How do they do it?<\/p>\n\n\n\n
Here\u2019s is the common-wisdom answer: a visionary leader + flawless strategy + a culture of innovation (etc.). It\u2019s a fantastic story that the companies and their leaders are only too happy to perpetuate.<\/p>\n\n\n\n If you dig deeper, though, you find that the backstory is far more convoluted and messy than we were made to believe. Luck is always a major component in success, and the progression is is rarely (if ever) Vision \u2192 Strategy \u2192 Product. if you\u2019ve been following my articles you\u2019ll recognize the alluring siren song of Plan-and-Execute<\/a>.<\/p>\n\n\n\n Great vision and strategy are good stories written in hindsight.<\/p>\n\n\n\n Here\u2019s a case in point \u2014 the iPhone \u2014 the most successful product of our generation. The official history is that the iPhone was the brainchild of Steve Jobs, derived form his bold post-PC vision<\/a>. Jobs was famously willing to bet on a high-risk product that will usher-in a new age of computing, even at the cost of cannibalizing Apple\u2019s thriving iPod business.<\/p>\n\n\n\n Apple is usually extremely secretive, but the true story of the iPhone had gradually been allowed to leak out. In The One Device<\/a> Brian Merchant relays a detailed history of the iPhone as told by the people who built it.<\/p>\n\n\n\n Far from being a result of a premeditated strategy, the iPhone was a case of multiple strategic initiatives converging to create a perfect storm:<\/p>\n\n\n\n Apple found the vision and strategy for the iPhone through trial and error, and the process was as much bottom-up as top-down. Steve Jobs was not the all-knowing, all-seeing inventor. He was an opportunistic leader willing to test strategic ideas, shut down the ones that didn\u2019t work and push further the ones that that do. He connected the dots and created a coherent product and business out of disparate projects. He absolutely the title \u201cthe \u201dfather of the iPhone\u201d, just not in the way we think.<\/p>\n\n\n\n \u201cPeople think innovation is just having a good idea, but a lot it is just moving quickly and trying a lot of new things.\u201d \u2014 Mark Zuckerberg<\/p>\n<\/blockquote>\n\n\n\n Whether intentionally or not, great companies arrive at their product strategies through parallel explorations which I\u2019ll call here strategic tracks. This principle is so important that it deserves its own acronym \u2014 MuST.<\/p>\n\n\n\n Strategic tracks test big ideas \u2014 new products, new business models, etc, by building short\/medium size projects. Each strategic track can be thought of as a series of experiment on a grand scale. The goal is as much discovery as validation \u2014 we start with an idea and see where it takes us.<\/p>\n\n\n\n These are the strategic tracks that lead to the iPhone.<\/p>\n\n\n\n As you can see the tracks are overlapping, sometimes even mutually exclusive. That\u2019s perfectly fine. We don\u2019t want to force the entire org to conform to just one, unproven strategy, that would be foolish.<\/p>\n\n\n\n Testing multiple strategic ideas improves the odds of finding the next big thing.<\/p>\n<\/blockquote>\n\n\n\n MuST is the opposite of classic plan-and-execute strategy development:<\/p>\n\n\n\n Let\u2019s look at a few famous examples of use of MuST that demonstrate why it is so powerful.<\/p>\n\n\n\n \u201cA strategy with optionality is like a highway with multiple exits\u201d. \u2014 Nassim Taleb<\/p>\n\n\n\n Here\u2019s a rough timeline of Google\u2019s product launches in its first few years.<\/p>\n\n\n\n Google started out with Search and advertising. Then, somewhere in 2000\u20132001, it began branching out in multiple directions. The diagram shows only the most prominent products launched or acquired, but there were hundreds of other projects. Did Google lose its bearings?<\/p>\n\n\n\n Thing make a lot more sense through the perspective of strategic tracks.<\/p>\n\n\n\n Google\u2019s product strategy was to build Web apps that will get more data and more people onto the Web. While many of the early projects weren\u2019t game-changers, they opened new strategic directions. Google Groups was a good prelude to Gmail. Froogle turned into Product Search, which is now Google Shopping. The unsuccessful Google Video lead to the 2006 acquisition of YouTube. Years later these are core products of Google that make it billions in revenue.<\/p>\n\n\n\n Google made heavy use of the principle of optionality. Each track gave Google technology, code, inventions, market footprint, learnings, customer and partner relationships, at a relatively small cost. By 2005 Google had the option to enter Messaging, Geo, Media, Social and more. Some of these options it exercised, while others, like social networking, started by Orkut, it passed on. Through this process Google was able to diversify itself and avoid becoming a one-hit-wonder.<\/p>\n\n\n\n \u201cSuccess = talent + luck; In late 1980 Microsoft founders Bill Gates and Paul Allen were presented with a dilemma. Their biggest customer, IBM, had asked them to develop an operating system for its future personal computer, the IBM PC. Microsoft had never developed an operating system, and actually Gates and Allen believed that Unix will be the future PC OS. What were they to do? Microsoft, still in many senses a startup back then, could have rejected the offer and focused on its core products \u2014 programming languages and dev tools. Alternatively it could have pivoted and gone all-in on the operating system project. But Gates and Allen chose a third option \u2014 they acquired the rights to a rudimentary operating system aptly named QDOS (quick and dirty operating system) and within a year evolved it into PC-DOS which they sold to IBM. Hidden in the agreement was a clause that allowed Microsoft to resell the software, and resell it did.In the following years dozens of IBM-PC clone companies emerged and they all licensed their operating system from Microsoft. Microsoft\u2019s had found its big breakthrough by turning an opportunity into a strategic track.<\/p>\n\n\n\n Luck plays a much larger part in success than we think. Being in the right place at the right time is invaluable. The question is what do you do when opportunity knocks. Classic strategy theory will have you go through exhaustive research, analysis, deliberation and planning. Alas, no amount of research and deliberation could have predicted the impact of the IBM PC or of multi-touch. With MuST it\u2019s a matter of opening a new strategic track and seeing where it leads.<\/p>\n\n\n\n Netflix makes the most rigorous use of MuST. In this article<\/a> former Netflix VP of product, Gibson Biddle, explains how the company creates \u201cswimlanes\u201d to test strategic hypotheses. Each swimlane has a team testing one strategic idea by building a series of tactical projects and experiments and measuring them against predefined metrics. At any given point Netflix has between 2 and 10 independent swimlanes.<\/p>\n\n\n\n Here\u2019s what Netflix\u2019s strategic tracks might have looked like in the mid-2000s (right), when the company was trying to invent its streaming services, and what these end up in (left):<\/p>\n\n\n\n As an example, the \u201cmargin enhancement\u201d track tested different monetization options, including subscription, advertising and pay-per-view. The team discovered through experiments that the best model was an all-you-can-eat streaming subscription for ~$10\/month \u2014 basically what we have today.<\/p>\n\n\n\n Periodically Netflix management adjusts the swimlanes: close ones that didn\u2019t lead to meaningful results (e.g Community and Exclusives), open others, and adjust the funding for existing swimlanes per their results. This is not unlike what Steve Jobs did at with the iPhone, but driven by data rather than product intuition. Netflix\u2019s use of MuST paid off \u2014 at 20+ years old it\u2019s a household name, enjoying revenue growth of ~40% YoY. With its current experimentation Netflix is likely able to test strategies even quicker, as it already demonstrated with its next breakthrough \u2014 Netflix Originals.<\/p>\n\n\n\n So high-performance companies have used Multiple Strategic Tracks to great effect for decades, albeit with different approaches.<\/p>\n\n\n\n Then, in the late 2000s, this happened:<\/p>\n\n\n\n The phenomenal success of the iPhone and the iPad made everyone stop and question what they were doing. Every company wanted to be the next Apple and every leader wanted to be the next Steve Jobs. Everyone wanted to copy Apple\u2019s playbook. Ironically the wrong lessons were learned. We bought the PR story: a visionary CEO, top-down strategy, moonshot projects.All of a sudden everyone talked of \u201cgoing all-in\u201d, \u201cmaking big bets\u201d and \u201cmoonshot projects\u201d. Caution was thrown to the wind and strategic hypotheses were turned into white elephant projects with little or no validation. Dogma and hype replaced MuST. The result was a series of big, expensive failures: Google+, Google Glass, Facebook VR, Facebook Chatbots, Amazon Fire phone and others. It was quite depressing to watch.<\/p>\n\n\n\n Multiple Strategic Tracks is an extremely powerful product strategy pattern that is not going away. With the adoption of evidence-based development (Lean Startup, Design Thinking etc) more and more companies are rediscovering it. With today\u2019s rapid development, quick iteration method, MuST is no longer the prerogative of large companies. In fact any company that already found its first success should already be laying out strategic tracks for the next big thing. I\u2019ve even seen forward-looking startups do this successfully. If this is your situation you should give MuST a go \u2014 you never know when your first success will run out of steam.<\/p>\n","protected":false},"excerpt":{"rendered":" Product Strategy is hard. For most tech companies their first big product success is also their last. Finding a second hit is very hard no matter how much we invest in vision and strategy development. The core business somehow always generates 90%+ of revenue and engagement. But some companies are different. Consider these magical product sequences:\u0420\u0430\u0437\u0440\u0430\u0431\u043e\u0442\u043a\u0430 \u0441\u0442\u0440\u0430\u0442\u0435\u0433\u0438\u0438 \u043f\u0440\u043e\u0434\u0443\u043a\u0442\u0430 \u0441 \u0438\u0441\u043f\u043e\u043b\u044c\u0437\u043e\u0432\u0430\u043d\u0438\u0435\u043c \u043d\u0435\u0441\u043a\u043e\u043b\u044c\u043a\u0438\u0445 \u0441\u0442\u0440\u0430\u0442\u0435\u0433\u0438\u0447\u0435\u0441\u043a\u0438\u0445 \u043d\u0430\u043f\u0440\u0430\u0432\u043b\u0435\u043d\u0438\u0439 (MuST)<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5,7],"tags":[],"class_list":["post-1","post","type-post","status-publish","format-standard","hentry","category-product-management","category-strategy"],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/epicproduct.ru\/en\/wp-json\/wp\/v2\/posts\/1","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/epicproduct.ru\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/epicproduct.ru\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/epicproduct.ru\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/epicproduct.ru\/en\/wp-json\/wp\/v2\/comments?post=1"}],"version-history":[{"count":25,"href":"https:\/\/epicproduct.ru\/en\/wp-json\/wp\/v2\/posts\/1\/revisions"}],"predecessor-version":[{"id":119,"href":"https:\/\/epicproduct.ru\/en\/wp-json\/wp\/v2\/posts\/1\/revisions\/119"}],"wp:attachment":[{"href":"https:\/\/epicproduct.ru\/en\/wp-json\/wp\/v2\/media?parent=1"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/epicproduct.ru\/en\/wp-json\/wp\/v2\/categories?post=1"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/epicproduct.ru\/en\/wp-json\/wp\/v2\/tags?post=1"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
<\/figcaption><\/figure>\n\n\n\nIt Ain\u2019t Necessarily So<\/h2>\n\n\n\n
![\"\"](\"https:\/\/i0.wp.com\/miro.medium.com\/max\/1905\/1*d1PO2C6P-RLwdRqmK48UFA.jpeg?w=900&ssl=1\")
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Multiple Strategic Tracks (MuST)<\/h2>\n\n\n\n
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Google\u2019s Early Product Strategy \u2014 Creating Optionality with MuST<\/h2>\n\n\n\n
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Microsoft\u2019s \u2014 Capitalizing on Strategic Opportunities with MuST<\/h2>\n\n\n\n
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Great success = a little more talent + a lot of luck\u201d \u2014 Daniel Kahneman<\/p>\n<\/blockquote>\n\n\n\n<\/figure>\n\n\n\n
Netflix \u2014 Systemizing MuST<\/h2>\n\n\n\n
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The Anti-pattern of Product Strategy \u2014 Big-bet projects<\/h2>\n\n\n\n
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Rediscovering MuST<\/h2>\n\n\n\n