BEYOND THE BUILD
Product Strategy Done Right — Part 3: A Playbook to Developing A Winning Product Strategy for Product Leaders
Product leaders face the challenge of developing offerings that not only captivate customers but also stand the test of time. This requires carefully navigating the complexities of product strategy development — from market segmentation and user-centric design to ethical innovation and diversification. At the foundation of effective product strategy is a deep understanding of customer needs and the leveraging of personas to craft relatable, human-centric approaches. Armed with this insight, product leaders can then turn to strategic tools like the Strategy Canvas, Kano Model, and ERRC Grid to differentiate their products in the marketplace. However, crafting a differentiated strategy is only half the battle. Equally crucial is the ability to communicate the product vision, gain organizational buy-in, and ensure flawless execution. Recognizing the profound responsibility they hold, product leaders must also explore strategies for balancing innovation, user well-being, and sustainable business models — transforming their offerings into ethical forces for good. Furthermore, effective product leaders must leverage diversification strategies, uncovering opportunities for variants, unbundling, and leveraging software platforms to elevate their market leadership. Developing a winning product strategy requires building and utilizing a comprehensive set of insights, frameworks, and practical tools to drive sustainable success in today’s dynamic business landscape.
Table of Contents
Market Segmentation and Product Strategy Development
Sharpening the Focus — Identifying the Primary Need for Product Strategy Success
Personas: Transforming User Data into Relatable, Human-Centric Product Design and Strategies
Crafting Differentiated Products: Strategic Tools and Frameworks for Standing Out
From Strategy to Action: Communicating Your Product Strategy and Gaining Organizational Buy-In
Ethical Product Strategy: Balancing Innovation, User Well-Being, and Sustainable Business Models
Elevating Your Product Strategy: Leveraging Software Platforms for Success
Product Diversification Strategies — Variants and Unbundling
Strategic Product Bundling: Maximizing the Benefits, Avoiding the Pitfalls
Other reads related to this series of Effective Product Strategy Development
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Market Segmentation and Product Strategy Development
When developing a product strategy, the strategic process of dividing your potential customer base into distinct, homogeneous groups is the key to crafting a product that truly resonates with your target audience.
For effective product strategy development, market segmentation is a must-have whereby thoughtfully dividing your potential customer base and selecting the most promising segment, you can create a product that truly resonates and sets you up for long-term success.
Segmenting the market by customer traits and product benefits are two powerful approaches that can unlock valuable insights for product decisions.
Segmenting by Customer Traits
The first segmentation approach involves grouping customers based on their demographic, psychographic, and geographic characteristics. This could include factors like:
- Demographics: Age, gender, marital status, occupation, education, income
- Psychographics: Activities, interests, opinions, values
- Geography: Region, country, city, urban/rural
By understanding the distinct profiles of different customer segments, businesses can tailor their marketing, product development, and sales strategies to better meet the unique needs of each group. This type of segmentation provides a clear picture of who the customers are and what motivates them.
Segmenting by Product Benefits
The alternative approach is to segment the market based on the specific benefits the product offers or the problems it solves for customers.
This shifts the focus from customer attributes to the value proposition of the product itself.
This benefit-based segmentation can be particularly powerful, as it allows businesses to uncover hidden opportunities and even redefine market boundaries. A great example is Nintendo’s Wii console, which disrupted the gaming industry by appealing to a previously overlooked segment — older adults and young children. By focusing on the unique benefits of motion-controlled gaming, Nintendo was able to attract an entirely new customer base beyond the traditional “hardcore” gamers.
The advantage of this approach is that it encourages businesses to truly understand the needs and pain points of their potential customers, rather than relying solely on demographic data. This can lead to innovative product development and more effective marketing that resonates with the target audience.
Ultimately, both customer trait-based and benefit-based segmentation have their merits, and many successful products employ a combination of the two approaches. The key is to continuously explore new ways of slicing the market to uncover hidden opportunities and deliver exceptional value to customers.
Avoiding Segmentation Pitfalls
Of course, market segmentation is not without its challenges.
One common mistake is to blindly adhere to pre-existing customer groups, even when developing innovative new products.
- This is a common mistake where product teams cling to existing customer segments, even when developing innovative new products.
- The danger here is that the pre-defined segments may no longer be relevant or may overlook emerging opportunities.
- Product leaders need to be willing to challenge their assumptions and explore new ways of segmenting the market, rather than defaulting to the familiar.
Another pitfall is prematurely dismissing a good product idea simply because it doesn’t neatly fit into the existing market segments.
- This rigid, segmentation-first approach can cause businesses to miss out on valuable opportunities to redefine or expand the market.
- Instead, businesses should remain open-minded and flexible, using segmentation as a tool to uncover new possibilities, not as a constraint.
To avoid these pitfalls, the key is to cultivate a mindset of constant exploration and adaptation when it comes to market segmentation.
Therefore, product teams should:
- Regularly re-evaluate their existing segments to ensure they remain relevant and aligned with the evolving market.
- Actively seek out new ways to slice and dice the customer base, looking beyond traditional demographic or behavioral factors.
- Be willing to challenge their assumptions and explore innovative product ideas, even if they don’t immediately fit the pre-defined segments.
- Adopt an iterative, test-and-learn approach to segmentation, continuously validating and refining their strategies.
By staying flexible and open-minded, businesses can leverage market segmentation as a powerful tool to uncover hidden opportunities and deliver exceptional value to their customers.
Avoiding the traps of rigidity and preconceived notions is crucial for maintaining a competitive edge in today’s dynamic marketplace.
Segmenting and Selecting the Optimal Segment Using the GE-McKinsey 9-box matrix
The GE-McKinsey 9-box matrix is a powerful tool that helps product teams assess the attractiveness of a given market segment and their ability to effectively serve that segment. The matrix evaluates two key dimensions:
- Segment Attractiveness: i) Market need: How strong is the need for the product/service? How much will customers benefit from it? ii) Market size: How large is the potential customer base? iii) Market growth: Is the segment showing signs of growth and expansion? iv) Competitive landscape: How intense is the competition in this segment?
- Business Strength: i) Customer relationships: Does the business have the necessary expertise, marketing channels, and customer acquisition capabilities to serve this segment effectively? ii) Entry barriers: Are there any significant barriers (e.g., regulatory requirements) to entering and competing in this segment?
By plotting the various segmentation options on this matrix, businesses can identify the most promising segment — one that is highly attractive and aligns well with the company’s strengths.
However, the segmentation process doesn’t end with segmenting and selecting the more attractive ones.
To truly validate the selected segment, product leaders should combine this analytical approach with an iterative strategy-validation process. This involves:
- Choosing the most promising segment based on the GE/McKinsey assessment.
- Conducting further validation work on this segment, such as direct customer observation, problem interviews, and competitive analysis.
- If the validation is unsuccessful, move on to the next most promising segment and repeat the validation process.
- Continue this iterative cycle until a suitable segment is identified or the business decides to pivot and fundamentally change the product strategy.
By blending the GE/McKinsey matrix with this iterative validation approach, businesses can make more informed, data-driven decisions about the optimal market segment to target. This helps ensure that the selected segment is truly primed for the product’s success, reducing the risk of costly missteps.
Ultimately, this comprehensive segmentation process empowers businesses to deeply understand their target customers, tailor their offerings accordingly and position themselves for long-term growth and market leadership
Sharpening the Focus — Identifying the Primary Need for Product Strategy Success
The key to product success often lies in uncovering the right need — the problem that people desperately want to be solved or the benefit they can’t imagine living without.
Whether you’re creating a “vitamin” (a nice-to-have product) or a “painkiller” (a solution to a pressing issue), your ability to identify and address this fundamental need will be the driving force behind your product’s triumph.
Distinguishing Between Vitamins and Painkillers
Vitamins are those products that provide a pleasant, desirable experience.
Think of the Sonos wireless hi-fi system, which offers the convenience and joy of seamless music streaming.
Painkillers, on the other hand, are the solutions that tackle a burning problem.
Like the search engines that help us find information on the internet.
While both types of products can find success, the key is to ensure that your offering truly resonates with your target audience, whether it’s addressing a pressing need or delivering an irresistible benefit. After all, no matter how you classify your product, it must create tangible value for its users — or it will simply fade into obscurity.
Step 1 — Establishing the Right Mindset
Discovering the right need requires more than just a methodical approach; it demands the cultivation of the right product and business mindset. Here are four essential guidelines to keep in mind for effective product leadership:
- Let go of your product ideas and business goals — at least for now. If you’re too attached to a specific solution, you’ll struggle to empathize with your users and may miss crucial insights.
- Develop genuine empathy for your target audience. Reach out with humility and a genuine desire to understand their feelings, needs, and interests.
- Keep an open mind and be willing to challenge your assumptions. The right need may not align with your preconceived notions, so be prepared to adapt and learn.
- Take the time required and avoid rushing the process. Discovering needs is not a sprint, but a journey of exploration and discovery.
Step 2 — Uncovering Needs
Whether you have a specific need in mind, a product idea, or a target group, there are three powerful techniques to help you uncover the right need to address:
- Directly observe and talk to your prospective users and customers. Understand their pain points, frustrations, and the emotions they experience when using existing solutions.
- Gather insights from customer support data and complaint logs. Identify the recurring problems and struggles that your target audience faces.
- Leverage your own relevant personal experience, but be mindful of your biases and preferences.
By combining these techniques with the right mindset, you’ll be well on your way to discovering the need that’s worth addressing — the one that will truly resonate with your audience and set your product up for long-term success.
Empathy and Customer Journey Mapping: In pursuit of product success, two powerful tools stand out when it comes to understanding customers: i) Empathy and ii) Consumer Journey Maps.
- Empathy Mapping — Seeing Through Your Customers’ Eyes: An empathy map is a simple tool that helps you truly understand your target audience. By capturing the who, what, and why of your customer’s experiences, this visual aid fosters genuine empathy and insight. At the heart of an empathy map are five key elements: i) Who the customer is, including relevant demographic details, ii) What the customer says and does, iii) The feelings and emotions the customer experiences, iv) The problems the customer wants to solve, v) The benefits the customer seeks to obtain. The updated Empathy Map version also incorporates several key changes: i) Incorporating a “Goal” section to clarify the context and purpose of the exercise. ii) Numbering the sections to make the intended sequence more explicit. iii) Placing “Think and Feel” centrally inside the head to emphasize the difference between observable and non-observable phenomena. iv) Moving “Pains and Gains” inside the head. v) Adding thought-starter questions to facilitate the exercise. The recommended usage process involves: 1) Starting with the Goal section to define the subject and its objective. 2) Working clockwise around the external sections (See, Say, Do, Hear) to imagine the user’s experience. 3) Focusing on the internal “Think and Feel” section, including Pains and Gains. 4) Potentially using the completed Empathy Map as an input for Value Proposition design.
The key when building this map is to focus on direct observations, avoiding the temptation to speculate or project your assumptions. By truly listening and observing, you can uncover the unvarnished truth about your customers’ needs and desires.
- Customer Journey Maps: Complementing the empathy map is the consumer journey map — a visual representation of how users and customers interact with your product (or a competitor’s) throughout their entire experience. This map typically starts with how people become aware of the product, followed by the steps they take to evaluate, acquire, and use it. By tracing this consumption chain, you can identify pain points, inefficiencies, and opportunities to streamline the customer experience. When creating a consumer journey map, consider not just a single product, but the broader ecosystem of products and services that your customers engage with. This holistic view can reveal hidden insights and uncover innovative ways to address your customers’ needs.
These visual aids not only capture the nuances of how users and customers currently get their jobs done, but they also shine a light on the unmet needs and pain points that your product can address.
Step 3 — Refining the Need Statement
For effective product development, the ability to identify and articulate the right need is the difference between a runaway success and a costly failure. It’s not enough to simply uncover a broad, vague problem — you need to refine and sharpen that need into a specific, actionable statement that can truly guide your product strategy.
The process of making a need statement more precise often starts with a broad, general description, like “help me improve my eating habits.” While this is a good starting point, it lacks the clarity and focus needed to drive effective product development. To transform a vague need into a laser-focused one, apply these three essential tips:
- Frame the desired benefit from the customer perspective: Frame the need from the user’s or customer’s perspective focusing on the desired benefit the user wants to achieve, using a template like “help me [desired benefit or problem to be solved].”
- Make it testable: Ensure the need statement is specific enough that you can validate its existence and assess the risks involved. For the example above, “Help me reduce my risk of developing type-2 diabetes by 20%.” This version provides a clear, measurable target that can be validated through research and testing.
- Capture the outcome: Focus on the result the user or customer wants to achieve, not the features or outputs of the product. For example “Help me improve my eating habits to live a healthier, more energetic life.” This statement shifts the focus to the user’s desired result — a healthier, more energetic lifestyle — rather than just the eating habits themselves. Putting it all together, the refined, focused need statement could be: “Help me reduce my risk of developing type-2 diabetes by 20% so I can live a healthier, more energetic life.” This statement is specific, testable, and centered on the user’s desired outcome — a clear and compelling foundation for product development.
By applying these tips, we’ve transformed a broad, vague need into a precise, actionable statement that will guide the product strategy and ensure it truly resonates with the target audience.
Step 4 — Selecting the Primary Need
But what if you uncover multiple needs that your product could address? This is a common scenario, and it requires you to identify the primary need — the core reason people would use or purchase your offering. Selecting the primary need is crucial, as it will shape your value proposition, guide the user experience design, and inform your marketing messaging. Without a clear primary need, your product risks becoming unfocused and failing to truly meet the most pressing demands of your target customers. After all, a product that truly benefits its users is often the foundation for long-term commercial success. Let’s consider an example of selecting a primary need when faced with multiple potential needs that a product could address.
Suppose you are developing a new fitness-tracking app. Through your research and customer interviews, you’ve identified the following potential needs that the app could address:
- Help users lose weight and improve their overall health.
- Allow users to better track and manage their fitness activities.
- Provide users with personalized workout and nutrition recommendations. In this scenario, you have three distinct needs that the app could potentially fulfill.
To select the primary need, you would need to evaluate each one based on factors like:
- Strength of the customer need — How pressing and important is this need for your target users?
- Alignment with your business goals — Which need best fits your overall product strategy and vision?
- Feasibility to address — Can you realistically build a solution that effectively meets this need?
- Competitive landscape — Is this a need that is currently underserved by existing products?
Let’s say after this analysis, you determine that the primary need is “Help users lose weight and improve their overall health.”
This would be the core reason people would use your fitness tracking app. Selecting this as the primary need would then shape various aspects of your product development:
- Value Proposition: Your app’s value proposition would be centered around helping users achieve their weight loss and health goals.
- User Experience: The app’s features and interface would be designed specifically to support users in weight loss and health improvement.
- Marketing: Your messaging and positioning would emphasize the app’s ability to drive tangible health and wellness outcomes for users.
By clearly identifying and prioritizing the primary need, you can ensure your product development efforts are laser-focused on delivering maximum value to your target customers.
This foundation is crucial for long-term commercial success, as it keeps the user’s most pressing needs at the center of your product strategy.
Personas: Transforming User Data into Relatable, Human-Centric Product Design and Strategies
When developing products, it’s easy to get lost in a sea of data, demographics, and user research. But to truly connect with your target audience and create products that resonate, you need a more personal approach — and that’s when user personas — those captivating fictional characters — breathe life into your users and customers.
What are Personas?
Personas are powerful tools that go far beyond just static user profiles.
They are dynamic, living representations of the individuals at the heart of your product development efforts.
There are many benefits to building robust user personas, including:
- Fostering Team Empathy and Understanding: Personas help your development teams better relate to and deeply understand the target users. By creating these vivid character sketches, you can shift the mindset from designing for generic “users” to designing for specific, relatable individuals.
- Guiding Intuitive User Experiences: The insights gleaned from persona development can directly inform the design of your product or service. Personas allow you to tailor the user experience to the unique needs, goals, and pain points of your target audience, resulting in an intuitive, user-centric offering.
- Informing Compelling Marketing: Personas don’t just benefit the product team — they can also be invaluable for your marketing efforts. By understanding the specific motivations, interests, and challenges of your personas, you can craft messaging and content that speaks directly to your customers’ needs and desires.
The richness of persona-driven design extends far beyond surface-level demographics. These character sketches allow you to truly empathize with your users, guiding you towards intuitive experiences and compelling marketing that resonates on a fundamental level.
Using personas ensures your product development efforts are centered around the people who matter most — your customers.
Structuring and Bringing Personas to Life — Transforming Abstract Data into Relatable Characters
Crafting effective personas is an art form that requires striking the right balance between detailed richness and focused simplicity. That’s where a well-designed persona template can be a game-changer, guiding you through the key elements that bring these character sketches to life.
![A sample of the simplest user persona template [Source] — you can expand this based on your needs — HubSpot has a more advanced template if you want to check it out!](https://miro.medium.com/v2/resize:fit:1400/format:webp/1*Cbl9Mo6nwxyvVtIRNTwlWg.jpeg)
The simplest user persona template is structured around three essential components that work in harmony to create a powerful, relatable representation of your target users and customers.
- Picture and Name: Giving your persona a face and a name is a crucial first step in making them feel like a real, living individual. The visual representation and the byname you choose should be carefully selected to align with your target audience. This humanizing touch helps your team empathize with the persona and relate to them on a deeper level.
- Persona Details: Within this section, you’ll capture the relevant characteristics, attitudes, and behaviors of your persona. But the key is to avoid the temptation of information overload. Focus only on the details that truly matter in understanding this individual and their motivations. Things like demographics, interests, pain points, and lifestyle factors can all contribute to a well-rounded persona profile.
- Persona Goal: At the heart of the persona lies their primary goal — the problem they want to solve or the benefit they seek to obtain. This is a critical element, as it shifts the focus away from your product vision and instead centers on the persona’s perspective and needs. Describing the goal from the user’s point of view ensures your persona remains grounded in real human motivations, not just features or functionality.
By grounding your personas in visual cues, relevant details, and user-centric goals, you transform abstract data into relatable, empathetic characters. These personas feel like real people, not just demographic targets. And this sense of authenticity is what allows them to guide your product development efforts with genuine, human-centered insights.
By consistently structuring your personas around these three key components, you can ensure they remain focused, impactful, and truly representative of the people you aim to serve. Personas built upon this foundation become powerful tools that breathe life into your user research, inform your design decisions, and connect your team with the individuals at the heart of your business.
Essential Tactics for Crafting Effective Personas
Developing personas that truly resonate with your target audience requires a thoughtful, user-centric approach. By following these tactics, you can create personas that become powerful tools to guide your product development efforts.
- Understand Your Audience: The foundation for effective personas starts with thorough user research. Before you even begin crafting your personas, you need to deeply understand the needs, pain points, and motivations of your target users. Conduct interviews, observe user behavior, and gather insights that will inform the creation of personas grounded in reality.
- Collaborate with Your Team: Personas are most effective when they’re a collaborative effort. Engage your cross-functional team, including developers, designers, and marketers, in the persona creation process. This fosters a shared understanding of your target users and ensures buy-in across the organization.
- Distinguish User and Buyer Personas: In many contexts, especially in B2B, it’s crucial to recognize that the goals and characteristics of your users and buyers may differ. User personas represent the individuals who will directly interact with your product, while buyer personas capture the decision-makers who may have different priorities and needs. Developing both types of personas can provide a more holistic understanding of your target audience.
- Identify a Primary Persona: With multiple personas to consider, it’s important to select a primary persona that represents your core target audience. This primary persona should be the focal point of your product development efforts, ensuring your team remains laser-focused on the needs of your most important users.
- Prioritize the Primary Goal: When defining your personas, resist the temptation to create a laundry list of objectives. Instead, capture the persona’s single most important goal or problem they’re trying to solve. This primary goal should be the driving force behind your product strategy and user experience design.
- Start Simple and Iterate: Personas don’t need to be overly complex to be effective. Start with initial, good-enough persona descriptions and refine them over time based on ongoing user research. This iterative approach allows you to continuously improve your understanding of your target audience and adapt your personas accordingly.
- Bring Personas to Life: The true power of personas lies in how actively you leverage them throughout the product lifecycle. From ideation to user stories and beyond, ensure your personas are integrated into every aspect of your product development process. This will keep your team focused on the needs of your target users and customers.
By bringing your users and customers to life through carefully crafted personas, you’ll empower your teams, inform your design decisions, and connect with your audience in a way that drives lasting success.
Fellow Product Enthusiast!
I’d love to hear your thoughts!
Share your insights and feedback in the comments below and let’s continue this discussion.
Crafting Differentiated Products: Strategic Tools and Frameworks for Standing Out
In today’s crowded marketplace, standing out from the competition is not easy. But with the right tools and mindset, you can devise a product strategy that transforms your product into a differentiated one.
Product leaders have three key tools at their disposal to help develop a differentiated product offering:
- The Strategy Canvas: This framework allows product leaders to visualize the competitive landscape and identify uncontested market space where they can create unique value. By mapping out the key factors that customers consider when choosing between competing products, the Strategy Canvas reveals opportunities to differentiate and outperform rivals.
- The Kano Model: This customer satisfaction-based approach helps product teams understand which product features and attributes are most important to their target customers. By categorizing features as basic, performance, or delightful, the Kano Model guides the prioritization of development efforts to maximize customer satisfaction and loyalty.
- The ERRC Grid: The Eliminate-Reduce-Raise-Create (ERRC) Grid is a strategic tool that prompts product leaders to challenge industry norms and reconstruct the customer value proposition. By systematically examining which product/service elements to eliminate, reduce, raise, or create, the ERRC Grid unlocks innovative ways to stand out from the competition.
Tool 1 — The Strategy Canvas
At the heart of a differentiation strategy lies the powerful Strategy Canvas. This visual tool allows product leaders to analyze their offerings against the competition and uncover new avenues for creating a unique and compelling value proposition.
The Strategy Canvas was originally developed as part of the Blue Ocean Strategy framework, designed to help businesses identify untapped growth opportunities by charting a course away from the crowded, competitive “red ocean” of their industry. However, this versatile tool can be just as effectively applied to individual products and services.
Originally developed as part of the Blue Ocean Strategy, the strategy canvas was designed to help businesses rank themselves against their rivals and identify untapped growth opportunities. But this versatile tool can be just as effectively applied to individual products.
- Mapping the Competitive Landscape: i) The first step is to determine the key factors that define the current industry standard and are used to advertise and sell products. These factors become the horizontal axis of your strategy canvas. Limit yourself to around 10 factors to maintain focus and clarity. ii) Next, rank your product and your competitors based on the degree to which they fulfill each of these factors. This is not a scientific exercise, but rather a qualitative assessment based on your research. Connect these scores to create value curves — and aim for a curve that diverges from the industry standard.
- Achieving Differentiation: The key to making your product stand out is to strategically eliminate, reduce, raise, and create new factors. This is where the true power of the strategy canvas lies. By thoughtfully adjusting the factors that define your offering, you can carve out a unique position in the market. Perhaps you’ll eliminate features that have become table stakes, reduce the emphasis on certain performance metrics, raise the bar on factors that truly matter to your target customers, and introduce entirely new elements that redefine the category.
- Maintaining Differentiation Over Time: The strategy canvas is not just a tool for new product launches — it’s an essential ongoing exercise. As the competitive landscape evolves, you must regularly revisit and update your canvas to ensure your product remains differentiated. Look no further than the iPhone as an example. As Apple’s competitors caught up with the original features, the company continuously introduced new factors, such as face recognition and enhanced camera capabilities, to stay ahead of the curve.
In a world of copy-cat and replicated products, the strategy canvas can help empower you to chart a bold, differentiated course. By deeply understanding your competitive landscape and strategically adjusting the factors that define your offering, you can transform your product into a true industry standout.
Tool 2 — The Kano Model
At the heart of the Kano model lies a simple yet powerful premise:
Product features can be categorized based on their impact on customer satisfaction.
This framework allows product teams to make more informed decisions about which features to prioritize and develop. The model examines features based on two dimensions:
- The investment is needed to implement them (horizontal axis)
- Their potential to satisfy customers (vertical axis)
This analysis allows the model to distinguish three distinct feature categories:
- Basic Features: These are the must-have elements without which the product simply cannot be viable. For the original iPhone, basic features included making calls and sending text messages. These are the table stakes that customers expect, and their absence would lead to significant dissatisfaction.
- Performance Features: These features lead to a linear increase in customer satisfaction — the more you offer, the better. The iPhone’s internet browser and media player fell into this category. Customers actively seek out and appreciate these features, and they can provide a competitive edge.
- Delighter Features: These are the features that truly delight and excite customers. The iPhone’s revolutionary touch screen and sleek design were prime examples of delighters. While their presence leads to high customer satisfaction, their absence does not necessarily cause dissatisfaction.
The Kano Model offers an important insight: the features that differentiate a product today may not ensure its long-term attractiveness.
The model predicts that:
1) Delighters will eventually become performance features
2) Performance features will turn into basic, expected elements
For example, the iPhone’s touch screen — once a groundbreaking delighter — has now become a basic expectation for any modern smartphone. This means product teams must continuously invest in keeping their offerings fresh and differentiated, leveraging the Kano Model to strategically eliminate, reduce, raise, and create new features.
While traditional Kano analysis involves detailed customer surveys and interviews, product teams can take a more informal, iterative approach when building their strategy:
- Focus on understanding if the product possesses true delighters or standout features that will set it apart from the competition.
- Prioritize prototype-based feedback, as it is far more valuable than abstract questions about hypothetical features.
- Be selective in applying the Kano Model, targeting only the features most likely to impact the product’s desirability.
By understanding the evolving nature of feature categories and strategically managing your offering, you can ensure your product remains captivating and irresistible to your target customers.
By categorizing features based on their impact on customer satisfaction, teams can focus their efforts on the elements that will truly delight and differentiate their offering in the market.
Tool 3 — The ERRC Grid: Simplifying to Standout
Most often, the path to product success is paved with strategic simplification. While the temptation may be to pack your offering with every feature under the sun, the true key to differentiation lies in the art of elimination, reduction, and innovation.
The Eliminate-Reduce-Raise-Create (ERRC) grid is a powerful tool from the Blue Ocean Strategy that empowers you to transform your product into a true industry disruptor.
At the heart of the ERRC grid are four essential elements:
- Eliminate: Identify the features that you will remove or simply not provide in your product. These may be industry standards that have become table stakes.
- Reduce: Determine which features you will offer to a lesser extent compared to your competitors. Prioritize the ones that matter least to your target customers.
- Raise: Strengthen and enhance the features that truly resonate with your audience and set your product apart.
- Create: Introduce entirely new features that your competitors lack, redefining the category and delighting your users.
Let’s look at how Apple masterfully applied the ERRC grid to the original iPhone launched in 2008:
By strategically simplifying their offering, Apple was able to create a truly differentiated product that stood out in a crowded market. Of course, this requires a deep understanding of your target users and the problem you’re solving — as well as a healthy dose of courage.
Simplifying for Continuous Differentiation — The ERRC grid isn’t just for new product launches. It’s an essential tool for maintaining differentiation over time, as your offering matures and the competitive landscape evolves. When rewriting or updating an existing product, identify and eliminate redundant or underused features ruthlessly. Leverage user research and analytics to uncover the features that are no longer serving your customers. And consider unbundling specialized features into standalone offerings to create a more focused, user-centric experience.
From Strategy to Action: Communicating Your Product Strategy and Gaining Organizational Buy-In
While having a clear and well-defined strategy is crucial to success, translating that strategy into a tangible, communicable form can be challenging. This is where a Vision Board can help communicate your strategy — a powerful tool that empowers you to capture your product’s strategic direction and bring it to life.
The Five Essential Elements of The Product Vision Board
The product vision board empowers you to capture your product’s strategic direction in a clear, communicable, and testable format and is structured around five interconnected components that work together to form a comprehensive plan:
- Vision: This is the overarching purpose and aspiration that guides your product’s development. It serves as the North Star, aligning your team and stakeholders around a shared, inspiring goal. Your vision should be bold, ambitious, and enduring, capturing the true essence of why your product exists.
- Target Group: This element defines the specific market segment or user persona you’re aiming to serve. By clearly articulating your target audience, you can craft a compelling offering that truly resonates with their needs and desires. If your users and customers are distinct, be sure to capture them separately and indicate their relative priority.
- Needs: This is the primary problem you’re solving or the key benefit you’re delivering. It represents the core reason why your customers would choose your product over the competition. Clearly defining this need is crucial, as it will drive the development of your offering and shape your value proposition.
- Product: This section outlines the features and capabilities that make your offering unique and desirable. These are the strategic differentiators that set your product apart from the competition. Focus on identifying 3–5 key elements that truly captivate your target audience, rather than creating an exhaustive product backlog.
- Business Goals: These are the tangible benefits your product will bring to your organization. By articulating clear, measurable objectives, you can ensure your product strategy is aligned with your company’s broader vision and priorities. Avoid generic goals and instead focus on quantifiable outcomes that demonstrate the value your offering will deliver.
A Holistic, Adaptable, and Testable Roadmap
By structuring your product strategy around these five essential elements, you can create a roadmap that is not only clear and communicable but also testable and adaptable.
The interconnected nature of the vision board ensures that each component informs and reinforces the others. Your target audience, for example, directly shapes the needs you’re addressing and the features you’re developing. And your business goals provide a crucial lens through which to evaluate and refine your overall strategy.
Moreover, by iterating on the content until it is specific enough to validate, you can transform the product vision board into a living, testable plan. This allows you to continuously refine your strategy based on user feedback and market changes, keeping your product aligned with evolving customer needs.
The Key Principles of Successfully Building a Vision Board
Developing an effective product vision board requires a thoughtful, user-centric approach. As you work through this strategic exercise, keep the following guiding principles in mind:
- Let the Vision Lead the Way: The product vision is the North Star that aligns your team and stakeholders around a shared, inspiring goal. Craft a vision that is bold, ambitious, and enduring — one that captures the true purpose and aspiration behind your offering. Avoid the trap of simply restating your product idea or a generic business objective. Instead, focus on creating a vision statement that is: Inspiring: It should ignite passion and excitement within your organization. Shared: It should resonate with and be embraced by all key stakeholders. Ethical: It should reflect your company’s values and commitment to doing good. Concise: It should be succinct and easy to communicate. Ambitious: It should set a high bar and challenge your team to achieve greatness. Enduring: It should guide your product development efforts for the next 5–10 years. By leading with a clear, compelling vision, you can ensure your product strategy remains focused, aligned, and true to its core purpose.
- Focus on a Specific Target: Describing your target group in detail is crucial for crafting a product that truly resonates. Use specific demographic and behavioral attributes to paint a vivid picture of your ideal user or customer. Resist the temptation to cast a wide net — a focused, well-defined segment is key to creating a compelling, user-centric offering. If your users and customers are distinct, be sure to capture them separately and indicate their relative priority. This level of specificity allows you to deeply understand your target audience’s needs, pain points, and motivations, informing every aspect of your product strategy.
- Clearly Define the Need: At the heart of your product vision board lies the primary need you’re aiming to address. Articulate the specific problem you’re solving or the tangible benefit you’re delivering in clear, user-centric terms. Identify this primary need and elevate it to the forefront of your strategy. Ensure it is the driving force behind your product development efforts, rather than being overshadowed by features or business objectives. Be wary of confusing needs with product features — a need describes the “why” behind your offering, while features describe the “what.” Maintaining this distinction is crucial for creating a strategy that is truly grounded in user value.
- Highlight Your Unique Strengths: Pinpoint 3–5 key features that differentiate your product and make it truly desirable to your target audience. These are the strategic differentiators that set your offering apart from the competition. Avoid turning this section into an exhaustive product backlog. Instead, focus on the most impactful, captivating elements that will resonate with your users. Keep an open mind and be prepared to evolve this list as you gather more user insights and feedback. By honing in on your product’s unique strengths, you can craft a compelling value proposition that communicates why customers should choose your offering over alternatives.
- Quantify Business Impact: State your business goals in clear, measurable terms, prioritizing them to create focus and alignment. Avoid generic objectives like “make money” or “grow the company.” Instead, articulate the specific, quantifiable benefits your product will deliver to the organization. These quantifiable goals might include metrics like increased revenue, reduced costs, improved customer retention, or enhanced brand equity. By tying your product strategy to tangible business outcomes, you can ensure your offering is aligned with your company’s broader vision and priorities.
By keeping these key principles at the forefront, you can craft a product vision board that is not only strategically sound, but also inspiring, user-centric, and actionable. This holistic, testable roadmap will empower your team to deliver offerings that captivate customers and drive lasting success.
The Collaborative Power of the Product Vision Board
The true power of the product vision board lies in its collaborative nature. By engaging key stakeholders and the development team in a workshop setting to co-create this strategic roadmap, product leaders unlock a wealth of benefits that transform the vision board into a transformative tool.
- Fostering Buy-In and Shared Ownership: First and foremost, this collaborative approach fosters buy-in and shared ownership across the organization. When the team actively participates in shaping the vision, needs, target audience, product features, and business goals, they develop a deep sense of investment in the outcome. This shared ownership helps ensure the vision board is embraced and championed throughout the product development lifecycle.
- Leveraging Diverse Perspectives: By tapping into the diverse perspectives and collective knowledge of the cross-functional team, product leaders can craft a vision board that is truly representative of the product’s strategic direction. Developers may surface technical insights, designers can contribute user experience expertise, and marketing can lend their customers intimacy — all of which coalesce into a holistic, well-rounded plan.
- Encouraging Healthy Debate: The collaborative workshop setting also encourages healthy debate and constructive challenge. Team members can push back on assumptions, offer alternative viewpoints, and work together to refine the vision board until it is specific enough to validate. This iterative process is crucial, as it transforms the vision board from a static document into a living, testable strategy.
- Maintaining Alignment and Responsiveness: By continuously refining the content of the vision board based on the team’s feedback, product leaders can ensure it remains closely aligned with evolving customer needs and market changes. User research, competitive analysis, and other inputs can be seamlessly incorporated, keeping the product strategy nimble and responsive.
The result is a vision board that is not only clear and communicable but also deeply rooted in the collective wisdom of the organization. This collaborative, iterative approach empowers the team to take true ownership of the strategic direction, fostering alignment, accountability, and a shared sense of purpose.
Complementing the Vision Board with a Business Model
To truly drive product success, product leaders must ensure their offering’s business viability by backing it up with a robust, well-designed business model.
- The Landscape of Digital Business Models: When it comes to digital products, there are several common business model archetypes to consider: i) Subscription: Customers pay a recurring fee to access the product, as seen with offerings like Microsoft Office and Adobe Creative Cloud. The subscription model offers several advantages, including a predictable revenue stream, the ability to continuously update and improve the offering, and a closer relationship with the customer base. However, it also requires building a compelling enough value proposition to justify the ongoing cost. ii) Freemium: A basic version of the product is offered for free, with premium features available for a charge, as exemplified by Spotify and Strava. The freemium model can be an effective way to acquire customers and build awareness, but it also requires carefully balancing the free and premium tiers to ensure the paid features are enticing enough to drive conversions. iii) Advertising: Revenue is generated through in-app or online advertisements, as employed by platforms like YouTube, Facebook, and Instagram. The advertising model can be highly scalable, as the marginal cost of serving additional users is relatively low. However, it also requires building a large, engaged user base and carefully managing the user experience to avoid alienating customers. iv) Bait and Hook: A free or discounted product is used to lock in customers, who are then monetized through the sale of another product or service, as with iTunes and the iPod. The bait-and-hook model can be effective in driving adoption and creating a loyal customer base. However, it also requires carefully orchestrating the relationship between the two products or services to ensure the overall offering remains compelling. As product leaders, the key is to deeply understand your target customers, their needs, and pain points, and then thoughtfully select the business model that best aligns with your value proposition and strategic objectives.
- Capturing the Business Model in the Vision Board: For some products, the business model already exists — it’s simply a matter of aligning your offering to an established monetization strategy. Take the example of iTunes, which was originally designed to help sell iPods by providing a platform for digital music downloads. But for other products, particularly those that are more innovative or disruptive, the business model must be developed in tandem with the product itself. This is where the extended product vision board becomes a powerful asset, allowing you to capture both your strategic vision and your intended revenue model. This comprehensive framework not only outlines your strategic vision and product roadmap but also delves into the key components of your business model: i) Competitors: An analysis of the strengths and weaknesses of rival offerings, helping you identify opportunities to differentiate your product and create a compelling value proposition. ii) Revenue Sources: The specific ways your product will generate income, whether through licenses, subscriptions, ads, or premium features. iii) Cost Factors: The expenses associated with developing, marketing, selling, and supporting your product. iv) Channels: The avenues you’ll use to reach and sell to your target users and customers, whether that’s through a mobile app, e-commerce platform, or traditional retail partnerships. By integrating these business model elements into your overall product strategy and vision board, you can craft a holistic plan that ensures your offering is not only strategically differentiated but also financially viable.
In a world of commoditized products and eroding margins, the ability to innovate your business model can be a true competitive advantage. By thoughtfully aligning your strategic vision, product roadmap, and monetization strategy, you can unlock new avenues for value creation and capture.
Translating the Business Model into an Actionable Business Case and Financial Model
While the business model describes the high-level mechanics of how your product will generate value, the business case takes this a step further by forecasting the financial performance of the offering over time. This allows you to assess the economic viability of developing and launching the product.
- Crafting a Robust Business Case for Core Products: For core product offerings, where the market is well-established, crafting a detailed and reliable business case is often a more straightforward exercise. With a clear understanding of the competitive landscape, customer needs, and pricing dynamics, you can develop realistic projections for revenue, costs, and profitability over the coming years. This quantitative analysis serves as a crucial input to the decision-making process, helping you determine whether the anticipated financial returns justify the investment required to bring the product to market.
- The Challenge of Disruptive and Adjacent Products: However, for more innovative or disruptive products, where the market dynamics may be uncertain or nonexistent, developing a robust business case can be significantly more challenging. The lack of historical data and established benchmarks makes it difficult to forecast financial performance with a high degree of confidence. Similarly, for adjacent products that extend beyond a company’s core competencies, creating an accurate business case can prove elusive. The unfamiliar competitive landscape and customer behaviors introduce additional variables that can undermine the reliability of financial projections.
- Leveraging the Business Model to Justify Investment: In these cases where a detailed business case is difficult to construct, you can still leverage the business model, case, and scenario-based financial projection to justify the investment in product development. By clearly articulating the strategic rationale and highlighting the potential upside, you can build a compelling case for moving forward. Focus on outlining the key elements of your business model, such as the target customer segments, value proposition, revenue streams, and cost structure. Use this foundation to estimate the anticipated benefits, whether in the form of increased revenue, reduced costs, or enhanced competitive positioning. Equally important is assessing the risks of inaction — the potential consequences of not pursuing the product and allowing competitors to capitalize on the opportunity. By framing the investment decision in these strategic terms, you can make a persuasive argument for allocating resources, even in the absence of precise financial forecasts.
The business case is a crucial tool for translating your business model into a tangible, actionable plan. While the specific approach may vary depending on the nature of your product, the key is to leverage both the quantitative and qualitative aspects of your strategy to build a compelling justification for investment.
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Ethical Product Strategy: Balancing Innovation, User Well-Being, and Sustainable Business Models
While it's tempting to get caught up in the accelerated world of product development, product leaders have a profound responsibility to ensure their offerings not only delight customers but also safeguard their well-being and the health of the planet.
Putting Users First — Protecting Their Mental Health and The Ethical Imperative of Product Design
In the pursuit of innovation and engagement, it can be tempting to create products that are inherently addictive or harmful, even if users seem eager to interact with them. But we have a profound duty of care to our customers — one that goes beyond simply meeting their explicit needs.
- Digging Deeper — The Implicit Impact on Mental Health: Putting users first may seem like an obvious principle, but it requires a deeper level of consideration. While we must strive to understand and address their stated requirements, we must also be vigilant about the implicit impact our products can have on their mental well-being. After all, what good is a feature-rich, highly engaging offering if it comes at the cost of users’ psychological health and stability? The sad reality is that many digital products today are designed in a way that encourages unhealthy, compulsive behaviors — behaviors that can have serious consequences for the very people we aim to serve.
- A Duty of Care — Mitigating Negative Effects: As product people, we have a moral obligation to proactively mitigate any negative effects our offerings may have on our customers’ mental health. It’s simply not enough to create an addictive or detrimental product, even if users appear eager to engage with it at the moment. This doesn’t require a deep background in psychology — it just takes a genuine interest in our users, a willingness to listen to their ideas and concerns, and a close observation of how they interact with our products. By cultivating this empathetic, user-centric mindset, we can uncover opportunities to enhance our offerings in ways that safeguard mental well-being.
- Uncovering Opportunities to Protect and Empower: Perhaps it’s introducing features that encourage healthy habits and self-care. Or perhaps it’s designing interactions that are less intrusive and more respectful of users’ attention and focus. Whatever the specific solutions may be, the key is to approach product development with a heightened sense of ethical responsibility. After all, the products we create have the power to either enrich people’s lives or undermine their mental health. By making user well-being a top priority, we can transform our offerings into forces for good — tools that empower, inspire, and protect the very individuals we aim to serve.
- Embracing Fair, Sustainable Business Models: When digital products are offered for free, monetization often relies on exposing users to ads and selling their data. However, this approach can encourage unhealthy user behaviors that undermine their well-being. The solution lies in moving towards fair, sustainable business models that don’t exploit our customers. This may mean transitioning to paid content and services, where the value proposition is so compelling that users are willing to pay for it. By aligning our monetization strategies with the true value we provide, we can create mutually beneficial offerings — products that users are genuinely excited to engage with, and business models that ensure our long-term viability without compromising ethics.
- Designing for Ethical, Responsible Technology: As we work with our development teams to bring our products to life, we must be vigilant about the design and technology choices we make. Discourage the use of manipulative “dark patterns” — design choices that manipulate users into doing things they didn’t intend to do, like buying a product or signing up for a service — and instead embrace “calm technology” that stays at the user’s periphery. Equally important is mitigating algorithmic biases and designing for fairness when leveraging machine learning. The data we use to train these systems can often reflect societal prejudices, which then get amplified in product recommendations and decisions. By proactively incorporating ethical criteria into our development processes, we can ensure these crucial considerations are not overlooked in the pursuit of technical innovation.
- Minimizing Environmental Impact: Even digital products have an environmental footprint, through the energy consumed in their development, hosting, and use. As responsible product leaders, we must seek out carbon-neutral providers and find ways to reduce unnecessary travel and resource consumption. Not only is this the right thing to do for the planet, but it can also deliver tangible business benefits in the form of cost savings and enhanced brand reputation.
In an era of unprecedented technological change, the path to sustainable success lies in crafting digital offerings that truly put people and the planet first.
By holistically addressing the ethical considerations around user impact, business models, design choices, and environmental sustainability, we can transform our products into forces for good.
Dark Patterns: Manipulative Design Tactics That Undermine User Trust
The term “dark patterns” refers to deceptive or coercive user interface elements that exploit psychological biases to influence user behavior, often in ways that benefit the company at the expense of the user. These manipulative tactics can take many forms, all of which undermine user autonomy and erode trust in digital products.
- Hidden Fees: Presenting an initial price for a product or service, but then adding additional fees or charges at the checkout or signup process that were not disclosed upfront. This bait-and-switch tactic can leave users feeling misled and taken advantage of. Amazon has been criticized for not displaying the full price of products upfront, with additional fees and taxes only revealed later in the checkout process. Ticketing websites like Ticketmaster are known for adding various “convenience fees” and “service charges” that can significantly increase the final price.
- Misleading Wording: Using vague, ambiguous, or deceptive language to obscure the true nature of an offer or make it seem more appealing than it is. This could involve exaggerated claims, omission of key details, or framing choices in a manipulative way. Free trials that automatically convert to paid subscriptions unless canceled, with the cancellation process buried in the fine print. Game apps that use vague language around in-app purchases, making it unclear that real money is being spent.
- Difficult Cancellation: Making it overly complicated or frustrating for users to cancel a subscription or service, such as burying the cancellation process or requiring multiple steps. This “roach motel” design traps users in an offering they may no longer want. Netflix was criticized for making it very difficult to cancel a subscription, requiring multiple steps and account changes. Gym memberships are notorious for having complex cancellation policies that discourage members from leaving.
- Forced Continuity: Automatically enrolling users in a subscription or recurring payment plan without their explicit consent. This takes away the user’s control and can lead to unexpected charges. Amazon Prime’s automatic renewal of memberships unless proactively canceled. Or video streaming services that default to auto-playing the next episode, keeping users engaged.
- Disguised Ads: Presenting advertisements as legitimate content or functionality, tricking users into engaging with them. This blurs the line between useful information and commercial messaging. Instagram influencer posts that are not clearly labeled as sponsored content. News articles that blend editorial content with native advertising.
- Confirm shaming: Using guilt-inducing language or design to shame users into taking an action, such as declining a newsletter signup. This emotional manipulation undermines the user’s autonomy. Airline booking sites that use guilt-inducing language to discourage users from declining travel insurance or other add-ons. Newsletter signup forms that shame users for not wanting to receive updates.
- Roach Motel: Designing user flows that make it easy for users to get into a service or purchase, but very difficult for them to get out. This creates a sense of entrapment and frustration. Mobile apps that make it easy to sign up but extremely difficult to delete an account. Subscription services that require multiple steps and phone calls to cancel.
The key characteristic of these dark patterns is that they leverage psychological biases and manipulate user behavior in ways that benefit the company at the expense of the user’s best interests.
Elevating Your Product Strategy: Leveraging Software Platforms for Success
Strategically leveraging software platforms can be transformative, offering the potential to accelerate growth, enrich user experiences, and unlock new revenue streams. However, realizing these benefits hinges on adopting a thoughtful, user-centric approach.
Unlocking the Benefits of Platforms
Software platforms can be a powerful tool in the product development arsenal, offering a range of compelling advantages that can accelerate growth, enhance user experiences, and unlock new revenue streams.
- Standardizing for Seamless Experiences: One of the key benefits of software platforms is their ability to standardize core functionalities and user interactions across a portfolio of products. This can create a cohesive, streamlined experience for customers, reducing friction and cognitive load as they move between different offerings while reducing development and delivery costs. The example of Microsoft Office is a prime illustration of this principle in action. By providing a common platform with shared services and UI guidelines, the various productivity apps — Word, Excel, PowerPoint, and others — can work in harmony, presenting users with a familiar and consistent experience.
- Fueling Open Ecosystem Growth: On a larger scale, opening platforms to third-party developers can spawn thriving ecosystems that drive significant value for the platform PMs. Amazon Web Services (AWS) is a prime example of this dynamic. By making its cloud infrastructure and services available to external developers, AWS has created countless new products and services that leverage its capabilities. This, in turn, has generated substantial revenue for Amazon, as the platform has become an indispensable part of the modern technology landscape.
However, these powerful tools also come with potential pitfalls that must be carefully navigated.
- The Perils of Platform Mismanagement: Software platforms are not without their potential drawbacks. If not carefully managed, they can become unwieldy, bureaucratic behemoths that slow down the very product development they were meant to accelerate. As platforms grow in scope and complexity, the overhead of maintaining them can become a significant drag on agility and innovation. Teams may find themselves trapped in a web of interdependencies, unable to move quickly and adapt to changing market demands. In worst-case scenarios, platforms may even be retired shortly after launch, failing to meet the needs of the teams they were intended to serve. This can be the result of an overly ambitious, technology-driven approach that loses sight of the user’s needs and priorities.
Striking the Delicate Balance in Platform Management
Effectively harnessing the power of software platforms requires a nuanced approach that balances the needs of the platform itself with the requirements of the products and teams it supports. By treating the platform as a strategic product, investing in the necessary enablement assets, and scaling incrementally, organizations can unlock the transformative benefits of standardization, ecosystem growth, and operational efficiency — all while avoiding the pitfalls of platform mismanagement.
- Prioritizing the Platform as a Strategic Product: At the heart of successful platform management is the recognition that the platform itself must be treated as a strategic product, complete with a clear vision, roadmap, and set of key performance indicators. This product-centric mindset ensures the platform development is guided by a coherent, long-term strategy, rather than ad-hoc, technology-driven decisions. Crucially, these platform-level priorities and objectives must be closely aligned with the needs of the products and teams that will be leveraging the platform’s capabilities. By maintaining a user-centric focus, platform product managers can strike the right balance between meeting the platform’s requirements and empowering the broader product ecosystem to thrive.
- Investing in Enablement and Adoption: Alongside strategic planning, platform PMs must also invest in the necessary assets and resources to facilitate easy adoption and usage by the product teams. This includes comprehensive documentation, development tools, and other enablement materials that make it seamless for teams to integrate with and leverage the platform. By lowering the barriers to usage and providing a robust support system, platform product managers can encourage widespread adoption and drive the realization of the platform’s transformative benefits — from standardized user experiences to streamlined operational efficiency.
- Scaling the Platform Incrementally: When launching a new software platform, it’s crucial to resist the temptation of an overly ambitious, “big bang” approach. Instead, platform product managers should start small, introducing an MVP for a limited number of products first. This measured, iterative scaling allows the platform team to validate the initial value proposition, gather feedback from early adopters, and make incremental improvements before onboarding additional products and expanding the platform’s capabilities. This helps avoid the pitfalls of an overengineered, technology-driven platform that fails to meet the needs of its intended users.
Prioritizing the User
At the heart of any effective software platform strategy lies the commitment to the end-user.
Rather than allowing the platform to become an inflexible, technology-driven constraint, platform product managers must maintain a laser-sharp focus on the needs, pain points, and evolving requirements of the very teams and customers they aim to serve.
- Embedding User Expertise on the Platform Team: One of the key principles of user-centric platform management is to staff the platform development team with members drawn directly from the product groups. This cross-pollination of expertise ensures the platform team has a deep, first-hand understanding of the challenges, priorities, and aspirations of the end-users. By embedding this user-focused mindset within the platform’s core development, product managers can make more informed, empathetic decisions that align the platform’s capabilities with the real-world needs of the teams that will be relying on it. This helps prevent the platform from becoming a disconnected, ivory tower initiative that fails to meet the mark.
- Validating Early and Often: Understanding user needs is only half the battle — platform product managers must also actively validate their platform’s design and functionality through ongoing feedback and iteration. By soliciting input from the product teams, platform product managers can ensure the offering remains responsive to evolving requirements, rather than becoming a rigid, one-size-fits-all solution. This user-centric validation process should be woven into the platform’s development lifecycle, with regular check-ins, prototypes, and opportunities for the product teams to provide candid, constructive feedback. Only by maintaining this open, collaborative dialogue can platform PMs ensure their offering truly empowers, rather than constrains, the very groups it was designed to support.
- Avoiding the Pitfalls of Technology-Driven Platforms: The alternative — a platform that is developed in isolation, driven solely by technological capabilities rather than user needs — is a recipe for failure. Such inflexible, ivory tower initiatives often become bloated, over-engineered behemoths that fail to meet the mark, frustrating the very teams they were meant to assist. By contrast, a user-centric platform strategy, underpinned by deep user expertise and ongoing validation, helps ensure the offering remains agile, adaptable, and laser-focused on delivering genuine value to its stakeholders. This, in turn, drives widespread adoption, seamless integration, and the realization of the platform’s transformative potential.
By embracing this user-centric ethos, platform product managers can unlock the full transformative power of their offerings — empowering product teams to innovate, streamlining operations, and delivering exceptional experiences that delight customers. It is this relentless focus on the user that separates the platforms that thrive from those that falter.
Product Diversification Strategies — Variants and Unbundling
To drive sustained success, product leaders must constantly evolve and adapt their offerings to meet the ever-changing needs of customers. Two powerful strategies that can help achieve this are:
- Product variants: By developing specialized versions of the core product to cater to distinct customer segments, product leaders can deepen engagement with existing users while also broadening their appeal to new markets.
- Unbundling: The strategic decoupling of features and functionalities into standalone offerings allows product teams to better meet the unique needs of their target customers, while also unlocking new revenue streams.
These two approaches empower product leaders to continuously refine and enhance their digital offerings, ensuring they remain relevant, compelling, and responsive to the dynamic needs of their user base.
Expanding Your Product Line with Variants
In the highly competitive world of digital products, standing out from the crowd is essential for long-term success. One powerful strategy for achieving this is the creation of product variants — specialized versions of your core offering that cater to the unique needs and preferences of different customer segments.
By developing a diverse product line or family, you can unlock a range of benefits that drive sustained growth and market leadership:
- Serving Existing Audiences and Attracting New Users: By developing a product line or family, you can deepen your engagement with your existing user base while simultaneously broadening your appeal to new markets. The key is to identify the specific needs and pain points of your target customers and then craft tailored solutions to address them. Microsoft’s Visio offering provides a prime example of this approach in action. The company provides both a Standard and a Professional version of its diagramming tool, each with its own distinct set of features and capabilities. The Standard edition caters to the basic visualization needs of general users, while the Professional variant offers advanced functionality for more sophisticated power users. Similarly, YouTube has cultivated a diverse ecosystem of product variants, including YouTube Premium for ad-free viewing and YouTube Kids for a curated, family-friendly experience. These specialized offerings allow the platform to serve the diverse needs of its massive user base, from casual content consumers to parents seeking a safe environment for their children.
- Unlocking New Revenue Streams: Beyond simply expanding your reach, product variants also unlock the potential for new revenue streams and enhanced profitability. For example, the ability to charge a premium for advanced features or specialized experiences can significantly boost your bottom line. Take the Visio example again — Microsoft can command a higher price point for the Professional edition, as it provides greater value to its target power-user audience. And YouTube Premium subscription service generates additional revenue by offering an enhanced, ad-free viewing experience. By thoughtfully segmenting your product offerings, you can effectively monetize the unique needs of different customer groups, creating a diversified revenue model that is more resilient to market fluctuations.
- Driving Continuous Innovation and Adaptation: Beyond the immediate financial benefits, product variants also serve as a powerful catalyst for ongoing innovation and adaptation. As you introduce new specialized versions of your core product, you gain valuable insights into evolving customer preferences and emerging market opportunities. This, in turn, empowers you to continuously refine and enhance your offerings, ensuring they remain relevant and compelling in the face of changing competitive landscapes and user demands. The agility and responsiveness afforded by a product variant strategy can be a true competitive advantage.
By catering to the unique needs of your target audiences, you can drive sustainable growth, boost your bottom line, and future-proof your offerings in an ever-evolving marketplace.
Unbundling — Unleashing the Power of Focused Innovation
Unbundling involves taking a feature or set of features from your existing product and promoting it as a standalone offering. This approach can have a truly transformative impact on your product ecosystem and your ability to drive innovation.
- Streamlining the User Experience: By separating core functionalities into dedicated products, you can create a more streamlined, focused user experience. Gone are the days of feature-bloated, one-size-fits-all offerings that try to be all things to all people. Unbundling allows you to hone in on the specific needs of your users and deliver a tailored, optimized experience. Take the example of Facebook Messenger. Originally a feature within the main Facebook app, Messenger was unbundled and released as a standalone product. This not only improved the messaging experience for users but also allowed the Messenger team to rapidly innovate and expand the platform’s capabilities, from communication to payments and business integrations.
- Fostering Focused Innovation: By freeing features from the constraints of a larger product, unbundling also unleashes the potential for more focused, rapid innovation. Without the need to balance the competing priorities and development cycles of a monolithic offering, the unbundled product can evolve and adapt at its own pace, unencumbered. Apple’s iTunes provides a prime example of this dynamic. What started as a simple digital music player eventually ballooned into a sprawling suite of media management tools. But with the release of macOS Catalina in 2019, Apple recognized the need to unbundle iTunes into separate Music, TV, and podcast apps. This allowed each product to innovate and improve its user experience independently, without the baggage of the legacy iTunes.
- Capitalizing on New Market Opportunities: Unbundling also opens the door to new market opportunities that may have been overlooked or overshadowed within the context of the original product. By elevating a feature to a standalone offering, you can reach new customer segments and unlock novel revenue streams. By unbundling the messaging functionality, Facebook was able to transform Messenger into a robust platform for communication, payments, and business interactions — capabilities that may have been obscured had it remained tightly coupled with the main Facebook app.
Unbundling provides a powerful mechanism to innovate quickly and decisively, by liberating key features from the constraints of a larger product and empowering them to thrive as dedicated, specialized offerings. Whether it’s:
— Streamlining the user experience
— Fostering focused innovation
— Capitalizing on new market opportunities
the strategic unbundling of your product can be a transformative force.
Diversifying Your Product Portfolio: Product Variants vs. Unbundling
The key differences between product variants and unbundling are:
- Expanding Your Reach with Product Variants: Product variants are specialized versions of your core offering, designed to cater to the unique needs and preferences of specific customer segments. By creating a product line or family, you can better serve your existing audience while also attracting new users. These product variants not only expand your reach but also unlock new revenue streams. The ability to charge a premium for advanced features or specialized experiences can significantly boost your bottom line.
- Unleashing Innovation through Unbundling: Unbundling, on the other hand, involves taking a feature or set of features from your existing product and promoting it as a standalone offering. This approach can have a transformative impact, as we’ve seen with Facebook Messenger and Apple’s iTunes. By separating core functionalities into dedicated products, you can streamline the user experience, foster more focused innovation, and capitalize on new market opportunities that may have been overlooked in the original bundled offering.
The key distinction is that product variants expand the core product line, while unbundling separates features or functionalities into new standalone offerings.
Variants cater to specialized needs within the existing product ecosystem, while unbundling creates new independent products.
Both strategies can drive growth and innovation, but they achieve this in different ways —
Variants by diversifying the core offering
Unbundling by enabling more focused, specialized products
Unlocking the Benefits of Diversification Through Variants or Unbundling
Whether you choose to create variants or unbundle your product, the potential benefits are numerous:
- Fueling Future Growth: By introducing new products and capabilities, you lay the foundation for continued expansion and evolution.
- Serving Diverse Audiences: Specialized offerings allow you to better cater to the unique needs of your existing customers while also attracting new target groups.
- Boosting Revenue and Profitability: Variant pricing and new revenue streams can significantly enhance your bottom line.
- Increasing Agility: Smaller, more focused products are easier to manage and develop, enabling you to respond more quickly to market changes.
By striking the right balance between these two strategies, you can transform your offerings into a dynamic, adaptable ecosystem that delights customers and drives sustainable growth.
As you diversify your product portfolio, be mindful of potential pitfalls :
— don’t overwhelm your customers with too many options
— avoid cannibalizing your existing offerings, and
— ensure seamless coordination across your product family
Aligning Your Product Strategy Across Variants and Unbundled Offerings
When it comes to diversifying your product portfolio through variants and unbundling, a thoughtful, strategic approach is essential. The way you structure your product strategy and roadmaps can make all the difference in unlocking the full potential of these powerful growth levers.
- Variants — Maintaining Alignment with Flexibility: For product variants, where you are creating specialized versions of a core offering, consider adopting a single overarching strategy with separate roadmaps for each variant. This allows you to maintain alignment across the product line while still accommodating the unique needs and development cycles of the individual variants. By having a unifying strategic vision, you can ensure that the variants work in harmony, reinforcing a cohesive brand and value proposition. At the same time, the separate roadmaps empower each variant team to innovate and adapt at their own pace, tailoring their features, user experiences, and go-to-market approaches to their target customers. This balanced approach helps you reap the benefits of diversification — expanded reach, new revenue streams, enhanced competitiveness — without sacrificing the synergies and efficiencies that come from a coordinated product family.
- Unbundled Products — Dedicated Strategies and Roadmaps: For unbundled products, where you are promoting a feature or set of features as standalone offerings, a more decentralized strategy and roadmap structure is often more appropriate. These new products may have distinct goals, target audiences, and development cycles that require dedicated strategic planning and execution. By giving unbundled products their tailored strategies and roadmaps, you empower the teams to focus on the unique value propositions, user experiences, and growth opportunities of these specialized offerings. This independence allows them to innovate rapidly, respond to market changes, and capitalize on new revenue streams without being constrained by the legacy of the original bundled product. At the same time, it’s crucial to maintain strategic alignment and synergies across your product portfolio. Establish clear communication channels, shared metrics, and collaborative processes to ensure your unbundled products complement and reinforce your overall strategic vision.
By striking the right balance between centralized and decentralized product strategies, you can unlock the full potential of diversification through variants and unbundling. This dynamic, adaptable portfolio of offerings will delight customers, drive sustainable growth, and future-proof your business in the face of relentless market changes.
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Strategic Product Bundling: Maximizing the Benefits, Avoiding the Pitfalls
In today’s crowded digital marketplace, product leaders are constantly seeking new strategies to differentiate their offerings and drive growth. One powerful tool in their arsenal is the strategic bundling of complementary products and services.
Benefit 1 — Making Individual Products More Attractive
One of the key benefits of product bundling is its ability to enhance the appeal of individual products, especially those that may struggle to gain traction on their own. By thoughtfully curating a bundle, product teams can create a much more compelling value proposition for customers.
The example of YouTube Premium is a prime illustration of this principle in action. By bundling ad-free content, video downloads, and access to the YouTube Music streaming service, the platform was able to transform a set of disparate features into a highly attractive, differentiated offering.
What may have been seen as niche or underwhelming individually was elevated into a must-have subscription through the power of bundling.
Benefit 2— Driving Increased Sales Through Discounts
Bundling can also be a powerful tool for boosting overall sales by offering customers an attractive package deal.
The classic example is the McDonald’s Happy Meal, where the bundle of a burger, fries, and a drink is priced lower than purchasing the items individually. This bundled discount creates a strong incentive for customers to opt for the package, driving higher average order values and revenue for the business.
By carefully curating the components of the bundle and setting the right price point, product teams can unlock significant growth opportunities.
Benefit 3 — Leveraging Popularity to Boost Competitive Positioning
Product bundling can also provide a distinct competitive advantage by leveraging the popularity of one offering to bolster another.
Microsoft’s bundling of Internet Explorer with its Windows operating system is a prime example of this strategy in action, helping the company win the first “browser war” against rival Netscape. By tapping into the widespread adoption of Windows, Microsoft was able to rapidly grow Internet Explorer’s market share, despite the technical merits of competing browsers. This bundling strategy proved to be a powerful competitive weapon, showcasing how the strategic pairing of products can transform the dynamics of an entire market.
Realizing the full transformative potential of product bundling requires a nuanced, customer-centric approach. Teams must carefully curate the components of the bundle, ensure a harmonized user experience, and price the offering competitively to drive maximum value for customers.
By thoughtfully assembling complementary offerings into a cohesive package, product teams can unlock new avenues for growth, differentiation, and market leadership — elevating individual products, boosting the bottom line, and cementing a dominant position in the increasingly competitive digital landscape.
Navigating the Pitfalls of Product Bundling
While the strategic bundling of products can unlock a range of compelling benefits, there are also potential pitfalls that must be carefully navigated to ensure the success of these offerings. By understanding and proactively addressing these common missteps, product teams can harness the power of bundling without succumbing to its potential downsides.
- Avoiding Bloated, Cumbersome Bundles: One of the primary pitfalls to steer clear of is the creation of overly large, bloated product bundles that become cumbersome and unappealing to customers. The cautionary tale of Netscape’s ill-fated Communicator bundle serves as a prime example of this misstep. In an attempt to make its browser more attractive and defend its market share, Netscape tried to pack a wide range of additional products — including email and news clients — into a single, all-encompassing bundle. However, this resulted in a clunky, feature-heavy offering that overwhelmed users rather than delighting them. The lesson here is more is not always better when it comes to product bundling. Resist the temptation to simply throw every available feature or product into a single package.
Instead, focus on curating a lean, streamlined bundle that delivers exceptional value without sacrificing usability and ease of use.
- Maintaining Flexibility and Choice: Another common pitfall is the restriction of customer choice by only offering a full product bundle, rather than allowing the flexibility to purchase individual components. Microsoft Office’s historical approach of selling the entire suite, rather than individual apps, is a prime example of this misstep. While the bundled offering may have provided a perceived value proposition, it also alienated customers who only needed access to a subset of the included applications. By denying these users the ability to pick and choose, the bundle risked becoming a one-size-fits-all solution that failed to meet the diverse needs of the target market. To avoid this trap, product teams must strike a careful balance between the benefits of bundling and the importance of customer choice.
Consider offering both a full bundle and the ability to purchase individual components, empowering users to select the solution that best fits their specific requirements.
- Ensuring a Harmonized User Experience: It’s crucial to ensure a seamless, harmonized user experience across the various products within a bundle. Customers should be able to transition between the different offerings with ease, enjoying consistent functionality, interfaces, and overall usability. The cohesion of the Microsoft Office suite serves as a prime example of this principle in action. By maintaining a unified design language, shared keyboard shortcuts, and integrated file management, Microsoft has enabled users to work fluidly across Word, Excel, PowerPoint, and other bundled apps. Failing to achieve this level of integration and consistency can undermine the value proposition of the bundle, frustrating customers and diminishing the perceived benefits of the offering.
Product teams must invest the necessary time and resources to ensure a truly cohesive, delightful experience across all bundled components.
By understanding and proactively addressing these common pitfalls, product teams can harness the transformative power of bundling without succumbing to its potential downsides.
A strategic, customer-centric approach that prioritizes lean, flexible, and harmonized offerings is essential for unlocking the full benefits of this growth-driving strategy.
