A key skill for any Product Manager is ‘saying no’. You need to actively choose which things to do, and which not to do. This is different to simply not getting around to doing something in your backlog. It’s a conscious “we’re never going to do that” type of decision. It’s also one of those topics you read about that sound easy on paper, but prove to be quite difficult in person.
So as a Product Manager, how can you make it easier?
The best way to start is to formulate a clear strategy up-front. Most well-known brands and startups have strategies which involve saying ‘no’.
- IKEA said no to pre-built furniture
- Tesla said no to fossil-fueled cars
- Afterpay said no to variable payment schedules
- Dollar Shave Club said no to retail distribution
- Twitter said no to more than 140 characters (for awhile)
- Jiffy Lube said no to pretty much anything not lube related
It is the same for software. BaseCamp is known for saying a hard ‘no’ on Gannt charts. Some customers asked for it. Competition sprung up that offered it. It didn’t matter. As a company, doing Gannt charts was one ‘no’ that Basecamp would stick with. And by most people’s accounts, Basecamp is a hugely successful business.
This is an example of a trade-off in action. All the time & resources that were saved on not building Gannt charts went into other things; R&D, marketing, sales, reducing tech debt, customer onboarding, analytics, the list goes on.
Okay so we get that saying ‘no’ and trade-offs are powerful. How then might you start formulating a clear strategy to enable that?
The answer lies in the three key pillars of business strategy (Porter, 1996):
- Positioning – what you serve and who you serve it to
- Trade-offs – choosing which activities to do, and which not to do
- Fit – how the activities you perform interrelate
To understand which trade-offs to make, first we need to identify a unique and valuable position. Trade-offs will then become more apparent. With positioning and trade-offs in place, we will have a competitive strategy. However that is not enough. For it to become a sustainable strategy – one that cannot be copied over time – we need to maximise the fit between our activities. We will cover the first two pillars in this post.
Finding a Valuable Position
By definition, a strategy should help you win. You can win by gaining incremental advantages, and these can be achieved by strategic positioning. Let’s review the three kinds of strategic position.
You’re a specialist. You do one niche thing really well for a lot of people.
- Boost Juice offers many people a refreshing smoothie
- Medium allows many people to read and publish blogs
- Trello allows many people to keep track of tasks
- MailChimp allows many people to send email campaigns
You’re a one-stop-shop. You do everything for one set of people.
- IKEA makes any and every kind of furniture to home-makers
- Bunnings has everything hardware & outdoor for DIY enthusiasts
- Microsoft Office is a complete toolset for word processing
You’re the big fish in a little pond. People don’t have any choice but to use you.
- Carmike Rural Cinema operates in cities with less than 200,000 people
By taking a strong position, you focus your resources on pleasing a group of people consistently. Another side-benefit is that you can actually gain fans through what you say ‘no’ to doing. In our Basecamp example above, there are no doubt Users that dislike traditional project management and Gannt charts. Therefore the fact Basecamp actively says ‘no’ to them only reinforces that this product was made for people like them. Similarly, you will hear about IKEA customers that “love putting furniture together”. For them, this ‘no’ is actually a benefit. Thus trade-offs can lead build loyalty amongst your target segments.
If you try to please everyone, you end up pleasing no-one
Competing at a given position
Assume you are assessing a new market opportunity and have a position in mind. There are already some existing competitors. Why would anyone choose you?
Or perhaps you’re an existing product and you’re struggling to compete. How do you make that shift to get an edge on competitors?
There are two key decisions to make from within your position:
- Whether you will offer better quality, or worse
- Whether you will offer a higher price, or lower
These form the axis of the Jobs-To-Be-Done Growth Strategy Matrix (Ulwick, 2016).
Source: Ulwick, 2016
Let’s look at when each of these approaches will work.
Better quality + charge more
This is great when there are underserved customers. These people have an unmet need and will pay a premium for it to be filled. This is also known as a differentiated strategy. These are the premium products in any category. For example:
- Tiffany rings
- Boston Consulting Group
Better quality + charge less
This always works, if you can pull it off. Either you have a new technology, a new way of working, or perhaps are willing to survive on lower profits (and live off ramen noodles). This is a dominant strategy. Through innovation, many of the most successful startups have created a better product at a lower price. For example:
- Uber X
Worse quality + charge more
This is ideal when customers have limited options, aka an access-based position. If you’ve ever bought food from a cinema, you’ll know about getting a worse product for a higher price. This is a discrete strategy. Other examples:
- Auto mechanics in rural areas
- Windows Millenium (ME)
Just kidding – not even those with limited options should have gone near Windows ME.
Worse quality + charge less
This is the other hotbed for startups to play in. This works for overserved markets, where existing products are too expensive and too high a quality for what people want. This is the disruptive strategy.
- IKEA furniture
- Dollar Shave Club
- Air BNB
Now, let’s do a health check. Where does your opportunity or your existing product fall on the matrix above? You want to be anywhere but “stuck in the middle” (a Michael Porter term).
Many market leaders of the past have become extinct trying to hold on to the middle. From Blockbuster, to Nokia, to Yahoo, you simply can’t survive in the middle.
Any old school Dungeons and Dragons player knows you don’t want to become a generalist; better is to “min/max”. This means you minimise one statistic (e.g. Magic) to maximise another (e.g. Strength). You make the trade-off and go all the way with it, to become the ultimate Magician or ultimate Warrior; not the ruggard innkeeper that can perform a light show.
The heart of strategy is choosing what not to do, so you can nail the things you are doing. The next time a customer/senior manager asks you to put something on your Product roadmap, remember – you want to min/max your product. Don’t be stuck in the middle. And that probably means saying no.
Porter, M. (1996). What is strategy?. Harvard Business Review, (Nov-Dec 1996).
Ulwick, A. (2016). Jobs to be done. [s.l.]: Idea Bite Press.