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Strategy
A vision without a strategy remains an illusion.
Lee Bolman
What is strategy?
A vision tells you where you want to go. A strategy tells you how you will get there.
The product strategy describes the sequence of large initiatives required to move the company from its current state toward its vision. It answers the question: what do we need to do, in what order, to make our vision a reality?
Like the vision, a good strategy should be powerful and simple to understand. Elon Musk summarized Tesla's entire product strategy in a single blog post. Unlike the vision, the strategy may evolve over time as you learn, as markets shift, and as new opportunities emerge.
The initiatives in a strategy can take many forms: new products, geographic expansions, major features, platform investments, or acquisitions. What matters is that they are sequenced deliberately and that each initiative builds toward the vision.
Des Traynor, co-founder of Intercom, said that "Product Strategy is about saying NO." This is precisely right. A strategy without clear boundaries is not a strategy at all. It is a wish list. The power of strategy comes from focus: choosing what you will do and, just as importantly, what you will not do.
For Product Directors, strategy operates at multiple levels. There is the company strategy, which you inherit and must align with. There is the product strategy, which you help shape and are accountable for executing. And there are the tactical decisions you make daily that must be consistent with both. Your job is to hold all three levels in your mind simultaneously and ensure they remain coherent.
Strategic frameworks
Models are simplifications of reality. As the statistician George Box said, "All models are wrong, but some are useful." Strategic frameworks help you see patterns, communicate with others using shared language, and make decisions grounded in something larger than the immediate situation. Here are four frameworks every Product Director should know.
Porter's Five Forces
Michael Porter's Five Forces framework, introduced in 1979, remains one of the most useful tools for understanding competitive dynamics. It asks you to analyze five sources of pressure on your business:
Competitive rivalry. How intense is competition among existing players? Are you in a market with many similar competitors fighting on price, or are there clear differentiators? High rivalry compresses margins and demands constant innovation.
Threat of new entrants. How easy is it for new players to enter your market? If barriers are low, any success you achieve will attract imitators. If barriers are high, you have more room to build.
Threat of substitutes. Could customers solve their problem in an entirely different way? A video conferencing tool competes not only with other video tools but also with phone calls, emails, and in-person meetings. Substitutes constrain your pricing power.
Bargaining power of suppliers. How much leverage do your suppliers have? If you depend on a single cloud provider or a proprietary API, you are exposed. If you can switch easily, you have more control.
Bargaining power of buyers. How much leverage do your customers have? Enterprise customers with large contracts can demand custom features and lower prices. Millions of individual consumers have less individual power but can leave quickly if dissatisfied.
As a Product Director, use this framework to understand where you are strong and where you are vulnerable. Your strategy should reinforce your strengths and address your vulnerabilities before competitors exploit them.
Blue Ocean Strategy
W. Chan Kim and Renée Mauborgne introduced the Blue Ocean concept in 2005. The core idea is simple: instead of fighting competitors in a bloody "red ocean" of existing market space, create new market space where competition is irrelevant.
The key insight is that you do not have to choose between differentiation and low cost. Through what they call "value innovation," you can pursue both simultaneously by fundamentally rethinking what you offer.
The framework provides four questions to guide this thinking:
Eliminate. Which factors that your industry takes for granted should you eliminate entirely? These are features or services that add cost but no longer create value.
Reduce. Which factors should you reduce well below the industry standard? Sometimes good enough is good enough, and over-delivery wastes resources.
Raise. Which factors should you raise well above the industry standard? These are areas where exceeding expectations creates disproportionate value.
Create. Which factors should you create that the industry has never offered? These are the innovations that define your new market space.
Cirque du Soleil is the classic example. They eliminated animal acts and star performers. They reduced the importance of the arena and the danger of stunts. They raised the artistic quality and the theatrical experience. They created a new form of entertainment that blended circus and theater. The result was a blue ocean with no direct competitors.
Nintendo did something similar with the Wii. Instead of competing with Sony and Microsoft on graphics and processing power, they created a new dimension of value around motion controls and casual gaming, attracting customers who had never considered buying a console.
When developing your product strategy, ask yourself: are you fighting for share in a red ocean, or is there a blue ocean you could create?
The Bowling Pin Strategy
The Bowling Pin strategy, popularized by Geoffrey Moore, addresses a common challenge: how do you enter a market when you are small and unknown?
The answer is to start with a narrow beachhead, a single "pin" that you can dominate completely. Once you own that niche, you use it as a reference to knock down adjacent pins, expanding methodically into related segments.
Facebook executed this perfectly. They started with Harvard students only. Once they dominated Harvard, they expanded to other Ivy League schools. Then to all universities. Then to high schools. Then to everyone. At each stage, exclusivity created desire, and success in one segment provided credibility for the next.
For Product Directors, the bowling pin strategy is particularly relevant when launching new products or entering new markets. The temptation is always to go broad immediately. Resist it. Dominate a narrow segment first, learn from those customers, and expand from a position of strength.
Wardley Mapping
Simon Wardley developed Wardley Mapping as a way to visualize strategy in terms of value chains and evolution. While more complex than the other frameworks, it is increasingly relevant in technology companies.
A Wardley Map plots components of your value chain on two axes. The vertical axis shows visibility to the user, from invisible infrastructure at the bottom to user-facing features at the top. The horizontal axis shows evolution, from novel and uncertain on the left to commodity and well-understood on the right.
The power of the map is that it reveals strategic options. Components on the left are candidates for differentiation and custom building. Components on the right should probably be outsourced or bought as commodities. Movement along the axis is predictable: everything evolves from left to right over time.
For AI-era product strategy, Wardley Mapping is particularly useful. It helps you see which AI capabilities are still novel and differentiating versus which have become commoditized. It helps you decide where to invest in custom development versus where to use off-the-shelf APIs.
Strategy in practice
Frameworks are useful, but examples are instructive. Two companies illustrate strategic clarity in action.
Tesla's Master Plan
In 2006, Elon Musk published "The Secret Tesla Motors Master Plan" on the company blog. It was remarkably straightforward:
The strategy was public, sequential, and logical. Each step funded the next. Each product built capabilities and brand equity for what followed. Fifteen years later, Tesla had executed almost exactly this plan.
The lesson is not that you should publish your strategy publicly. The lesson is that a good strategy can be stated simply, that initiatives should build on each other, and that long-term commitment to a clear sequence beats opportunistic jumping between ideas.
Google's Platform Strategy
Google's strategy has been to organize the world's information and make it universally accessible. But information is useless if people cannot reach it. So Google's secondary strategy has been to control the access points.
When Google depended on Firefox to deliver search traffic, they built Chrome. When mobile threatened to bypass the desktop web, they built Android. When Microsoft threatened to control the PC, they built Chrome OS. Each initiative was defensive: ensuring that no gatekeeper could stand between users and Google's services.
They also used tactical moves. Google pays Apple billions annually to remain the default search engine on iOS. This is not product strategy. It is a holding action that buys time while Google builds alternatives.
The restructuring into Alphabet in 2015 acknowledged that Google had become so large that a single strategy could not contain it. Waymo, Verily, and other bets operate with their own missions and strategies, loosely held by the parent company. This is portfolio strategy at the corporate level, distinct from product strategy within each unit.
Strategy in the age of AI
Every framework described above remains valid, but AI introduces new variables that Product Directors must consider.
Build versus buy versus API
The classic make-or-buy decision has a new dimension. You can build AI capabilities in-house, buy them through acquisition, or access them through APIs. Each choice has different implications for differentiation, cost, speed, and control.
Building in-house requires data, talent, and time. It creates potential differentiation but carries execution risk. Buying through acquisition is fast but expensive and often fails due to integration challenges. Using APIs is fastest and cheapest but creates dependency and offers no differentiation since your competitors can use the same APIs.
The right answer depends on whether AI is core to your value proposition or a supporting capability. If AI is your product, you probably need to build. If AI enhances your product, APIs may be sufficient. Most Product Directors will find themselves somewhere in between, building custom layers on top of foundation models.
When AI commoditizes your differentiator
The more troubling strategic question is what happens when AI commoditizes something you thought was your moat.
If your product's value came from sophisticated data analysis, and now any competitor can access similar capabilities through an API, your differentiation has evaporated. If your product relied on human expertise that AI can now replicate, your pricing power is under pressure.
This is not hypothetical. AI is actively commoditizing capabilities in writing, image generation, code production, data analysis, and customer service. Products that were differentiated two years ago may be undifferentiated today.
The strategic response is to move up the stack. If AI commoditizes the capability layer, differentiate on workflow, on integration, on data, on trust, or on brand. Find the layer that AI cannot easily replicate and build your moat there.
Speed as strategy
When AI allows you to ship features in days instead of months, speed itself becomes a strategic variable. You can test more ideas, iterate faster, and respond to competitors more quickly.
But speed cuts both ways. Your competitors have the same acceleration. The half-life of any feature advantage is shrinking. This argues for strategies based on compounding advantages, things that get stronger the more you use them, rather than point-in-time features that can be copied.
Network effects, data flywheels, ecosystem lock-in, and brand trust all compound over time. Features do not. In an AI-accelerated world, invest more in compounding advantages and less in features that competitors can replicate in weeks.
Defensive moats in the AI era
Traditional moats are being tested. Data moats are weaker than they appeared when foundation models trained on public data can match or exceed models trained on proprietary data. Technology moats erode quickly when the underlying capabilities are available to everyone.
The moats that remain defensible are those rooted in human factors: brand trust, especially for high-stakes decisions; deep integration into customer workflows; network effects that grow with usage; and switching costs created by accumulated data and customization.
As a Product Director, audit your moats honestly. Which ones depend on technology that AI is commoditizing? Which ones are rooted in factors that AI cannot easily replicate? Shift your strategic investment toward the latter.
Closing thoughts
Strategy in the AI era requires more frequent revisiting than strategy in slower-moving times. The underlying frameworks remain sound, but the tempo has changed. What once warranted annual review may now need quarterly reassessment.
Yet the fundamentals endure. Make clear choices. Say no to distractions. Sequence your initiatives deliberately. Build moats that compound over time. And always ensure that your strategy serves your vision, not the other way around.