Modern Ways to Create Product Requirements Documents (PRDs): Incorporating the DHM Model

Aviral Vaid

Hatched by Aviral Vaid

Jul 10, 2023

5 min read

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Modern Ways to Create Product Requirements Documents (PRDs): Incorporating the DHM Model

Product requirements documents (PRDs) are essential tools for effectively communicating the vision, features, and functionality of a product to the development team. Traditionally, PRDs have followed a rigid structure, but modern approaches have emerged that offer more flexibility and efficiency. In this article, we will explore how to create PRDs using a pragmatic user story format and how to incorporate the DHM (Differentiate, Hypothesize, and Measure) model to drive product strategy. By combining these two approaches, we can create PRDs that not only outline the necessary details but also align with a long-term product vision and strategy.

The Pragmatic User Story Format

The simplest way to create a PRD is to use the pragmatic user story format. This format includes several key elements that are crucial for effective communication and understanding.

  • 1. Core User Story: Start by clearly defining the core user story, including the actor or user persona involved. For example, "As an admin user, I can X so that..."
  • 2. Essential Functional Details: Provide a summary of the core functional details in bullet points. Keep this section brief and easy to understand for the development team.
  • 3. Scenarios: Include information about different scenarios and what actions should be taken. While it's not necessary to cover every possible scenario, discussing them during scoping or sizing sessions can help identify any potential gaps or challenges.
  • 4. Link to Designs: Ideally, include links to designs that have been fleshed out as much as possible. However, be prepared for iterations and tweaks as the development process progresses.
  • 5. Link to Epic or Labels: Provide wider context by linking the user story to the relevant epic or labels. This helps the development team understand where the story fits into the bigger picture.
  • 6. Comments or Questions: Use the comments space to document important decisions or clarify any questions. These comments can be valuable references in the future, helping to understand why certain decisions were made.

By following this pragmatic user story format, PRDs become more concise, actionable, and adaptable. Smart engineers can think through scenarios and work with the team to find pragmatic solutions on the fly, eliminating the need for exhaustive documentation of every possible scenario.

Incorporating the DHM Model

To drive product strategy and create a PRD that aligns with a long-term vision, we can incorporate the DHM model. The DHM model focuses on eight hard-to-copy powers that can differentiate a product and enhance margins. These powers are:

  • 1. Brand: Building trust with customers over time by consistently delivering value and minimizing trustbusters.
  • 2. Network Effects: Leveraging the power of network effects to create value and increase the stickiness of the product.
  • 3. Economies of Scale: Achieving cost advantages through increased production and distribution scale.
  • 4. Unique Technology: Developing proprietary technology that sets the product apart from competitors.
  • 5. Counter-positioning: Finding a unique position in the market that challenges the status quo and offers a compelling alternative.
  • 6. Switching Costs: Creating barriers for customers to switch to competitors by making it difficult or costly to do so.
  • 7. Process Power: Developing efficient and effective internal processes that drive competitive advantage.
  • 8. Captured Resource: Securing exclusive access to a resource that is essential for the product's success.

To incorporate the DHM model into the PRD, consider the following exercises:

Exercise #1: Reflect on how your product currently delights customers and jot down ideas on how it could delight them even more in the future. Think about how each of the eight hard-to-copy powers could be leveraged to create a competitive advantage.

Exercise #2: Use the eight hard-to-copy powers as a springboard and brainstorm ways your product could create a hard-to-copy advantage in the future. Consider how each power could be applied specifically to your product.

Exercise #3: List a few price and business model experiments that you might explore over the next 1-3 years. This exercise encourages you to think beyond the current pricing and business model and consider different approaches that could enhance the product's value proposition.

By incorporating the DHM model into the PRD, you not only outline the necessary features and functionality but also align them with a long-term product strategy. This approach ensures that the PRD is not just a static document but a living guide that evolves with the product and market dynamics.

Actionable Advice

Before concluding, here are three actionable pieces of advice for creating effective PRDs:

  • 1. Focus on the user: Always keep the user in mind when creating PRDs. Understand their pain points, needs, and desires, and ensure that the features and functionality outlined in the PRD address these effectively.
  • 2. Iterate and iterate: PRDs should not be set in stone. Embrace an iterative approach and be open to feedback and changes as the product evolves. Regularly review and update the PRD to reflect new insights and market dynamics.
  • 3. Collaborate and communicate: PRDs are collaborative documents that require input from various stakeholders. Engage with the development team, designers, product managers, and other relevant parties to ensure a shared understanding and alignment. Regularly communicate updates and changes to keep everyone informed and involved.

In conclusion, modern ways of creating PRDs involve using a pragmatic user story format and incorporating the DHM model for product strategy. By combining these approaches, PRDs become more concise, adaptable, and aligned with a long-term vision. Remember to focus on the user, iterate regularly, and foster collaboration and communication to create effective PRDs that drive the success of your product.

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