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Step-by-Step Exercises to Define Your Product Strategy
Below are all of the exercises from each of my strategy essays. I have also included pre-formatted Google Slides to enable you to define your strategy quickly. The Google Slides provide all the activities and examples you need, so it’s fine to skip to them directly by clicking here. Some find it easier to read the summary below first, however.
Exercise #1: Delight. Describe how your product delights customers today and what will make it even better in the future.
Exercise #2: Hard to copy. List all the ways your product might create a hard-to-copy advantage, using the Netflix examples above as a guide.
Exercise #3: Margin-enhancing. List all the possible business model and price/plan experiments you will explore over the next few years.
Essay #2: “From DHM to Product Strategy”
Exercise #4: In thinking about your product’s potential “delighters,” hard to copy advantages, and business experiments (the three exercises above), what are 4–6 high-level hypotheses you’d like to test in the next year or two?
Essay #3: “The Product Strategy/Metric/Tactic Lockup”
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Exercise #5: Outline your strategies, the proxy metric you will use to evaluate progress against each strategy, along with the projects you will execute.
Essay #4: “Proxy Metrics”
Exercise #6: Identify your North Star metric — the high-level equivalent of monthly retention at Netflix. Now re-look at your work in the Strategy/Metric/Tactic Lockup and re-evaluate your proxy metric for each strategy, using the following questions as a guide:
- Do the proxy metrics adhere to the following structure? Percentage of (members/new customers/returning customers) who do at least (the minimum threshold for user action) by (X period in time).
- Is each proxy metric measurable? Moveable? Not an average? Are you confident that your proxy metric correlates to your high-level metric? Is the metric gameable?
Essay #5: “Working Bottom-up”
Exercise #7: If teasing out your product strategies is challenging, try the bottom-up approach. Create a list of projects you believe are essential, then sort the ideas into different “buckets.” The names of these buckets likely articulate your high-level product strategies.
Essay #6: “A Product Strategy for each Swimlane”
Exercise #8: For each swimlane (pod) in your organization, identify the proxy metric for that effort, along with key strategies, proxy metrics, and projects in that area. (Typically this work is done by the product leader for each pod.) Below, I list an example from the Netflix personalization swimlane, circa 2005:
The topline proxy metric for the personalization pod was “percentage of new members who give at least 50 ratings during their first six weeks with the service.” The team believed that if it could move this metric — a proxy for personalization improvements — they would eventually improve retention. Netflix ultimately proved that personalization improved retention.
Essay #7: “The Product Roadmap”
Exercise #9: For each of your product strategies, outline the projects against each high-level product strategy over the next four quarters. I have included an example roadmap, below, from Netflix, circa 2005.
Essay #8: “The GLEe Model”
Exercise #10: To complete the GLEe exercise for your product and company, ask yourself three questions:
1) What is the initial product that enables the company and product to “Get Big” over the first three to five years of its life? Are there trends the product can ride, much like Netflix rode the wave of DVD players and e-commerce? What are the trends for your product or company?
2) As you get big, what is the next phase that the product will “Lead?” For Netflix, it was internet video and the opportunity to “Lead streaming.”
3) Once your product establishes a leadership position, how might it “Expand” even further? Given the brand, network effects, economies of scale, and unique technologies your product will establish over time, what is the next wave of growth? What is your equivalent of Netflix’s global expansion?
Reflecting on your answers to the questions above, complete the GLEe model for your product and company:
- Get Big on _______________
- Lead ____________________
- Expand __________________
Essay #9: “The GEM Model”
Exercise #11: In thinking about the needs of your overall company, how do you prioritize Growth, Engagement, and Monetization? What metric will you use to measure each?
As an example, here is the prioritized GEM model for Netflix in 2005:
- Monetization: As measured by lifetime value and gross margin
2. Engagement: As measured by monthly retention
3. Growth: As measured by the year-over-year member growth rate
Determine how you would like to prioritize growth, engagement, and monetization for your organization, then identify the metric you will use to measure each factor.
Using the Google Slides at the link below, define your company’s product strategy. To make edits, make a copy of the deck.
Click here to build your product strategy presentation using the pre-formatted Google Slides.
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