How to Close Agile’s Strategy Deficit Death Trap

If you want to foresee the foreseeable and understand the potential of an idea before wasting time and money, always start with strategy.  At Tangible, we consider strategy as the business science that informs, justifies, and optimises, the computer science. It’s the essential R that often gets swamped or sacrificed by D.  

Whereas ‘Agile’ is a software development methodology, never intended to discover whether the venture should be pursued or the commercial potential of doing so.

The Agile Manifesto was created when web technologies were moving at an incredible pace in the late 90s, and developers wanted to implement the new technology quickly and see the live results. This was right for the scenario, but the scenario has little in common with, for instance, a new B2B solution for an industry where the problems, competitors, and opportunities are better established and accessible through commercially focused research.

Prototyping can then be useful to fine-tune the solution. However, when an effective strategy is combined with Agile, you create an environment where you (1) don’t have to build a product to establish whether you should have and (2) identify the commercial potential early and can pivot if it’s not compelling or devise the optimum plan to achieve it, if it is.

More akin to ‘ready, aim, fire’ than spending a lot of time and money to ‘fire’ only to find the reason for failure was foreseeable.

The widespread misuse or misunderstanding of Agile as a mechanism to skip strategy has certainly contributed to ‘No market need’ consistently topping the list of reasons for failed new software ventures. The truth is that it is extremely rare that being quick or first is more important than being right and going to market knowing how you offer more value than competitors can.

Strategy not only helps us avoid waste but also enables you to move quickly with confidence, identifying the full potential of any given opportunity and how to achieve it across marketing, sales, and all aspects of execution.

Once the plan is established and compelling, Agile provides an excellent development methodology. However, whilst successful product development is hard to achieve, it is only one factor of product success. Ultimately only the demand for the value delivered versus alternatives will dictate success.

What is Strategy?

If you’ve been asking, ‘How do I write a business case?’ Or ‘How do I write a business plan or product plan?’ ‘What is product strategy?‘ all these questions rely on projected sales. The strategy will enable you to establish what those sales are likely to be, who they will be from, and most importantly: why.  

Effective marketing and promotion of your product will be vital. You’ll need the right marketing plan, but strategy becomes part of your competitive advantage at that stage, enabling you to reach a distinct target market with a compelling proposition.

We’re going to outline the key components of a robust strategy and how you can use highly accessible and proven Tangible methods to drastically increase your chance of commercial success, attract any investment you may be looking for, and make the most of your product or business opportunity.

Vision, Strategy, and Customer Value

Let’s start by explaining the key components of a commercially successful proposition.

Founders have a vision, but customers buy value propositions. Strategy is what transforms the vision into a value proposition that presents compelling value to the buyer.

Vision – A purpose and belief

A vision goes beyond your personal reasons for pursuing the venture, although this plays a role. A vision you can create a strategy around should be based on knowledge of a trend or opportunity in a given market, including how and why things should be different.

Strategy – How you deliver the vision

The strategy is the basis of the business case and business plan, and it cannot be formed without it. The strategy will include identification and validation of the specific market, proposition, obstacles, and how they will be overcome, then, the most valuable proposition to optimise the maximum commercial potential.

Value Proposition – What customers will buy, and why 

Why it’s a compelling offer, better than alternatives, for a distinct target market. The end result of the vision and strategy formation is purely from the customers’ perspective.  Who are they? What do they buy? Why will they buy from you?

Tangible Strategy – The Key Components

Strategy doesn’t ask markets, ‘will you buy it?’ – it identifies and validates a ‘prime’ target market that attributes the most value to your solution, the methods they currently use to solve the problem, and the performance of those methods, then; as a result, the most valuable differences you could offer. 

We label these components of strategy as the ‘market, problem, alternatives, and solution’. However, it’s not unusual for the idea to be conceived in reverse order; we often work with clients who have a good idea of the solution and need to fully understand the market, problem, and alternatives, to form the right plan before they leap in or seek investment.

Market – Identification of a findable and sizeable target market with the gap you propose to fill and the highest value attribution to you doing so. 

Problem – Concise definition of the problem faced by the target market including the impact and prioritisation of the problem.

Alternatives – How the problem is currently solved including alternative methods, direct competitors, and the current performance of each option. 

Solution – The basis of your value proposition, specifically including how your solution will provide greater, high priority, value versus alternatives.

3 Key Tools to Help you Form Your Strategy 

Whilst most ideas start with a product concept, the most vital aspect for any strategy is the need to focus on who your market will be, how they solve the problem now, and why they will buy your solution. 

We’ve selected 3 example tools from the Tangible framework which are focused on a new B2B software solution. These tools inform each one of the market, problem, alternatives, solution components.

Target Market Profile (TMP)

Personas are commonplace and can be useful but often they’re too vague to help inform strategy in a meaningful way. TMPs need to be based on research and actual data so they provide factual information on how an industry works, and the consequences for the role we believe will value the solution most.

Accurate and validated personas are crucial in the transformation of an idea into something more concrete.  It’s the first step in understanding the client’s world and the potential value attribution to the concept we’re working on.

Propensity Pyramid

‘Lack of market need’ is the number 1 reason for products to fail so, once TMPs are formed, we’ve built this simple tool to establish the markets likeliness to invest in the new solution.

This is vital as clients will not pay to solve every problem they face; lack of market need doesn’t mean they don’t face the challenge, just that it’s not a high enough priority for them to actually part with hard-earned cash to solve it.

From your research, you can identify where specific segments fit on the tiers of the pyramid. The segment at the top will represent the best return for your time and money. Focusing your build, sales, and marketing efforts upon them will be absolutely vital. 

Value Curve Analysis

The Value Curve Analysis is used to understand how you should differentiate and why you will win.

The model combines a number of data points to accurately identify the correct focus for positioning for the solution for maximum value attribution and differentiation versus the competition.

In this example we have a range of potential differentiators across 2 market segments, shown against the performance of just 1 competitor.

Segment 2 (shown in red) demonstrates significant value attribution against the competitor, so they should be our target. In addition, we should focus the positioning and messaging on integration, no contract term commitment and ease of use – not only are they important to our target market, it’s where we outperform the competition.

Summary

In strategy we’re aiming to pull learning forward because many of the vital questions can be answered before significant time and money is spent. 

In order to build meaningful business cases and as a result, business plans, there is some essential strategic thinking that must come first. By having a clear process and using accessible tools you can fully understand any opportunity and give yourself the best shot at being successful. 

There is of course more you can do and we support clients in a vast array of scenarios. However, at the point of considering pursuing an idea, there isn’t anything more important than validating the commercial potential. Focusing purely on the market and their value attribution versus alternatives, most simply:

• Who are they?
• What do they buy?
• Will they buy from you?

This understanding and validation of the market, and value, is at the core of understanding the commercial viability of your idea, for your own purposes, as well as going to the heart of every investor question.

We don’t ask ‘will you buy it?’, we understand their business and learn ‘why they will buy it’. In doing so we establish how the optimum potential of any opportunity can be achieved.

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