How do you know when to invest in a second product and become a multi-product company vs innovating on your existing product?

This can be tricky! It will depend on a triangulation across a number of factors including: 1. The room to grow in your existing product (both in terms of TAM, the competitive dynamics and your current position in the market) -- this will help determine how much headroom you have to innovate on the existing product vs launch new ones. If you have some obvious "low hanging fruit" on the existing product it's usually a sign that there's more work to be done there before launching into new product ...Read More

I would consider the following factors: What are the goals at that time? How best are the goals served? e.g need a product-2 to monetize and sustain product-1, which is growing but no line of sight to monetization  Competitive value - What is the best way to build or defend moat? Is the sum going to be greater than parts? Vertical or horizontal integration? Solution offering rather than piecemeal feature offering? Execution confidence- Are we in the position to take on a second product? Can we d ...Read More

I don't think I have a great answer for this; I think there are a few possible points to consider though, and I think it ultimately comes down to how you understand the user/market problem your company is positioned to solve with its product(s). Is that problem best solved by a single product, or does a group of products better address the problem or need? If so, how and why? Is your product not serving the needs of your customers, and if not, why? Does the product have meaningful shortcomings a ...Read More

Deciding to become a multi-product company is a significant strategic leap. I didn't work deciding if we should do it or not, but I was in different situations where the company did or did not, and I learned through them. I'd approach this by evaluating a few key dimensions: Saturation of the First Product: First, consider whether our core product still has significant room to grow. Is our main product hitting a plateau in terms of market penetration or innovation? If there are still obvious “lo ...Read More

Great question that goes beyond product strategy and into larger company strategy. Every product serves a given user job or jobs. When you have product market fit and things are going well, you then have a choice:  Continue investing in serving the original job to gain a larger piece of the total addressable market for that job or: Think about a new product offering that could either serve your existing customer in new ways or create a new adjacent customer segement to your original one.  I don' ...Read More

Phenomenal question, I recently gave a full talk on this topic.  I think about going multi-product as a way to transform your company for the long run and to expand companies life cycle.  Every company has a cycle of life - Companies are in startup mode, growth phase, and peak before start declining. Hence, best time to innovate is during the upward trajectory in the growth phase. Read more about it in this article: https://www.gsb.stanford.edu/insights/mark-leslie-key-enduring-growth-strategic- ...Read More

The way to grow a company and to expand the revenue it can target is to expand the TAM through more offerings or new products particularly if there is a defensible market opportunity in the area. When you think you’ve maximized your product’s core growth levers or the customer base has unmet needs that aren’t a natural fit for the existing product, you build an new one that fits your company’s strategy. Sometimes a “new product” is a new SKU that you can sell that packages up capabilities that s ...Read More

Deciding to launch a second product and transform into a multi-product company isn't just about diversifying your portfolio—it's a strategic choice that should be deeply aligned with your long-term vision and the realities of the market. It's crucial you base this decision on solid evidence and careful analysis, ensuring that expanding your product lineup truly benefits your core mission, business and customer needs. Here’s the approach I take: Assess Market Saturation and Growth Potential: Chec ...Read More

The decision to invest in a second product versus innovating on an existing product depends on a variety of factors, including market demand, core competencies, competitive landscape, resource allocation, strategic goals, and financial viability. By carefully considering these factors, a company can make an informed decision that aligns with its overall vision and mission. Market demand: Is there a clear need and demand for a second product? Are there opportunities to address new market segments ...Read More

This is based on a few things: Your strategy - are your customers going with integrated solutions? If yes your hand may be forced Market needs - sometimes the opportunity has a timing and you need to ride that curve otherwise you will be left behind Your existing product maturity curve - how much investment do you need to make in your existing product to grow it at the pace you want Your internal capabilities - do you have the people/cash flow to invest in this Assuming you are past your 1st pro ...Read More

There are two types of common triggers for a second product: market saturation and innovation advantage.  Market-forces or market saturation:  When your first product has stabilized with consistent user adoption and satisfaction, consider expanding to a second product.  Monitor KPIs—if growth metrics like user engagement, retention, and revenue plateau despite improvements, it may signal time for new product exploration. It's key to dig deep here to make sure that this plateau is not because of ...Read More

This is a fairly complex decision and depends upon various factors such as: competitive landscape, organizational vision/strategy, development effort, rollout strategy and most importantly end customer needs. Customer Feedback: There is ongoing feedback from customers that point to a need for an adjacent product. e.g. Jira is for project management use cases but there is an indication from customers to bring in a wiki/documentation tool such as Confluence. Competitive landscape: if the competiti ...Read More

From my experience, you should never invest in another product unless your first product has achieved PM-fit because you dont want to kill the momentum and growth youre already seeing by splitting your customer's attention in two different directions (unless your new product is serving another ICP and totally different GTM). Otherwise, Id introduce another product if: Your current product’s growth is plateauing and you dont have any more innovative ideas to add to the product. Pay attention to w ...Read More