One answer comes from Michael McGrath, author of Product Strategy for High Technology Companies, a book recently named in FirstRound’s round-up of recommended reading.
McGrath uses a travel metaphor to explain what he means by “product strategy”:
There are two approaches to travel. Pick a destination and proceed toward it, or wander off in any direction at all. Both approaches will take you someplace. If your motive is to travel for the sake of travel, then any direction will do. But if you have someplace specific in mind, you will need to plan your route. No technology organization exists for the sake of existing. Each is created with some intention in mind: to offer some product, service, or combination of the two. But an intention isn’t a strategy any more than a chosen destination is a map to that destination.
Product strategy is like a roadmap, and like a roadmap it’s only useful when you know where you are and where you want to go.
For McGrath, a company’s product strategy, if they have one, is the description of the series of steps they think they’ll take, in the context of other steps they could take, to get from where they believe they are to where they imagine they want to be.