The Cost of a Bad Product Strategy

We spend lots of time praising the savvy strategic moves of winning products and companies. But for every success story, there’s a graveyard of failed products laid low by bad product strategies.

A bad strategy is hard to overcome. You’re burning cash and daylight, building up a legacy of technical debt and features that aren’t moving you in the right direction. And if no one realizes it’s wrong or adjusts course quickly, a promising product can become a lost cause.

What Does a Bad Product Strategy Look Like?

If there was a simple test for bad product strategy most companies would happily use it. Unfortunately, good intentions and enthusiasm can disguise the fundamental flaws lurking in the shadows.

Here are some tell-tale signs your strategy might be on the wrong track:

Lack of specificity

Broadly stated objectives with no appreciation for the nuances and details are typically unsuccessful. There’s no clarity or consensus on what exactly the organization is trying to accomplish. This leaves things open to interpretation.

When everyone leaves the meeting to begin plotting and executing, those varied readings of the strategy become problematic. It can lead to very divergent tactics that may not bring the culminating company to an ideal destination. You might even end up with different groups arriving in completely different places.

For example, take Kmart’s product strategy from earlier this decade: “To thrive as a mass merchandising company that offers customers quality products through a portfolio of exclusive brands and labels.”

If your strategy is so generic a completely different company in a totally different industry could also adopt it, it’s pointless. Those are slogans, not strategies.

Another related issue is the bad product strategy that tries to do too much. Even companies that undergo a complete transformation can only change so many things at a time. Reinvention takes time and a good product strategy tackles those evolutions in well-timed phases. This provides focus and creates measurable and achievable goals.
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You don’t know your customers

If you don’t understand your target market, you’re building a product for a user that doesn’t exist. Target markets aren’t supposed to be aspirational. Extensive research and testing should dictate who the target user is and what they care about.

Unless you work for Amazon or Google, it’s naive to think your target market is “everybody.” If you don’t get a lot more specific than “consumers” or “teenagers” you’re likely building a bad product strategy on a pie-in-the-sky foundation.

Segway is a great example of this. Their pedestrian people-mover was amazing (and amazingly expensive) tech. But the masses were not demanding a replacement for walking.

The company eventually found some niches in the tourist market and law enforcement. In the meantime, they wasted a whole lot of time and money chasing an unrealistic “ubiquitous” goal. Bike-share and scooter-share companies are now attacking this same market using much cheaper and simpler solutions.

Without locking down who your target users are, what their real-world problems are, and how your solution can solve problems or add value for them, you’re destined for weak adoption. Your marketing department will be blowing money on vague, ineffective campaigns. Your sales team won’t even know who the competition is since they don’t understand what an ideal prospect looks like.

Features beat value

We all love to talk about adding more features. They’re new and exciting and mean your product can do even more than before. But being able to do more doesn’t mean your product has gotten better.

Lots of products could add additional functionality, but the best restrain themselves from slapping on widget after widget. Instead, they concentrate on adding value. If a new feature isn’t solving a problem it’s just taking up space. It distracts the team from building things that accelerate revenue and engender customer loyalty.

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When Procter and Gamble hired Continuum to help them innovate in the floor cleaning segment, the starting point appeared to be “improve the mopping experience.” Yet research led them in a different direction.

“We had to identify the right problem. People’s struggles cleaning their floors stemmed from the overall process, rather than a discrete product,” the case study says. “People needed an easier and faster solution for this universal task. With this in mind, the team shifted their focus—from making better detergents to reinventing the way we mop.”

You confuse customer requests with product requirements

Customers ask for stuff and that’s OK. They often ask for pretty useful or interesting things since they’re the ones using the product. While every request should be warmly received and reviewed, just because someone asked you to build it doesn’t mean you should. Doing so is a bad product strategy.

While a customer-generated feature request might turn into something that particular user likes, it may have many downstream consequences. It can divert development resources away from working on strategically important items. It may also create regression and testing issues that will linger for years.

Plus a feature slapped on to satisfy one customer may derail the user experience of others. Not mapping out the full implications of a request and determining if it’s truly worthy of making the roadmap is a common-yet-harmful mistake.

Operate in a silo

Creating a product strategy in a vacuum shortchanges the reality of the situation. Your organization is highly interdependent even if you don’t want it to be. Not incorporating everyone in developing, approving, and executing a strategy often results in a disjointed final output.

The user experience can be terrible if the team isn’t aware of the overall objectives and lacks context. Disconnected marketing messaging leads to a tremendous churn if the value proposition isn’t well communicated. Sales can hit one brick wall after another if their prospects don’t belong to the actual market.

One embarrassing example of the danger of silos in product strategy happened to Sony. In 1999 two different divisions both released their own Walkman portable digital music players based on completely different tech.

Refuse to make hard choices

You cannot be all things to all people.

“Bad product strategy ignores the power of choice and focus, trying instead to accommodate a multitude of conflicting demands and interests,” says UCLA’s Richard Remelt. “If the challenge is not defined, it is difficult or impossible to assess the quality of the strategy.”

Failure to accept reality can put companies into a state of denial. They concoct strategies destined for failure despite their short-term palliative effects. Look at Kodak—despite inventing the digital camera they backed off investing further in the technology. They didn’t want to damage their traditional film business, even though it was clearly going to be overtaken by digital within ten years.

Ignore where you’re starting from

Whether you’re a startup or an international titan, no strategy begins with a clean slate. A new company’s potential customers are pre-existing entities or individuals. There are competitors or alternate solutions already available. You may have the baggage of existing processes, facilities, staff, inventory, debt, technology… the list goes on.

Any strategy that doesn’t take that all into account is naive and likely to fail. “If you fail to identify and analyze the obstacles, you don’t have a strategy,” Remelt says. “Instead, you have a stretch goal or a budget or a list of things you wish would happen.”

The mobile phone industry has seen different companies at the top of the mountain over the years. But one of the most expensive failed attempts to scale it came from a company normally recognized for always getting it right.

When Amazon launched its Fire phone, it seemed to completely ignore that two other highly popular operating systems already existed. Almost everyone already owned an Android or iOS smartphone, so there wasn’t a large untapped market to attack. And buying an Amazon phone incurred significant switching costs.

That made it a bad product strategy to think a newcomer could enter the fray and steal significant market share from either Apple or Google. This was exacerbated because there was no good reason for anyone to purchase one.

Said one Amazon insider: “In essence, we were not building the phone for the customer—we were building it for Jeff (Bezos).” It’s 3D Dynamic Perspective feature was the only real differentiator, but no one could come up with any practical application for it.

Facebook had to learn the same lessons as Amazon. They also launched their own phone (although the hardware wasn’t designed in-house) and it quickly suffered a similar fate. This didn’t scare them off from trying to create other hardware plays that have similarly flopped, like the dismally performing Portal.


Bad product strategy can happen to any company, even wildly successful ones. Coca-Cola, Frito-Lay, Apple, and Google have all had their faceplant moments. Applying a bit of sanity testing by ensuring you’re not making any of the above-mentioned missteps can save you and your company from dealing with a miserable post-mortem.

To learn the secret to a focused product strategy, read our blog on outcome-driven roadmaps.

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