Mental Models for Product Strategy
Note: This is part 3 of 3 of a series on applying 19 of the hundreds of mental models to product. See my previous posts for models for innovation and decision making. Enjoy!
Ahhh, strategy. Everyone wants to be strategic, and for good reason. Aside from making you sound smart, it helps to have a well-considered plan of attack to give yourself the best odds of success. Good strategy is tricky because like decisions, the uncertainty and stakes cloud our ability when clarity is power.
Here are a handful of mental models to help you navigate these murky waters and create a bulletproof strategy for your product.
(Yeah, the military wordage is gonna be heavy here, sorry)
1 — Strategy and Tactics
What it is: What would this piece be without at least a little discussion into what we mean by strategy? This model is for the delineation between strategy and tactics. One without the other is not nearly as valuable. Your strategy is your overarching goal, developed over time. Your tactics are your detailed plans to achieve your strategy.
Application: You need to get clear on both. The strategy is your “what” and “why”, the tactics are the “how”. For example, your strategy might be, “acquire a 30% market share to ensure profitability.”. The tactics might be, “to create pricing plans that undercut competitors, create a marketing strategy targeting new users, etc.”
“Strategy without tactics is the slowest route to victory. Tactics without strategy are the noise before defeat.” — Sun Tzu
2 — Beachhead
What it is: In military strategy, a beachhead is a specific point in which a fighting force can focus its resources to create a foothold. In business, it represents a niche market that a firm can specialize in to out-perform the established players with a new product or service.
Application: It’s hard to beat the big guys at their own game, so it can be foolish to try. So create a new, smaller game in which your product can succeed. Find your niche, be better than everyone else at it, and then expand. It makes sense to some people to spread their efforts, thinking it’s a numbers game that will play out in their favor. In some cases, they’re right. In most cases, you should focus on your competitive advantage and then experiment on where else you can apply your strength.
3 — Seize the Middle
What it is: In chess, seizing the middle of the board is an important tactic because it allows the greatest number of potential moves. In business, it’s more about being in the middle of the supply chain or business process. Microsoft seized the middle of the computer industry by focussing on operating system software, then hardware, then productivity software. Now, all of us at some point have interacted with Microsoft.
Application: What opportunity does your product have to seize the middle of some industry or niche? If you can become a useful middleman between suppliers and consumers, you’ll have the opportunity to influence both. It gives you optionality as well, which is so valuable in our mercurial world.
4 — Circle of Competence
What it is: Everyone (and every firm) has two circles. A smaller, inner circle of the stuff you actually know, surrounded by a larger encompassing circle that includes what you think you know. (See below) To focus your efforts, stick to your core competency, that which you know and can succeed at.
Application: Almost every product planning process I’ve been a part of has had some feature creep. It’s not a bad thing, those ideas are valuable and are worth considering. However, keep in mind your core competency to make sure you don’t make wasteful investments into your product.
Think WeWork. They spent untold hundreds of millions of dollars buying companies that made little sense for what was a desk-rental business. Then they lost the most shareholder value ever. Be proud of your competency, grow it to avoid competitors, and be wary of distractions which end up becoming detractors.
5 — Bullseye Framework
What it is: Move through the rings of a classical target, from broad to targeted to find the ideal distribution channel for your product. To take you from brainstorming, to testing, to execution. The outer-ring is every channel you can think of to market in, writing down ideas for each one. Then, you test the most probable 4–5 based on your research and discussion. When you’ve found your best option, you go all in.
Application: You have a lot more channels to market your product in than you think. When you need to gain some traction, it’s worth exploring them all. Especially early on when you’re looking for some valuable first-feedback on your product, smaller channels like blogs or networking events are great. You don’t know until you know, so don’t waste valuable resources on a hunch or pre-established belief about where to market. Brainstorm, test, execute.
6 — Multiplying by Zero
What it is: I’m assuming everyone reading this piece has completed 3rd-grade math, so you know what happens when you multiply any set of numbers, no matter how large, by 0. Mathematical in origin, but quite practical in application.
Application: Consider a scenario in which the factors of your product are rated from 0–10. Design — 8, reliability — 7, marketing — 9, usability — 0. 8*7*9*0=0. All the effort and success in the world won’t matter if you’re failing at a critical aspect of your product. In fact, you don’t even have to go to zero here to illustrate a point. As illustrated below by this graphic by McKinsey, you can have a poor overall customer experience if you’re lacking in even a couple of areas.
What isn’t clear is where your factors are indeed multiplicative instead of additive. My sense is that most things are additive, but it’s still a useful framework to keep in mind.
7 — Technology Adoption Lifecycle
What it is: A way of describing how new technologies are adopted into society. According to this model, it goes: innovators, adopters, early majority, late majority, and laggards.
Application: It’s important to consider where your product falls into this framework when designing and marketing it. For instance, a brand new technology will need more explaining on usage and the purpose. As the technology spreads and there are more adopters, the messaging will focus more on the marginal advantages your iteration has, or simply price-point.
Think microwaves. The first ones needed a lot of convincing of people to use in their homes, through the explanation of the science and usefulness. Now, you might laugh at the thought of someone refusing to use one. When you buy a microwave now, it’s probably purely on how well it fits your kitchen and little else. If you mistake your product for its place in this lifecycle, you can have a torrid time designing and marketing it. I’ve heard “it just wasn’t our time” or “the world wasn’t ready for it” too often.