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Tim and Sabba founded Veed.io in 2018 and grew from 0 to 50,000 users with no marketing budget and no outside funding in 6 months. If you run a bootstrapped startup, then you know how impressive this is.
But while they didn’t have a marketing budget, they had a product strategy and framework that consisted of the following steps:
- Signing up for all startup directories
- Building free tools
- Using their network
- Creating content that their users wanted to see
- Launching many times with new features and versions
Nowadays, Veed.io has 1 million users and annual recurring revenue of $7 million, or at least they did in February.
They gained most of these numbers while being bootstrapped and are a great example of how much difference having a product strategy framework makes.
What is a product strategy framework?
Asking yourself what you plan to achieve and documenting how you plan to get there is probably the simplest explanation of a product strategy framework. It answers the questions of “what”, “why”, “when” and “how” when making important product decisions. Whether or not you have a clear product strategy framework can make or break your business, and it’s not a mistake you want to make.
Why is a product strategy framework that important?
Every team should know what they are doing, and a product strategy framework helps facilitate that and improve productivity. When you have a clear strategy, it will be easier for everyone to understand the direction of the product and what they can do to impact its success.
You don’t want a sales/marketing person that doesn't know why they are selling or who they are selling to, or a customer service executive that can’t resolve problems because they don’t exactly understand the product. You are going to lose money that way, and that’s the last thing you want as a bootstrapped founder.
Having a solid product strategy framework also helps you determine your action plan and product roadmap. You don’t want to be prioritizing the wrong things because you don’t have a product strategy framework or misuse the limited resources and time available to you.
The major elements of a product strategy framework.
There are three major elements involved in creating a product strategy framework.
1. Market Vision
The market vision describes in detail who will be using your product and what that means for the business. It answers the following questions:
- Who exactly are your customers?
- What problems do they have that you can solve?
- What opportunities and threats lie in solving these problems?
The answers to these questions will help you come up with a go-to-market plan that brings in customers. This go-to-market plan should highlight who your target customers are, how you intend to beat your competitors, your product positioning and what makes your product unique.
2. Product Goals
A good product strategy framework needs clear and measurable objectives. Goals and metrics that will help you measure success and guide your development process. These objectives have to be time-based, and state whether you want to achieve them in the next quarter, year, or 18 months, so there’s urgency for execution. Knowing what number of active users you want to hit daily, weekly, or monthly lets you know when you are failing and when to ramp up efforts.
A good way to approach goals is to create them based on the work required from your team and the impact it will have on customers. The goals don’t have to be broken down into great detail, as you have the product roadmap for that, but it should be clear enough. A good example will be “increase revenue by 50% in the first quarter”.
3. Product Initiatives
Product initiatives are tied to product goals and outline what must be done to achieve those goals. Think of them as projects that should be completed for your product to succeed.
They should be related to your company’s core strategy and broken down into actionable tasks to be implemented. Some examples include:
- Reducing churn.
- Language localization.
- UI improvements.
- Breaking into new industries or geographical areas.
- Increasing mobile adoption.
What are the types of product strategies you can employ when creating your framework?
- Cost Strategy
This strategy is focused on creating a good product that is more affordable than what competitors offer. To employ this strategy, you need to assess the resources being used and save money during production. Offering a more affordable option can help build your customer base. It is great if you are introducing a product in a low-effort segment where customers don’t think a lot about what they are buying, or if the product is being produced on a large scale.
The customers that respond to this product strategy typically don't have any loyalty toward a particular brand. So if you can create a product that is cheaper, without reducing value, it can make you a customer’s favourite.
2. Differentiation Strategy
This strategy answers the question of what sets your product apart if we are not counting the price. What makes it stand out? Maybe it’s the materials used, features or functionality. How different are they from what is in the market?
Under a differentiation strategy, you need to stand out from your competitors. You may offer better quality, quantity, pricing, appearance, and customer service.
Whatever it is, you then advertise and make it known to customers.
3. Focus Strategy
A focus strategy involves focusing on a specific segment in the market or a specific buyer persona. The idea behind the focus strategy is to develop, market, and sell a specific product to a specific group of customers.
This strategy has proven effective because it targets the needs of a select group of people and often earns the brands that use it great brand loyalty.
4. Quality Strategy
Quality strategy targets customers who want only the best and are looking for products with the best quality in the market. This strategy and the cost strategy are at odds because the prices here are naturally high to compensate for the supplies required in production.
Most products utilizing the quality strategy are tagged as luxury and have customers who go out of their way to pay for them. Implementing this strategy requires the following:
- Identifying the importance of quality from the customer's perspective and playing on that.
- Determining how customers grade you against competitors in terms of quality and making necessary adjustments.
5. Service Strategy
Many customers take customer service seriously, and this product strategy is hinged on that. It involves using outstanding customer service like quick response and better after-sales service to attract customers with the right purchasing power.
With this strategy, customers come to value the experience you deliver and not your products. For it to work, departments of a company like sales, marketing, operations, human resources, and other functions must work efficiently and together in order to create an excellent service strategy.
What are the steps to creating a product strategy framework?
- Identify your target audience and talk to them.
You can’t create a great product strategy framework based on your gut, or what your team thinks. You need to go out and talk to prospects, and you need to do it before releasing a product to the market.
If you create a framework without a solid understanding of the target audience, you will spend a long time searching for customers because these products are used by people, and if you don’t prioritize their needs, they are not going to use your product.
Your product strategy framework should define who your target audience is. Ask yourself, Who are your customers? Where do they live? How old are they? How educated are they? What is their estimated income? What are their personality traits? What are their pain points? What are their needs?
This information can be gotten from user interviews and field studies and should be an integral part of your framework design because the information obtained can be used to create personas that represent different relevant user types. With these personas, you can answer the questions above and understand what makes a person want to become a customer.
- Define and understand the problem.
To solve your customer’s problems, you need to define what their problems are. After defining the problem, you need to determine if it is a problem worth solving and if your target audience really needs a solution to this problem and is willing to pay money for it.
Most times, people are quick to jump to providing a solution without really understanding what the problem is in the first place.
Ask yourself, What is the situation? What are the pain points you came across in your user research? What is the context of the problem? Has something changed? What is the prospective impact of your solution? What’s at stake? What are the risks if you don’t address this problem?
- Define your product’s vision
The product vision is a compelling and simple statement that captures what the product is all about and what its future should look like. A good vision should be simple, clear, catchy, and aspirational. It should also drive your product roadmap/journey and all strategic decisions.
Product vision and product strategy can sometimes be mistaken for one another, but they are not the same. While the product vision states the reason for the product, the product strategy is a guide on how to correctly execute the vision.
Here are a few things to keep in mind when defining your product vision:
- You need to outline long-term goals. When you have a clear long-term goal, it’s easy to create a vision of what the product will look like in the future.
- Get the emotional buy-in from your team members: This will help keep team members properly motivated when it comes to achieving the vision.
- Initiatives should be tied back to the vision: every initiative should be carried out for a reason and be connected to the product’s vision.
- Sync and communicate with team members and other stakeholders
Creating a great product strategy framework includes a lot of cross-functional brainstorming with members of your team. Bringing people into a room with different skill sets such as design, development, marketing, and sales is a great way to generate product ideas, probe the problem a bit more, and spark innovation.
Doing this also keeps team members involved and invested.
Also communicate your product strategy when it has been created, what you are building, how long it will take to build, and the important decision-makers.
- Define what success looks like.
Knowing the problem and having a vision isn’t enough, you still need to keep track of how quickly you’re moving towards success. With OKRs and KPIs, you can track your progress and measure performance.
These success metrics should be derived from product goals that will influence your product initiatives and translate your product strategy into an actionable plan.
Some examples of success metrics are:
- Increase customer satisfaction by 20% by Q3
- Increase mobile downloads by 50% by Q4
- Execute the product strategy
Don’t just create a framework for product strategy and forget about it. If you’ve taken time out to create a product strategy framework with clear goals and initiatives, then you need to execute.
But with execution, you need to bear in mind that a product strategy framework is not set in stone, and you might not be able to follow the exact route in your strategy framework as things like priorities, resource levels, and competitor behaviour change. Instead, look at it as something that evolves alongside your company.
Conclusion
Successful companies like Nike, and Amazon have rolled out product strategies and frameworks that you can learn from, but the problem with learning from companies like this is that their initiatives and plans might not always work for you.
That’s why we created a community of founders that are like you (bootstrapped) and can offer a step-by-step breakdown of what they did.
Join now by visiting https://www.ramenclub.so/#join-ramen-club