tinatudose, Author at Cristina Tudose

September 24, 2023September 24, 2023

Product Led Growth (PLG)

PLG

PLG is a go-to-market strategy that relies on the product itself as the primary driver of customer acquisition, conversion, and expansion. Instead of focusing heavily on traditional sales and marketing techniques to convince potential users to buy a product or service, a PLG strategy centers around the product providing value, which in turn drives growth and expansion within an organization.

Key features of Product-Led Growth:

Free or Freemium Versions: Many PLG companies offer free versions of their product, allowing users to experience the value first-hand before deciding to upgrade.
Viral Growth: PLG products often include features that encourage sharing, leading to organic and viral growth.
Bottom-Up Adoption: Instead of selling to top executives, PLG products often gain traction with end-users and spread within organizations from the bottom up.
Self-Service: Many PLG products have self-service options, allowing users to get started without the need for sales demos or lengthy onboarding.

Examples of companies that employ PLG strategies include:

Slack: This collaboration tool grew rapidly in popularity because individual teams within companies started using it. As those teams found value in Slack, its usage spread to other teams and often the entire organization.
Dropbox: It offered free storage to individual users and then provided incentives for users to refer others. As people got accustomed to using Dropbox for personal files, they began to introduce it at their workplaces.
Zoom: While Zoom does have a sales-driven B2B approach for larger contracts, its ease of use and freemium model allowed individuals and small businesses to start using it spontaneously, leading to wider adoption.
Canva: This graphic design tool allows users to sign up for free and start designing immediately. As users realize the power of its premium features, they often upgrade.
Notion: A note-taking and organization tool that initially gains traction with individual users but can expand within organizations as teams begin to see its value.

In a PLG strategy, the product is not only something you sell but also the primary mechanism by which you acquire, activate, and retain customers.

PLG in B2B vs. B2C

Product-Led Growth (PLG) can be applied to both B2B (business-to-business) and B2C (business-to-consumer) models. However, the concept has been particularly popular and evident in the B2B SaaS (Software as a Service) sector. Here’s a breakdown:

B2B (Business-to-Business):
- Examples: Many SaaS companies like Slack, Zoom, and Dropbox started with a freemium model or a free trial, allowing businesses or individual professionals to use the product and see its value. Over time, as users within a business see the value, the product adoption can spread, leading to upsells and expansions. This approach can bypass the traditional long sales cycle seen in B2B by targeting end-users first.
- Advantage: By offering a product that end-users love and can start using without a complicated sales process, there’s potential for rapid organic growth and viral adoption within and between organizations.
- Challenge: Monetization and ensuring that the free or low-tier users convert to paid or higher-tier users.
B2C (Business-to-Consumer):
- Examples: Apps like Spotify or Canva allow consumers to start with a free version, and once they recognize the value or need additional features, they might upgrade to a premium version.
- Advantage: The massive scale of potential users; if the product resonates with consumers, it can achieve vast organic growth.
- Challenge: The consumer market can be more fickle and driven by trends. Also, the balance between offering enough for free to entice users and reserving premium features for paying customers can be delicate.

In summary, while PLG is prevalent in the B2B SaaS sector, its principles are not restricted to it and can effectively be applied to B2C models as well. The key is ensuring that the product itself delivers clear and immediate value to its users, prompting them to promote, share, or upgrade based on their positive experience.

Loops

In a Product-Led Growth (PLG) strategy, loops refer to self-reinforcing cycles that drive user acquisition, retention, and expansion. These loops leverage the product’s value to create organic, scalable growth mechanisms. When set up correctly, each loop should feed into itself, compounding growth over time.

Here are some common loops used in PLG:

Viral Loop: This loop leverages users to bring in more users. A product can encourage sharing, inviting, or collaboration.
- Example: Dropbox offered extra free storage for users who invited friends to sign up. As more users adopted Dropbox, they invited even more users, creating a viral effect.
Usage Loop: The more a user engages with a product, the more value they derive, which in turn leads them to use the product even more.
- Example: In a tool like Notion or Trello, as users create more boards, integrate with other tools, and centralize their work, they become more entrenched in the platform, making it less likely they’ll churn.
Feedback Loop: Users provide feedback on the product, leading to improvements, which then increases satisfaction and encourages even more feedback.
- Example: Companies that actively solicit feedback and show they act on it can enhance user trust and engagement.
Monetization Loop: As users derive more value from a product, they’re more likely to upgrade or purchase add-ons. This additional revenue can then be reinvested in the product, further enhancing its value proposition and encouraging more upgrades.
- Example: A freemium model where basic users upgrade to premium when they need advanced features. The revenue from premium users can be used to develop even more features, prompting further upgrades.
Content Loop: Users create content on a platform, which attracts more users, leading to more content creation.
- Example: Platforms like Medium or YouTube rely on content creators to draw in viewers. As viewership grows, more creators are incentivized to join, adding more content and drawing in even more viewers.
Network Loop: The more people join a platform or use a product, the more valuable it becomes to each subsequent user.
- Example: Communication platforms like Slack or Microsoft Teams become more valuable as more team members join. As more teams within a company adopt the platform, its utility multiplies.
Data Loop: The product gets better as more users contribute data, which in turn attracts more users due to the enhanced product quality.
- Example: Machine learning algorithms in products like recommendation systems on platforms like Spotify or Netflix. The more users interact, the better the algorithm becomes at predicting and suggesting content, enhancing user experience.

To effectively leverage these loops in PLG, companies need to deeply understand their user behaviors, continuously measure and optimize their loops, and ensure that the product continually delivers value at every stage.

April 26, 2021February 25, 2023

Product Strategy

What is Product Strategy?

This image has an empty alt attribute; its file name is strategy-types.png

I wrote about Corporate Strategy and Business Strategy in prior articles, hence I encourage you to read those first before looking at Product Strategy. Product strategy relies a lot and has to follow the strategies at corporate and business levels.

Product strategy defines what value to create for what target market. It could be same or existing value for same or existing target market. These approaches result in different strategy types. The ultimate goal is to achieve product market fit with the value proposition for that respective target market. The value to be created is usually different according to the product life cycle and industry life cycle, and it has to be aligned with the business and corporate strategies.

For example, if you enter a mature market with a new product and your business strategy is to differentiate, then the product strategy should look for unique value to create for customers, value that is not addressed by the competitors. The focus shouldn’t be for example on entering the market with a similar copy-cat product (same features) to a smaller segment of customers – since this doesn’t aligned with the business strategy. More to come on this…

What Product Strategy is NOT?

Product Strategy is Not a Metric

I really have to emphasize on this as product strategy is often expressed as a metric to improve. As an example, “let’s improve CVR” or “our strategy is to improve DAU by 20% by this quarter”. Not only this is not product strategy, but also it can incentives product managers to build bad products that are optimized for driving those metrics up short-term at the expense of long-term customer experience degradation. For example, to increase DAU you might have coupons that drive people on your site but they never return – they were there just for the money and they never saw a value in your product afterwards.

Product strategy needs to talk about what value the product brings to the users, about how is the product solving for a problem that a specific market has, and how that value creates a a sustainable Product Market Fit.

However, metrics are an awesome tools to measure whether your strategy is achieved or not. To the example above, you may set up you strategy to increase users awareness and you may try different ideas/techniques to do so, while measuring the success of those as DAU but also looking at other second order effect metrics – such as Return Rate etc. It’s really important to know what you want to achieve, you are trying to increase awareness by trying different ideas on creating value to users. You are not trying to move blindly a metric in vacuum. Always think about the value proposition for your product and how to measure to know that you achieve the product market fit.

Product Strategy is Not a Roadmap

Product strategy ultimately defines what value to be created for what target market. The roadmap defines a prioritized sequence of milestones in order to achieve the strategy. The sequence might change based on the learnings at each step, however the strategy remains the same.

Product Strategy Types

Product Strategy is defining what value (new/existing) to create for what market (new/existing). The combination of these aspects results in different strategy types.

How do you determine which strategy to use?

Similarly to corporate strategy, one needs to create a SWOT analysis that looks at macro-environment (PESTEL) and micro-environment (Porter 5 Forces) to understand the competitive landscape and finally decide which strategy needs to be employed and when.

The difference between product and corporate SWOT analysis is that product analysis is done for only ONE product while corporate analysis is done for a portfolio of multiple products. Corporate strategy looks at all the products in the portfolio and decides which one to choose to invest/divest and which should be pushed further for which market. Obviously if the corporation has only one product then the two analyses overlap.

Product Strategy Value Creation

Product strategy is about value creation for a target market. Based on the SWOT analysis one would have to choose the right value to generate for the right market.

Target Market (or User Segment)

One way to look at the target market is based on the product life cycle. Here is an example of target market you would want to consider, based on Crossing the Chasm principles by Geoffrey A. Moore:

The entire premise of this approach is that in order to establish yourself as a market leader, you have to first secure a specific niche as a beachhead first. If it’s a new product that means that innovators and early adopters will jump on it first. In order to grow your product to early majority, you have to appeal to this segment. The premise is that this segment is more pragmatic and wants to buy or use products already proven. Hence, the chasm between early adopters and early majority. You need to have proven the product value before you expand your market. To cross the chasm you will need to secure a small target market first, then expand.

Every segment has a different need, hence appealing to those needs is what you need to identify. Also, the more you advance on the product lifecycle the more rivalry amongst competitors there will be, hence you need to identify needs that are solved already by the competitors and how/where to meet and beat them.

Identify Market Needs

Based on the strategy chosen, you will have a market that you need to unlock. Finding the needs of that target market will mean to gather qualitative and quantitative data about your market.

The goal is to identify what are user problems and needs by walking with them on their journey and identify at each step their pain points.

Value Proposition

Value proposition is basically answering the needs of the target market chosen in the strategy. Once you identify the needs, you have to identify which one/s to address.

One way that I like to assess the user needs is using the value curve canvas. This is borrow from the Blue Ocean corporate strategy, but it can be very well applied on the product level as well. The main idea is to plot the key user needs of your product against the competition and alternatives and rank them on a scale of user perceived value. As an example, let’s take Southwest airline against other airlines and alternatives such as cars.

Source: “Charting Your Company’s Future,” **Harvard Business Review**, Vol. 80, No. 6, June 2002

This is a great way to find your product differentiation.

Note: if you are entering a market with a new product then you have to think about a Minimum Viable Product or better put Minimum Valuable Product. Without going into details, MVP means finding the minimum set of features that can deliver the value that answer to the biggest pain points and can differentiate your product from the competitors. MVP has to deliver the value proposition that your product is offering.

Prioritization

The way to think about what value to choose to address is using 3 artifacts:

SWOT analysis. For example, think about your Strengths and core competencies that puts you in the best position to solve for those needs.
Additionally, I like to use VRIO (Valuable to customer – Rare amongst competitors – Inimitable by competitors – Organized to deliver as company) model for choosing and prioritizing the needs to address.
ROI Analysis or Cost-Benefit Analysis. Basically you want to see what is return (reach * impact) over the effort (cost) to do it.

Product Market Fit

Once you found the target market and the value proposition, you must validate that there is a fit. In other words you must validate that the hypotheses are correct and there is a market willing to use and pay for the value proposition.

There are many ways to validate the product market fit (PMF) by testing online and offline with prototypes or online experiments. (This is outside of scope of this article).

Lagging and Leading Goals

All in all, the goal of any strategy employed at each stage of the product life cycle is to find the PMF, by either targeting new market with the same product or by enhancing the product for the same market. However, you wouldn’t want to have a product market fit just once in a lifetime of a user, you want to have repeating users that get this value over and over again. Hence, the ultimate goal is to reach PMF repeatedly.

While reaching PMF is the ultimate goal, there are other intermediate goals that help achieve the ultimate one. I called them leading goals as they lead to PMF repeatedly and sustainably across different target markets. The ultimate goal I call lagging goal as it happens by default by achieving all the leading goals.

At each stage of the product you will be going through different strategies that will require to set different leading goals. Usually they go in order, from acquisition of new target market, to activation, retention and revenue. The revenue might be optional as sometimes at the beginning of the product life cycle you might not focus on making revenue right away, you have to be laser focus to cross the chasm, to have the product used by the early and even late majority before you think about charging and making profit. But it all depend on the nature of the product, if it’s an ecommerce business you have to charge people, but if it’s a social media site you might think about monetization at a later stage.

Metrics

Lagging Goal Metrics

The lagging goal is to achieve PMF repeatedly and sustainably across different target market. However, in order to know that you have achieve this you will have to measure it. There are many ways to measure the PMF, qualitative by surveying the users or quantitative by actual measuring usage of the value prop and retention.

Value prop validation: by any core action rate (aka “AHA” metric)
Repetition validation: by measuring retention rate for a time interval 1 day, 7 days, 30 days depends on how often the value prop should be exercised (e.g. Return Rate = Users at the end of the period – New Users/Users at the beginning of the period)

Leading Goals Metrics

Each leading goal can be measured by different metrics according to the nature of the product:

Acquisition

New DAU, WAU, MAU
Bounce Rate etc.

Active

Core action Rate (the rate of users performing the core action)
Signup/Subscription Rate
Other engagement metrics: CTR, Referral/Share Rate,

Retention

Return Rate/D1/D7/D30
avg DAU÷MAU ratio (stickiness)
Churn Rate (U. lost/U.beg) etc.

Revenue

ARR/MRR (annual and monthly recurrent revenue)
CLTV/AC (customer lifetime value/acquisition cost)

All the goals should be measured and measurable.
“You can’t control what you can’t measure.” Tom DeMarco

Tactics to employ for different strategies and goals

For each strategy, you will have to setup a measurable goal to achieve. There are tactics that allow you to facilitate this. Below there are some examples for each Goal at every stage in the lifecycle. Explaining these tactics is for another article’s scope.

The reason why I want to bring up the tactics here, is because many people call these strategies. I strongly believe these are just tactics to achieve the strategy because you may pick and choose different ones or change them as you sit it fit but your overall strategy doesn’t change.

See an example in action below:

The strategy is market penetration, basically growing your user base, let’s say into early majority (as seen in the picture above) by providing the same value proposition that your product already offers.
The market is early majority
Leading goal: Then you will take a leading goal to improve acquisition, such as increase DAU by X%.
Lagging goal: While you keep an eye on the lagging goal of achieving the product market fit in this new segment/market. For this you will look at let’s say Retention Rate D7 of xx% for that cohort.
Tactics: As tactics you may choose to build acquisition loops in a form of paid loops; or you may choose to build content loops or social or viral. You get the point. Some might work other might not. However, you are still working towards the same strategy and same goal. You need to grow the market usage.

In conclusion, product strategy is value creation for a target market that leads to product market fit. Different strategies may be chosen for different stages of the product life cycle. The leading goals chosen to achieve the strategy should be a correct measurement of the strategy success of failure. Ultimately, you always have a lagging measurable goal to meet at that is product market fit goal, measured by retention and core action rates. Lastly, tactics to employ are numerous from Growth Loops, Scaling solutions to Monetization ones that allows you to achieve the proposed strategy.

February 10, 2021February 10, 2021

Podcasts

12 Podcasts Marketers Should Listen To

1. Masters of Scale by Reid Hoffman
2. State of Demand Gen by Chris Walker
3. The Knowledge Project by Shane Parrish
4. The B2B Marketing Leaders by Dave Gerhardt
5. Everyone Hates Marketers by Louis Grenier
6. Nudge by Phill Agnew
7. The Growth TL;DR by Kieran Flanagan 🤘SVP Marketing at HubSpot and Scott Tousley
8. The Prof G Show by Scott Galloway
9. Leveling Up by Eric Siu ✓
10. The Marketing Millennials by Daniel Murray
11. Inside Intercom
12. How I Built This by Guy Raz

April 28, 2020April 28, 2020

Conversation Optimization Tools

A/B testing & Multivariate Testing Tools

These are must-have tools to run tests on your site.

Optimizely – The biggest player in the market. Fun fact: It was used by both the Obama and Romney campaigns during the last US elections.

VWO – Easy to use and powerful tool for all your A/B testing needs.

Adobe Target – Adobe Target is an enterprise testing tool that does a great job of leveraging a visitor-based metric system. They’re one of the most popular enterprise tools out there.

ChangeAgain.me – ChangeAgain.me provides a visual interface to Google Experiments for A/B Testing.

Conductrics – Conductrics is an advanced tool that offers methods from AB Testing blended with Machine Learning to deliver optimal experiences, for each user, automatically.

Convert.com – Convert.com offers “affordable enterprise testing and personalization.

Marketizator – Marketizator is another new player in the testing tool market. They position themselves as a sort of all in one optimization tool: pop-ups, on-page surveys, A/B testing, personalization, segmentation.

Maxymiser – Maxymiser is a powerful tool, one of the more expensive enterprise tools out there.

SiteSpect – SiteSpect is a testing tool that uses a proxy server, so it avoids many of the client-side problems and retains the robustness of server-side tools.

Heatmap & scrollmap tracking

What do people do on your site? Where do they click? How far down do they scroll? What gets noticed and what gets ignored? These tools will give you the answers.

SessionCam – my top recommendation.

Clicktale – A bit on the expensive side, but really good.

Mouseflow – Clickmaps, heatmaps, scrollmaps, recorded user sessions – you name it.

Inspectlet – The budget-friendliest option among these.

HotJar – HotJar does (almost) everything. In addition to their targeted polls, they also offer funnel tracking, session cams, heat maps, and more.

Lucky Orange – Lucky Orange offers an “All-in-One Conversion Optimization Suite,” including analytics, recordings, live chat, heatmaps, funnel analysis, form analytics, and polls.

Usability testing

Usability testing is the black horse of boosting conversions. If your site is difficult to use or hard to understand (means it has usability problems), it will result in poor conversions. These tools help you figure it out

UserTesting.com – Probably the biggest marketplace to finder testers.

Open Hallway – I like their monthly fixed fee option where you can do as many tests per month as you like. You can also recruit users from the marketplace.

TryMyUI – For $99 dollars you can have as many people as you want to be part of a usability test (when you recruit your own testers). They also offer an AI solution for session replay videos called Stream.

Ethnio – Recruit your own testers from website visitors. Very useful for recruiting testers.

Analytics tools

You need data to make the right decisions.

Google Analytics is awesome when you know how to use it. Mandatory for everyone.

KISSmetrics – Google Analytics tells you what happened, KISSmetrics tells you who did it.

MixPanel – for hardcore analytics people. This is advanced level stuff. It can tell you anything, but you have to configure it yourself.

Heap Analytics – Heap Analytics automatically captures every user action in your web or iOS app and lets you measure it all after the fact.

Amplitude Analytics – A newer player in the analytics space, but quickly gaining traction. Popular for behavioral cohorting and tracking for correlative events. Great dashboard features.

Email marketing

Email marketing is the cornerstone of any successful marketing. These tools help you rock it.

GetResponse – I could not live without it. This is my go-to choice for email marketing. It’s amazingly good and better priced than its competition.

Aweber – I’ve used it in the past and I know a ton of people who use it as their email marketing software of choice.

Intercom – Intercom is a rapidly growing startup that positions itself as an all-in-one customer communications tool. You can use it for live chat, support, onboarding, email automation, customer database, lead generation, and education/documentation.

Shopping cart recovery

Shopping cart abandonment means the loss of a customer who is going through the check-out process of an online store. It’s widespread – abandonment rate is north of 72%. These tools help you convert some of those abandoners into buyers.

Vero – Send emails to your customers based on their behavior. Can be used with any type of site.

Rejoiner – Built for online stores, it tracks shopping cart abandonment in real-time and helps recover sales

SeeWhy – Recover lost ecommerce sales by sending optimized email and social media messages to cart abandoners in real time.

CartRescuer – Another good one.

Bounce X – as part of their “Behavioral Marketing Cloud,” Bounce X offers a robust albeit expensive solution for behavioral email retargeting.

Landing page creation

If you do any type of promotions or advertising, you need landing pages. You can either hire the pros or use DIY landing page creator tools.

Landing Page Makeover – when you want the conversions pros to build you a high-converting landing page. (Disclaimer: I’m involved and will probably work on your landing page).

Unbounce – Build, publish and test landing pages. The leader in DIY landing pages.

Lander – The newcomer on the scene. Super simple to quickly build pages, no cost for unlimited landing pages.

Survey tools

Tools for sending out surveys over email.

Google Docs surveys – I love the simplicity. Free.

TypeForm – Most beautiful surveys.

SurveyGizmo – One of the most common survey tools.

Qualtrics – the leader in market research for enterprise organizations.

Web traffic survey tools

Qualaroo – Qualaroo is still probably the best at what it does.

HotJar – HotJar is great because it includes so many other conversion research tools as well as triggered surveys.

WebEngage – Another one.

Real-time personalization

Evergage – Nice balance of features and price.

Monetate – Enterprise level tool, also does testing. Expensive.

Granify – eCommerce personalization using AI.

Perpetto – eCommerce personalization suite, from recommendation engines to cart abandonment and more.

Form analytics

Clicktale

Formisimo

Cross-browser and cross-device testing

Email testing

Litmus

ReturnPath

Browser testing

Cross Browser Testing

SauceLabs

Mobile devices

Perfecto Mobile – Mobile Devices Testing

Device Anywhere

Mobile Emulators & Simulators

Open Device Lab – Grass roots community movement. Shared community pools of internet connected devices for testing purposes of web and app developers.

Mobile App Testing

Testlio

Screencasts

Camtasia Studio – I do all my tutorial videos and screencasts with Camtasia Studio. In fact I even use it for video editing. It’s awesome.

Web hosting and content delivery networks

Fast websites are crucial for high conversions. Here are web hosts and CDNs to use to speed up your site.

WP Engine – Web hosting made for WordPress. Blazing fast, fanatic support, stuff that dreams are made of.

LiquidWeb – shared hosting, dedicated hosting, cloud hosting, CDN. They have it all. If you need truly amazing support, they’re your choice.

Storm on Demand – the best priced cloud hosting service out there. Runs ConversionXL too. Amazing support.

MaxCDN – one of the more affordable CDNs. I use it on ConversionXL.

Cloudflare – Part CDN + part security service = Kickass.

Inscapsula – similar to Cloudflare, but has shown to offer a much better level of security / protection according to research.

Google mod_pagespeed – have your web host install this module onto your Apache web server.

April 11, 2020April 11, 2021

Business Strategy

What is Business Strategy?

Business strategy focuses around how should the value be captured in the competitive landscape. It answers the question on how the business should compete? In other words how the business should achieve competitive advantage in its industry.

Competitive advantage can be defined as the value for customers that is greater than the cost of supplying and superior from competitors.

Business Strategy Types?

There are two types of business strategies to bring a competitive advantage:

Cost Leadership Strategy – means to achieve the lowest cost possible vs. competitors while maintaining a quality that is acceptable to consumers
Differentiation Strategy – means to create a unique value to the customers vs. competitors.

In reality one could apply these strategies standalone or in a hybrid mode according to the industry cycle stage and SWOT of the business.

Cost Leadership Strategy

The Cost Strategy usually means that the business seeks to make its products or provide its services at the lowest cost possible relative to its competitors while maintaining a quality and the value that is acceptable to consumers.

The techniques to achieve this are usually:

Lowering Input Costs, such as labor, raw materials. As an example a business my outsource some of the processes to lower the labor cost.
Economy of Scale, where costs drop significantly when producing multiple “goods” increases. For example, Amazon by investing in enormous warehouses to stock its inventory they achieved big scale economies in storage and distribution.
Economy of Scope, where efficiencies are gained from demand-side changes, such as increasing the scope of marketing and distribution by bundling two products together. (E.g. Fast-food brands bundled under the same facility taking advantage of the one distribution channel)
Know-how, having the staff knowledgeable and experienced may reduce trial and error and waste. Hence, the cost might end up lower.
Segmentation is to identify a smaller segment of the market that can be served at lower cost, where competition is not serving this segment well.

Differentiation Strategy

The Differentiation Strategy means to create a unique value to the customers that is perceived by the customer to worth a price premium.

One can create unique value to customers by having superior:

Characteristic of the product, such as advanced technology (e.g Tesla), high-quality ingredients or components (e.g. Apple), product features, user experience (e.g. Uber) , superior delivery time (e.g. UPS), customization (e.g. Shopify) etc.
Customer relationship, such as customer service and responsiveness (e.g. Amazon)
Brand Reputation where emotional perceived value is high (e.g. Airbnb)
Blue Ocean Strategy where a new market space is defined where competition is minimized rather than operating in high competitive space as red ocean. Blue ocean strategy requires doing things in a new way or/and delivering a leap in value to customers. For example

Read Related Blogs

Corporate Strategy
- Business Strategy
  - Product Strategy

April 8, 2020April 26, 2021

Types of Strategies

Tolstoy opens Anna Karenina by observing: “All happy families are alike; each unhappy family is unhappy in its own way”. Business is the opposite. All happy companies are different: each one earns a monopoly by solving a unique problem. All failed companies are the same: they failed to escape competition” (Peter Thiel, Zero to One)

First, I would like to differentiate between Business, Corporate and Product Strategy. While sometimes all three might overlap depending on the size of the company and the product diversification, in reality they are very different and the way I think about them, in a simplified way, is the following:

I love Peter Thiel’s quote above as it applies to all three strategic levels. I’ve seen many corporations, businesses as well as products stuck in a competitive environment for way too long competing on price or on negligible perceived differentiators that eventually ended up failing.

Finally, I would like to talk more in depth about each strategic level and what tools to employ to escape the fierce competition into a “temporary” monopoly. I say “temporary” as the competition usually catches up and then you have to escape again. Change is the only constant! But this is the fun in strategy: you follow a moving target and you get to (re)define it as well!

Corporate Strategy
- Business Strategy
  - Product Strategy

April 8, 2020April 25, 2021

Corporate Strategy

What is Corporate Strategy?

Corporate Strategy centers on finding the value (aka WHERE to look for value – choosing the businesses to compete in based on company’s vision).

Most corporations have a portfolio of businesses, capabilities and relationships spread across different industries and markets where they chose to operate. The corporate level strategy decides across all of these company’s portfolios in order to create value for its stakeholders and answers these key questions:

What products? What markets? What capabilities? What stream of expertise?

There are two different type of strategies: deliberate and emergent. The way I look at it is that either the strategy is well defined top-down (deliberate), or is defined incrementally through trial and error. I personally think that an emergent strategy can be employed at a lower level of the business where the risk is less. However, at the corporate level “If you don’t know where you are going, how will you know when you have arrived?” and how can you empower people to follow?!

Setting up a corporate strategy

I personally like to set a strategy, that will meet the company’s mission, that can be adaptable based on factors that are carefully analyzed. Hence, to set a strategy one needs to analyze/understand the lay of the land in order to employ specific strategic techniques.

Analysis/ Lay of the Land

While there are many tools to gather information, I prefer to talk about the most common ones. I usually assess the current portfolio of the company (using the framework BCG-matrix) then based on opportunities I see I will do a SWOT analysis assessing the external and internal environment.

BCG-Matrix Analysis

BCG (Boston Growth-Share) matrix is a framework to evaluate the strategic position of the business brand portfolio and its potential. The general purpose of the analysis is to help understand, which brands the firm should invest in and which ones should be divested.

Source: THE BCG MATRIX EXPLAINED, Marketing-Insider(2017)

SWOT Analysis

It’s bringing together the Strengths, Weaknesses, Opportunities, Threats based on other analysis:

PESTEL

This analysis will informed the Opportunities and Threats.

Porter 5 Forces

Source: Porter’s Five Forces, Business to you (2016)

This analysis will informed the Strengths and Weaknesses.

Industry Life Cycle Stages Analysis

Source: LifeCycle Industry, johnsohn.dk, (2019)

This analysis will inform the Opportunities and Threats in the industry.

SWOT/TOWS

Finally all of them will put together a TOWS analysis that will help coming up with the best strategic techniques.

Strategic Techniques

In order to define the strategic direction based on the SWOT, one technique that I like to use is choosing the options from Ansoff Matrix.

An example of when you might think to apply these strategy it could be based on industry lifecycle, obviously based on the SWOT.

Please note that when the corporation has only one product (not a portfolio of products) the corporate strategy coincides with the product strategy.

April 8, 2020April 9, 2020

Shop for clothes from photos?

Proposal:

Corporate Strategy & Mission: Build a public social network to capture and share the world’s fashion moments and easily shop for them, meet InstaFashion.

Observations:
Fashion industry is growing 4% to $2.4T in 2020. However, the market is fragmented. Users switching cost is low, since people get inspired and shop from multiple locations.

Inspiration happens from Instagram but also from fashion blogs, movies, street, runways, brands sites, pinterests, blogs, etc. Businesses are using social platforms for attention grabbing as the users are overwhelmed by choice (e.g. TikTok, Instagram).

In addition, users shop from multiple locations (23% Brick and Mortar, 27% Amazon, 28% Brand, 22% other). However, the experience is not personalized by their interest, style, personality or context. (more details see Appendix 1):

Customer Problem:
As a user that wants to dress appropriately for each occasion, in accordance with my personality & style, I want to get inspired for outfits and shop them easily.

Business Strategy:
By building a social community around fashion, users will be able to easily find and inspire each other with outfits ideas and also conveniently purchase them by linking consumers directly with the brands.

Business Metric:
MVP: Reaching Product Market Fit by acquiring users that get value from the product, where value is inspiration and easy shopping.

Primary: MAU (Monthly Active Users)
Secondary: DAU/MAU, Return Rate, Engagement Rate

Product Strategy (MVP): Allow users to share and browse fashion related photos while helping them to buy it. (based on Customer Journey see appendix 2)

The MVP has two phases:

1. Discovery Phase: This is the phase where we validate the biggest assumption before we invest in development.

Problem Validation: Validate our biggest assumption that users do want to shop directly for the outfits that they see in the social media. For this, we will do users research and talk to customers.
Solution Validation: Validate different prototypes with users. For example, have users click a point on the outfit and show the item brand, price and direct link to buy it. (see Appendix 3)
Feasibility Validation: From a technical perspective we need to know if this is feasible. For example,
1. Can we scrape online fashion brands ands tore everything locally for training?
2. Do we have the technology that does object recognition on a photo to match items or similar items that we previously scrapped?
3. Do we have a recommendation engine?

2. Development Phase: MVP will entail building the minimum E2E experience where customers can get the value prop.

By helping users browse photos with outfits that match their style and interest, they will stay engaged and return more frequently.
By having users easily create an account on the platform, it will remove the signup friction and have them faster engage.
By helping people share their outfits, they will be able to become influencers on the platform, stay more engaged and keep the others engaged.
By allowing users to tell their preferences (e.g. like/not like), they will get a more personalized experience and it will increase their engagement, time on site and return rate.
By helping users find right away where they can purchase the same or similar articles from the photos they like, they will use the service more often and return more frequently.
By notifying the influencers when their outfits/posts were liked, we will improve their return rate.
Nice to Have: By allowing people to save their preferred outfits, it will increase their usage and return rates.

Appendix

1. Opportunities & Threats

2. Customer Journey

3. Example of Solution Validation

March 29, 2020April 9, 2020

Product UX

There are many philosophies around how to evaluate a good product design.

I like to quote 2 sources of inspiration:

The UX Pyramid:

8 Steps of an Intuitive Design from Everett McKay book that in my mind fits in the Conveniency/Pleasurable steps above.

The way I think about user experience and design is in 3 folds (in priority order):

It has to be functional by solving the customer problem in a reliable way
The experience is intuitive by being able to complete the task without reasoning, experimenting, documentation, training or memorization, and
It is a delight to use it.

February 29, 2020April 10, 2021

Corporate Strategy

xxWhat is Corporate Strategy?

Corporate Strategy centers on finding the value (aka WHERE to look for value – choosing the businesses to compete in based on company’s vision).

- What products? What markets? What capabilities? What stream of expertise?

Setting up a corporate strategy

Analysis/ Lay of the Land

BCG-Matrix Analysis

BCG matrix is a framework to evaluate the strategic position of the business brand portfolio and its potential. The general purpose of the analysis is to help understand, which brands the firm should invest in and which ones should be divested.

Image result for BCG Matrix