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Product Management: How can you make sure investors love your strategy?

What Investors Care About?

Investors hate missing out on a great opportunity but equally they fear making a bad investment. For Product Management it is essential that they consider the needs of this crucial stakeholder.

So what are some of the things that investors think about when investing in product companies…

  • The challenge the product is trying to address and the evidence you have captured that this is a challenge the market wants solved
  • The size of the market opportunity
  • Any early traction you have obtained for your product
  • Your articulation of the value you bring to the market and how you will monetise this value
  • Why your business is uniquely different and how you compete with others?
  • Why you think people will be compelled to buy from you? Who your buyers are and what do they care about?
  • What team is in place to execute on the product strategy and how effective are this team?
  • Your strategy for marketing communications and sales
  • Your strategy for partnering with others to gain market traction or to execute on your product strategy

If this is what investors want to understand about your business, then how much attention do the leaders in your business, including Product Management give these areas?

As someone who has helped startups with their business plans and product strategy I understand that to capture the interest of the investor community it is hugely important to articulate the growth opportunity for your business through a business plan and associated Product Strategy.

Articulating the market opportunity and your value proposition for each target market is crucial. Clearly representing the challenge you address for your target market, capturing insights from this market and understanding how you will capture market interest to drive revenue growth is essential to ensure you get the kick-start of investment you need to scale your business.

Strategy is based on a differentiated customer value proposition. Satisfying customers is the source of sustainable value creation.” 

Robert Kaplan and David Norton (Strategy Maps)

Of course your Product Strategy needs to consider areas such as your mission and vision (with associated metrics of success), segmented market opportunity, your pricing strategy, your positioning of value for each target market, your competitive differentiation, any partnership strategy and a link to any sales and marketing strategies. You also need to highlight the key metrics that you will monitor to ensure product success – recurring revenue goals, customer acquisition rates, etc.

Everyone in the organisation needs to have sight of the key objectives (OKRs or SMART metrics of success) that the business is aiming to achieve at a high level so that they can define and align their own metrics of success to drive these corporate objectives.

A company that has captured initial investment through a clearly defined business plan and product strategy will move quickly to focus on the execution of this plan – hiring engineers, marketers and sales personnel. Keeping these resources aligned to deliver on the promises made to investors is now crucial!

It is really important that you can demonstrate to an investor that everyone in the business is aligned around the product strategy and that you can show how cross functional goals and initiatives are aligned. So it is important to define clear corporate goals and objectives that can be cascaded throughout the business. This ensures that you:

  • Create an aligned and collaborative organization that shares a common understanding of how the business will create value
  • Ensure the organization remains focused on corporate strategic objectives
  • Maximize ROI for corporate resources and ensure all resources are delivering effectively
  • Support decision making for all employees
  • Enable Sales and Marketing to clearly position the products and solutions to the target market and thereby drive revenue growth

How can you make sure you are investor ready?

Whether you are a startup or SME you should take the time to ensure that you have captured the right insights from the market to create a clear and compelling Business Plan and Product Strategy.

There are so many things that Investors care about but you need to focus on what is key in the context of your industry.

I have recently spent time running strategic insight gathering and value proposition workshops with companies across multiple industry sectors. The exercise has been enlightening for everyone – particularly those companies that have spent a lot of time focusing on the “execution” rather than the “strategic” side of product management and for those companies that have a requirement for near term investment. These workshops support the company with the insights that are needed to create a compelling product strategy.

Contact me siobhan@integratedthinking.ie for more details on how your business can capture market insights to drive future opportunity.


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5 Steps to Deeper Customer Insight

Market Insight Product Manager Product Strategy
Capturing Market Insight for Product Strategy

Why your Product Strategy needs to be based on deep market insight

As a Product Manager does market insight simply involve letting your existing customers dictate what they would like to see in the product? Sometimes, more influential customers (those with a strong contribution to overall revenue) can drive product strategy.  However, because one large company asks for something does not mean that there are lots of customers with this same need.  Individual customers generally have little concern for the needs of other customers.

It is easy to lose sight of market demand if you are too focused on your own product. If your product strategy requires that you deliver a broad-based market-driven offering then focusing on individual customer demands may not help you to achieve this. It is more likely to drive you down a services route.

Customers can provide lots of useful insights related to their use of the  product and what they would like to see in our product. However, there are steps you can follow to proactively capture deeper customer insight, enabling you to focus on the broader market.

5 Step Insight2Value Process – As a Product Manager:
  • Step 1: Capture Insights – Research and articulate data on your current business context, future market opportunities, buyer behaviours and competitive landscape
  • Step 2: Focus – Apply a methodology to help you to identify and prioritise key market opportunities that will drive revenue and enable you to clearly articulate your service/product/solution offering for these markets
  • Step 3: Position – Create a positioning statement that enables you to differentiate in a competitive landscape
  • Step 4: Validate – Apply Voice of the Customer (VoTC) techniques to enable you to validate your market hypothesis through qualitative and quantitative research
  • Step 5: Communicate – Create a compelling message that can be used in a targeted marketing campaign. Supporting you to create a Marketing Plan that will drive engagement with your target markets
High Performing Strategic Marketing

My approach is consultative and collaborate. Therefore, I strongly believe in approaches that help your business to align the disciplines of product management, engineering, sales and marketing. I have the foundations and understanding of how products are designed and engineered. I know the importance of an aligned approach across the organisation.

For those of you in the Technology Sector, everything I do will help you to create relevant business requirements (Business Epics) for the product or solution development backlog – aligning product management/strategic marketing and solution development (engineering).

Remember: “The customer rarely buys what the company thinks it is selling him. Companies need to take a customer-first perspective to succeed…”

Peter Druker, Innovation and Entrepreneurship

Checkout the Insights2Value approach to support your business to drive insights that will add real value.

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Top 10 signs that your company should look closely at Product Management

Whether consciously or not, most companies adopt some aspects of a Product Management discipline from their inception. The founders often perform the product management role – defining product strategy, setting revenue targets, meeting customers, capturing requirements, supporting
marketing initiatives, and managing investment priorities.
However, as the company grows it becomes more difficult to cover all bases and the essential parts of a true product management discipline need to be part of a more structured function within the company.

So what are the top 10 indicators that your company needs to reposition to adopt a product management discipline?

1) Absence of Customer or Market Focus – “Inside-Out” rather than “Outside-In”

Although your company is having conversations with customers they are typically driven by a handful of people, often senior leadership, and there is inconsistent feedback to the product development team. There is little understanding across the organization of the target or addressable market resulting in ad-hoc capture of competitor, customer or market data. This lack of customer focus means product requirements are not linked back to a customer need or problem and there are no formal links between marketing and product development. With no mechanism in place to support proactive engagement with customers your company is struggling to create products that customers truly value.

2) Lack of Alignment to Drive Strategic Objectives

As your company has grown it has become increasingly difficult to align everyone towards a common goal. Engineering, marketing, finance and sales teams have grown organically but are  operating in silos with little cross-functional alignment. This has led to  a lack of cohesion on how these functions will drive corporate strategic objectives or prioritize product strategic direction. It has become difficult to benchmark or measure the effectiveness of these teams.

3) Lack of Focus – Unclear Product Direction

In your early stage company  your founder worked to a clearly defined business plan and growth strategy which ensured they captured necessary investment. As the company has scaled the focus has shifted away from the customer or market and the product strategic direction has become predominantly driven from personal hunches. In the quest to win more business there is little focus on customer validation and tentative links to corporate strategic objectives. The “Highest Paid Person in the Organization (HIPPO)” is having a huge influence on how individuals prioritize their work and in this culture of the priority du jour there is a large element of confusion and an unhealthy lack of focus.
In order to cope with fluctuating markets, requirements are changing continually – business priorities are not articulated clearly and the product direction is not aligned across functions. Engineering is calling the shots and often drop or change features with little or no consultation with key stakeholders. Requirements are not understood during development so are regularly re-scoped to suit tight deadlines with little understanding of market or customer impact. Resources move frequently between projects and there is a developing culture of “fire fighting” or “organized chaos”. Engineers are creating and testing code but if asked to link back to a clear business case they are struggling.

4) Adopting a Tactical rather than Strategic Approach

In order to win business your company has  approached each customer engagement as a bespoke deployment, with solutions tailored to the customer’s exact needs. This  has resulted in a lack of cohesion or repeatability between customer releases with a large “services” component for each deployment. Code has become difficult to manage across customer sites and the development team are struggling to manage an increasing number of customer quality issues with a knock-on impact to release dates. Engineering priorities are predominantly driven from sales opportunities with little focus on the strategic direction.

5) Ad-Hoc Product Positioning

Although your company may have initially created a technically masterful product they are failing to articulate its value to the market. When asked, Engineering position the product from a technical standpoint and fail to understand or demonstrate how the product relates to a customer need or problem that can be addressed. Consequently, Marketing battle to understand the technical complexities of the product and with a lack of a defined value proposition the company is struggling to position the product to their own sales team and ultimately to the market.

6) Unclear View of Product Commercial Performance

Development resources are assigned arbitrarily to projects, with little focus on “return on investment” or any link back to corporate objectives. It has become difficult to ascertain the cost to develop a product release or to link these releases to a value proposition or product strategy. Marketing promotions are failing to associate upcoming releases with value to the customer. Win/Loss analysis does not exist or is ad-hoc at best and customer data is not fed back to the product development team. Product pricing is  arbitrary and unclear. There is no mechanism to associate product releases with clear revenue targets. Pricing varies across customers due to the bespoke nature of the deployments.

7) Too Many Projects and Too Few Resources

Due to an uncertain economic climate or investor pressure to grow revenues key decision makers in your company are feeling the need to say “yes” to any new revenue generating projects. In this tactical environment, resources are scurrying between projects with little focus on the end-game or corporate strategic objectives. The company has no gating process to prioritize project investment based on ROI.

8) No Innovation/Ideation Strategy Established

Due to the tactical nature of your business there is no clear process for capturing new ideas, prioritizing these ideas or bringing them through a gating process. You have a team that have the potential to generate lots of ideas but there is nobody to catch these and prioritize investment.

9) Unconscious Decision Making

With a lack of market or customer data product decisions are being made in a vacuum. The company is moving so fast that it cannot recognize that it is in a cul-de-sac.

10) Lack of Competitive Differentiation

Your competitive landscape is crowded and customers are finding it difficult to find compelling reasons to select your company’s products. You struggle to identify unique selling points for the products or solutions and it has become increasingly difficult to position your company competitively.

These indicators can manifest themselves to varying degrees in companies, depending on their stage of growth, but are a useful litmus test for the need to adopt a product management discipline.

Understanding what product management means to your organization – irrespective of your stage of development, product management principles will help to align key stakeholders in your organization to deliver your growth strategy, supporting you:

  • To create scalable and repeatable products or solutions that customers truly value
  • To ensure future growth through the continued progression of innovative ideas
  • To ensure the organization is focused – marching not only in the “right direction” but in the “same direction”
  • To ensure that the organization works to a clearly defined business model that meets corporate strategic objectives
  • To allocate the finite set of resources available to the company to resource the right projects and achieve maximum return on investment

I am a mentor in Product Management and have experience in supporting clients across multiple industry sectors to adopt the discipline. Get in touch to find out more.