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Real pain points: What’s the pain that triggers someone to use your offering? In the case of microcredit, the assumed pain point was that most poor people were entrepreneurs who needed access to capital to start or grow a business.Design: What functionality in your offering solves that pain? Microcredit was designed as the solution for the pain point above so entrepreneurs could lift themselves out of poverty. Duflo and Banerjee showed that while microcredit was helpful for some entrepreneurs, it wasn’t the right design for solving poverty. Their scientific approach to understanding the problem of poverty showed that real pain points and design cannot be based on assumptions alone—they must be validated in reality.Capabilities: What capabilities or infrastructure do you need to deliver on the promise of the solution? For microcredit to work, Grameen Bank invested in financial literacy for borrowers. Companies commercializing microcredit invested in a different capability: aggressive marketing and debt collection. Their capability wasn’t aligned with the design or the real pain points and microcredit took a turn for the worse.Logistics: How do you deliver the solution to your users? Aligning a sustainable business model with the real pain points, design, and capabilities was important to Grameen Bank, so it charged low interest rates and kept costs low by having staff live in dorms. Companies commercializing microcredit raised interest rates, and the logistics of the business model became disconnected from the vision and strategy.
How does your product get into people’s hands? Through what channels will you sell it?On which platform will they be using your product—for example, is it a paper-based form or an app on their mobile device or a web page that they’ll primarily access from their desk?Will people need training in how to use your product? How will you support them if they have issues?What’s your pricing and business model?
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Chapter 4. Strategy
Connecting the why and the how
The example of microcredit illustrates that even when driven by a radical vision, a product can go awry in the absence of a cohesive strategy.
In the RPT way, product strategy means asking the following four questions with the mnemonic RDCL (pronounced “radical”):
When our real pain points, design, capabilities, and logistics aren’t aligned with the vision, it can spell doom for our product, like it did for microcredit.
How to craft your own RCDL strategy
A good product strategy must comprehensively address RDCL and be grounded in reality by testing any assumptions. You can use the RDCL strategy canvas, and follow these four steps to document your own.
Step 1: Discover users’ real pain points
To create the change you envision through your product, people must engage with your product. This, in turn, requires a deep understanding of who needs to interact with it and what pain points they are trying to solve when they turn to it.
It’s tempting to define your market broadly. But products that try to do everything for everyone risk working for no one. Founders often worry that being too specific about their target customer segments will limit their potential market size. This worry is understandable—it’s important to think of your future expansion trajectory. However, if you can’t drive initial adoption in a small population of well-targeted customers, that future you’re preparing for will be moot anyway. In defining your target customers and their pain points, it’s important to verify that a pain point is real.
If you do not validate the pain points, the rest of your strategy is built on a shaky foundation. To be validated, a pain point must be both valued and verified. Here’s an easy-to-remember formula:
Validated = Valued + Verified
For a pain point to be valued, your user must be willing to give up something in exchange for having the problem solved. This exchange can be in the form of a fee to use a product that solves the problem. But even in the example of free products such as social media, the user is giving up privacy and time in exchange for using them. If the pain point is not valued, monetizing your product becomes hard.
In addition to being valued, to be real, a pain point must also be verified. Have you observed that others feel this pain, or do you assume that customers have this need?
Step 2: Design your radical product
Design helps you solve your users’ pain by answering these questions: “What are they interacting with to solve their pain?” and “How do they feel when they interact with your product?”
The Radical Product Thinking answer to “What is good design?” is relatively straightforward: a “good” design is one that fits into and advances your overall strategy. When we talk about how a product is “designed,” we are talking about how we can intentionally shape how people use our product (the interface) and how they perceive it (the identity). Interface design is how you expose your product’s underlying capabilities to your users. When paired with an enabling capability (such as data, expertise, or algorithms), the details of an interface are often called features.
You should leave the actual designing up to expert designers, but if you provide them with the right strategic guidance, you are much more likely to end up with a marketable product
Step 3: Define your capabilities
Defining the capabilities in your RDCL strategy means answering the question, “How will you deliver on the promise of your design?”
Capabilities are the special sauce you have (or need to develop) in your organization that powers your design. Your capabilities can be tangible, such as data, technology, architecture, and infrastructure, or intangible, including relationships, partnerships, and processes. An example of a tangible capability at Netflix is its viewership data, which powered the company’s recommendation algorithms. Competitors didn’t have a similar volume of viewership data to replicate the accuracy of Netflix’s recommendations.
Your users should experience only the design. But capabilities enable you to uniquely deliver on the power of your design.
Step 4: Define your logistics
Here are some questions you could consider to define the logistics for your product:
It’s important that the logistics for your product are aligned with the real pain points for customers. Often companies try to layer on popular approaches to pricing or delivery that are favorable to them, even if they are not particularly well suited for the specific product or the customer. For example, the recurring revenues from a subscription pricing model make it tempting to impose subscriptions on every product. As a result, sometimes products that may be perfectly suited for one-time payment get unnecessary features tacked on to justify a recurring pricing model.
The role of iteration
In crafting your RDCL strategy, do not expect to get all the answers right the first time but rather to put a stake in the ground based on what you’ve researched. You’ll then need to test your strategy against reality.
This is where iteration comes in. You can iteratively test and improve on the RDCL strategy you crafted. Through your execution and measurement, you’ll test how well your design is working to address the real pain points. You’ll refine the capabilities that help you deliver on the promise of the design and improve how you deliver the solution to your customers through logistics. Just remember to regularly review your RDCL strategy to update it based on the learnings from your iterations. Your RDCL strategy is the bridge between your vision and your tactical activities.
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