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8 traps to avoid as you build out your product strategy

Having a product strategy means having a long-term road map for your product. This road map helps you make decisions, schedule product releases, plan for contingencies, and should ideally be trackable, detailed and timely.

Think of it like you’re going on a road trip – you need to figure out your destination, decide where you’ll stop, and map out gas stations along the way (in a pre-smart phone era). If you don’t, you could end up lost and stranded on the side of the road, your plans completely derailed.

At our recent ScaleUp event in Toronto, we had the privilege of hearing from product strategy guru,  Thomas Nielsen. Nielsen has spent the past 30+ years working in technology in product leadership roles at some of North America’s biggest tech companies, including Microsoft, Adobe, RealNetworks and Brightcove. So, he knows his stuff.

Throughout his career, he’s seen a lot of the ways businesses err when building out their product strategy…to the point that he’s compiled a list. He shared this list with us at our event, so now we’re sharing it with you.  

According to Nielsen, here are eight product strategy traps companies should avoid.

  1. The Discovery Trap

You know the market and what it needs. However, your customers know a lot too. Never assume you’re the sole expert in something. Listen to your customers as they discover new problems within the market and adapt your product to help provide innovative solutions.

What are some ways to listen to your customers? Have feedback surveys or focus groups, read your online reviews (not just the good ones), and create a channel for your customers to speak to you (and then respond quickly). There are a ton of different ways to listen to your customers, so tailor it specifically to your clientele and make sure they know your value their feedback.

  1. The Priority Trap

You’ve signed one or two big customers and they’re asking you to change your product features to suit their needs. But wait – their needs conflict with your product strategy!

It can be tempting, but try to avoid changing your core product to suit one customer, especially if you know 50 other customers like it the way it is.

Instead, listen to their requests (see above) and determine if the changes be implemented effectively. Carefully assess the value of a money-making opportunity if it will drastically change your product.

  1. The No KPI’s Trap

Key Performance Indicators are your (best) friend. They’ll help you understand the performance and overall health of your business so you can make important adjustments as needed to achieve your strategic goals. Basically, KPIs will help get you where you want to go quicker and easier.

Here are some of the top KPIs to measure in your product :

Commercial KPIs:

  • Monthly Reoccurring Revenue per product
  • Monthly bookings
  • Average Revenue Per User

Product Strategy KPIs:

  • Product Net Promoter Score
  • Product Customer Satisfaction Score
  • Product Engagement Score

Operational KPIs:

  • Product Team Velocity
  • Average story points per user story
  • Roadmap Capacity Allocation

Governance KPIs:

  • Internal Product Reviews
  • Customer Visits/Surveys
  • Internal Net Promoter Score
  1. The Agile Trap

Agile – one of the tech world’s favourite buzzwords.

You think being agile is the best thing for your company. It means you can release updates and new products whenever you feel like it. It helps you stay relevant and responsive – two very good things. However, agility needs to be tempered with planning.

Don’t just release new features because you can. Get your whole organization (including GTM and sales) involved in it. It’s better to do a “big launch” and get everyone on board, than to have multiple smaller updates that are inconsistent and not communicated to your customer effectively.

  1. The Pricing Trap

Pricing (and explaining your pricing) is just as important as the features of your product. Pricing needs to be a product decision – that is, you need to articulate a pricing and packaging strategy that pays attention to features and functionality decisions.

This is very much related to versioning strategies – how many versions there are and how price points across the versions are decided. Get your sales and marketing team involved and work with them to build out your pricing strategy and how you’ll justify it to customers.

Part of your overall strategy should include a pricing strategy. Check out this article for more information on how to build one.

  1. The Legacy Trap

Once a product version has been launched, it must be managed. Decide who works on legacy products versus new products. Legacy may not be as exciting, but it’s important to pick the right people to maintain and sustain legacy products. Pick people who are passionate about your existing model, and are willing and capable to deal with the technical debt that will occur when you build your new model.

  1. The Organization Trap

Don’t assume that the same people who got you to your first success will be able to get you to your second. You may need to hire new thinkers and creators along the way.

Learn from those who have been successful in businesses before – different phases of a company require different people. Someone who was helpful in creating strategies for you as a startup, might not be as effective once you grow to a larger size. Learn more about organizational change and growth strategy.

  1. The CEO Trap

The CEO can’t do everything. They cannot create new products while also running a company. Let your product leaders funnel the CEO’s ideas and make sure they feel confident enough to say no if the idea isn’t great. Only the product management team should add or take away from your product.

There is of course so much more to consider with product strategy, but hopefully these “Eight things to avoid” can help point you in the right direction. For a deeper dive into product strategy, check out the journal: Startups’ roads to failure

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