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5 Ways to Figure Out What Direction a Product Is Taking

Identifying how well a tech product is doing can get pretty complicated. It's impossible to know exactly what the developer is thinking and what their next move will be. Nevertheless, there are a lot of hints that they may drop along the way. Here are five ways that we can try to uncover product strategy without having insider knowledge.

1. Marketing Messaging

This one is fairly obvious. A company will give away a lot of information through its marketing messaging. It gives away what they're most proud of and, more importantly, what they think will sell. Their website, Twitter, sales deck, etc. will all demonstrate this clearly. Companies will want to sell on their competitive advantage, sure, but they also want to pivot the consumer mindset towards the direction the product wants to go.

Twitter, as a company, is a fantastic example of this. While they categorize themselves as a News organization, and one of their biggest competitive advantages is the ability to connect millions of strangers quickly, they market themselves as a haven for television/video engagement. A majority of their recent messaging has been surrounding driving viewers to television or video streaming on Twitter's platform. While Twitter's users may primarily use Twitter for news or communication, the platform wants to move towards user engagement via video streaming, and so it markets itself as that.

2. Customer Targeting

With its messaging, a company will also give away who its trying to target. It'll tell you what demographics, what kinds of companies, what geographies, etc. they're trying to target. This can help determine a lot of different factors about the product direction. Companies will generally try to shift in the direction that the customers are trying to shift in. They will build features based on them and tailor their product for them. For SMBs, the product will shift towards potentially being cheaper, more flexible, and easier to launch. For large enterprises, products will become more feature heavy, customizable, and service-heavy.

Returning to the example of Twitter, it's clear that Twitter is trying to target B2C organizations worldwide with its video advertising strategies, marketing how many users it has access to and conversion rates for various industries. It markets how it can tap into specific demographics and can provide data to inform strategy development. This demographic, while broad, is very specific: Twitter wants to pull companies that would otherwise advertise on TV to Twitter. This tells us that Twitter will push its product to behave like a video platform, offering video ads frequently in Twitter feeds and expanding its streaming capabilities.

3. Revenue Breakdowns

Looking at where the money comes from also can help understand a company's direction. Breaking down their revenue streams, as much as possible, helps identify which parts of their products are the most valuable and which are growing. By extension, understanding where most of the expenditure goes can provide similar information. Companies will want to sustain products and features that drive growth and bring in revenue. Thus, products that bring in large amounts of revenue will be driving factors, or, products with a lot of investment are big bets for the company to drive growth.

For Twitter, as with any social media, it's all about advertisers, while data sales represent a swiftly growing, but small (< 10%) segment of their revenue. Advertising also primarily comes from "Promoted Tweets" and "MoPub" or mobile publishing, which of course includes the video advertising segment. They've begun to reduce their losses with layoffs, although their ad revenues have fallen. Their shift to video ads also makes sense as they claim that user engagement rises from video advertising and that costs per user are cheaper for video ads. So, they will push further into video advertising for this reason. And, since data sales have been consistently growing, they may also push those tools.

4. Market Share and Market Share Growth

Understanding which markets a company has a share in can be pivotal to understanding its audiences. Again, companies will drive their products towards their audiences to solidify their bases, and will also attempt to push out into certain markets they don't have a base in. So, understanding market share and their previous growth strategies can help identify future growth plans.

Aside from Facebook and Instagram, Twitter has the highest reach in the 18-34 demographic as well as in multiple platforms. However, its usage is low, with users logging in infrequently and for short periods of time. Thus, Twitter will likely try to push in two directions: 1) towards solidifying and expanding its base in the "millennial" demographic; 2) towards improving user engagement to hook users in and keep them there. This strategy may play into their growth as a video and news platform and may be part of the reason why they switch from a chronological home feed to a recommendation engine based feed.

5. Features and Feature Development

Companies are generally acutely aware of what their products' capabilities are and what they aren't. They'll want to make sure they're a step ahead of their customers by building innovative features and identifying market trends that they want to stay on top of. At the same time, they'll try to ensure that they offer the same features that any direct market competitor has. If a company is developing out features that other products offer, its clear that that company is trying to push into that market. So, it's easy to tell where a company is going based on what features its developing out.

Stepping away from Twitter, a classic example is Instagram Stories. Within a few months, more people were using Instagram Stories than were ever using Snapchat. This idea, which they very directly lifted from Snapchat, was both polished and improved in the Instagram version. This clearly means that Instagram is pushing towards expanding its messaging features, which are still fairly lackluster. This was proven when they also launched video calling at F8 this year. Their growth strategy is towards turning Snapchat into a direct competitor and then dominating that market.

Understanding a competitor's product strategy can help you focus your own strategy to either align yourself with theirs or compete with it.

Harvard CBE can help your company understand your product strategy in the context of your competitors.

Dhruv Gupta is a Managing Director for CBE, and a junior at Harvard studying Computer Science and Government.

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Free Cheats

In order to increase the effectiveness of marketing, I advise you to also use free and shareware methods, such as YouTube and Instagram - this is a great way to expand the space for your company on the Internet. And to create high-quality content, I recommend using Movavi. This is an excellent software for working with videos, one of the best and currently available

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