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

startup
(Image credit: Shutterstock.com / Pressmaster)

I’m a consultant, and - don’t roll your eyes - according to every personality profile tool I’ve used, I’m a “strategist”. At risk of looking like the proverbial hammer that thinks every problem is a nail, I go from one company to the next, pointing out that their strategy is flawed, partial, out of date or simply non-existent. I’ll try to avoid saying “holistic”, “paradigm” or “agile” during the course of this article, but believe me, in business you need to think strategically. 

But what is “strategy”, other than a cliché blithely trotted out by marketeers, chancer consultants and corporate climbers? If you’ve spent much time wading through documents filled with complicated diagrams that map your company, industry, competitors and customers in an amazing kaleidoscope of mind-boggling conceptual tapestry, or reduce them to impenetrable quadrants or concentric circles, you could be forgiven for thinking it’s deep magick.

Contrary to what some consultancy firms would have you believe, doing strategy is not mysterious. It’s simply shorthand for a long-term plan of action designed to achieve your business goals. Because it’s long-term, it should also be fairly high-level, leaving room for tactical decisions and changes of direction within its bounds. Formulating strategy is a predictable process, with well-worn tools and templates. With the right mindset and approach, anyone can do it.

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

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

The CEO is smart and assertive, and tends to be right about things, so naturally has to make all the decisions and their opinion trumps everything (known as the “HiPPO” effect - the Highest Paid Person’s Opinion holds sway).

Due diligence

Every week the exec team has a new idea, and everyone has to drop what they’re doing and attend to it. Nothing ever gets finished and missed deadlines are the norm.

Teams are under constant pressure, and made to feel like failures. Morale is low, churn is high and people burn out. It’s a death march.

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

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

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

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

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

All well and good, but there seems to be a persistent belief that, simply because you’re a tech startup, you’re going to be the next Uber. Because, y’know, digital disruption. Unfortunately, this can blind investors to critical flaws in (or absence of) the value proposition. It can be some time before the realization dawns that a whole lot of money has been thrown away. Venture Capital firms work on the basis that 1 percent of their investments will hit the big time, making up for the 99 percent of failures.

But really, should we accept such widespread negligence? Investors really should stop obsessing over the credentials and proclivities of founders, and look deeper at what makes for sustainable success and longevity: namely a customer-first strategy.

How to do product strategy 

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

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

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

Stubborn on the vision, flexible on the details of execution 

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

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

An inspiring vision supported by a solid product strategy will inspire your team to great things; when it comes to job satisfaction and motivation, meaning always trumps salary and other benefits, but teams also need belief in their mission, and this is what a well-constructed and maintained product strategy will give them.

Aidan Dunphy, founder and Principal Consultant, Samepage

Aidan Dunphy is founder and Principal Consultant at Samepage, a digital consultancy focused on transforming business through the strategic deployment of the right digital tools.