PSP 2: Three Ways Into a Market

In 2002, Jira entered an existing market because project management software already existed. It is a red ocean because it is an established market with competitors. Jira differentiated its product with customization and support for different workflows. Because the market already understood why this software was needed, it could focus on differentiation. Jira needed to believe that a centralized project management source would remain important and that customizations would provide enough value for teams to choose Jira. They also had to believe projects would become so complex that a less simple product was a worthwhile trade-off for better-structured workflows.

Linear entered a resegmented market dominated by tools like Jira. The founder described his frustrations with the tools everyone used and focused on modern software development teams that needed to move fast and work efficiently. Linear wasn’t an entirely new category, but it changed how these tools work. It’s a red ocean with a blue niche, since it targeted teams that believed that tools were too slow and too complicated. Jira focused on features and customization, while Linear focused on user experience. Linear had to believe that PMs and engineers wanted a simpler project management tool and that market tools created debt for teams that move quickly.

Productboard entered a new market by focusing on a problem most project management tools had already solved. It’s a blue ocean because they realized PMs needed to understand customers and their needs to make effective decisions about which features to prioritize, so they built a solution for that. This created a new category for product management tools by collecting and organizing customer feedback, prioritizing features, and helping build and communicate roadmaps. Productboard had to believe PMs struggled to organize customer feedback and that customers would pay and find value in PM-specific strategy and discovery tooling. They also had to believe companies could justify this specialized product category.