What is product strategy? The short answer is, it’s all the product decisions that aren’t tactical: analytics, onboarding, retention modules, virality features, and even monetization models.
The long answer, though, is a lot more helpful:
When I worked as a product consultant with a top-notch firm, my colleagues and I would usually “swoop in to the rescue” with precise, surgical solutions for clients. Once we’d implemented our instructions, the product would show a significant spike in the selected goals’ metrics. But our job was easy. 95 percent of the time we came up with tactical tricks that most product managers are not familiar with. Don’t get me wrong. We weren’t fooling anyone. These tricks work and they have that “why didn’t I think of that?” taste to them. So our clients were happy.
What’s wrong with that, you ask? Why not implement tactics that would raise onboarding conversions by 20-30 percent or day-seven retention rates by 10 percent?! Because most growing startups must grow an X-times factor and not +XX percent. That’s usually just not enough.
If your product manager is focusing on pushing onboarding conversion from 30-60 percent (even if they succeed) while your average user acquisition cost is 10 times their average lifetime value (and from what I’ve seen, those are the typical numbers for an early stage product), then your problem is not your product manager; the problem is your product strategist… Oh, you never hired (or heard of) one? Well, then I guess that’s on you.
Why most startups fail
Here’s why most startups fail.
- It’s not because their onboarding wasn’t perfect — they probably improved the heck out of it.
- It’s not because their Call-To-Action buttons weren’t rigorously A/B tested.
- It’s not because they didn’t have the best optimized and automated push notification module.
- It’s not because their “invite a friend” bonus was not big enough.
- And it’s not even their in-app purchase or store model not being a perfect fit.
Product-oriented startups fail because they aren’t able to achieve product/market fit fast enough.
It doesn’t necessarily mean these products had no chance from the get go. It just means they ran out of time and money too soon. All too often, the reason is they dedicated too much time and effort to tactics (the “it’s not because…” list from above) before reaching product/market fit. In other words, they’ve neglected their product strategy and instead focused on product tactics, tricks, and easy fixes.
It seems that startup CEOs, especially those coming from technical backgrounds, are so obsessed with work output and “progress” that they often forget to check their course. As ironic as it sounds, these CEOs (who often grew up hacking), get all corporate and organized when it’s their turn to become company leaders. They tell everyone they are building a minimum viable product but take three times as long as they should because they “don’t feel comfortable” with the design. The minute they stop looking for ways to hack the system (and that includes the product), they enter the big company game, only they have neither the tools nor the $ to win.
A product consultant’s confession
I was an entrepreneur, still am. I’ve walked in those shoes more than once. But when you become a consultant and you give great advice, increase conversions and any other metrics by nearly 100 percent, and yet still see a company shut down six months later, you get a clearer picture of what’s going wrong.
You took the easy path where you knew all of the answers. You got great results at minimal risk and the client loved you. But you also should have known that the tactical approach would have never gotten them the x10 increase they actually needed to have a chance to succeed.
If they’d gotten to the point they acknowledge they need a product consultant, chances are they are far from product/market fit. The likeliest scenario is that their product strategy (probably existing only in their subconscious) is very much off. And that requires a much more drastic fix.
Yoav Yechiam leads product strategy for consulting firm Y-Perspective. He has lead product for eight B2C companies, been CEO three times, and sold a company once. He was until recently the senior product consultant at Moburst. He is also a lecturer and does pro-bono mentoring for early stage startups.