For companies transitioning from start-up to scale-up, understanding the basics of a product roadmap framework can help prioritize R&D, enhancements and resources.

Not all product roadmaps are created equally. In fact, in my 20-plus years in product management, development and strategic planning, I’ve found that many software companies think their product roadmap is simply a list of projects. The problem with a “to do” list is that companies spend time and energy working backward from a preconceived solution, missing opportunities to drive meaningful innovation, efficiency and revenue along the way.

A product roadmap should be a culmination of a disciplined research and data gathering process where customer, market, and competitive insights intersect and are distilled down to a set of deliverables that have the highest ROI.

For growth companies looking to make the transition from start-up to scale-up, understanding the basics of a product roadmap framework as I outline below can help prioritize research, development, and enhancements to their product and assist in resource allocation. From target market segments to packaging, pricing and positioning, the product roadmap framework charts the course in a strategic, scientific and unbiased way.

Being overly reliant on internal feedback risks solving near-term, well-articulated problems versus what will really impact the economics of your business.

First and foremost, product roadmaps are about strategy

A product roadmap is an execution plan guided by the company strategy and product vision in order to build measurable business value. It factors in markets, geography, growth rates, competition, customer targets and pricing. The starting point should include a thorough evaluation of the company goals and its product strategies:

1. Where does the company want to be in five years? What are the paths to achieving those goals?
2. Where does the company need to invest in its product so it can fulfill its strategy?
3. What needs to be accomplished in the next 12 months to achieve these company and product goals, and in what order? Think about what’s important right now to stay focused.

From there, you need to capture customer, market and competitive insights. Product teams can gather this data by developing and leveraging programs such as Win/Loss analysis, NPS, CSAT, recording earnings calls for public competitors, reading industry reports, market studies, share-of-wallet studies, conducting focus groups and advisory boards.

This research process should be tailored to the unique needs of the business, and always include – but not be limited to – feedback from sales, support calls and customer tickets. One common pitfall at this point is being overly reliant on internal feedback. The risk is solving near-term, well-articulated problems versus using more strategic external data gathering efforts to identify what will most positively impact the economics of your business. A mantra to remember here is “build only what will sell, and sell what you build.”

Diagram of a product roadmap framework

a product roadmap framework diagram

When asked what they would do with an extra million dollars, product managers can refer to the roadmap’s stack-ranked list of initiatives and cut line.

Budgets and prioritization

Once companies get close to or above $10M in revenue, they need a scientific process to pinpoint which projects will provide the most economic benefit.

Coming out of the start-up phase, organizations typically have a proven business model based on an identified problem that their software can solve. Yet as they begin to scale, they must weigh any product-related investment against the following criteria:

    1. Will this project increase bookings? Does it speed up the sales cycle or open access to additional markets? Does it solve a critical problem for customers, and are they willing to pay for it?
    2. Will it aid renewals for existing customers? Will the new functionality or direction make it easier to retain or grow existing customer accounts?
    3. Does it reduce overall cost? Cost reduction matters as part of overall profitability. Yet consider opportunity cost as well: For instance, automating a manual process may enable engineers to be repurposed away from low-value work to higher-value, revenue-generating tasks.

A carefully constructed roadmap prepares product managers to be agile in the face of opportunity—and risk. When asked by leadership, “What would you do with an extra million dollars?” product managers can refer to the roadmap’s stack-ranked list of initiatives and cut line. With more money the cut line moves down. In the face of a budget reduction, the cut line moves up.

In essence, the roadmap becomes a GPS for the product team, providing a path forward during which projects are selected and prioritized based on the value to the business, and cover all research and development spend (i.e. maintenance, new features, new product development, and retiring technical debt).

How to align prioritization with business objectives

a chart describing how to align priorities with objectives

Common mistakes and roadblocks in product roadmaps

As organizations scale, many voices vie to influence the road forward: outspoken customers, salespeople working to seal specific agreements, engineers envisioning cool tech they’d like to build. But beware of letting the loudest voices shape the roadmap instead of a thoughtful strategy and field data.

With a well-designed product roadmap framework, you can avoid common mistakes, such as:

  • Building what people want, not what they’re willing to pay for
  • Missing new opportunities by prioritizing the urgent over the strategic
  • Confusing the end-user with the buyer or decision-maker
  • Implementing “one-offs” requested by Sales to land a deal
  • Letting contractual commitments dominate the roadmap
  • Misidentifying features or specs as customer benefits
  • Getting consumed by tactical activities
  • Mistaking novelty or “cool” engineering for real value
  • Wasting resources on maintaining redundant systems and features due to too-slow integration
  • Failing to tamp down bugs before they grow out of control
  • Adding features instead of addressing fundamental problems

To maintain an unbiased perspective, nothing compares to getting out in the field to watch real people using your product.

The importance of product management leadership

As software companies pursue their growth journey, product management plays an essential role in keeping the company’s development on track with the larger strategy. During the start-up phase, employees from engineers to salespeople may wear many hats. But as companies mature, they need to invest in higher-order functions and specialize their operations.

At this stage, product managers own not just the prioritization but the vision of current and future development—most importantly, to ensure the product continues to solve the problem it’s designed for. To maintain an unbiased perspective, nothing compares to getting out in the field to watch real people using your product. Seeing it in action can spark inspiration for high-level strategies. Even tactical efforts like building heat maps of feature usage or reconstructing a click-to-task process can provide insights on customer pain points and improve the experience.

Here’s the bottom line.

Customers, sales partners and engineers will have input, but your product roadmap should be developed and prioritized based on data to enable truly informed decisions. It’s the key to innovating rapidly and accelerating growth without losing sight of the strategic vision. When an organization has a well-built product roadmap framework in place, the path ahead is factually supported and more clear.

Learn more about LLR’s Value Creation Team, purpose-built to collaborate with portfolio companies and help them define and execute on high-impact growth initiatives.

This GrowthBit is featured in LLR’s 2022 Growth Guide, along with other exclusive insights from our portfolio company leaders and Value Creation Team. Download the eBook here.