With a weak product strategy, funding could be the worst thing that happens

Product strategy.

There, you can cross that off your ‘management BS bingo’ chart. I’ll try to avoid saying “holistic”, “paradigm” or “agile”, but believe me you need to think strategically. Now, to explode some myths about strategy:

• Your business absolutely needs it. Yes it does. Don’t confuse chaos and reactiveness with agility (oops).
• Successful businesses pay a lot of attention to it. They don’t talk about their strategy of course, because they prefer you to think they’re clairvoyant.
• It’s not a secret, deep magick, or the preserve of a special breed of business guru. Anyone can do it, although you will need to learn some things about yourself in the process.
• You can be taught how to do it, like juggling. No really, I learned how to juggle and I’m really, really clumsy.
• You don’t need to read 14 trendy business self-help books a week. These will just eat up your time and make you feel inadequate.

So what is this thing, “strategy”, other than a cliché blithely trotted out by marketeers, chancer consultants and corporate climbers? It’s simply shorthand for a long-term plan of action designed to achieve your business goals. Because it’s long-term, it should also be fairly high-level, leaving room for tactical decisions and changes of direction within its bounds.

Sounds pretty obvious that you should have a product strategy, doesn’t it?

Yet, it’s amazing how rarely businesses actually formulate a proper strategy, especially in the software world. There are various reasons for this, most of them arising from those dreaded cognitive biases to which humans are so prone. Other humans anyway; you and I are strong-minded enough to remain objective, right? Hmm, so do any of these scenarios sound familiar?

• The CEO is smart and assertive, and tends to be right about things, so naturally has to make all the decisions and their opinion trumps everything.
• Every week the exec team has a new idea, and everyone has to drop what they’re doing and attend to it. Nothing ever gets finished and missed deadlines are the norm.
• Teams are under constant pressure, and made to feel like failures. Morale is low, churn is high and people burn out. It’s a death march.

These problems happen all the time in companies that aren’t working together to achieve clearly defined outcomes in a measurable way. In the absence of a clear strategy, executives and managers resort to opinion and force of will to try to make progress, which is never a formula for sustainable success.

In startup culture, the problems listed above are frequently hidden, or even seen as benefits. Of course the Founder CEO makes all the decisions – who else? Of course we keep changing course, that’s agile (oops again)! And yeah, no self-respecting startup works their staff less than seventy hours per week… in fact they should sleep in the office!

These attitudes are perpetuated by innumerable stories of ‘success’ from Silicon Valley, where VC money seems to spring from the ground for anyone who fits the tech founder blueprint. Success seems to be equated with being funded, and there’s a suspicion that actually being a useful product that people will pay for can be overlooked in the endless search for the next funding round.

The investment world is not immune to such delusion. VCs do their due diligence... 

• on the founders 
• on their accounts and financial projections
• on the technology they’re using
• on whether their business plan has been filled out correctly
• have they done some market research?
• have they sized the market? 
• have they checked out their competitors?

All well and good, but there seems to be a persistent belief that, simply because you’re a tech startup, you’re going to be the next Uber. Because, y’know, digital disruption. Unfortunately, this can blind investors to critical flaws in (or absence of) the value proposition. It can be some time before the realisation dawns that a whole lot of money has been thrown away. Investors really should look deeper at what makes for sustainable success and longevity, namely a customer-first strategy.

How to do product strategy

There are many tools which help you to organise and communicate your thoughts, such as the Lean Canvas, Value Proposition Canvas and Product Vision Board. However, you shouldn’t imagine that you can arrive at a solid product strategy simply by spending time at a whiteboard armed with your Sharpies and sticky notes.

It’s buyers, actual or potential, that turn a business idea into a profitable bottom line. They will only buy the product, and keep buying it, if it solves a problem that’s bad enough, or creates a gain that’s valuable enough. The opinions of the founders and their funders are worthless in this matter; if you follow these too closely you risk ending up with a product that on paper is full of useful features but nobody wants to buy, like Homer’s Car.

The only thing that counts is hard evidence gained from well-constructed user research. The real work happens out in the field, talking to your customers and finding out what they need.

Stubborn on the vision, flexible on the details of execution

Once you have clearly identified your target segments (and perhaps user/buyer personas), the problem(s) you’re trying to solve and a high-level concept for how you’re going to do it, you’re ready to start. Wait, though – don’t you need a detailed plan or design? How will you know when it’s ready? You need something to show those investors!

The truth is that digital products are never ‘ready’. Customer expectations change so quickly that you can’t hope to ever reach a point where the product is perfect. What you can do is ensure that your product strategy keeps your team focused on a ‘North Star’, always working towards solving the target problem. You must empower them to make decisions about product features, for example, so long as they’re validated by ongoing customer research and they support the strategy.