The Probabilistic Product

Chapter 4. What AI Product Strategy Really Is

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Strategy is choosing what not to do.

Legendary Harvard Business School professor and strategy scholar, Michael Porter, made that point nearly thirty years ago, and per his definition, operational effectiveness is performing similar activities better, while strategy is choosing different activities or performing similar activities in different ways.[1] GenAI has not changed this distinction, but it has made it easier to ignore.

At a previous organization, I inherited a tool that allowed users to upload PDFs and ask questions about them. Overall it worked well and a customer wanted to buy it. While this is the kind of signal every product leader hopes for, I could not get past a critical question: why would anyone use our product instead of ChatGPT or Claude?

From what I could tell, the answer was partly procurement. The customer didn’t have access to the right enterprise licenses. It was also a competitive reaction. They had seen a similar tool from a competitor and wanted to see if we could deliver something ...