2013’s Top 10 Product Strategy Moves

Standard

2013’s Top 10 Product Strategy Moves

The verdict is out – for the technology industry, 2013 was a disappointment according to Quartz. Om Malik says – “Oh no, it wasn’t!”

Regardless of which camp you are in, it’s hard to argue that the major franchises in technology and business made big-time product strategy moves this year to invent or disrupt markets, grow or take share & change the rules. This article looks at 10 of the most memorable ones.

One Lens To Rule Them All
A few years ago, I came across Nilofer Merchant‘s list of proven techniques to change the competitive equation. The deck, replete with industry examples, is embedded below for those interested in the primer.

I made a Cliffs’ Notes-like summary (the full version is highly recommended!) that I’ve used over the years to look at how companies have used them over the decades.

2013 was no different – while the plays themselves surprised, delighted and even frustrated us at times, the underlying thinking goes back to techniques well understood and used as a playbook by the best in the business. Here we go, with the Top 10:

1. Commoditizing your Competitor’s Cash Cow

To say that the Office Suite is a cash cow for Microsoft is an understatement. In Q2 FY ’13, the division made $5.69 billion, approximately 20% of all revenue. This was a 10% decline over a 12-month period. During this period, the move to mobile (smartphones + tablet) only accelerated. As of Q1 2013, the world’s largest maker of PCs shipped more smartphones than PCs.

Taking advantage of its dominant mobile OS position, Apple made a bold move to commoditize Office 365’s $99 / year cash cow by offering up iWork (and iLife) for FREE to all new users of iOS as well as Macs.It remains to be seen if this directly disrupts Office’s moat built around enterprise users, but suffice it to say that Redmond is paying attention, as indicated in this official comment titled “Apples and Oranges” which casts this as merely an attempt to catch up.

2. Re-defining The Business You Are In + Turning a Luxury Into A Commodity

It’s safe to say that Uber (‘lifestyle meets logistics‘) is among the most disruptive (and useful) services we’ve seen grow over this year. So much so, that the laws around its existence and operation literally are being re-written.

Having a black car was part of a celebrity’s entourage – Uber has brought this within the reach of most, if not all people. In doing so, it has solved currency challenges, allowed passengers to easily split cab-fare, allow drivers to more easily afford their cars and addressed several other problems that have been holding up an innovation-starved transportation industry.

3a. Turning An Asset Into A Liability

The best example of this in 2013 was Snapchat. Used to be that the place for teens to hang out was Facebook. Well, until the parents showed up. I saw this first hand with my nephews during this past Labor Day weekend – the adults were on Facebook, while my nephews were on Snapchat, WhatsApp and Twitter. More than any other app, Snapchat has turned Facebook’s biggest asset (its user base) into a liability (core user cohorts leaving and, literally, taking their friends with them). The silver lining is that teens still spend time on Instagram, which is owned by Facebook and is in the photo sharing space.

3b. Turning A Liability Into An Asset

In the beginning of 2013, many were skeptical about Foursquare. Its v1 product was built for the social media over-sharing user who could “check-in” into a venue. Thanks to some solid passive geo-fencing technology and a v2 product that was built for the ‘other 90%’, the company leveraged its extensive database of check-ins and tips to create a recommendation service. Again, it’s early to tell where this goes but looks like what seemed a liability is now at the core of its biggest asset – the freshness of its content.

4. Selling A Lifestyle (And A Personal Image)

Instagram solved two user problems well – a) convert those pesky, unusable mobile phone photos into something valuable, even sleek and cool and b) make it brain-dead simple to share them. In doing these well, they rose beyond a successful app to promote a lifestyle. Almost every photos app which is competitive now has filters and emphasizes the simple sharing flow.

5. Transform Distribution

This definitely seems like the year that distribution of goods and key services was transformed – quite literally. Whether it is bringing farm-fresh food to your door step(Goodeggs), finding someone to run an errand or be your courier (Taskrabbit, Postmates),getting a ride (Lyft), letting your car earn its way while you are gone (Getaround), havinggrocery or high quality meals in hours (Instacart, Munchery)… the list goes on…. we even had private flying disrupted (Blackjet)… well, almost!

6. Taking On A By-stander

Given that users spent over 18 billion listening hours in 2013 (up from 1.8 billion hours in 2010) and the adjacency to industries it already participates in (Music), Apple attacking Pandora in music radio was a much expected & no-brainer move. Not to mention, Pandora was Top 3 mobile ad revenue generator in 2013. While Apple has not won (yet!) it’s a classic case of taking on a by-stander in a well understood industry to take (or protect) market share.

7. Attack From An Unexpected Direction

Two words – Apple Maps. Although the initial launch was the lone blot on the spotless product launch record (well, maybe not lone… considering MobileMe), the company has hunkered down, fixed bugs and launched key updates. In addition, usage led to the data getting better (as is the case with any Maps product). Further Apple has doubled down to make key acquisitions (Broadhop, WifiSLAM, Embark, Locationary etc.) to deliver public transit info., Wi-Fi based triangulation, better geocoding etc. In doing so, Apple attacked Google from an unexpected direction and took market share and 23M users in the US – something that would have been hard to predict earlier in the year. This is an area to watch in 2014 as mobile becomes more pervasive, in more countries.

8. Leverage Critical Mass To Execute Faster

Speaking of Apple, can Samsung be far behind? Whether it was the ‘phablet’ launches to round out the various form factors and corner over 63% of the Android market or the quick rush to market of their Watch and Smart TV products, Samsung continued its efforts to quickly replicate features and even products that might otherwise cause users to switch platforms. It’s bet on its own operating system Bada and its own partner ecosystem will be a play to watch in 2014.

9. Segmentation As A Weapon (To Focus)

The auto industry is simple (if not easy) to understand, product-wise – economy, mass-market, luxury. Tesla picked its early adopters and initial category (the luxury electric car) and delivered a product that won several loyal fans who had hitherto been forced to pick between looks and fuel economy. In doing so, they have found an initial base to monetize key innovations (such as the nationwide charging network) before moving to other categories thatclearly are clamoring for a version that fits their unique needs and price points. How they move from their core group of early adopters to the every man as the transition from the luxury to economy and mass-market segments will be really interesting to watch.

10. Get Help From Partners

There are a bunch of examples of this – Nokia taking advantage of the Windows Phoneplatform, Kindle Fire taking advantage of Android etc. (something Motorola had done earlier too, but not to the extent that Amazon did). Building on top of the core stack that it forked, Amazon attempted to own the web browsing layer – through its Silk product, in addition to building out an e-commerce services and customer support layer. Through this, it became the fastest growing Android tablet licensee of 2013.

Bonus! Changing The Rules

In pursuing a few different but elegantly connected moon shots, Google has leveraged its core business to try and change the rules. On the infrastructure layer, Project “Loon” and Self-driving cars attempt to bring access at various levels. Innovations like Google Glass helps interact with this world. The work on Google Now, Maps etc. offer newer versions of well-known services over existing as well as new infrastructure layers. All of this (even if unsuccessful its its current form) will help the ecosystem solve problems that allow users to live better and more connected / productive lives. 2014 will be interesting to see the impact of many of these efforts – which are, to be clear, in early stages for the most part.

Of course, this is only a limited set from the hundreds of plays made in 2013. Also, note that many of the illustrative examples are in consumer tech, but by no means is innovation or key strategic moves restricted to this industry. Please post moves in other industries in comments. I would love to hear your feedback.

Related articles

Leave a comment