In this thought leadership article, I’m speaking with Chief Product Officer, Spencer Parker, about how founders and product managers can become better at product strategy. Spencer has spent more than 26 years in product management, and in this article, he will share his advice and thoughts from his experience leading product strategy at startups and publicly traded companies.
Many of the founders I speak with struggle with product strategy. Why do you think so many startups find it difficult to create a product strategy?
“I think there’s a whole number of different reasons. First, you need to ask the question: what is strategy? Because from a company perspective, there are two main strategies: there is the company strategy, and then there is the product strategy. And you can never have a product strategy without a company strategy. And I think a lot of startups run headlong into trying to create a product strategy before they even sort out their company strategy. And then they get things wrong at the company strategy level.”
But it’s not only product strategy that companies often get wrong. According to Spencer, startups often confuse goals with strategy:
“When I talk to a lot of startups, they will tell me their company strategy is to reach $100 million ARR within the first five years. That is not a strategy; it’s a goal. Goals and strategy are two very different things. Strategy is about how you are going to get somewhere, not the signposts along the way.”
Spencer goes on to emphasize that the first thing a company needs to do is sort out its company strategy:
“The company strategy is more than just the product. It needs to be done by the founders fairly early on, even before they have an MVP out there. It involves how the leadership team should lead, how the company should present itself, and its very reason for being.”
But starting early on the company strategy doesn’t mean that it needs to be written in stone. In fact, Spencer emphasizes that a strategy rarely stays the same:
“Often it takes a good year into a startup company’s life before the company strategy is solidified. Over time, the strategy can morph and change a bit. Different decisions are made that take the company in different directions. Markets change, and there are all sorts of external influences. So, things change. Nothing ever stays the same when it comes to strategy.”
But once the company strategy is in place, then Spencer recommends creating a product strategy, which defines how the company strategy is going to become a reality through a product itself. However, Spencer mentions one common mistake to avoid when creating the product strategy:
“A lot of founders make the mistake of going too far out in the future. People start thinking in five-year strategies. You need to think more short-term. Where do we go after the MVP? What use cases are we trying to build towards? I think the very first product strategy should be no longer than a year. This will help you set the wheels in motion while moving forward with a three- and then five-year strategy later on.”
Now we’ve covered a bit about how startups should go about product strategy, but what is it about strategy that makes it so difficult for product managers in general?
“Strategy is really the one thing you can’t teach people. You can inspire people with as much knowledge as possible, but everybody’s brains work in different ways. Some people are very good at delivery, some people are very good at abstract thinking. Strategic thinking is another type of thinking altogether. And I have only come across a very small subset of product managers in my time that really gets strategy.”
As a leader in product, Spencer describes how he has experienced great strategic thinkers:
“When I see staff that are really good at strategic thinking, it’s like a hallelujah moment. Finally, we’ve got someone who is thinking outside the box here. It’s someone who is thinking five steps ahead rather than what we are delivering this quarter. When this happens, as a leader, I make sure that person gets on a fast track, because it’s a rare trait.”
According to Spencer, many product managers think and call themselves strategic.
“Working out a roadmap using RICE or any other techniques is not strategic thinking. This is not a diss to anybody who thinks like that. And it’s absolutely a valuable part of any product management team. You need analytical, data-backed decisions. But you also need to play into the strategic world, where some of it is more gut feeling than anything else.”
Spencer also mentions that if you want to do strategy, you have to be able to explain yourself clearly.
“You need to explain why you are making these strategic decisions and what made you go down certain paths. You don’t have to justify them, but you have to be able to explain them. Again, there is a big difference between justifying and explaining.”
But what are the signs that a product manager is good at strategy?
“First of all, certainly in the more junior product managers, it’s how much they question the roadmap. It’s the minute that a junior product manager comes to me and says, you know what? We could do all of these things, but we could also do something over here that is different from what our competition is doing. We can change the conversation with customers.”
Spencer calls those moments a lightbulb moment.
“It’s a lightbulb moment because they are not just thinking about it analytically, they are thinking about strategically, how do I beat that competition? And do I beat that competition by just copying everything they have? Or do I do something drastically different that changes the conversation with the customer? I’m always looking for those little shoots of people thinking differently, thinking outside of the analytical box.”
Now, I know you said earlier in this interview that strategy is not something that can be taught, but what would you recommend product managers and leaders do in order to become better at strategic thinking in their jobs?
“You need to have a bedrock of knowledge. The more knowledge you have in you, the better you get at starting to use that as your sort of bedrock of strategic thinking. So there is nothing wrong with reading books about strategic thinking and strategy. One of the traits of PM’s is that we are an information sponge. We love reading new books about stuff. We love bringing new data and knowledge into our heads.”
Spencer goes on to add:
“Starting out, you probably don’t have all of the knowledge you need. To start building up that knowledge, I recommend joining relevant book clubs. Next, I would recommend employing people around you who know more about things than you do. Know what you don’t know. Fill those holes with people that have better knowledge on certain topics and rely on their guidance in certain cases. Don’t think it’s all on you to run strategy.”
I asked Spencer if he could give some examples of what he meant by employing people around you with better knowledge than you in a product management context?
“You might be in charge, you might be the CPO or the VP of product, you might be the strategic person in the company. But don’t be afraid to bring knowledge out of people. Salespeople are going to be telling you stuff from the street all the time. Marketing is going to be telling you all about the competition, how they’re talking about it to customers, things like that. Suck that knowledge in, but then apply it strategically rather than analytically.”
But if you are not a CPO or VP, how should you go about presenting your strategic thinking to them?
“Put a meeting in the diary with the person that runs strategy, the CPO, or whoever might welcome these types of conversations. But be prepared. Don’t just say, ‘Oh, I’ve sort of got this idea.’ Do your research. Be a PM. Go talk to customers. Go talk to the sales team. Go talk to the sales engineers. Sales engineers are brilliant for this. They are the hidden gems in most companies. They do all the work for salespeople and don’t get paid anywhere near as much as they do, and they have all the knowledge needed to succeed.”
Spencer also mentions the importance of patience after presenting your thinking:
“The CPO’s time is precious. Go straight to the point. Deliver the details, deliver the data in a way that they can consume. Don’t always expect an answer there and then, because most strategic thinkers mull on things for time. And it could be suddenly, two weeks later, that the CPO comes back and tells you that was a great idea. How can we spike this thing?”
Now, earlier in this conversation, you brought up the importance of having a thirst for knowledge and constantly learning. As we are coming to the end of this interview, what is something you learned along the way that you have carried with you ever since?
“One of the best things I have done is to get the whole team to do a DISC assessment and put them all up on a MIRO board or something like that. You don’t have to go into the finite details, but just have a box with information like, this is how I like to be talked to, etc. That way you can go into any one to one with somebody and get the best out of them.”
Spencer goes on to add:
“We have to talk to a lot of different people in product management, and sometimes we have to have some very hard conversations. So knowing how that person likes to be spoken to in a hard conversation makes it a lot easier. This means you can prevent them from switching off or getting defensive. Often people respect you more and perceive you as fair because you come across to them like, “although we have a problem, we can solve this problem.”
