The Four Components of Product Success

Strategic product thinking is hard. Especially when done as an afterthought - when the product is already in the market - it is nearly impossible to rise above specific features and metrics. Here is a framework that will help you do just that.

When I first started teaching product management (at IDC’s Adelson School of Entrepreneurship), I needed a way to break down strategic product thinking into distinct components that would help people understand and focus on one aspect each time. I created a model called “The Product Circuit”, which I have since used in product strategy processes with dozens of companies and in my lectures when I explain the journey to product-market fit.

The model includes four components that need to work together in order to create a successful product, especially if you want one that isn’t only loved by a few but also drives significant business success for the company through mass-market adoption. 

These four components are the market, the problem, the solution, and the product itself. Here is how it works at a high level:

You should always start by clearly articulating the problem you are solving. The next step (ideally before you even think about solutions but realistically it is rarely so) is to go to the market to validate that the problem as you defined it really is there and is a good one to solve. If you have worked in an early-stage startup, you have most likely witnessed, participated in, or led this process. Once you’ve validated that the problem exists and is worth solving, articulate the solution to see if it’s a good fit for the problem, and then return once again to the market to see if it agrees with you. Only once you’ve validated that your solution really is perceived by the market as a good approach to solving the problem you should get to work on implementing the actual product. Finally, make sure to conduct product validation once you’re done. 

As you are iterating through multiple rounds of product validation, learning what works and what’s missing, and fixing accordingly, you will come closer to closing the loop and achieving product-market fit. In the model diagram, this is represented by the switch in the electric circuit. What you first launch your product, the switch is wide open, and with each and every iteration you are closing it a bit more, until finally, the switch closes, current starts flowing through the wires, and the light turns on.

Note: I am describing it here as a thought process for a product that is first being brought to the market, and using a logical flow of one step after the other so that they are isolated and distinct. However, this is not how it plays out most of the time. Even for a new product, you probably have some technological proof of concept before you dive deeper into the problem. Alternatively, you might have run into this model with a product that is already mature.

Instead of viewing it as a step-by-step execution process, you should look at it as step-by-step strategic thinking. If your product is already in the market but you want to be more strategic about it, follow these steps and see how they apply in your case. What you should pay attention to is that you focus on each step as written here and not mix it with the other steps. For example, when you think about the problem, don’t move into thinking about the solution (and even try to forget about it as you do) until you have completed this step. It is the separation that helps you sharpen your strategy.

Let’s dive deeper into each and every one of the components and understand how they work together.

The Way You Define the Problem Will Impact Everything Else

Every product person knows that they should start with the problem, but the level at which to define the problem is very important. You want to be as specific and as detailed as you can, because it is these details that will dictate many of the decisions you make down the road regarding the product, the go-to-market strategy, the pricing, and almost any other aspect related to getting the product to succeed.

How detailed? At least two levels down from what your intuition tells you. Don’t be afraid to be too specific. Most issues arise when you are not specific enough, and not when you are being too specific. 

The problem definition also includes the customer segment you are addressing (who are you solving it for). Here, too, you want to be as specific as possible. 

One way to know if your problem definition is too high-level is if you can’t specify the exact audience that it is for. When you describe the target audience, it is tempting to define it as “everyone that…” or “every company that…”. This tendency is natural given the desire to prove that this product has business potential, but it actually hurts you.

If you stick to the everyone approach, you will define the audience with very generic characteristics. But products are never built for everyone. If you think about it, even Google Search isn’t for everyone (my kids, for example, can’t use it without help).

To be really specific with your target audience definition, shift your mindset from trying to get as many customers as possible, to trying to get only the right ones. Describe who would be the ideal customers for the product you have (in mind or already in practice), and only then seek to see if there are enough of them. 

The Solution and the Product Are Different Things

Once you have a clear understanding of the problem you are solving and for whom, you need to be able to explain the solution – the core principles behind your approach. The solution isn’t the product, but it can be viewed as a category of products or the secret sauce behind the product. 

Once you have validated that your target audience truly has an appetite for this type of solution, you can go to the implementation phase and deliver the solution. Here too, you need to be able to talk about your product very clearly, so that everyone understands what it is – both before you implement it and after as part of your product pitch.

Here’s an example: let’s say that the problem that you want to solve is to help people get faster from one place to another. There are many solution types for this: an airplane, a car, an electric bike, all the way down to route planning and navigation software. If you look closely, you will notice that they are solving different problems for different customer segments. If you haven’t figured it out in the problem definition phase, having too many possible solutions is also an indication that your problem isn’t specific enough.

Going back to the example, each of these solutions can have a number of different products that implement them. For example, if the solution is SUV, then the variety of SUVs out there are the products. Each is slightly different than the other, fits a slightly different audience, and has different benefits. 

Separating your thinking between the product and the solution (as a high-level approach), allows you to stay away from features and focus on principles and value. This is the only way to make sure the product you eventually deliver actually solves the problem you intended for it to solve.

The Market Is Where Business Happens

Unlike the three other components of the model (the problem, the solution, and the product) that are up to you to define and refine, the market component represents reality. It can prove or disprove what you have defined in the other three.

The market is never wrong, and as a product leader, it is your responsibility to make sure that what you define is in accordance with what the market tells you. This is a lengthy process that requires multiple iterations. It is the basis for the entire lean startup approach, and it explains why product-market fit is so hard to achieve and takes so long.

The validation process needs to be holistic, in the sense that regardless of the stage you are at, you should revalidate all of the components of the model. For example, even if you are already in the product validation phase, and you feel that something is wrong, the root cause isn’t necessarily the product (even if you validated the problem and the solution before). It can be that the problem as you defined it isn’t spot on, or that the solution isn’t well connected to both the problem and the product. They will all reflect on your product’s performance, even though the gap might not be in the product itself. The same applies to earlier phases too – if you are validating your solution, you might realize that it is actually the problem definition that needs to change first. That’s why in the model diagram above, the validation arrow in the middle is running through all the components and not simply as a direct line between the product and the market.

With each iteration, you’ll get closer to closing the product circuit. Once you do, that’s when every component is perfectly aligned with every other component, which puts you on the road to product success.

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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