Product Strategy Canvas
Product strategy is simple. And it’s for everyone in the organization. But, contrary to what many believe, it’s not:
A plan (“we will build x, y, and z”).
A goal (“we want to grow by 50% by 2024”).
An ambition (“we want to be the best”).
An action (“disable that feature”).
A Business Model.
A Unique Value Proposition.
Many companies do not have a product strategy at all.
A good product strategy
Defines a long-term vision (winning aspiration)
Is a single, integrated set of choices that reinforce each other and increase your odds of success
Defines the market (problems) and your playing field’s constraints
Focuses on customers whom you can’t control
Has a theory on how to persuade them to do what you want
Explains what competencies, resources, and systems you need
Passes the Can’t/Won’t Test. Your competitors can’t or won’t copy it
Has many levels (organization/division/team)
Allows you to formulate hypotheses
Why the new Product Strategy Canvas?
I couldn't find a single Product Strategy Canvas I could recommend. So here is a new one (v1.1):
It's based primarily on the work of Michael Porter and Roger Martin and contains:
How can I inspire people to get up every day and come to work?
What are we aspiring to achieve? What values do we uphold?
Start with something simple. Your vision will evolve along with other elements of the product strategy.
The market is defined by the problems people have. For example, IKEA’s market: people that want to get high-quality home furnishings at low prices.
What are the customer's problems (needs, jobs) worth solving?
Do we know the key market metrics?
Are there any constraints, e.g., geography or language?
3. Relative costs
What do we optimize for?
Do we optimize for low cost, like Southwest Airlines, or for unique value, like Starbucks?
Low costs might be a priority, but they do not necessarily mean having low prices.
Trade-offs define what NOT to do.
IKEA doesn't sell assembled furniture and limits available choices.
Trade-offs create focus, amplify the value and make the product strategy difficult to copy by others without sacrificing their existing businesses.
5. Value Proposition
What key customer needs/jobs do we want to solve?
Which of these do we want to address significantly better than our competitors?
How, at a high level, do we plan to solve them?
Will customers say, 'This is special, I'd be delighted to pay more'?
6. Unique Activities
A set of distinct activities in creating, producing, marketing, and delivering your product.
For IKEA: flat packs, warehouses attached to the stores, in-store restaurants, delivery outsourced to the customers, etc.
How will we communicate our Value Proposition to the customers?
What are the benefits that customers would derive from our key features?
How can we prove that?
What stories and emotions does our product evoke?
How do we envision growth? Is it PLG or Sales-Led Growth?
What are our preferred Sales and Marketing channels?
Will we rely on Social Media, SEO, Influencers, or Resellers?
9. Capabilities & Systems
What competencies and resources do we need to acquire? Do we need suppliers?
Are there any systems necessary to support our strategic choices?
10. Key Metrics
A few key metrics to measure how your product is doing and whether the product strategy is working.
Consider the North Star Metric and One Metric That Matters (OMTM).
11. Ask Yourself
What makes us think competitors can’t or won’t copy our product strategy?
Do the various elements of our product strategy fit together and reinforce each other?
What needs to be true for this product strategy to work? How can we validate these assumptions?
How to work with the Product Strategy Canvas?
Analyzing the market and the industry:
Discovering the market (customers, needs):
Creating and testing Value Proposition:
Other templates and frameworks: The Product Frameworks Compendium: Value Chain Analysis, Ansoff Matrix, McKinsey 7S Framework.
Related posts and websites:
In Bad Strategy & Good Strategy, Richard Rumelt suggested that strategy should contain Coherent Actions. I chose to exclude this idea as it does not align with the definitions provided by Porter and Martin. They posited that a strategy is an integrated set of choices, not a plan or a set of activities.
In Product, we tend to split Product Vision and Product Strategy. However, I am persuaded by Roger Martin's argument that you need to define your vision ("Winning Aspiration") alongside the other elements of the strategy rather than consecutively.
Some distinguish between Product Vision and Product Mission. Vision and Mission are often interchanged, causing confusion. I advocate using a single term because I don't see any value in separating these statements. I've explained this in more detail in this post. I also recommend reading an article by Prof. Roger Martin. You can also see how LinkedIn confuses those terms.
The Business Model (the exact method of generating revenue) is not a strategy. A strategy informs you about your relative costs and revenues. The Business Model evolves from the Strategy. Both elements are crucial.
Version 1.1 was released on 3rd Aug 2023 (current version)
Version 1.0 was released on 26th Jan 2023