Product Strategy Lessons From Henry Ford

Ford Model T revolutionized transportation and powered multiple other revolutions. What made it such a success, and what can we all learn from it? Hint: innovative technology can only take you so far.
By ModelTMitch - Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=69615054

Henry Ford didn’t invent the car. He wasn’t even the first to sell cars: in 1908, the year model T was launched, Karl Benz was already selling cars for more than 20 years in Germany, and the Duryea brothers were celebrating 15 years in business in the US.

Still, Ford’s Model T changed the world as we know it. Why? What was so special about it?

The answer is that it wasn’t special at all. In fact, it was deliberately not special. Ford’s famous quote tells you exactly how he wanted it done: 

Any customer can have a car painted any color that he wants, so long as it is black.

The car wasn’t special, but it doesn’t mean every little detail of it wasn’t thought through. Instead of being special, it was very specific

Henry Ford connected the dots in multiple fronts to increase the chance of success. In our world, this would have been considered a great product strategy.

Here are a few examples of how it all played together. As you are reading this, replace Ford’s car with your own product. Are you following these guidelines, or are you making avoidable mistakes?

Specific Target Audience

Ford wasn’t selling “a car”. Had he decided to build a car – without any additional information – the magic couldn’t have happened. 

In order for the car to become such a great success, all relevant departments must work together, or at least under the same assumptions. Marketing needs to know exactly who the target audience is and what value proposition to talk about. Sales need to be able to connect the specific need of that target audience to the actual product, which in turn needs to deliver on the value originally promised by marketing. 

If Ford’s strategy would have stayed at the highest level of “selling a car”, marketing could have only talked about the generic qualities of cars (get faster from one place to another, and don’t clean after your horse). To be able to get a large number of people interested – even in times when you didn’t have to fight so hard for their attention – you must be more specific. People want to understand that you are getting their needs, that you are solving their specific problems.

The target audience in this case was very specific (although very wide, and that’s also an important part of product-market fit). The Model T was a car for the ordinary people, working-class, as opposed to the rich and famous who were the only ones able to enjoy the luxury of cars thus far.

Note: while the Model T was a car for the masses, it wasn’t a car for everyone. If you were too poor you couldn’t afford it, despite it being affordable as one of its major benefits. And if you were too rich, you could have afforded cars that would not require you to make the trade-offs one would make to simply own a car. No product serves everyone. Even Google Search doesn’t (think about the minimum requirements for using it and you will discover quite a few). 

If your product is for “everyone” (in B2C) or “every SMB/Enterprise” (in B2B), think again. You want to be much more specific than that so that you can direct everyone in the company to the right audience, the one that would bring you success.

Specific Value Proposition

Now that you have a specific target audience, what is it that this target audience needs? In Ford’s case, “the masses” needed the car to be able to expand their convenient travel distance and make it part of their day-to-day life. They needed such a car to be affordable and reliable. 

The reasoning behind ‘affordable’ is pretty straight forward: it was the audience definition itself that distinguished it from the rich and famous, so clearly budget is an issue. But how affordable exactly? There was still some research to conduct, to understand what is the target audience’s budget. Eventually, the Model T was sold for $850, which was still slightly higher than the average US salary at the time. 

What about the need for reliability though? Why is it important? You could say that if you want a car for ordinary people they should not have to worry about mechanical issues because they wouldn’t know what to do, but that would be just scratching the surface. If you claim that this is something that is important for your audience, you should be able to explain exactly why (and validate these assumptions as you go).

Here is the real reason: the US at that time was still very rural, and if you wanted to sell the car to “the masses”, you had to address rural areas as well. In such areas, the car needed to be able to drive through the worst roads. That’s a very specific definition of reliability, and now we all understand what it means exactly and why it was needed.

Note that these are not product specifications or features, these are product qualities. These are the things that are important to your customers about your product. If you ask the question this way – ‘what is important for you about the product’ – features and specifications wouldn’t be the answer. 

Is it important for anyone that your car has four wheels? No, it is important that it will drive smoothly. And if someone, say, Harley Davidson, can achieve that with three wheels – that’s perfectly fine.

And of course, you should be able to fully understand and also be able to explain to others why these things are important, much like I did above.

Specific Trade-Offs

Making the luxury of cars affordable to the average American person can only be achieved with mass production. That was Ford’s unique “technology” (other than the car itself) – the assembly line. 

Up until then, there were few people who knew how to build cars, and they each worked on a single car start to end. Each car was built manually this way – a lengthy and expensive process. The assembly line, in which each worker was responsible for their specific part of the work, and could do that for many cars one after the other, enabled making that process much more efficient and reduced cost. With the assembly line, an entire car could be built in 6 hours. 

However, some trade-offs needed to be made. In the name of affordability and reliability, ease of use wasn’t the most important quality of the car. For example, you had to start it from the outside and then jump right into the driving car. if you used the starting handle the wrong way, it could break your arm.

And of course, any form of individual taste or uniqueness was left outside because that would impede the manufacturing process and add unnecessary complications. Ford’s black color quote is a perfect example of that.

To judge by the quote, Ford was very comfortable making that trade-off. What allowed him to do that, is that he understood why this trade-off was made, and how it all fits into the bigger picture: to sell a car to the masses, it has to be affordable. To make it affordable, it has to be produced more efficiently. Having multiple variations slows down production. It’s very simple.

Ford also knew what he couldn’t compromise on – reliability for example – and he actually showed off the car’s ability to drive in extreme conditions as a PR tactic.

Plenty of Detail

As you can see, product strategy involves getting into a very detailed level of explaining the bigger picture and how it all fits together. What people usually call strategy is in many cases just a general direction. In Ford’s example, if he only set the direction of “selling a car to the masses” and got right to work on it, it would have been very hard to connect all the dots. 

Taking it to the next level of detail (or even a few levels deeper) helps you understand your product better and gain deep knowledge of the constraints and the trade-offs to be made.

This is not an easy task. It involves a lot of abstract thinking that requires you to think 10 steps ahead and make sense in a complex world with many unknowns. But avoiding it isn’t going to help you. The constraints and complexity would still be there, and you’ll meet them eventually. You better be prepared, understand them in advance, and save yourself some of the trial-and-error that could be avoided otherwise.

Since creating a solid product strategy is not easy, much of the CPO Bootcamp is dedicated to it. The participants learn how to build their own product strategy step by step, and get my direct feedback on the outcome.

Whether you do it with my help or not, make sure you are able to explain your product’s world at the proper level of detail. It’s not easy, but it is probably the most important strategic impact you can make.


My free e-book “Speed-Up the Journey to Product-Market Fit” — an executive’s guide to strategic product management is waiting for you

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