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Case study: Connected product strategy map

Overview

The product strategy map (PSM) defines your product across six key dimensions: target audience, problem to solve, value proposition, differentiation, growth strategy, and business model.

Defining the strategy map helps you validate assumptions and make adjustments before dedicating extensive resources to product development. It also provides a strategic framework to inform your product roadmap and go-to-market plan. With a clear strategy map, you can build products that effectively solve real customer problems.

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In this case study, you’ll follow along with how founder Sachin Rekhi defined the PSM for one of his startups, Connected.

What you'll do

Get context on Connected.

Define your target audience.

Identify the problem to solve.

Craft your value proposition.

Determine your differentiation.

Outline your channel strategy.

Define your monetization strategy.

Iterate on the product strategy map.

1 Get context on Connected

Founded in 2006, Connected was focused on streamlined contact management.

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It enabled users to bring all their contacts together in one place, keep those contacts up to date, and access social context about those contacts. For example, seeing their status updates and recent photo or content uploads.

He was actually in the process of working with sales reps to sell the online audio ad product in his first startup

Anywhere.FM⁠

that the idea for Connected was born.

Sachin recalls, “I was following Matt Stegman, our top sales guy. While out, he flicks through his phone and calls a friend of his who turns out to be a media buyer. Next thing I know, we have a meeting at her agency to go sell our audio ads. In the first 15 minutes of this meeting, we’re not talking about audio ads at all. We’re talking about their families, their kids, their dogs. It was all foreign to me as an engineer, but I started to appreciate the value of building rapport and being strategic about relationships.”

So the Connected team started to explore bringing together two ideas:

How do we help you keep your contacts up to date from a productivity perspective?

How do we help you be a better friend and colleague to build and maintain relationships more strategically?

Furthermore, they believed it was the right time to start working on Connected because of two key headwinds:

The challenge of contact management was becoming worse because of the fragmentation of contact data. Contacts spanned email, mobile devices, professional networks like LinkedIn, and personal networks like Facebook.

Almost all conversions now had a digital footprint, which means it could be tracked. Even phone calls could be tracked if for example they were done via Google Voice. A product like Connected wouldn’t have been possible before these technological advances but now it was.

Sachin came up with the idea of the PSM framework while working on Connected. He says, “With my first startup Anywhere.FM, we didn’t use a PSM and I regretted it. There were a lot of things I learned the hard way. With Connected, I vowed to do things differently. That's when I developed this product strategy map. We leveraged this framework back then.”

2 Define your target audience

In general, when defining the target audience dimension, it’s important to focus on the narrowest relevant set of users.

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In Connected’s case, while anyone could technically benefit from managing relationships more effectively, it's the people experiencing acute pain who will get the most value out of the product.

This led the Connected team to hypothesize that outbound professionals were their core audience. An outbound professional is anyone in an organization whose primary job requires them to interface with people outside of the company and maintain those relationships.

Specifically, they focused on these types of outbound professionals:

Sales people.

Independent professionals managing large networks: One example is recruiters, whose jobs require them to maintain relationships with people looking for jobs as well as hiring managers. Another example is journalists, who need to keep relationships with plenty of sources to get information for their articles.

Referral-based service professionals: this included independent consultants, real estate brokers, lawyers, and accountants.

All these segments were included in the “outbound professionals” audience that the Connected team honed in on as having the most acute pain with the highest willingness to pay.

3 Identify the problem to solve

To correctly pinpoint your product's problem space, consider these three key areas:

Outcome your customers seek. Ask yourself, what are your customers attempting to achieve? This should not focus on your product or solution, but rather on the end goal your customers have in mind.

The motivation driving the customers. Understand why your customers want to reach this outcome. Explore the motivations and drivers behind their desire to achieve a particular goal.

Gaps that hinder your customers from fulfilling their desired outcomes. Identify why your customers can't achieve their desired outcome currently. These obstacles form the basis of the problem your product aims to solve.

This is how the Connected team applied the framework:

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Outcome: Outbound professionals want to leverage their social capital to move their business forward.

Motivation: There was a direct tie to managing and maintaining relationships well and the value extracted for their businesses. For example, the salesperson is going to make more sales or the real estate broker is going to get more house deals done.

Gap: Similar to Connected’s reasons for why now, the primary gap is that contact and relationship data has become fragmented across many networks. Even professional networks like LinkedIn seem to exacerbate the problem because it’s easier to make connections but harder to maintain them.

This leads the Connected team to define their problem statement as, “Outbound professionals struggle to effectively manage their most important asset, their professional relationships, due to the fragmentation of data across email, address books, social networks, calendars, and mobile devices.”

4 Craft your value proposition

Using the “product homepage” approach, the Connected team broke this dimension down into:

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The product tagline: The high-level, one-sentence value proposition. For Connected, they summarized the value prop as “contact management without the work”. They knew that people wanted to maintain the relationships, but they all found the work required daunting.

3-5 sub-benefits: The distinct individual benefits that your product provides.

All your contacts are in one place. Connected imports a user’s contacts in real-time, continuously from all the places they already exist. This way, users have a reliable single source of truth about all their contacts and the conversations they’ve had.

Always up to date. Connected also keeps those contacts up-to-date so that anytime someone changes their job description on LinkedIn or changes the city they live in on Facebook, their contact information automatically reflects the latest.

Integrated with social platforms. They knew people didn’t want to just see people's latest email addresses and phone numbers. So Connected would pull together status updates from Facebook and LinkedIn, photos from various networks, and blog posts they were writing about. This richness of information gave users more opportunities to reach out and build rapport with their contacts.

To hone in on these three sub-benefits, the Connected team did an initial brainstorming exercise. They put together a large list of potential ideas and then grouped those ideas into similar sub-benefits.

Prioritizing among these three sub-benefits required the Connected team to consider what features align with which sub-benefits and strengthen their competitive differentiation. For example, one common feature request they kept hearing in user research was reminders. "Remind me when I haven't talked to someone in six months or something."

They chose not to focus on building this feature despite user demand because there were plenty of existing competitors on the market that offered reminders. As Sachin explains, “That wasn't a focus area for us because we didn't think we could differentiate relative to the competition in that category.”

5 Determine your differentiation

To start, the Connected team mapped out potential competitors:

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Direct competitors: Their direct competition includes companies like Gist, Nimble, Contactually, and Plaxo. These companies were all in the space of aggregating contacts and putting them together in one space.

Indirect competitors: Their biggest indirect competitor, which was bigger than all of those direct competitors, was the spreadsheet. Those who cared about relationships tended to use a spreadsheet to manage them. The simple ones would just be a list of contacts. The more sophisticated ones would have columns like name, how you met, last time you contacted them, and interesting notes about them.

Adjacent markets: Traditional CRM tools like Highrise and GoldMine. While these tools weren't made for contact management, savvy professionals found ways to adapt the tools.

With this understanding of competitors in mind, the Connected team then thought about how they could differentiate their product. They honed in on the idea of differentiating through technology. Two examples of how they did this:

They built the technology in a way that allowed users to import their contacts in real-time.

They also built a proprietary contact merge algorithm that could recognize duplicate contacts and combine them. The algorithm could see unique attributes from social media platforms and tie them together so users wouldn’t get duplicate contacts.

6 Outline your channel strategy

Recall that there are four major categories of acquisition channels that products use to drive growth: viral, content, paid, and sales. It’s key to understand not just how to optimize the channel, but also how to improve product-channel fit.

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The Connected team was inspired by Mint, which was in the personal finance space. In particular, they were impressed by the personal finance blog that Mint started called MintLife. They saw this as a great example of acquiring users through content marketing. Specifically, Mint they had a million users sign up for the product before it was even available because of the blog.

This led the Connected team to hypothesize that they were going to create a Connected Life blog, which would be about helping outbound professionals to learn the best practices of building, maintaining, and leveraging relationships. They even planned to have vertical-specific content for real estate, journalists, investors, and more.

This was their original idea on how they were going to drive user acquisition into our product. However, over time, the Connected team would realize that this approach didn’t generate product-channel fit and they’d need to revisit this dimension.

This shows that it’s okay if certain dimensions of our product strategy map need to be iterated upon. Reflecting on this challenge, Sachin says, “I should have better assessed how viable content marketing would be in acquiring outbound professionals. For Mint, there were a lot of personal finance enthusiasts that were reading blogs online and they leveraged that to build their blog audience. But for Connected, it turns out outbound professionals oftentimes weren’t as tech-savvy and therefore content marketing wasn’t the right approach.”

7 Define your business model

When it came to modernization strategy, the Connected team decided to enable a 14-day trial, no credit card required.

The rationale was that within 14 days, users would get to the aha moment of seeing all their contacts imported with the proprietary algorithm working. After that, users would pay $10 / month to keep using the product.

Behind the scenes, the Connected team heavily debated free trial vs freemium. They opted for a free trial for two reasons:

Practical limitations. When users imported all of their contacts, especially their email ones, it drove up server costs significantly. They realized that they couldn’t afford to host tons of free users, especially with their limited runway.

Lack of proof. Other competitors like Xobni had a free product with 500K users, but they never seemed to convince anyone to pay. The Connected team wanted to start with a price point so they could quickly determine who was willing to pay for their product.

Sachin also remarks, “We also debated if we should get more creative with our business model in terms of things like charging for the number of contacts, similar to what MailChimp does. But we realized since we were going after individuals, not businesses, we had to keep it incredibly simple because otherwise, people would worry about being nickeled and dimed. That cognitive load would make it more difficult for them to purchase.”

8 Iterate on the product strategy map

When they launched Connected, they quickly realized they were inundated with competition.

Gist had just raised a $10-million series A.

Another contact management product Nimble showed up on the market. Its founder was well-known in the CRM solutions space and quickly gained a lot of traction through his connections.

Another tool called Contactually also emerged, with a similar value proposition and target audience to Connected.

At first, the Connected team thought they could win by focusing on out-executing the competition.

But they quickly realized that they had some deeper-rooted strategic issues.

They realized they were growing linearly, not exponentially. This indicated that the content acquisition loop was working, but not enough to drive acquisition fully.

This led the Connected team to look into paid advertising but all the CRM providers had bid up the price for paid search ads for terms like “contacts” and “contact management”. On a $10 per month per user subscription, they couldn’t afford to invest in paid advertising.

But they couldn’t just charge more for the subscription, because they already had feedback that $10 per month was expensive.

That’s when the Connected team considered pivoting from single-user utility to team value. They believed this could solve the challenges around willingness to pay and not having enough money to focus on user acquisition.

One of the features they built to unlock single-team value was allowing users to search for prospects not only across their network but across the networks of everyone on their team.

What was key to this was understanding relationship strength. Connected was able to use the existing contact data to prioritize relationships and tell a user who on their team had the strongest relationship with the prospect.

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Pivoting on the value proposition also led them to pivot to other dimensions, like the target audience. They went from focusing on individual professionals to SMBs. By going after SMBs, they were also able to meaningfully increase the price point from $10 a user a month to $600 per year.

Recap

Get context on Connected. Connected was founded in 2006 with the aim of streamlining contact management.

Define your target audience. The primary target audience for Connected included outbound professionals like salespeople, recruiters, and referral-based service professionals.

Identify the problem to solve. The main problem Connected aimed to solve was the fragmentation of contact and relationship data across multiple digital platforms, making it difficult for outbound professionals to manage and leverage their relationships effectively.

Craft your value proposition. Connected offered a threefold value proposition: consolidating contacts in one place, keeping them updated, and integrating social media updates.

Determine your differentiation. Connected differentiated itself by focusing on technological solutions like real-time contact import and proprietary algorithms for merging duplicate contacts, setting itself apart from both direct competitors and traditional methods like spreadsheets.

Outline your channel strategy. Initially, Connected planned to use content marketing as a primary channel, inspired by Mint’s success with MintLife. However, they later found that this strategy did not fit their target audience well, prompting a reconsideration of their approach.

Define your monetization strategy. The business model was based on a free 14-day trial followed by a subscription fee, influenced by the need to manage server costs effectively while establishing a sustainable revenue stream.

Iterate on the product strategy map. Facing stiff competition and realizing limitations in their original strategy, Connected pivoted towards providing team value, focusing on SMBs instead of individual users, which allowed them to increase their price point significantly.

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