How to Develop a Product Vision and Product Strategy?
Why product vision and product strategy are needed to make a successful product effort? How to develop the product vision and product strategy in a way to contribute to company and customer success? Let’s figure this out.
In the previous post, I focused on why any product effort is made. In fact, it is needed to bring a business benefit by solving a problem of a certain market. I considered business objectives that come from business vision and business strategy as triggers for making any product effort.
This time, I want to be focused on why product vision and product strategy are crucial and how to derive them from business vision and business strategy. To ensure that any product effort results in company success, a dedicated product team should develop the product vision to be aligned with the business vision. Similarly, the business strategy should direct product strategy. Every product effort towards the accomplishment of a product objective should contribute to the successful accomplishment of a business objective, as the following picture shows.
Product Vision Development
Product vision reveals the purpose of a product.
To put it another way, it gives a clear-cut answer to why a product is supposed to be created. The product vision should be aligned with business vision to ensure that a product supports the company effort in building up a successful business.
As an example, business vision could be the following: “we help companies build the right products”. This vision clearly shows the higher purpose for what the company exists. However, it does not explains how the vision will be achieved. How the company will support companies in building something valuable? Will it provide on-site training? Will it sell unique online courses? Will the company build any digital product? It is not known as long as a business strategy is lacking.
A business strategy explains how business vision will be realized. It determines, for example, what your business is all about, product or service you are selling, and a problem you are solving as a company. For instance, the business strategy of a startup company could be as given below.
“Our target is to help European startup companies lunch their products and achieve product-market fit within 6 months. We will create innovative digital products that align product management, product design, research, and data analysis and make these activities less challenging. Our company will hire world-class product advisors who will provide our company with hand-on support and share their experience and knowledge to create the best products in the market. What will make us different from our competitors is a better value proposition and customer support.”
It is clear from this business strategy that the company wants to help specific companies build the right products by means of rolling out innovative products. The company assumed that the best solution to deliver value would be a major focus on the development of digital products with solid customer support.
Business vision should be big enough to change a business strategy if it does not work. The business vision should give flexibility to pivot. As an example, if a company does not achieve product-market fit after a created product is delivered, it can phase out the product and start providing other services such as training or workshops.
A business strategy is dynamic. Its very first version is based on assumptions. It evolves through learning on the basis of gained knowledge about a market and its needs and expectations. Also, the business strategy depends on the maturity of a product. For example, once a product achieves product-market fit and generates expected revenue, most likely, it means that available strategy needs to be replaced. In other words, the first important step is taken successfully. And if a company wants to scale and grow the product, a new business strategy needs to be properly developed again.
If according to the business strategy, a company intends to build some product to gain a business benefit, a dedicated product team needs to be put together to provide necessary capabilities. Afterwards, product vision can be developed by the product people.
Existence of business vision and business strategy is a prerequisite for product vision development.
Let’s take given examples of business vision and business strategy and create product vision. The product vision could be as given below.
“Our product is a web-based application aimed at enabling startup product teams to reduce the risk of building the wrong product. This will be achieved by allowing teams to test customer value and user experience in a structured way based on the experience of the most successful companies and product experts”.
This vision supports the business vision and business strategy, which is to create digital products and hire world-class advisors. The vision conveys the message that customers and users will receive a solution that has an added value — opportunity to create a product in the similar way as the most successful companies do it.
Product Strategy Development
A product strategy shows how product vision is delivered.
A product strategy helps not to get lost during engagement in tactical activities such as the implementation of features, collecting requirements, managing stakeholders. Before any feature is developed, a dedicated product team needs to make sure that its heading is right.
According to Roman Pichler, a product management expert specialised in digital products, a product strategy consists of the three elements, namely market and needs; key features and differentiators; and business goals as the picture below shows.
Market and Needs
This element is needed to define target customers and users as well as their problems to be solved. In other words, it gives an answer to for whom a product is built and which desires it aims to satisfy.
Let’s take the example of the product vision above and improve it by adding specific information on the market and needs. It can be written in the following way as described below.
“Dedicated product teams who work for startup companies need to put a big effort into product discovery activities to validate their assumptions about customer value and user experience in order to make a release of a product less risky. There are a lot of techniques and approaches provided by different sources. Some of them can be out of date, misleading or inappropriate. Product teams want to invest less time into choosing proper techniques and wish to validate their ideas faster. Product teams aspire to use the most successful approaches”.
Key Features and Differentiators
This element shows how indicated problems are solved and which key features need to be delivered to generate unique value to stand out.
For instance, the following key features could solve the problems given above.
- “Provide the possibility to find out the best customer-oriented validation techniques by accessing a customer portfolio.
- Provide the possibility to adapt selected techniques to meet specific business needs of customers.
- Provide the possibility to easily teach product teams to use adapted techniques.
- Provide the possibility to manage and track progress.
- Enable customers and users to easily access customer support.”
Business Objectives
This element describes how a product brings a business benefit and contributes to the implementation of a business strategy. A business objective shows what a company needs to accomplish to result in success. You can read more about business objectives and find examples in my previous post.
As long as product vision and product strategy are derived from business vision and business strategy, it is easy to answer how a product helps a company to be successful.
Final Thoughts
Business vision and business strategy influence the definition of the right product. A product cannot be right as long as it does not meet business and customer expectations. Knowledge about these expectations helps to build a successful product vision and product strategy.
Product vision explains why a product is built. It focuses on customer and user outcomes. However, a product should work for business. Thus, business vision and business strategy are prerequisites for product vision development.
A product strategy shows how product vision is realized. It helps product teams not to stray from the path. The product strategy is made up of the elements that give an insight on who are target customers, what are their problems, what features need to be implemented, and how business can benefit from all of it.
