Strategy and Strategic Planning for Startups: What the expert says - Episode 3
Q&A with Radhika Dutt, entrepreneur and co-creator of the Radical Product movement
Francesco | 25.06.18
In this episode of our Q&A series, we speak with Radhika Dutt, entrepreneur and co-author of Radical Product, about vision, strategy and planning.
Q: Hi Radhika, and thank you for accepting this interview. Let’s start with the first question: Many founders think that they don’t need a true strategic plan. All they need to do is to build something and test it fast on the market, if the product is good it will automatically be a success. Do you think they are right?
A: There’s a common belief that permeates the startup ecosystem: As a founder you try different things and pivot until you find product-market fit. In reality, a founder has 1-2 pivots (at most) before you run out of funding and momentum.
Often Slack is cited as an example of a pivot - they started off as a gaming company and then “pivoted” to a communication tool. When your vision fundamentally changes, it’s not a pivot, it really means you’re starting a new company. Because Lean and Agile make it easy to iterate based on feedback, these methodologies are often used to iterate on the vision itself, leading to the product disease, Pivotitis. This often results in wild swings in your product offering and target customer segments, exhausting and confusing your team.
The analogy I like to give is that Lean and Agile give you speed but when you add Radical Product thinking to it, you get velocity, i.e. speed AND direction. Radical Product is a global movement of leaders building vision-driven products. It provides a methodology for strategic product thinking, in a similar way that Lean and Agile provided a methodology for feedback-driven execution. You can use the free and open source Radical Product Toolkit to bring Radical Product thinking into your organization.
Q: For founders and entrepreneurs with little or no experience, it’s often very hard to come up with a sound strategic plan. Could you suggest a standard process or a kind of ‘step-by-step’ guide they can follow to develop a well-crafted strategic plan?
A: We recommend starting with the “source code of your Vision”. We’ve crafted a madlibs version of a vision statement to make it easy for anyone to craft a vision, and have a structured discussion with your team so you can iterate on it together. We call this the source code for your vision because it may sound long and even a little awkward – it’s not intended as your marketing message on your website. Your marketing team can compile this into a clean build and that’s the version of the vision you can tell the world. But this source code is what makes your vision actionable to your team. This is what you would put up in a conference room so you can refer back to in a heated discussion and ask, “Are we being true to this vision?”.
The company’s mission can be aspirational and broad, but your product vision has to be actionable. For example SpaceX’s vision is to colonize Mars and travel to the stars. If you hand this vision to the product manager who works on the reusable rockets, it’s just not helpful. This PM will need to come up with their product vision for their product. Every one of us needs to own the vision for the product that we’re working on.
Once you have a clear vision statement, you can then work on your RDCL Strategy. The RDCL format helps you get to the core questions of product strategy:
- Real Pain Points: What’s the pain point that will trigger someone to take action? Who has this pain point (identified group of users)?
- Design: What do these users engage with in our product? I.e. What does the product do (features) and how does it do it (appearance, brand, voice)?
- Capabilities: What gives us the power to deliver on the value that our design promises?” Ideally this would be a unique and defensible capability (this could be technology or some distinct advantage over anyone else)
- Logistics: How do we deliver it? How do we price the product? What is our support model?
Once you have your RDCL Strategy, you can evaluate it to see how each element of the strategy helps or hinders Vision and Sustainability. Considering the trade-offs between Vision and Sustainability helps you determine whether the proposed strategy results in too much Vision Debt, or if it over-exposes you to risk through too much Vision Investment.
Q: What advice or resources do you recommend for someone who has built their vision and strategy? How do they translate it into execution?
A: Once you have a clear Vision and Strategy and you have a rubric for decision making, you can translate it into a roadmap and begin your Agile (or Waterfall) execution. There are many great tools for creating roadmaps - the one thing we’d advise is making sure that your roadmap is cross-functional. Most companies have a one-dimensional backlog — it tracks what engineering (and maybe design) needs to do. In reality, while your tech team is working on the beta product, your professional services team might be working on APIs to simplify integration into the customer’s environment, your marketing team might be working on a sequence of activities that ends in the public launch, and your sales team might be negotiating friendly customer sites.
A cross-functional strategic roadmap ensures that you’re executing on your strategy in the most effective possible way.
All of these groups are working on critical aspects of your product strategy, with dependencies that need to be aligned. A cross-functional strategic roadmap can tie it all together, and ensure that you’re executing on your strategy in the most effective possible way. Once you have that, you can build your hypothesis-driven Execution and Measurement model. Often, founders are under pressure to measure popular metrics like number of active users or ARR. These may or may not be the right metrics for your company. Creating a hypothesis-driven Execution and Measurement model helps you tie your metrics to the strategy so that you’re measuring what matters. Here’s a link to a post on how to create a cross-functional Strategic Roadmap and the Execution and Measurement model.
Q: Now I would like to ask you about another very common problem, the ‘strategy-execution’ gap: We spend a lot of time in creating our beautiful strategy, but then very often we don’t implement it fully. According to your experience, what is the best way to ‘close’ this gap?
A: Often we have a good strategy but real life gets in the way - one example is when you have your roadmap but then your sales person says, “We can win this marquee customer if we just add one custom feature”. By the end of the fiscal year your entire roadmap is driven by a stack of contractual obligations that you need to fulfill to get revenue recognition. This is a product disease we call Obsessive Sales Disorder. It’s easy to fall trap to this disease - in fact, we’ve been victims of this disease and I’ll also admit to having contributed to it. In retrospect, if we had this Vision vs. Sustainability rubric, it would have been easier to discuss a feature or opportunity with the team. A custom feature helps you survive another day, i.e. it’s good for Sustainability, but may be a bad Vision Fit. By taking on such an opportunity, you’d be adding Vision Debt - it helps you mitigate risk short term but taking on too much Vision Debt confuses your customers and frustrates your team. This is not to say that you never take on a custom feature to win a major customer - once you have the shared vocabulary, it helps you and the team acknowledge when your execution may be deviating from your vision, so you can plan remedial action.
Q: What’s your best advice to new founders and entrepreneurs on strategic planning?
A: In our careers, we typically found strategic planning meetings to be long and often painful - in these meetings discussions continuously devolved into tangents. Strategic planning doesn’t have to take up a lot of time. Bringing product thinking into your organization doesn’t require additional process - once you establish a shared language for planning and communicating your vision and strategy, it helps align teams and you execute at a higher velocity across the organization.
Thank you very much, Radhika, for sharing your knowledge and expertise with us!
Radhika Dutt is a product leader and entrepreneur who has worked in several industry verticals including robotics, adtech, AI, broadcast, telecom and wine. She co-founded the Radical Product movement after repeatedly seeing the same product diseases across industries. Radical Product is a movement that provides a methodology for strategic product thinking, in a similar way that Lean and Agile provided a methodology for feedback-driven execution. You can use the free and open source Radical Product Toolkit to bring product thinking into your organization. You can follow her on the Medium publication, Radical Product and on Twitter @radhikadutt.
Need an help in planning and sharing your strategy? Here's I am Why, a tool developed specifically for startups and SMEs.
Stay tuned for the next episode of the strategy and strategic planning for startups Q&A. And if you have some more questions for the experts, let us know at firstname.lastname@example.org or via our social media channels.