Dave Masom was employee #5 at Pack Health and led its Product function from the company’s early days until its acquisition by Quest Diagnostics. During this time, Pack Health’s products helped thousands of individuals struggling with chronic diagnoses such as Type 2 Diabetes, obesity, and hypertension, helping people achieve significant reductions in HbA1c, weight, and blood pressure. In this article, Dave discusses what product strategy is and how it evolved at Pack Health over time.
What is product strategy?
Product strategy is the high-level plan for how a company’s products and services will contribute to achieving that company’s vision and goals. It involves identifying customer needs and preferences, designing products and services to meet those needs, and bringing those products and services to market. Crucially, it involves choices: bad strategy is typically the refusal to decide between competing options. For products in particular, the refusal to choose can result in products that are bloated and fragile. It can be tempting to add more and more features in an attempt to serve more people, but this adds complexity and usually results in the product serving nobody well.
How does product strategy change as a business scales?
There is no formula for determining the correct product strategy for a business at different stages. However, there are some factors that are likely to be common in the early, growth, and exit stages of a startup.
When starting a new venture, your focus needs to be on learning and speed. It’s easy to get pulled in a number of different directions at this stage. To some extent, this is good, because you don’t know which ideas may be winners. You need to explore. But you need to explore with intention: if you try something and don’t know whether it worked or not, you’ve not gained anything.
When you have traction, your focus needs to shift slightly. When you have something that is working, a new possibility enters the scene: by making a change, you might actually make things worse. In the extreme, this is when companies get disrupted: they become fixated on not losing what they have. On the other end of the spectrum, some companies never learn to move beyond the MVP, continually adding more and more half-finished ideas that never achieve their full potential.
Finally, when preparing for an exit, you need to ensure your product and business is a coherent package that’s attractive to whoever you’re planning to sell to. Imagine opening a beautifully-wrapped gift, only to find a shirt that’s clearly been worn and stained. Businesses can fall into this trap by ignoring things like data security and regulatory compliance that come up in due diligence.
What is Pack Health?
Pack Health is a patient engagement platform for people with chronic diagnoses like Type 2 Diabetes, obesity, rheumatoid arthritis, and COPD. Pack Health’s programs match individuals with a dedicated health coach who provides support, guidance, and accountability to help those individuals achieve their health goals, as well as educational resources and digital tools to help them on their journey to better health. Pack Health partners with health insurance companies, employers, and pharmaceutical companies to fund the program so that eligible individuals can access it for free.
What did Pack Health’s product strategy look like at the startup stage?
In the early days, Pack Health had limited resources and was an unknown entity. In the world of healthcare, credibility and trust matter a lot, because people’s health is on the line. Therefore, our product strategy involved building this trust and demonstrating that our programs could deliver meaningful health outcomes as quickly as possible.
To do this, we hacked together our initial product offering using a combination of manual effort and off-the-shelf tools. Our patient engagement platform was built on top of Salesforce (before they had a dedicated healthcare product) and our health coaches would make calls and send texts and emails manually. One of our early investments was in a series of automated surveys that assessed our members’ progress and allowed us to capture the improvements they were making with quantifiable metrics like weight loss and reduction in blood sugar levels (HbA1c).
Further reflecting this desire to learn quickly while gaining credibility, a lot of our early work was structured as research studies. This brought in funding while giving us the capability to measure our impact and prove to other potential customers (such as health insurance companies) that our programs were worthwhile. And although it took years to actually happen, we were able to publish our early results in peer-reviewed journals, which further strengthened our credibility.
This strategy reflected the nature of our industry: health coaching was a new, unfamiliar concept at the time, and healthcare is generally cautious to adopt new things. Our strategy allowed us to build and experiment while funding that experimentation.
Three questions to ask at the early stage:
- What is my riskiest assumption? How can I de-risk it as quickly as possible?
- How can I learn as I build? How can I reduce my time to market?
- Where might I be able to get away with not building in the first instance, in order to move fast?
What did Pack Health’s product strategy look like at the growth stage?
As Pack Health gained traction, we started to develop a sense of what our DNA was. Our founders and many early employees had consulting backgrounds, and this was infused in the company culture. We liked to solve problems for our customers, and this sometimes put us in danger of building a series of one-off products rather than one cohesive product. This is where our definition of strategy requiring hard choices really showed, as we had plenty of opportunities and we had to say no to many of them.
We identified that many of our competitors were focused on employers. Very few were focused on pharmaceutical companies, despite their ability to pay, due to the number of hurdles required to work with them. We decided, given our prior experience of working with these companies during our research phase, that we could uniquely serve this part of the market. We developed functionality such as a modular curriculum builder, white labeling of our digital assets, and pharma-specific tools such as adverse event reporting to serve the needs of these companies, which helped us secure multi-million dollar contracts. We won contracts head-to-head against companies that had received 10X our funding because we were able to adapt our platform to meet the pharmaceutical companies’ brand requirements and content needs in a way that others weren’t.
Again, this strategy worked for us because of our unique situation. Part of achieving product-market fit is about knowing what kind of business you are. The mechanics of a business that sells $1 million+ B2B contracts is very different from one that sells to consumers for $15 per month.
Three questions to ask at the growth stage:
- What are my company’s strengths and unique capabilities and how can I enhance them with my product strategy?
- How do the realities of my market, pricing, etc. dictate the options I have in my product strategy?
- What skills and capabilities do I need to execute on my product strategy?
What did Pack Health’s product strategy look like when they were preparing to exit?
In 2021, Pack Health was being approached by various potential acquirers. Each company had their own reasons for being interested in Pack Health - all of them wanted to use our platform as an extension of their own products, but in dramatically different ways. And each had its own very long list of due diligence requests.
During this time, we focused our product strategy on making Pack Health as attractive as possible to these buyers while maintaining our growth rate and a high level of service for our customers. The healthcare industry is highly regulated, and most buyers wanted assurances that our platform would not cause headaches for them. We needed to show that we understood the regulatory framework we operated in and could demonstrate compliance. And we needed to show we had solid information security that would not expose a potential buyer to unnecessary risk.
Of course, these requirements were not new to us: our clients had also wanted similar assurances, often through certifications like SOC2 and HITRUST. Even with the right systems in place, it took us a long time to put together the necessary evidence to achieve these credentials. At the exit stage, we accelerated this work to get it across the finish line, including hiring people who had incredible attention to detail and were able to get us the level of documentation we needed to be successful.
Notably, the timing of this work was crucial. In the early days, most customers did not perform detailed assessments of our systems: our work with them was simply too small-scale to matter. As we reached the growth stage we needed to show that our systems were secure, but some gaps in the formal requirements were okay. As we reached truly enterprise-scale deals and the potential of acquisition, fulfilling these requirements became essential. Doing too much upfront would have stymied our ability to innovate; starting too late could have prevented us from closing major deals.
Three questions to ask when looking at an exit:
- What potential companies might be interested in our product, and why?
- What gaps do we have that could prevent us from being an attractive target to those buyers?
- What work do we need to do to tell our story to these prospective buyers?
Strategy is about focusing on the essentials based on a diagnosis of the current situation. Therefore, your product strategy must change as you progress through the different stages of a company’s journey.
In the early stage, your focus will likely be on rapid learning and iteration as you search for product-market fit. For Pack Health, this meant demonstrating the credibility of our approach to a relatively risk-averse industry by using lightweight MVPs before building out a fully functional system.
In the growth stage, you need to start taking a more systematic and disciplined approach to product development in order to protect what you have while continuing to grow and innovate. For Pack Health, this meant rearticulating who our target customers were - including deprioritizing segments we could serve but for whom we weren’t the best option - and then focusing our efforts on building differentiated functionality that served our target customers.
Finally, when preparing for exit, you need to ensure you are packaging up your offering so that you will be attractive to your potential buyer. For Pack Health, this meant that we resolved any lingering questions about regulatory compliance and information security.
Your journey will be different, but the process is the same: take time to evaluate where you are in your journey and what your next horizon is. Only then can you craft a great strategy to get there.
About Dave Masom
Dave is currently the Chief Product Officer at Conserv, a comprehensive environmental monitoring solution for collections that is helping preserve cultural heritage for future generations. Prior to joining Conserv, he was the VP of Product for Pack Health. He is also the co-founder of AppThink, an author of product management courses on Pluralsight, and writes about product management at Making Good.