By Marty Cagan · svpg.com · LinkedIn
Cagan argues that many companies blur business strategy and product strategy, which leaves executives buried in feature-level decisions and product managers without the context or empowerment they need. Business strategy defines objectives and where to invest, such as choosing a sales model, a revenue model, or an adjacent market, while product strategy describes how to deliver on those choices. Because a business opportunity may not be deliverable, product discovery is needed to test cost, value, and usability. He uses Amazon's portfolio of retail, marketplace, cloud, and devices to show how a business sets a budget and metrics that product teams then pursue. Keeping the two roles distinct gives both leaders and product organizations clearer responsibilities.
01Key takeaways
- Separate business strategy (where to invest and which objectives to pursue) from product strategy (how to deliver those objectives).
- Give product teams a budget and business metrics, then let them choose the best way to hit them.
- Treat a business opportunity as a hypothesis and use product discovery to test cost, value, and usability before committing.
- Rebalance the investment portfolio over time and be willing to cut underperforming bets to fund better ones.
- Executives should avoid making feature-level decisions and instead ask the right business questions and make hard calls on investment.
02Key sections
- The confusion between the two strategies
- Executives end up making feature-level calls they are not suited for, while product managers lack the business reasoning behind decisions. Planning sessions often contain detailed plans with no stated business strategy behind them.
- What business strategy covers
- Business strategy sets objectives and chooses where to invest, such as the sales model, monetization approach, or entry into adjacent markets. These choices carry product implications but are not the same as the product approach.
- What product strategy covers
- Product strategy explains how to deliver on the business strategy, and product discovery checks whether the opportunity is actually feasible, valuable, and usable.
- Portfolio management
- The business maintains and rebalances a portfolio of investments and knows when to cut losses. Amazon's mix of retail, third-party selling, cloud computing, and devices illustrates this.
- Division of responsibilities
- Executives own business strategy and portfolio planning, while product leaders, especially directors of product management, own product strategy and product portfolio planning.
03From the post
“A partnership dedicated to teaching best practices to product teams and product leaders”
04Frameworks mentioned
Summary and takeaways written by PM Atlas; quotes are short excerpts. © the original author.