Three Horizons

Use it when you need to balance running today's core product while funding tomorrow's breakthroughs.

What is it?

The Three Horizons framework is a strategic roadmap model that helps you juggle short-term performance with medium-term optimization and long-term innovation.

Originating at McKinsey & Company, it divides your project portfolio into Horizon 1 (core businesses you defend and extend), Horizon 2 (emerging opportunities you scale), and Horizon 3 (completely new bets). By explicitly categorizing initiatives, you avoid over-investing in today's cash cow at the expense of tomorrow's growth engine, or vice versa. Three Horizons equips product leaders and founders with a clear structure for resource allocation, risk management, and milestone-setting across different time horizons.

It's the go-to framework for crafting a balanced product strategy, aligning stakeholders around what to optimize now, what to incubate, and what to explore.

Why it matters?

Three Horizons forces you to invest in both sustaining your cash-flow engines and discovering the next big thing, reducing the risk of stagnation and ensuring your product roadmap fuels ongoing customer engagement and revenue growth.

How it works

Growth co-pilot turns your toughest product questions into clear, data-backed recommendations you can act on immediately.

Define Your Horizons

Label existing initiatives as H1 (maximize core revenue), H2 (scale new capabilities), or H3 (experiment with disruptive ideas). This clarity prevents scope creep and aligns your team on priorities.

Audit Your Portfolio

Map every project or feature request onto the three horizons. Quantify current ROI and potential upside to see where you're over- or under-investing.

Allocate Resources

Split budget, headcount, and leadership attention by horizon. A typical starting ratio is 70/20/10, but calibrate based on your market maturity and risk tolerance.

Set Horizon-Specific Metrics

Assign distinct KPIs, e.g., churn and NPS for H1, new revenue growth for H2, and learning milestones or proof-of-concepts for H3, to track progress and signal when to scale or kill.

Review and Iterate Quarterly

At each planning cycle, reassess your horizon mix. Shift projects between horizons, reallocate resources, and adjust your roadmap based on real-world results.

Frequently asked questions

Growth co-pilot turns your toughest product questions into clear, data-backed recommendations you can act on immediately.

What exactly are the three horizons?

Horizon 1 is your core business you defend and optimize, Horizon 2 is adjacent or scaling opportunities, and Horizon 3 is blue-sky bets that require proof-of-concepts.

What exactly are the three horizons?

Horizon 1 is your core business you defend and optimize, Horizon 2 is adjacent or scaling opportunities, and Horizon 3 is blue-sky bets that require proof-of-concepts.

How often should I review my horizons mix?

Treat it as part of your quarterly planning. A regular audit every 3–4 months keeps resource allocation aligned with market feedback.

How often should I review my horizons mix?

Treat it as part of your quarterly planning. A regular audit every 3–4 months keeps resource allocation aligned with market feedback.

Can small startups use Three Horizons or is it only for large enterprises?

Absolutely, scale the timeline and scope. Even a two-person team can map key features into short-, mid-, and long-term buckets for better focus.

Can small startups use Three Horizons or is it only for large enterprises?

Absolutely, scale the timeline and scope. Even a two-person team can map key features into short-, mid-, and long-term buckets for better focus.

How does Three Horizons differ from OKRs or roadmap tools?

Three Horizons is about portfolio balance and risk management across time. OKRs and roadmaps set targets within that structure but don't ensure you're funding future growth.

How does Three Horizons differ from OKRs or roadmap tools?

Three Horizons is about portfolio balance and risk management across time. OKRs and roadmaps set targets within that structure but don't ensure you're funding future growth.

What's the ideal resource split across horizons?

The classic 70/20/10 is a starting point, 70% on core, 20% on scaling, 10% on new bets, but tweak based on your industry dynamics and growth stage.

What's the ideal resource split across horizons?

The classic 70/20/10 is a starting point, 70% on core, 20% on scaling, 10% on new bets, but tweak based on your industry dynamics and growth stage.

You've balanced your initiatives across the three horizons. Now run your roadmap through the CrackGrowth diagnostic to expose execution gaps and prioritize experiments that accelerate each horizon.

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