypotheses and constantly revise based on your learnings.
✅Do: Use all of the above to guide proper product discovery.
❌Don’t: Consider a roadmap as a committed plan with fixed content and deadlines.
❤️Step 7:
Underpin your strategy with values and principles.
Explicitly list core values, cultural aspects, or product principles that serve as guardrails in everyday decision-making. Include factors regarding internal collaboration, trust, transparency, or autonomy.
✅Do: If such values don’t exist yet, kick off an initiative with leadership to discuss across the entire company.
❌Don’t: Promise what you cannot keep.
💰Bonus Step:
Map product initiatives to financial KPIs.
Build the key elements of the financial model of your company into a KPI tree. Map how your product initiatives contribute to certain business metrics.
✅Do: Aim for a significant overlap to show how the product work contributes to the company’s financial goals.
❌Don’t: Exaggerate by applying precise mathematical formulas. A schematic mapping is often sufficient.
All of the above is explained in slightly more detail in the respective chapters of the B2B Product Playbook.
🎁As a giveaway, find a more visual explanation of the above combined with a fictitious example here.
If you are eager to learn more and want to practice, I will be running a cohort-based course “From Product Manager to Product Leader” in which product strategy will be addressed in a dedicated module. Sign up for the waitlist to be updated.
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