How to make a Product Strategy?

I explored the definition of ‘Strategy’ in What does having a ‘strategy’ mean?

I wanted to next explore Product Strategy from the perspective of the three pillar theory to see if it translate into a specific goal like “making a product win in a market”.

The three pillars that define strategy were,

1. Knowing the players and the environment
2. Knowing personal capabilities and tools, and
3. Ability to achieve goal by executing the knowledge from 1 and 2

Some product management context

Since I have 3 years of product management experience, I would be a good subject to implement this theory into what happens in real world. Hence to build context, I would like to briefly explain how product management deals with strategy —

A ‘software’ product manager’s performance is measured based on metrics - the metrics can be acquisition, activation, engagement, retention, monetisation, or customer satisfaction. Each of these metrics could have a sub-metric that is widely used in software culture or a custom metric which is made up to measure a specific use case not observed widely in the ecosystem.

So a product manager is a good one if they positively change the metrics in given timeframe. The positive change can be short term wins or long term gains. A junior product manager might be heavily judged on short terms while a senior predominantly on long term.

Since metrics are quantitatives - numbers or ratios, they cannot be directly dwindled with. They can only be impacted indirectly. So it is not same as writing 500 lines of code a day or launching a website by end of this week.

Manipulating indirect impact will require a ‘Strategy’. Hence every product manager is expected to have a strategy that leads to measurable impact. ‘Measurable’ is important as well, because if we can’t quantify can’t measure one’s individual success as well.

Now let’s dive into implementing our theory to identify key aspects of a product strategy.

P1: Knowing the players and the environment

Players in case of any product would be,

1. The customers (target audience)
2. The competitors
3. The enablers
4. Ourselves

The environment would include,

1. The market of the product (macroeconomics)
2. The behaviour of the market (historic fluctuations, public opinion, microeconomics)
3. The market of competition

P2: Knowing personal capabilities and tools

Personal capabilities include,

1. Skills available within the team
2. Availability of per skill person hours
3. Ability to maintain internal efficiency
4. Leverage over external decisions (for instance leverage over external regulations)
5. Ability to bring liquidity (funding, credit, etc)

Tools would include,

1. Distribution channels and their historic performance (communities, socials, etc)
2. Human capital
3. Machine infrastructure (hardware compute, AI tools, etc)
4. Licenses (patents, contracts, MoUs, etc)

P3: Execution

This is more of an ability to create a ‘want’ within the market. This is only possible if one knows the market and knows how to use tools available to them. This step with include all the specifics that come from product management experience like the ones below,

1. Ability to generate a ‘want’ for the product in the market (differentiate, accessibility, hackability/opensource, curiosity, status, etc)
2. Ability to align everyone in the team to common vision and goals
3. Ability to align/pivot based on feedback to improve accuracy
4. Ability to translate strategy into roadmap and daily tasks