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Focus on One Product vs. Developing New Products


#1

Currently we have a single product business. We’re very focused but have all of our eggs in one basket.

This feels risky to me, so I’ve been planning to develop other products to market to our existing customer base. This will certainly fragment our attention and resources and I am not confident this is the right path. I’ve recently heard stories of companies developing new products only to realize years later that their flagship product is far outperforming their other products but they take about the same attention and resources to maintain.

We’ve seen Basecamp recently realize this and double down on their flagship product and are in the process of shedding all their excess products. And in a recent interview, WP Engine founder Jason Cohen highlighted that in his previous venture (Smart Bear Software) they spent 3 years developing other products only to come to this realization and double down on their flagship code review product. In the WordPress space, Brave New Code has doubled down on their WP Touch product and the rest have taken a back seat. And Rocketgenius (makers of Gravity Forms) is a great example of a company who has focused on their single product for the past 5 years and has done exceptionally well.

I know there are plenty of counter examples as well, i.e. companies that have multiple products that are equally successful. But I guess I’m wondering if there’s a way to know in advance if it’s worth developing additional products rather than focusing. Or do you just have to go down that road for yourself to find out?


#2

I have no idea how you would know in advance. If you have ideas and resources to build a new product, go ahead and do it. We have built many products during the years. Some failed, some were not worth the effort. But if we stayed with our 1st successful thing and never tried anything new we wouldn’t exist as a company now.


#3

This is second-hand advice from podcasts, but try to put more effort into marketing and see if it significantly increases sales. If it doesn’t, start researching (not building) one product after another until you find one people are interested in paying for. If there are time-consuming parts of dealing with your existing product, you could look at automating/outsourcing them to free up more time where it makes sense.


#4

Much of the advice I’ve seen to focus on one product was either from people who had multiple products and discovered which one was their tearaway success, or was advice aimed at people who tended to move onto the next product far too quickly, without optimizing & improving their products.

If it were me, I’d think in terms of multiple revenue streams, not necessarily products. Evernote might be the core product, but they seem to have done well from branching out into retail accessory sales.


#5

I’ve tried making a second product, but it is hard to split time between two major products.

I think the first product needs to be rather complete, and you need a good team on it, processes well-defined, and major tasks delegated. Once you have that done, so that it is not requiring much time or mental energy, you can start on a second product.


#6

There is no such thing as a small product, so any product you build is going to take a lot of time, money, etc. investment and the assumption is always that if product 1 is making X that product 2 will do at least as well as product 1, in less time, etc. Reality never meets our vision of just how awesome and successful product 2 will be.

I call this “new girlfriend syndrome” and it’s somewhat inspired by a scene from the movie High Fidelity http://youtu.be/2jSDoOldNuU?t=1m20s

Every time you have a new product idea, it’s just a fantasy. New product ideas are like a new girlfriend or a pretty girl you see on the street. It’s a mirage. It’s not real.

Your vision never comes with all the problems that go with it. Problems like…

Support problems. How do you get customers? Who do you sell to? What about bugs? It’s going to take longer than you think. It’s not going to make much money at first. And so on and so forth.

All of those problems are going to happen on product #2 that happened on product #1 because they happen on every product.

Look at how long and slow it is to be a pretty good success: http://unicornfree.com/2013/5-years-of-saas-growth-every-month-exact-numbers or http://www.bingocardcreator.com/stats/sales-by-month or https://demo.baremetrics.io/stats/mrr?start_date=2013-11-13&end_date=2014-06-18

It’s the long slow ramp of SAAS death: http://businessofsoftware.org/2013/02/gail-goodman-constant-contact-how-to-negotiate-the-long-slow-saas-ramp-of-death/

The reality is product #2 might take YEARS to make good money. Or it might not make money at all.

As humans, we are designed to forget the pain of what we’ve been through and how difficult it is. Mothers sort of forget how much pain child labor was. We forget or minimize how much time, effort, money it took to build a business that made real money. If we vividly remembered how terrible some things are, we would live a tortured existence like a soldier suffering from PTSD who can’t sleep without having flashbacks to war.

I’ve gone through all of this in my business a few times, especially building mobile apps, and I’ve landed on focusing on one problem/product/niche/audience and am going to build a business there.

If there is one “trick” to business, it’s to find something that works and repeat it until it doesn’t work anymore.

If your core business is dying and you can’t revive it, it might be time to move on, but if you’re just bored of repeating stuff that works, then product #2 isn’t going to solve your problems.

More often than not, new products are built because we’re bored, not because we’ve hit a sales brick wall.


#7

In the specific case of your WP Plugin, I really don’t know if it is big enough to sustain large growth over time, so you probably will end up building a 2nd WP Plugin someday, but if you do, it should probably be for the same core audience with similar problems.

So, since you are sort of in the WP developer space, coming out with a plugin that is less developer focused would be a mistake. Ultimately, the best resource you have to figure out what Plugin #2 would possibly be is to ask your customers what problems they have when it comes to WP.


#8

Thanks folks, I’ve decided to do pretty much what @SteveMcLeod described and wait until the current product is nearly feature complete before moving on to the next product. I had a great call with Dale Mugford about their doubling down on WP Touch, but turns out that’s only how it appears and they are actually planning new products for the future.