How do you measure success when launching a second product? Are you focused on current customer adoption or new customer adoption?
Measuring success starts with defining what success looks like. This is most successful when it’s a cross-functional effort, and teams across the organization are bought in.
Ahead of launch you should align on a metric. This will differ from product to product. You need to figure out what metric matters most to the success of your product, and make sure its easy to understand so folks can rally around it. For FigJam we focused on an engagement metric, Weekly Active Users (WAU), which we also track for Figma.
Once you have a metric, you need to set a goal. For a second product, it may make sense to look at external benchmarks or benchmark against your first product. Having a goal that’s time-based is also helpful — we set an end of year goal when we first launched FigJam.
It’s important to have regular check-ins to understand how you’re progressing against this goal, especially with a new product. I recommend involving the core cross functional team in addition to leadership. This keeps everyone accountable and allows you to adjust as needed.
In terms of expansion vs net new acquisition, even if your second product appeals to a larger audience than your existing customer base, focusing on current customer adoption first will likely be easier than acquiring net new customers. From a self-serve prospective, they’re already in the product so you can reach them directly. And from a Sales perspective, the team has existing relationships that they can leverage.
When introducing a second product, the success of its launch depends on how it fits into the company's existing offering. There are several factors to consider:
If the second product complements the first, the focus should skew toward current customers and leverage the trust already established with them.
If the second product targets a different audience segment or need, the emphasis should be on acquiring new customers.
Metrics like Monthly Recurring Revenue (MRR), Customer Acquisition Cost (CAC), and Lifetime Value (LTV) should be tracked to understand profitability and growth.
Metrics like product engagement, feature adoption, and churn rates can provide insight into the product's value.
Regular feedback loops, through NPS or CSAT surveys, can help identify areas of improvement and ensure customer satisfaction.
Overall, both current and new customer adoption are important, but the focus on one or the other depends on the company's strategy and goals.
I’m going to answer your question indirectly first: Going from a single product company to a multi-product company is a big shift, not just in your business goals but also in your company’s identity. It’s important to think through how this second product changes who you are, and I strongly recommend you pause before launch to think through your corporate-level messaging, which I’ve written about in a previous Sharebird AMA here (first answer). A quick example: when I joined Brex, it was a “corporate card company.” When we launched business accounts (an alternative to bank accounts), we had to reimagine who we were beyond our identity as a credit card company—we arrived at all-in-one finance, since we couldn’t call ourselves a “bank.” When we launched spend management software, we had to reimagine ourselves again—as a spend platform (which is the current messaging on Brex’s website).
To answer your question a bit more directly, it entirely depends on your goals. Is your goal to increase revenue or to increase market share? Is your new product relevant for your current customers, or is there only some overlap? With the Brex card and business accounts example above, we learned that the business accounts were most relevant for startups, whereas the Brex card was relevant for businesses of all sizes. Knowing that the audiences only partially overlapped changed how we set goals. You’ll need to answer these questions before you can determine your specific launch KPIs. My tactical advice would be to figure out the TAM for your second product and its overlap with your current customer base (think: Venn diagram). From there, you can craft your launch strategy and goals.