A product strategy is a set of choices about which customers a product will serve, what it will offer them and how it will win against the alternatives those customers already have.
The idea comes from corporate strategy and reached product work through two books. In Playing to Win, published in 2013, Lafley and Martin describe strategy as a set of connected choices, with two of them at the centre, where to play and how to win. In Good Strategy Bad Strategy, published in 2011, Richard Rumelt makes a related point from a different angle. Many documents called strategy contain no real choice at all.
That distinction matters every quarter. A product team has to decide what to build, what to leave out, which customers come first and where its limited engineering time goes. When nobody has made those choices explicitly, the team follows whoever has the loudest request or the most recent escalation.
The sections below explain what makes a real choice when resources are limited. They then cover the two choices at the heart of any strategy, which are where to play and how to win, and separate a product strategy from the vision, the roadmap and the goals that support it. Finally they look at the most common substitute for a strategy, which is turning an ambition into a number without making the choices that would deliver it.
Choices and the constraints that force them
A choice is what makes a strategy different from a statement of intent. Every organisation has limited money, limited engineering time and limited attention from its customers. Even though there are more opportunities than it can handle, a real strategy is defined by the decisions it makes. It chooses which customers to serve well and accepts that others will not get the same level of attention.
If resources were endless, a team could go after every opportunity at once and would never need to make tough decisions. Because they are not, choices must be made.
Three constraints do most of the work. Capital decides how long the organisation can fund a direction before it has to show a return. Capability decides what the team can build well, since twelve backend engineers will not produce a consumer product led by design because somebody decided they should. Attention decides how many things a leadership team can hold in mind at once, and it is the constraint ignored most often, because adding an eleventh priority to a list costs nothing on the day it happens.
A payments company with forty engineers shows what those constraints do to a decision. Its leaders can fund one of two directions, either reconciliation tools for mid market finance teams or approval workflows for enterprise procurement. Choosing reconciliation means procurement gets nothing for at least a year, and writing that down is the strategy. Funding both at half strength avoids the refusal and produces two products that each lose to a competitor who picked one.
Where to play and how to win
A decision to fund reconciliation tools for mid market finance teams contains two separate choices, and Lafley and Martin named them in 2013 as where to play and how to win. Where to play settles the customers, the segments, the geographies and the channels the product competes in, which is the same as settling everything it stays out of. How to win settles what the product offers those customers that the alternatives do not, and what the organisation can do to sustain the offer once competitors respond. A team settles the two choices together, since an attractive place to compete with no route to winning there is a place to lose money slowly.
Vision, strategy, roadmap and goals
A strategy document holds both choices, and it sits among three others that answer different questions. A vision describes the world once the organisation has succeeded. A roadmap describes the sequence of work. Goals describe the outcome that work is expected to produce.
| Document | The question it answers | What changes it |
|---|---|---|
| Vision | What the world looks like once the organisation has succeeded | Almost nothing, since a vision rewritten every year was an ambition |
| Strategy | Which customers the product serves and how it wins them | Evidence about the market, the competition or the organisation's own capability |
| Roadmap | What the team works on and in what order | Delivery reality, what the last release taught and a change in the strategy above it |
| Goals | Whether the work is producing the outcome the strategy predicted | Every planning cycle, since a goal carries a number and a date |
Strategy and roadmap are the two rows a team collapses together most often. A roadmap presented as a strategy says what will be built and leaves out who it is for and why it would win, so the first hard tradeoff in the third quarter has nothing to appeal to. Vision collapses the other way. A vision restated at greater length describes a better world with no route into it, and it survives challenge because it commits to nothing anybody can test. Goals are collapsed into strategy more often than either of them.
Goals mistaken for strategy
Goals stand in for the whole document because a number feels like a commitment. A leadership team writing down thirty per cent revenue growth, monthly churn below two per cent and entry into two new countries has described a destination in numbers and has said nothing about how any of it happens. Rumelt listed this in 2011 as one of the four hallmarks of bad strategy, under the name mistaking goals for strategy. The distinction he draws is between what an organisation wants and what it will do about the obstacle in the way.
That distinction matters because a number moves for reasons that have nothing to do with the strategy. Thirty per cent growth arrives on time when the sales team discounts hard enough, and the discount costs more than the growth returns. A strategy names the customers the growth comes from and what the product offers them that keeps the price defensible, so the team can tell a win from a number that moved.
The form a set of choices takes
Choices about customers, offering and advantage are the content of a strategy. Content on its own leaves a document that can be read in any order, argued with at any point and reversed by whoever calls the next meeting. What holds a strategy together is an internal structure, in which an honest account of the situation leads to an approach for dealing with it, and the approach decides what the organisation does on Monday morning. That structure has a name and three parts, and a strategy missing any one of them comes apart under the first serious challenge.