What is strategy and how do I build product strategy?

A note for new subscribers: This post is part of a monthly series on my notes on technology product management (this is what I do for a living). You might notice that these posts often link to older posts in the series on LinkedIn even though they are all available on this blog. That is intended for folks who only want to follow future product management related posts. Finally, for all those of you who don’t build tech products for a living, I believe many of these notes have broader applicability. And, I hope you find that to be the case as well…

A quick overview of what we’ve covered on “Notes on Product Management” so far –

What is strategy?

The best definition for strategy that I’ve come across is that good strategy answers 2 questions –

    1. Where should we play?
    2. How will we win?

The “where should we play” question defines our target customer/segment/market and the “how will we win” question tackles how we will differentiate ourselves from our competition.

A clear and well articulated strategy makes it possible to do fewer things better by helping everyone on the team separate signal from noise and easily articulate the trade-offs involved. So, if you’re hearing about or feeling a lack of focus or alignment within your product team, it is likely because of the lack of a coherent strategy.

That said, a well articulated strategy is still just the first step. A well executed strategy is the next step. When a strategy is well executed, it becomes easy for the team to reflect that understanding in their prioritization – i.e. the team can go from understanding the trade-offs to living those trade-offs. A well executed strategy requires the leadership team to align incentives (success metrics, pay, recognition) in a way that makes it easy for folks on the team to make the strategy come alive.

A simple test of this is to ask members of the team a) what they are focusing on and b) what they are not focusing on and why. If you have coherent answers on both, you are witnessing an exceptional example of executing on a strategy.

An example

When Bob Iger took over the CEO of Disney, his strategic vision focused on 3 pillars –

1. Generate the best creative content possible

2. Foster innovation and utilizing the latest technology

3. Expand into new markets around the world

If your first observation is that this isn’t rocket science, you wouldn’t be wrong. That may just be the first takeaway as you’re thinking about strategy – it is easy to articulate a simple strategy. And, it also turns that good strategy is often simple.

Disney, at the time, had a flailing animation division and had fallen behind Pixar (with whom they had a failing partnership) in generating great creative content. They also didn’t have any technological edge to speak of. As a result, the acquisition of Pixar became a relative no brainer – in hindsight at least. Iger and team continued to acquire multiple creative studios with incredible IP – Marvel and Lucasfilm are great examples of this – to continue doubling down on the “best creative content” pillar.

Fast forward to the launch of Disney+ last year and you can see how this strategy came together. Disney+ was made possible by acquisitions above that gave Disney the library of creative content to become a formidable global streaming player right from the get go.

And, the Disney+ launch is also important because it offers a telling story about the difference between a clear strategy and a well executed one. In the year leading up to the creation of Disney+, Bob Iger needed every one of his executives to support this new bet. However, and this is the predicament most leaders of complex businesses face, it is impossible to change behavior when they’re already compensated on how well they manage their existing (successful) businesses.

So, Iger requested approval from the board to move all his executives’ performance based compensation from metrics based on the success of their existing businesses to an evaluation by him on how well they were supporting the Disney+ launch.

That was a master stroke and a demonstration of the art of incentive management by the Obi-Wan Kenobi of CEOs.

So, how does all this apply to me as an Individual Contributor PM?

Your product team could do with a strategy. If you have a clearly defined strategy defined for your organization by your product leader that you are already executing toward, that’s great.

But, if you don’t or if that strategy isn’t yet directly translatable to your team, read on.

Let’s start with the obvious – ideally, every organization has a clear strategy. That strategy, in turn, would enable every product team unit to focus on doing things that ultimately move the needle and win.

But, it doesn’t always work out that way. That isn’t always down to leadership incompetence (though, sometimes, it is). The more complex and large the business, the harder it is for leaders to make statements about focus without risking de-motivation of the areas of the business that aren’t the focus areas at the moment.

So, if you are faced with situations where you are unclear about the strategy, there are 2 things you can do – 1) Ask the leaders (this is the obvious first step) and/or 2) Look at the metrics that matter.

The metrics used to measure success are the simplest manifestation of the strategy. Even when a strategy isn’t articulated clearly, understanding which metrics are emphasized over others helps understand what matters to leadership.

Assuming you have clarity on the organization’s strategy, it is now time to write your own strategy doc.

So, how do I write that strategy doc?

Here is a structure I’ve found useful.

I. Outcomes:

User/Customer Problem: Attempt to synthesize the top user problem you are seeking to solve. And, if you are representing a multi-sided marketplace, lay out the top problem for both sides of the marketplace. Stick to one overarching problem to avoid a laundry list – the purpose of this exercise is to bring focus.

Outcomes you are seeking to drive: Lay out the top 2 “true north” metrics you choose to drive along with a guardrail metric or two. 2 things to keep in mind when choosing these metrics –

1. The true north metrics would ideally be the metrics that matter to your organization. If you have no way of moving those metrics, add “Signposts” that you can move and that you believe will eventually move the true north.

2. Be thoughtful about guardrails/negative metrics and companion metrics. A negative metric if your strategy involves sending customers more email would be unsubscribe rate. Once you’ve got negative metrics sorted, take care to ensure you have companion metrics. Great metrics often work in pairs – e.g. depth and breadth metrics (Weekly active users and time spent per login), revenue and RoI.

If the outcome section reminds you of the problem statement, that’s exactly what it is. Product managers are problem managers.

II. Strategy: Let’s go back to the two questions we laid out when we started – “where do we play?” and “how will we win?” Outside of cases when IC PMs are hired to work on a venture bet, the answer to the “where do we play” question should generally be part of the organization’s strategy. This answer defines the audience whose problems you solve as part of your roadmap.

Our focus, then, is figuring out how to win. And, we do that by taking a stand on where we will focus our team’s energy. It is helpful to articulate these focuses in the form of 1-3 themes or pillars that all contribute to the desired end outcome. These themes work well when they connect to a journey – e.g. acquire -> retain -> monetize – or similar. They can also work well when they clearly ladder up to solve the top user problems you’ve set out to solve.

When done well, the strategy helps everyone understand exactly what we are doing and not doing. So, if you find yourself attempting to organize a catch all list of everything without needing to make hard, sometimes painful, trade-offs, that is not a strategy. That is just a list.

A great way to bring this section to life is to illustrate the user/customer experience 12 or 18 months later after successfully executing on your strategy. Doing so can help folks on the team clearly visualize what success looks like.

An important note – a collection of product principles is not a strategy: It is easy to confuse a strategy with a collection of product principles. Your strategy helps you create a focused plan to ensure you are the go-to solution for the problems of the audience you choose to serve. Product principles, on the other hand, are the values of a product. Product principles are best agreed upon at the level of the entire organization and are analogous to the values of a company. You rarely change them and they represent the choices you make without considering the trade-offs involved. You commit to them because you believe they are the right thing to do.

III. Roadmap: The next step is to lay out what this means in terms of feature ideas. The goal here isn’t to have product specs ready – not yet at least. Instead, the goal should be to get a low definition set of ideas that both feel right and have the team excited. (We’ll aim to cover roadmaps in detail in the next post)

Write all this out in a 1 page document. If you’re not able to synthesize your strategy in a page (with 0.5 inch margins :-)), then you don’t have a clear strategy.

The final test of a clear strategy is that it will make it easy for every member of the team to differentiate between ideas that matter and ideas that don’t. And, if that’s happening, we’re through with the first step.

How, then, do we move to the more important step – moving from well articulated strategy to well executed strategy if we don’t control the incentives of the product team?

By winning the team’s hearts and minds.

This, in turn, happens when we involve folks on our team early and often. Get started with the door wide open (i.e. ask everyone for opinions and ideas), then write your first draft with the door closed, and edit and revise with the door wide open again.

The more the team is (and feels) involved, the more likely it is to be successful.

Therein lies the magic of the strategy creation process. When it is done well, it helps get the entire team aligned and rowing in the same direction. That in turn magically resolves disagreements that might otherwise have showed up in future product specs and prioritization discussions.

If we’re then able to celebrate instances when team members execute in ways that support the strategy, we make it all the more likely that the strategic process we followed has ensured these ideas have now moved from theory to practice.

Do this often enough and the odds are good that we’ll end up building a track record that includes a run of valuable and successful products.

A career and life sidebar: The test of a good strategy within the product team applies just as well to our life and career. If we’re able to consistently articulate what we focused on alongside what we are not focused on, we’re making great progress toward being effective.

And, if we’ve picked focus areas consistent to who we are and who we want to be while being comfortable with the trade-offs we are making as a result of those choices, we’re on the path toward the only kind of success that can leave us feeling fulfilled – the kind that we intentionally chose for ourselves.

Gunpei Yokoi and the Lefty Rx

Gunpei Yokoi, then a creative game designer working at Nintendo in the 70s (before he became a legend), wasn’t the sort of person who was at the forefront of technology. So, he focused on creating games with an approach he termed – “lateral thinking with withered technology.”

Since he couldn’t count on himself being cutting edge, he’d simply look to put commonplace technology in ways that made games more affordable for Nintendo customers. One such technology he was interested in was remote controlled cars – then an expensive luxury in Japan.

Since these cars were expensive due to all the functionality required to control the car, he decided to simplify things by launching a car with just one button that could only turn left – the aptly named Nintendo Lefty Rx.

Its price made it easily available to a massive customer base who enjoyed racing these cars across circular tracks. Even when there were obstacles, you could left turn your way out of it – only adding to the excitement.

I love stories that demonstrate the power of simple, functional products that get the job done. The Lefty Rx is a great example of how simple can be very powerful.

The 80% experience

A question that has helped point to better product design every time I remember to ask it – what is the experience 80% of the users would want to go through? 

When asked, that question first reminds us that we must let go of all the complexity we are likely to introduce as super-users of our own products.

It then pushes us to simplify our flows to the few things most users care by removing any detailed how-to notes, unnecessary choices/steps, and excessive copy.

And, out of this exercise emerges a principle that applies just as well to product or process design as it does to effective communication – focus on clarity over completeness.

Your manager in the product team

A note for new subscribers: This post is part of a series on my notes on technology product management (this is what I do for a living). You might notice that these posts often link to older posts in the series on LinkedIn even though they are all available on this blog. That is intended for folks who only want to follow future product management related posts. Finally, for all those of you who don’t build tech products for a living, I believe many of these notes have broader applicability. And, I hope you find that to be the case as well…

Let’s imagine we posed a question to a group of Product Managers – can you share the list of folks/functions on your product team?

What list would you expect?

When I’ve asked this question, I’ve received answers that I cluster into 4 groups (illustrative).

This turns out to be a helpful way to think about the product team as well… with one exception.

That exception is one that is often absent from lists that describe the product team – the PM Manager

I consider that a big miss because good PM managers play two vital roles to help IC/individual contributor PMs be effective-

A) They help provide the organizational context and feedback you need to be successful: This includes providing clear guidance on overall strategic direction that helps you align your strategy/metrics and also providing feedback on your plans based on their experience.

B) They provide air cover when you need it (and it is likely you’ll need it this week): This is the more critical role the IC PM manager plays. In cultures that hold PMs as the “DRI” or Directly Responsible Individual, the IC PM is accountable for the performance of the product without having any formal reporting authority over the product team. As a result, executing parts of the job may involve pushing folks/rubbing folks the wrong way (when the pushing is over done as you figure out the right balance) from time to time. In such times, air cover is key.

Air cover isn’t just about your manager being the voice of reason to balance your role on the team. It also helps provide the space to execute with confidence that you have the space to try things and fail. An absence of air cover almost always results in an absence in experimentation and, thus, growth – both of the product and the person.

Finally, there is no one else in the organization who is more vested in your success. So, it is a bit of a no brainer to invest in this relationship. And, I’d go as far as to say highly functional product teams rarely become that way without a strong PM <> PM Manager relationship.

Building a great relationships with your manager: As in many matrixed organizations, the PM manager <> IC PM relationship can be a weird one. Depending on the nature of your product, you may be able to get by with little to no working overlap.

And, while there are a lot of folks who attempt to get by with that low touch relationship, my recommended approach would the opposite. So, here goes:

1. Invest heavily in getting to know and understand each other upfront. In a new role, spend time in your onboarding period to get to know and understand your manager. A simple way to do this is to request an hour to do a “user manual” session. Introduce yourselves to each other, share what matters to you and ask questions to better understand what drives them, understand how best to communicate with them, and what they’d love to see in a direct report.

The more you can get to know and understand each other upfront, the quicker you’ll enable trust to follow.

2. Share and involve them as much as possible – allow them to choose how much they’d like to be involved: With their permission, share and involve them as much as possible. Share early thinking/riffs on product direction/wireframes and invite them to brainstorming meetings/team meetings. If they show up on those docs and meetings, ask for feedback and act on that feedback.

I recognize this is sometimes viewed as contrarian advice. I’ve met with a few folk over the past months who’ve all shared situations that share a common cause – the absence of an open channel of communication with their manager. And, in every one of these cases, they were told by someone to only present “the good stuff” to their manager. So, they went through great pains to curate the good stuff and left aside topics that mattered – the pressure they were feeling, the challenges they were facing, and so on.

However, when they’re in the loop, they get to understand the challenges you are facing and how you operate. The better they understand this, the more they can provide specific guidance and trust you. And, the more they can trust you, the more context, scope, and air cover they will provide for you to steepen your learning curve and be successful.

There’s also limited long term upside in an out-of-the-loop manager. If you’re making big mistakes in doing your job, it is best you course correct at the earliest with help from the person who is most invested in making you successful. And, if you are doing your job well, that’s a really good thing for your manager to see.

And, if you don’t trust that your manager is invested in making you successful, it is likely time to leave.

Bonus tip: In the absence of your manager being able to participate in your meetings, a weekly 1:1 is a great forum to keep your manager in the loop. Keep a shared 1:1 doc, populate with the agenda in advance, and keep the hairiest topics right on top of that agenda.

3. For your part, do everything you can do make their life easier. Baseball executive Theo Epstein once said – “Whoever your boss is, or your bosses are, they have 20 percent of their job that they just don’t like. So if you can ask them or figure out what that 20 percent is, and figure out a way to do it for them, you’ll make them really happy, improve their quality of life and their work experience.”

There are many variants of this advice and they’re all valid. The principles at play here are as follows –

1. Everyone has a manager whose job it is to keep them accountable. Even the CEO reports to a board who, in turn, is accountable to shareholders. Understanding how to manage these managers is important for career success and happiness.

2. Become an incredibly valuable direct report and be the sort of person who removes more problems than you create.

These principles are, of course, equally applicable to the IC PM.

Managers make or break our experience. Aside from a few extraneous situations, it is highly unlikely we get anywhere if we have a poor relationship with our manager. In these situations, it is best to leave and find a new home.

On the other hand, if you’re considering a new role, it is worth prioritizing a connection with your prospective manager as among the most important criteria. When you choose well, you work with managers who appreciate your strengths and help ensure your weaknesses don’t get in the way.

And, every once a while, thanks to the power of incredibly aligned  incentives, these relationships transcend work relationships to become deep friendships.

When that happens, it turns out to be special – both for our career growth and our happiness.

Understanding the news and working with data

There’s a learning curve involved with understanding how the news works.

We might begin – as kids at least – with the assumption that the news is the objective list of everything of note that is happening around us/the world. But, we learn over time that a big part of understanding the news is looking beyond what is presented to us and asking 3 questions –

1. How was the information sourced/collected?
2. What have they omitted/chosen to omit?
3. What is the bias in their reporting?

Interestingly, the learning curve around working with data when we make product and business decisions is no different. The early promise of big data was that large amounts of data would solve any problem.

That promise didn’t pan out.

So, asking the above questions when we look at data/analysis and marrying a desire for data with a healthy skepticism for what it is telling us ensures we keep asking the questions that help get us closer to the truth.

As in the case of the news, better to replace “data driven” with “data informed.”

Personal IPOs and stock market tickers

Eugene Wei had a post on his excellent blog yesterday where he drew parallels between individuals building brands on social media and a company going public.

One way to understand the impact of these public social networks on humanity is to think of this as the era in which humans took their personal thoughts and lives public at scale. Billions of humans IPO’d, whether we were ready for it or not, explaining why the concept of a personal “brand” became such a pervasive metaphor.

In another era, most of us lived in social circles of limited scope. Family, school, coworkers, neighbors. We were, for the most part, private entities. Social media companies quickly hit on the ideal configuration for rapid network growth: take the interaction between any two people and make it public. Conversation and information-sharing became a democratic form of performance art.

One reason social networks quickly converged on this as the optimal strategy and configuration is that the majority of people on any social network merely lurk. By making the conversations of the more extroverted, productive nodes public, you sustain the interest of that silent majority of observers with what is effectively crowd-sourced (read: free) content. The concept of 1/9/90 is that a stable equilibrium can be achieved in a large network if the shouting class, the minority which entertains the much larger but silent majority, is given enough quantifiable doses of affirmation (likes) to keep the content spigot flowing. As these large public social networks grew, even many who were previously modest began taking the stage on social media to karaoke to the crowd. Live fast, die young, and leave a viral post.

Just as there are many advantages to being a public company, becoming a public figure carries all sorts of upside. Once your ideas and your self are traded publicly, anyone can invest and drive the value of those goods higher. If you’ve ever written a viral blog post or tweetstorm and gained thousands of followers, if you’ve had a YouTube video picked up by traditional media and found yourselves interviewed on the local news, you’ve felt that rush of being a soaring stock. Social networks not only provide public liquidity for anything you care to share on them, but they also continued to tweak their algorithms to accelerate the virality quotient of their feeds. In a previous generation, Warhol quipped the duration of sudden fame was 15 minutes, but social media has made that the time it takes to become famous.

The problem is that, like many private companies who find the scrutiny of public markets overly stringent, many of us were ill-equipped for “going public” with what were once private conversations and thought. It’s not just those who made enormous public gaffes and got “canceled.” Most people by now have experienced the random attack from a troll, the distributed judgment of the public at large, and have realized the cost of living our lives in public. Most celebrities learn this lesson very early on, most companies put their public-facing executives through PR training, but most humans never grew up under the watchful gaze of hundreds of millions of eyes of Sauron.

It is a powerful analogy and it made me wonder about Instagram’s recent decision to remove “like” counts. If an Instagram profile is the equivalent of a stock ticker, a “like” may have been the equivalent of the stock price.

And, as there’s only so much good that can come from constantly monitoring short term fluctuations on your stock price, removing “like” counts may turn out to be a master stroke.

Marketing dog food and happiness

What does marketing dog food have to do with building products, success and happiness? Everything, it turns out.

When Paul Iams launched Iams 999 – a high quality, high protein variety of dog food – he didn’t have a distribution system. So, he needed customers who were willing to go through a lot of trouble to get this shipped over.

It turns out there was just this right group – owners of show dogs. These folks loved what was great about Iams (better health + shiny coats) and didn’t mind, or even liked, what was bad about it (hard to get => competitive advantage).

We are all not different from Paul Iams. When we seek partners, customers, and managers, we strike gold when we find folks who love what’s good about us and don’t mind what’s bad about us.

As these relationships start with appreciation of our strengths, these managers, partners, users, and team members give us the most useful feedback, push us to become better, and also give us air cover and support when we inevitably screw up. We all need that appreciation, push, and support to ship our best work.

And, making the effort to find our segment makes all the difference in the world.

Magic and math

A simple way to understand how investors think about our business/product – they come for the magic and stay for the math.

The inspiring story is the magic that many of us associate with charismatic leaders. In times when everything is going up and to the right, there’s a lot of appetite for magic.

Eventually, however, no amount of magic can save a business or product from the math. So, our ability to deliver and capture value in a way that results in consistent y/y growth rates is the kind of math that creates its own magic in the long run.

From time to time, it is natural to wonder how much more successful our businesses/products might be with more magic and showmanship.

But, that’s short term thinking. The magic is the personality and the math is the character. And, while personality opens doors, character keeps those doors open.

So, if we had to invest in just one thing, let that one thing be making the math work.

This applies just as well to those who invest in our careers/lives.

PS: Unlike investors, our users/customers are just as likely to stay for the magic as they are for the math.

Discomfort and the obstacle

On most days in my attempts to do a half decent job as a Product Manager, I see two themes show up regularly in my reflections – i) Something new either got messed up or got real close to getting messed up and ii) I did something that upset somebody.

And, a realization that has accompanied these reflections over time is that there is no solve for this. (This was disappointing.. until it was liberating.)

Here’s why  – if we’re both stretching ourselves beyond our comfort zone and attempting to drive change, it is impossible to avoid making mistakes. The only questions worth focusing on then are – are we aware of them? And, are we following up with creative, constructive, and corrective responses?

As long as we’re doing that, that uncomfortable feeling in the stomach is the price we pay for our own learning, long term growth, and, hopefully, progress.

Of course, this isn’t limited to product management – it applies just as well to many jobs, to parenting, and to life.

The discomfort is a leading indicator of the obstacle. And, the obstacle is the way.