How do we validate that our product strategy is the right one?

This is a natural question and I would specify the question a bit to say "how do we validate that our product strategy is the right one for us?" 

Might seem like a small delineation, but the truth is, no one strategy is right for every company or product. What works amazingly for one company could yield paltry results for another. 

For that reason, I'd say the best starting place to determine whether you're developing a strategy that is right for your situation is

1. To be clear on the first principles you're designing around
2. Try your hardest to maintain an environment of intellectual honesty that normalizes healthy friction (by healthy friction, I mean people care, are not afraid of unnecessary repercussions for sharing original ideas, and communicate in a compassionate way with one another) 
3. Have a bias for action instead of perfection

Every strategy looks great in a deck or on a whiteboard, but you have to be willing to put something out there and see what the world tells you. To paraphrase Mike Tyson, everyone has a plan until they get punched in the mouth. If you've designed your strategy from your principles, aligned them to your goals, brought people along the journey with you, and aren't afraid of changing your mind due to feedback (👊🏾 ), you'll be able to inch yourself closer to what's best for your company.

First, define "right" by establishing clear goals – is it product-market fit? Is it growing an existing product to a certain milestone? These will help you determine the right form of validation to apply to each stage. 

For products that haven't yet achieved market fit, early & rapid customer feedback cycles are the best form of validation I've seen – push your target users to tell you over & over again in surveys & interviews that what you're building is something they must have, ideally by getting them to sign up or even pay you before you've even built it. 

Once you have a clear sense of your goals after product-market fit, figure out what inputs drive those outputs – for example, if your goal is 10x growth in total customers in a year then maybe you need to significantly grow your weekly signups. And if your product initiative is to reduce the number of steps in your signup flow, then your target metric is likely to be improving conversion at the end of that flow. Once you implement your product initiative, test whether it's hitting your goal and iterate rapidly until you find the best path forward. 

Pick the right input metric for each product initiative based on the goal for the initiative & track it closely to figure out whether your product strategy will get you to your goals. 

I'm going to borrow shamelessly from Jeff Gothelf in his book, Lean UX:

"With your prioritized list of assumptions in hand, you’re ready to move to the next step: testing your assumptions. To do that, transform each assumption statement into a format that is easier to test: a hypothesis statement.

Generally, hypothesis statements use the format: We believe [this statement is true]. We will know we’re [right/wrong] when we see the following feedback from the market: [qualitative feedback] and/or [quantitative feedback] and/or [key performance indicator change]. You can see that this format has two parts. A statement of what you believe to be true, and a statement of the market feedback you’re looking for to confirm that you’re right.

Expressing your assumptions this way turns out to be a really powerful technique. It takes much of the subjective and political conversation out of the decision-making process and instead orients the team toward feedback from the market. It also orients the team toward users and customers."

Pitch ideas with a mind towards how you can test them. Can you test them beforehand? Or do you need to launch and monitor? How will you know? Call this out to the leadership team for each idea.

Most situations don't have "one right" product strategy. Some market/product situations have several strong/good strategies. In other situations there may be no winning strategies for your company/team.

But "how should we validate that our product strategy is good?" Let's look at 3 examples: (1) validating a new strategy you're considering, (2) validating a strategy the team is executing against but without market feedback yet, and (3) validating a strategy for which you can gather real customer data.

Evaluating new strategy proposals:

Good strategies lay out a credible path to the right destination.

1. Does the strategy lead the product/team/company to a desirable place? Happy customers? A healthy business?

2. Is the strategy credible? Is your company/team likely able to execute on it to arrive at the desired destination?

3. Is there data to support the strategy? E.g. latent user behavior in which people are working around a missing product/solution? Market research on underserved and/or unmet needs? Early b2b sales conversations leading to strong interest?

4. Does your strategy play to your company/team strengths? Your assets and position in the market?

5. Are your strengths/advantages sustainable? (sometimes called a "moat")

6. How will competitors and new entrants likely react? Does your strategy still "win" after these reactions?

7. Does the strategy make it clear what you will NOT do? A good strategy clarifies which "good" projects/investments the team will not invest in.

Evaluating a strategy your team is executing against (to build product):

A good strategy aligns, stabilizes, and empowers teams.

1. Has the strategy aligned people and reduced debates (especially repeated debates)?

2. Is the strategy helping people and teams make decisions locally in a way that's consistent with the direction and destination you need to reach together?

3. Is the strategy leading to stability in product/project execution? E.g. consistent priorities for multiple quarters? Less fire fighting? Less churn?

Evaluating a strategy with market feedback:

Your product metrics should be telling a story consistent with your strategy.

1. If your strategy has you repositioning your product as a solution to a new set of problems, how are the market surveys changing every month/quarter?

2. If your strategy has you winning customers over from a competitor, how's that going every week/month?

3. If your strategy has you building more engagement with your users, how is engagement improving?

If the product data isn't matching the path laid out in your strategy - it's time to investigate why. Maybe the execution needs to be better. Maybe the strategy needs to be changed.

I emphasize the importance of continuous validation in your product strategy, a key principle championed by Marty Cagan. He teaches us that the essence of product management lies in the discovery process. So, let's break down how you can ensure your product strategy is on the right track:

1. Engage in Continuous Discovery: Always be in the mode of testing your assumptions. Use rapid prototyping and conduct experiments to validate your ideas with real users. This approach helps confirm that your strategy addresses genuine user needs and delivers value.

2. Implement Dual-Track Development: This methodology separates the discovery of viable ideas from their delivery. Validate new features or strategic shifts in the discovery track through prototypes and user feedback before they enter the delivery track. This safeguards against investing in features that don't meet user expectations.

3. Test for Product-Market Fit: Use minimum viable products (MVPs) to test your offerings in the real market. This is crucial for understanding whether your product meets a legitimate market need and can stand out among competitors.

4. Focus on Outcomes, Not Outputs: Orient your teams around achieving specific outcomes rather than just delivering features. This shift ensures that every effort is geared towards enhancing customer satisfaction and driving business success.

5. Regularly Gather Customer Feedback: Maintain a close connection with your customers through surveys, interviews, and usability tests. This feedback is invaluable for validating whether your product direction aligns with their needs and expectations.

6. Monitor Key Metrics and KPIs: Define and track key performance indicators that align with your strategic goals. Metrics related to user engagement, retention, and satisfaction are vital for assessing the effectiveness of your strategy.

7. Embrace Iterative Learning: Adopt a mindset of continuous improvement. Iterate based on feedback and market changes to refine your strategy, ensuring it remains relevant and effective.

Validation is a great signal that your product strategy is headed in the right direction before you start building against it. My favorite methods for validation include:

1. Conducting surveys on the themes of the strategy to see how much people resonate with it

2. Validating the strategy with internal audiences

3. Interviewing existing customers where I will show them the strategy in pieces and ask their thoughts for feedback

4. Going to Kubecon/other industry events and discussing the strategy with people in booths

5. Conducting a formal UXR study to validate the strategy in the form of Kano study

Validating your product strategy is essential, particularly before investing in new features. There are two techniques I use to ensure my strategy is most effective:

1. Customer validation: Talk directly to potential customers to understand their needs, wants, and pain points. This helps you assess if your product idea aligns with their problems and if they would be willing to pay for your solution. In addition, conduct user testing by developing prototypes and getting real people to interact with them. Observe their behavior, gather feedback, and identify areas for improvement.

2. Market validation: Look at competitors to understand where your strategy fits into the broader landscape. Similarly, pressure test your commercial model - are customers willing to pay for your product or service? Often they will say "yes", but fail to do so when you open it up.

No-one can, or should ever be sure that they have a 100% right product strategy. But you can do a lot to de-risk your approach, and your tactics should vary depending on how much time you have to plan.

• Is your strategy ultimately going to drive the change in behaviour you want? Find the key participants in your strategy -- e.g. the customers -- and talk, talk, talk to them. You'll learn a ton from the first 5-10 conversations, and suddenly you'll start to hear the same themes and be able to predict what they'll say. Then you can move on.

• Read, and connect with people who are familiar with this situation in your industry or other industries. How did things work out? Is the current market / environment similar enough that you can draw conclusions?

• The more experienced you are, the more confident you can be about relying on product intuition. A phrase I often use is "we've seen this movie before" and, it's surprising how many times the same situation gets repeated.

This question is very similar to the question about knowing that your strategy is successful, but I’m going to look at them through two different lenses. For this question, I’m going to look at it as a strategy for a new product that hasn’t been introduced yet, you have no active users, and you want to figure out if your strategy is the right one before you launch. To validate a strategy in this situation, the approach has to be proactive and thorough. The goal is to ensure that when you deliver the product to users, it gains traction and starts building your user base right from the get-go. Here’s how I approach it:

• Market research and user persona development: Before anything else, deep market research is critical. Understand the market landscape, identify gaps, and pinpoint the needs that your product aims to fulfill. Develop detailed user personas to represent your target audience. Knowing who you’re building for and their specific pain points helps tailor your strategy to meet real needs. Writing jobs to be done (JTBD) is a great way to distill what you've learned.

• Problem-solution fit: Validate the problem-solution fit early. Engage with potential users through surveys, interviews, and focus groups. Present them with your product concept and see if it resonates. Does your solution address their pain points effectively? Are they excited about the prospect of your product? This feedback is essential to refine your strategy before you even write a line of code.

• Competitive analysis: Conduct a thorough competitive analysis. Understand what similar products are doing well and where they fall short. Identify your unique value proposition—what sets your product apart? This differentiation is key to attracting users in a crowded market.

• Pre-launch campaigns: Depending on the product and market, run pre-launch campaigns to generate buzz and gather initial interest. Create landing pages, run social media ads, and engage in content marketing to build an email list of interested users. Measure the engagement levels and adjust your messaging based on what resonates most with your audience.

• Pilot programs and user testing: If possible, run pilot programs with a select group of users from your target market. This can be done through partnerships or exclusive invites. You don’t actually need to have a real product to show them—wireframes and designs can be enough, at this stage. Collect feedback on their experience, what they love, and what could be improved. Iterate on this feedback to fine-tune your product.

• Metrics and KPIs: Establish clear metrics and KPIs to track from day one. These might include sign-up rates, engagement metrics, conversion rates, and feedback scores. Thinking through these before you start to build helps you to focus on what you believe will make your product successful. Once you do have something available for customers to actually use, having these metrics in place helps you measure the initial traction and adjust your strategy based on real-world data.

• Minimum Viable Product (MVP) testing: Once you have a good understanding from all of the above, build an MVP to test your assumptions. The MVP should have just enough features to solve the core problem for your target users. Release this to a small group of early adopters or beta testers. Their usage and feedback will provide great insights into what works and what doesn’t, allowing you to make necessary adjustments.

• Feedback loops: Create robust feedback loops to continuously gather user insights. Use tools like surveys, in-app feedback, and user interviews to keep a pulse on how new users are interacting with your product and what their pain points are. This ongoing feedback is crucial for making iterative improvements.

• Alignment with business goals: This is the same as when you have a product that already has usage. Ensure that your product strategy aligns with your broader business goals. This involves regular check-ins with stakeholders to confirm that your product direction supports overall business objectives. Misalignment can lead to strategic drift, where your product might be developing well, but not in a way that supports the company’s long-term goals.

In the end, validating a product strategy for a new product involves a mix of thorough research, proactive user engagement, iterative testing, and continuous feedback. Ensure that your product resonates with its target audience. All of these things will help you build confidence that your strategy will enable you to gain traction and grow your user base effectively once you launch.

The core of product strategy is to answer the question "how you will differentiate"

Once you have a differentiated offering (based on internal alignment) then you can validate over a period of time by:

Track progress towards your success metrics: revenue growth, retention, customer acquisition..etc

Talk and listen to customer. They will tell you if your product is heading in the right direction

Conduct market analysis to verify that your product addresses a real and sustainable market need, ensuring it resonates with your target audience.