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Hi Product People,

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Picture this: You're planning a road trip. Would you plug your destination into GPS without knowing where you're starting from? Of course not! Yet this is exactly what many organizations do with their product strategy.

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I see it repeatedly: An organization sets ambitious goals, prioritizes key metrics (increase revenue by 30%!, acquire 1000 new customers!), and leaders immediately jump to solutions. "We'll save $10MM in support costs with AI chatbots!" But they skip a crucial step: Analyzing Your Current State.

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When Do You Need a Current State Analysis?

You need to build your current state during key strategic moments: when developing a new product strategy, experiencing significant market changes, seeing unexpected customer behavior patterns, planning major product portfolio decisions, or preparing for organizational transformation.

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Starting Your Current State Analysis

First, map your product portfolio. Many organizations lack a clear picture of their product ecosystem. They don't fully understand how their products make money, which customer segments each product serves, or how different products work together. They might even have products competing with each other or overlapping in confusing ways. Understanding this landscape is crucial before making strategic decisions.

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Next, analyze your data infrastructure. A solid current state analysis requires good data: customer segmentation, product usage metrics, revenue patterns, support tickets, sales win/loss information, and customer feedback all tell important parts of your story.

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This is where Product Operations becomes crucial. A strong Product Ops team can help set up proper instrumentation, establish consistent metrics, create insightful dashboards, and connect disparate data sources. They're essential for turning raw data into actionable insights.

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Using Current State to Guide Discovery

Your current state analysis reveals patterns that inform where to focus discovery work. When you see high churn in specific segments, that's a signal to prioritize customer research there. Feature adoption gaps indicate areas needing deeper understanding. Clusters of support tickets point to potential pain points, while sales patterns might reveal market positioning issues.

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Leaders should use these patterns to allocate discovery resources, define research priorities, set success metrics, and guide product team focus. Product Managers can use this information to prioritize customer conversations, focus experimentation efforts, identify quick wins, and build evidence-based roadmaps.

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Building Your Business Case

Your current state analysis becomes powerful when it tells a story. Instead of isolated metrics, weave a narrative: "Our mid-market segment shows 30% higher churn, coinciding with increased feature requests for customization options. Meanwhile, our enterprise sales team is losing deals specifically because of these missing capabilities."

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This narrative, backed by data, helps you secure resources for deeper discovery, justify strategic shifts, align stakeholders, and focus investment decisions. It transforms gut feelings into evidence-based strategy.

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Remember: Hypotheses, Not Solutions

Your current state won't give you answers - it gives you educated guesses to investigate. When you see mid-market customers churning, don't jump to "we need better features." Instead, form hypotheses about what might be happening. Maybe customers are outgrowing your solution, or perhaps they're struggling with implementation. Your discovery work will help validate or invalidate these assumptions before you commit significant resources.

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The key is balance: be thorough enough to spot real patterns but quick enough to maintain momentum. Your current state analysis isn't perfect knowledge - it's your starting point for smarter product decisions. Think of it as your product strategy compass, helping you understand where you are so you can better chart where you're going.

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P.S. Want to dive deeper into building an effective current state analysis? Our newest course, Mastering Product Strategy, will show you exactly how to do this - from initial data gathering to forming actionable hypotheses. The course launches in Q1 2025, and early birds save $200 with code HOLIDAY. Or get access to our complete course library, including Mastering Product Strategy, for just $1,999 with code LEARN2024. Both offers end on December 31st. Learn more here.​

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Creating great products often starts with validating the right concepts. It’s about testing your ideas early, focusing on what matters to users, and building a foundation that sets the stage for success. But how do you approach this process in a way that minimizes risk while maximizing learning?

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In this week's Product Thinking episode, I spoke with PJ Linarducci, CPO at Thumbtack, about his unique “Cupcake Approach” to product development. Creating great products often starts with validating the right concepts. It’s about testing your ideas early, focusing on what matters to users, and building a foundation that sets the stage for success. But how do you approach this process in a way that minimizes risk while maximizing learning?

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In this week's Product Thinking episode, I spoke with PJ Linarducci, CPO at Thumbtack, about his unique “Cupcake Approach” to product development. This method focuses on delivering a small but complete version of a product, similar to a cupcake compared to a wedding cake. By validating key assumptions with this approach, teams can identify what works and tackle the hardest challenges first before investing too much in unnecessary details.

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We also explored the importance of influence in leadership. P.J. shared how structuring teams as equals, where product managers, designers, and engineers collaborate openly, leads to better outcomes. This setup encourages teams to challenge ideas, align on shared goals, and develop stronger solutions together.

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Whether you’re refining an idea or testing a new concept, this episode offers strategies to focus on what matters most and create products that deliver real value.

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I’d love to hear your thoughts on the episode. Feel free to respond to this email or join the conversation on LinkedIn!​

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Key Moments on the Podcast to Check Out:

07:45 - Cultivating Influence Over Authority

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In discussing leadership dynamics, PJ emphasizes the importance of operating with influence rather than relying solely on authority. He cautions against the dangers of using positional power to drive decisions, as it can stifle open communication and feedback. Instead, he advocates for product managers to act as "organizers in chief," facilitating conversations among team members and synthesizing diverse perspectives into cohesive strategies. By encouraging collaborative decision-making, product managers can foster a culture where ideas are enhanced rather than simply followed, ensuring that the best solutions emerge from the collective input of the team.

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24:03 - The Cupcake MVP

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Here, PJ emphasizes the importance of focusing on core customer hypotheses when developing a minimum viable product (MVP). To do so, he brings in a cupcake analogy to illustrate that while an MVP must provide value, it doesn't need to be a complete version of the final product. The cupcake serves as a metaphor for distilling a product idea down to its essential components. PJ believes that product teams should prioritize validating the most critical hypotheses before building features, avoiding the comfort of easily built components like the pedestal for a singing monkey. By tackling the most challenging aspects of the product first, teams can ensure they are addressing essential user needs, rather than simply checking off boxes with features that may not contribute to the product's core value.
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26:08 - Understanding User Relationships: Beyond the Immediate Need

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PJ shares with Melissa some insights from his experience at Thumbtack, where they aimed to reduce user friction by fostering a deeper understanding of customers' needs. Instead of only asking for minimal information to facilitate immediate interactions, the team expanded their onboarding process to gather richer data about users' goals and aspirations for their homes. Surprisingly, users responded positively to this approach when they understood the value proposition behind sharing more information. This revelation illustrates that when users see clear benefits, they are willing to provide sensitive data, challenging the common belief that asking for too much information creates friction.

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​Episode Resources:

• ​PJ Linarducci​
• ​Thumbtack​

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Other Resources:

• ​Angel Squad​
• ​Productinstitute.com​

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LISTEN TO THE FULL PODCAST

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Episode 195: Sparking Joy in the Workplace with Robin Daniels ​LISTeN HERE​

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The CPO Accelerator is a members-only live virtual course for product leaders taught by Melissa Perri. The move from product leader to VP or CPO can be challenging. It takes a whole new set of skills to succeed at the next level, and you may be the first person at your company to hold this seat at the executive table.

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