Product strategy
Product portfolio and bets
Product portfolio management and strategic rates: resource allocation, risk, horizons, and stop rules.
A portfolio is used to manage aggregate risk and opportunity, not to rank all initiatives in a single formula. Separate commitment, core business development, and research rates; each investment must have a thesis, limit, next line of evidence, and termination condition.
What is a product portfolio
Definition of the term
The product portfolio is the totality of all current and promising products and initiatives of the company. Portfolio management involves analyzing the attractiveness, risk, maturity and potential returns of each product.
Why You Need a Portfolio Approach
Without a portfolio approach, disparate projects often emerge that compete for the same resources, do not bring synergies, and hinder the achievement of strategic goals.
** Example:**
The company develops three products in one niche. Two of them compete directly with each other in the same market. The result is customer tug-up, revenue cannibalization, and positioning confusion. The portfolio approach avoids this.
Bets: What it is and why it is needed
What is bets in product management
Bets are the company’s conscious bets on certain product lines or large initiatives. They determine which hypotheses and projects should be supported with maximum resources, because they can radically change the picture of the business.
How to formulate and choose bets
Bets link a company’s strategy to specific actions. Each bet should be clear, measurable and have success criteria.
** Example:**
B2B services decide to bet on a new segment of medium-sized businesses. The rate is formulated: in 12 months to achieve a 10% share in the new market through the expansion of functionality and marketing. The whole team is working on this task.
Strategic Prioritization: How to Emphasize
Classical Prioritization Methods
Matrix models
RICE, ICE, Kano, or simple growth-risk matrix.
With the help of bets, you can simplify the choice: not to spray on small things, but to invest in the most promising areas.
Example of application: focus instead of smearing efforts
In large fintech, there were more than ten features at the discovery stage. After the strategy, the management formulated three key bets for the quarter: automation of onboarding, entering a neighboring market and launching an affiliate platform. The remaining initiatives were temporarily put on hold. Focus led to accelerated growth of two bets and quick feedback on the third.
Mistakes and anti-patterns of portfolio management
Frequent errors
Insufficient focus Dozens of initiatives are launched at the same time, and none of them receives the attention they need.
Ignoring synergies Products evolve in parallel, with one team inventing what is already implemented in another.
Uncertain success metrics Without clear criteria, it is difficult to determine when the bet has justified itself or it is time to close it.
How to avoid it
Formulate a maximum of 2-4 priority bets for the period. Check them against your overall strategy and review them quarterly. Set metrics in advance to objectively evaluate results.
Practical Steps to Portfolio Management and Bets
Mini-checklist
- Identify and describe the entire product portfolio and key initiatives.
- Compare initiatives with the company’s strategic goals.
- Choose 2-4 bets per quarter or half year.
- For each bet, specify the criteria: goals, metrics, verification plan.
- Perform a monthly review: what works, what is worth reassembling or withdrawing from support.
- Don’t be afraid to close projects that don’t work.
** Case:** In a SaaS startup, each quarter at a general meeting, the team reviews the list of initiatives, selects three bets quarters, broken down by goals and deadlines. The report for each bet is public and discussed at the end of the period.
Where to learn more
FAQ
Why should companies manage their portfolios rather than individual projects? It is the portfolio view that allows you to see the overall strategy, allocate resources and not duplicate efforts.
How much bets should be formulated for the quarter? Optimally 2-4, otherwise the team loses focus and does not prioritize the important.
**What if the bet didn’t work? ***** Betting is for the sake of uncertainty. Failed bets are not a failure, but an excuse to re-assemble a plan and redirect resources.
What metrics should I use for bets? Depends on business goals. Usually, it is revenue growth, market share, NPS, retention or startup costs.
Where can I find examples of successful bets? See the cases in Reforge Product Strategy or the Harvard Business Review.
How do you explain to the management why you should kill the failed projects? Resources are limited. A successful company learns quickly by closing what doesn’t work and focuses on strong bets.