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Product Management Product Strategy

Outside In vs. Inside Out

We all have been there. You have a great idea to build the next best product. Say to find the best restaurants in the neighborhood or help users find the best deals. You go out and build the cool new product. Only to realize that the user response to it is “Meh…”. You thought it would solve their core problems in their daily lives but the reality is that you couldn’t get them back in the app even for the second time.

Inside-Out

In most businesses, this looks something like “Check out what this cool technology built by someone in Eng. Let’s make this a product/feature“. Or here is another version: “We already have technology X, why don’t we build product Y and create a new revenue stream“. Several months are spent building the next best thing only to meet with a tepid response from the market. Even if the business is able to sell it to a customer, retaining them is next to impossible.

It’s like the illustration below where the organizational journey is left to right:

Inside Out model for Product Strategy by Abhishek Tiwari

Yes, these are all first-hand examples I have faced in my career and often made these mistakes myself. This approach leads so much wasted software and resources. This is also the starting point of “Build it and they will come” thinking. That topic requires another post by itself.

It doesn’t matter to the customer how cool the technology is or how it can be efficiently reused to deploy a new product. It only matters if it actually solves the problem and enables customers to perform the job they want to do. That too if the job/problem is an important one.

You can change everything but not The Market

Steve Jobs famously spoke about it in this video:

This is absolutely critical to internalize. We as product people or anyone in the technology field can change almost change anything in their company.

  • Underlying technology
  • Hiring the right people
  • Having the perfect roadmap
  • Choosing the appropriate distribution strategy
  • Making smart partnerships
  • Making key acquisitions
  • Etc. etc. etc.

However, the one thing you and no one can change is The Market. That remains the immovable object in all this. This is where >90% of ideas die…

Outside-In

This is why, it is really important to start with the Market first and mold everything to work for the customer and the market. This is illustrated below where the journey is right to left.

Outside In model for Product Strategy by Abhishek Tiwari

This begins by understanding the market. What does it mean by “Understanding the market”? Setting aside the obvious TAM/SAM/SOM definitions of the market, for a good product strategy it’s important to accomplish the following:

  • Identify different segments of the market. You can do this based on size or their maturity level
  • Identify customer persona. Ideally broken down for the segments you created in the market
  • Conduct research into understanding their “Job to be Done“, which will yield their core needs and pain points
  • Zero in on the segment you can uniquely solve for
  • Conduct deep product discovery

Only when these steps are complete you can be somewhat sure that you are building for the market. Even then I will push to continue building and iterating the product with the customers. Now each of the aforementioned bullets deems their own blog post. Will get to them over time. However, as you can see, the whole process starts with the customer, stays centered around them, and ensures that we are building for their core needs & pain points.

Conclusion

In my experience, this concept is largely understood logically but it hasn’t fully seeped in. One big reason for this is that most Product and Tech folks are natural problem solvers. They are trained most of their lives to solve problems. It’s very much second nature to jump into solving when faced with a problem. This is what leads to the Inside-Out thought process.

What we need is to peel ourselves outside of that mold and consciously focus just on the customer and their problems. It is important to fall in love with the problem first than the solution. Solutions change and evolve over time, but the core problem remains and that is what customers actually want solved. This is very much at the heart of Paul Graham’s and YC’s mantra:

By Abhishek Tiwari

SVP Product wiser.com | ❤️ building Enterprise SaaS & Consumer Products | Beer & BBQ, enthusiast