The “wow, this is really cool; let’s make it!” road to product definition does not even come close to the wealth, fame, and success road signs. Your business likely caters to a segment of customers who have many different problems; how do you identify the critical problem you are going to solve first? Let’s try driving the road backward, starting with those who are actually successful, famous, and yes, ridiculously wealthy.

Jeff Bezos, CEO of Amazon, has made a small fortune for his company and shareholders by constantly emphasizing that teams “focus on customers, not competition.” The great clarity that this distinction provides is that your team remains problem focused, rather than reactive. Similarly, Larry Page, CEO of Google, frequently says, “Start with the customer and work outward.” His notion is similar, albeit less focused on strategy. From Larry and Jeff, we can learn that you have to focus on a real customer problem.

Sergey Brin, Google founder and president, brings another critical bit of wisdom to this picture. He has said repeatedly: “Don’t try to solve the easy problem. Solve the harder problem.” As the problem definition gets bigger, you’ll find that more users have a similar problem. As you increase the number of users you can help, you will increase your product revenue potential, and wealth, fame, and success will follow. If Larry and Jeff believe you need to solve a real customer problem, Sergey adds to that: you need to solve a real customer problem that many people share.

One example of how Google solved a real, harder problem is Google Pack. Google Pack was a free collection of utility software for your PC. When I worked on Google Pack in 2007 and 2008, we knew that users rarely applied software updates, because the experience of applying updates was complicated. And because the users’ computers weren’t updated, users had slow systems and security vulnerabilities, and were generally hassling their kids during holiday breaks.

Rather than trying to optimize each complicated user experience around updates, we built a system, subsequently used by Google Toolbar and Google Chrome, that enabled us to update all software, including third-party applications, without bothering users. This was a much harder problem to solve, especially in light of the myriad installation processes that third-party software requires. But because we built this software, we were able to reach and help hundreds of millions of users. The software was eventually open-sourced as Google Update. Based on its broad usage and utility as a platform, I think this was a highly successful product. It was successful because it solved a harder problem than the problem we first identified.

If you’ve uncovered a big problem that many users share, you’ve completed the most important step of your product definition process. More important, you’re on the road to helping a lot of people in a meaningful way! These criteria—real, big, and shared—probably seem obvious, but more often than not, teams ignore them. They also form the cornerstone of your mission. Framing your mission statement around that cornerstone, so you have something that can be used to build your strategy, is your next step.

Every team has to have a mission. If you haven’t articulated it, the team, your organization, and your investors are probably operating under wildly different conceptions of the mission, and that will lead to failure. Your team will fail because each person will likely pull in a different direction, causing tension, chaos, and pain. I’ve seen this happen many times. Sometimes teams don’t articulate the mission because they are afraid of engaging in the argument about what it is, but such a fear just delays the inevitable confrontation that will arise when you all realize you’ve been going in different directions. You can prevent this problem, and reduce conflict on the whole, by writing a great mission statement.

A great mission statement accomplishes three things—and only three things—beautifully.

An example of a team with a great mission statement is the personalization team at Amazon. These are the folks who built the product suggestion features that work scarily well. Their mission was to “increase customer delight.” This wonderful mission statement fits the requirements exactly:

A final note on mission statements: they need not cover everything. They should be sufficiently broad that many incarnations of your product or service can fit the description.

Strategy is a topic that has been overcomplicated by consultants in an attempt to make money. Engineering leaders have also overcomplicated it because they frequently have no idea how to approach the problem, and instead start waving their hands. Most of all, this topic simply feels over-complicated because strategy is nebulous, and it is hard to tell when you have a good one. Luckily, because we work in software, we can create a series of dramatic simplifications that will make your strategy much easier to develop.

Your strategy is a rough plan to win over your target customers given the unique assets of your company and the pressure from your competitors. That’s it. It’s not a detailed product description, and it’s not a page of nuanced plans. It’s a paragraph that states how you’re going to make your product more attractive than the competition’s product to a group of customers over the long term. In short, the three things you need to address are your customers, company, and competition.

For example, when I worked on Google Talk, I had a mission: “Allow anyone to communicate with anyone else, anywhere, on any device.” I looked at the competitive landscape for unified communications, video conferencing, and VoIP. I looked at Google’s unique assets. One unique and durable differentiator was that unlike Skype or other video conferencing providers, we could use Google’s massive cloud infrastructure to provide video conferencing through a switching technology, rather than through the older and much more expensive encode-decode-mix-encode-decode process. Typically, multiway video systems like that cost tens of thousands of dollars and worked poorly because the hardware added so much latency. Google’s technology was unique, and it was durable because you needed a big datacenter presence to replicate it. Nobody builds more datacenters than Google.

So from both a company and competition standpoint, it was a great fit. We could lead with our unique, low-cost offering. When I looked at our millions of Google Apps customers and industry trends, I saw an emerging market segment composed of workers who were increasingly distributed and working from home. On top of that, the conference-calling space was huge, and we had powerful assets in Google Voice that we could offer to users.

Given this data, I argued that we should try to lead the market in low-cost unified communications for businesses. This strategy would enable us to leapfrog Skype’s older technology and undercut Microsoft’s more expensive systems in the SMB and Midmarket segments. Ultimately, you can see that Google didn’t follow this strategy, choosing instead to emphasize its social efforts and Google+ Hangouts. But you get the point.

As you think about your company, customers, and competition, pay special attention to how your product will serve your customers better than the competition’s product in the long term. This is the one time in the shipping process in which it’s OK to think about competition, so revel in it! You need to think hard about the long term, because if you want your product to be a commercial success you need the differences between your product and the competition’s products to be durable. If they are not, your competitors will follow along quickly and offer a rebranded version of your product at a lower price point, and you won’t have achieved greatness.

Now that you know who is going to love your product and why you can do it better than anyone else over the long term, write it down in fewer than three paragraphs, and aim to fit the essence of your thoughts into one paragraph. The shorter you make your strategy, the easier it will be to achieve and defend.

Here’s another example. Let’s say we’re the Internet Movie Database (IMDb), a division of Amazon, and we’ve brainstormed the following mission:

Is the mission inspirational? I think so. Enlightenment seems inspirational to me. Perhaps excessively so for an engineering audience, but look at how we’ve applied it. We can say enlightening is about providing contextual data, driving discovery, even helping you know what your friends think. So that seems to fit.

Is it organizational and directional? Yes. It speaks to who you’re going to focus on—viewers. I didn’t restrict “viewers” to “movie viewers” because I think YouTube applies, as do Hulu and other portals. I don’t think photographs or other artworks apply, so I used “video viewers” as a way of restricting our focus. And enlightening speaks to providing intelligence and data, so the mission tells our team what kind of things we’re going to do for our users.

Does the mission fit on a t-shirt? Yes, unless you translate it into German and use a big font.

Now that we have a mission that we think is good, let’s build it into a strategy:

This strategy accomplishes what I need it to accomplish. It speaks to the type of product IMDb is going to offer and why the company is uniquely positioned to provide this service. It speaks to competition and how IMDb will be different, and justifies why IMDb should target a specific segment. It’s brief and to the point. It’s not excessively specific, but it is directional, speaking to specific goals of integrating across all video sources and exposing fun facts about movies.

Note that when I wrote about targeting professionals, I said “initially.” “Initially” is a bit of a cop-out, but it’s a great way of saying “tweens will go in Version 2,” which allows us to have a narrower initial focus without fundamentally rejecting the point of view that tweens are important. See How to Handle Randomization in Chapter 12 for more on the “it will go in V2” technique.

When you’ve written a basic mission statement and strategy (yours may be somewhat more fully fleshed out), you should sit down and discuss both artifacts with your leads. This is the first step of getting everyone aligned and bought into the direction you’re heading. If you can’t agree at this level of granularity, you shouldn’t move forward, because the next steps are more specific versions of your mission statement and strategy.

When you’ve reached a reasonable level of consensus with your team leads, you can move on to defining the product in detail.