Product Vision and Product Strategy: Do You Need Both?
What Are Product Strategy and Product Vision?
Product vision defines the future you want to create. It describes the purpose of your product, what problem it solves, and whom it serves.
The most common definition of product strategy is closely related to the previous term: product strategy is the plan to achieve the product vision. It includes specific goals, objectives, target market, competitive landscape, and product positioning.
Simply put, product vision is where we want to go, and product strategy is how we want to get there.
Characteristics of a Good Product Strategy
- Customer-centric. It is based on a deep understanding of the target market and customer needs and aims to deliver value.
- Clarity and practicality. It includes a clear value proposition and a plan to execute the product concept with specific steps and actions.
- Prioritization. The prioritization of feature development and capabilities is determined by their impact and the resources required.
- Adaptability. It is flexible and can adapt to changes in the market or customer needs.
- Collaboration. It involves all stakeholders, including the product development team, marketing, sales, and customer support.
- Data-driven. It is based on data and research, such as customer feedback, market trends, and competitive analysis.
- Continuous. It includes a plan for ongoing monitoring and improvement to ensure the product remains competitive and relevant over time.
Where to Start When Creating a Product Strategy?
Strategy is a key element that defines what your team will work on for the next year or so. This is what makes it difficult to create. To get a starting point, you can follow this advice: build your product strategy based on a series of product-market fits.
How do you achieve this? Usually, product strategy starts with the customer. Who does your product serve? Define the total addressable market (TAM) and figure out how to reach it. Starting with one segment (user persona, geographic segment) is the first step, then the next, and so on until you cover the full TAM.
This could be simply launching the product in the domestic market and then expanding to other markets. Alternatively, the strategy could be organized to sequentially target different user personas. For a B2B product, product-market fit might involve different vertical markets.
To shape the product strategy, you need to bring together all key stakeholders: the head of product, the head of technology, and the head of product marketing. For a small startup, you might involve the entire team for the best result.
Which Comes First: Vision or Strategy?
Generally, product vision comes first, as it sets the overall direction and purpose for the product. Product vision defines the desired future state of the product. It is a statement that guides the team and stakeholders, helping them understand the product's direction.
Once the product vision is defined, you can develop a product strategy that aligns with the vision and describes the steps and actions needed to bring it to life. Product strategy is the plan to achieve the product vision, so to be effective, it must be aligned with the vision.
Since vision and strategy are often developed during the same strategic session, it's safe to say that strategy influences vision. Which comes first and which defines the other is not that important. What matters is their alignment.
Difference Between Product Vision and Strategy
When explaining concepts related to product design, parallels can often be drawn with a house construction project. So, let's see where our product vision and product strategy fit when building a house.
Before laying the foundation, you need a blueprint, a clear idea of what the finished product should look like. That blueprint is your product vision. But vision alone isn't enough to build a great building.
You also need a solid construction plan, a strategy that outlines the steps and materials needed to realize that vision. Think of it as a contractor's plan for building a house.
Without a blueprint and a plan, your house might never be built or might not meet your requirements. Similarly, product vision and product strategy define the process and stability of development.
The difference also lies in timeframes: vision is typically set 3-5 years out, while strategy focuses on a 1-1.5 year plan. Product vision is the long-term perspective of what the product should become, and product strategy is the plan to achieve it in the medium term.
Scale of Ambition: How Different Product Visions Influence Product Strategy
Now that we won't confuse product vision with product strategy, let's look more closely at how they interact. This can be very illustrative if we take two different visions as examples—more ambitious and less ambitious.
An ambitious product vision might sound like: "Revolutionize the transportation industry by creating a fully autonomous electric vehicle that reduces carbon emissions and makes transportation more accessible and efficient for everyone."
If it's a modest product, imagine: "Create a mobile app that simplifies grocery shopping by allowing users to create shopping lists and share them with friends and family."
An ambitious product vision aims to have a major revolutionary impact on an industry and society, while a modest product vision focuses on solving a specific problem for a niche group of users without disrupting the market. Both are important, but the level of ambition and scope of the vision typically determine the complexity and resources needed to realize it.
In the first case, you'd start by creating a car prototype, then move to mass production and target high-income individuals, then find ways to create cheaper models and possibly work with government lobbying to promote the project.
In the second case, you'd focus on a specific design and promote it on social media, starting from your own country and then expanding to other countries if that's your goal.
These examples help illustrate how strategy depends on the scale of the vision. Of course, this is a very general overview, and real product strategies are not written in two sentences.
Golden Rules of Product Vision and Product Strategy
Now that we've clarified the relationship between product vision and product strategy, let's look at some principles that both are based on.
1. Focus on Customers, Not Competitors
Product strategy and product vision are powerful tools that should help you stay on track when you're tempted to do things based on what competitors are doing.
If you follow competitors, at best you'll come in second. If you go your own way, you have a chance to come in first.
2. Focus on Value
Clearly articulate what makes your product unique and why it provides value to customers.
3. Align with Company Goals
Ensure your product strategy aligns with the overall company goals and objectives so that it creates value for both the customer and the company, and doesn't cause conflict with other departments.
4. Collaborate with Cross-Functional Teams
Work closely with other departments such as marketing, sales, and customer support to ensure the product strategy is aligned and effective.
5. Use Data to Make Decisions
Make data-driven decisions, using research and customer feedback to guide product development strategy.
6. Be Flexible and Agile
Be prepared to pivot if necessary, adapting the strategy to market and customer demands.
Conclusion
Product vision and product strategy are essential for every product being developed. A clear product vision serves as a guiding star, inspiring and directing the team toward a common goal. A well-crafted product strategy provides a plan for execution, ensuring that resources are directed toward the most impactful initiatives.