Dear Gib: How do you tie the company strategy with your product strategy?
Short answer: The "GLEE" model helps you form a product vision that connects the company and product strategy.
Imagine it’s 1997, and you meet the co-founder of Netflix. He encourages you to join his startup because “someday Netflix will be bigger than HBO.” You’re wary. Netflix is shipping a handful of DVDs by mail and has only a few hundred customers.
But what if the co-founder laid out a long-term product vision that showed how the company might eventually outpace HBO? He tells you that over the next twenty years, Netflix will:
Get Big on DVDs by mail (in the first five years)
Lead streaming TV & movie delivery once internet bandwidth improves
Expand worldwide once the business is all digital, then
Expand further into original content, eventually outpacing HBO.
You’d be more open to working at Netflix. The GLEE model (Get Big, Lead, Expand, Expand further) helps craft a step-by-step product vision that forces teams to think long-term.
I’ve outlined Netflix’s product vision with perfect hindsight. But it’s pretty close to the original vision, with a few exceptions:
The timing of each transition was unclear upfront. For instance, the launch of streaming was five years later than expected.
The order of each stage was ambiguous, too. Netflix experimented with international expansion and original content during its DVD by mail phase, but both failed. Once Netflix was fully digital, however, both hypotheses succeeded.
So, think of your product vision as a fuzzy vision: the exact steps, order, and timing may change over time. Even though your product vision is a rough plan, it helps bridge the gap between your company and product strategy.
How to Create a Product Vision
To form your product vision, think about the trends and changes in your industry that may create waves for your company to “surf,” then see if you can fill in the blanks below:
Get big on ___________________
Expand further _______________
A critical exercise: figure out your product strategy for how you will delight customers in hard to copy, margin-enhancing ways, especially in the first “Get Big” stage. Getting big establishes a beachhead that you can eventually expand from to create hard to copy advantages through economies of scale, network effects, unique technologies, and your brand.
Why the Product Vision Is Important
The long-term product vision forces the team out of the day to day optimization to imagine how impactful the product will be in the long-term. It outlines a step-by-step plan for how to get there. Teams need to be reminded to “think big” and that anything is possible in the long-term. Sam Altman, the Chairman of Y Combinator, says this nicely:
“Be more ambitious…Talk about that big vision and work relentlessly towards it, but always have a reasonable next step. You don’t want step one to be incorporating the company and step two to be going to Mars.
There’s always a next step-- something that forces the product team to think long-term.
What is Netflix’s next step? There are many potential hypotheses -- live content, sports, AR/VR-enhanced stories. One hypothesis Netflix is currently exploring: interactive stories. Check out Netflix’s “Choose Your Own Adventure” children’s stories (Captain Underpants “Epic Choice-O-Rama” and DreamWorks’ “Puss in Book”). For adults, Black Mirror’s “Bandersnatch” and “The Unbreakable Kimmy Schmidt” are early explorations of this Interactive Story hypothesis. Will this be the next significant wave of Netflix’s progress? We’ll know in 5-10 years.
Align the Company Strategy and Product Strategy via Your Product Vision.
The key to alignment across the company is to have a shared product vision, then debate the resources allocated to each stage each year. If the exec team agrees to each stage's level of investment, it builds high-level alignment.
Below, I outline the approximate percent of resources against each of the phases in Netflix’s history. Note the early high level of investment in DVDs by mail tails off as the investment in streaming, international and, original content increases.
Today, there’s only a 5% investment in DVDs, and my estimate of a 5% investment in interactive stories assumes interactive stories are an early test drive. If interactive stories succeed, the hypothesis will get more resources over time. The opposite is true, too.
Test Alignment Within Your Company
Each quarter, I ask each department what the right investment level is for each stage of the product vision. This exercise helps the product organization to stay in sync with other departments.
Both company and product strategy inform which projects to invest in or not. Getting each department’s best thinking about how much to invest in each stage of the product vision tests alignment across the organization. If the departments have radically different estimates, spend time discussing assumptions and confidence levels in each stage of the product vision. This debate will help connect company strategy to product strategy, as each drives decisions about what to invest in or not, or in this case, how much to invest in each phase of the company’s step by step progression.
I hope you found this essay helpful.
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