Entrepreneurs often hang their hats on a single product, focusing their attention on developing and marketing their most promising prospect. However, at a certain point in the evolution of a venture, it may make sense to introduce a second, complimentary product or service.
Supplementing your existing product line or core service with another unique offering may in fact be the best way to grow your business, but the process isn’t without challenges and obstacles. If you’re not satisfied as a one-hit wonder, successfully changing your formula to include additional products requires careful deliberation and flexibility.
The Next Web (TNW) contributor, Pedro Franceschi, shared some of thoughts about the prospect and process of adding a second product. According to the author, expansion often equates to lasting power in competitive markets, particularly in rapidly advancing tech areas.
Though you may not see a second product line as the only thing standing between success and premature failure, it pays to give yourself to the idea, before it’s too late, if only for the fact growth and development not only serves your organization, but also your audience. Without buyers on your side, your one-hit business may indeed be vulnerable to untimely demise.
Proper Timing Ensures You Don’t Arrive Too Late or Play Your Hand Too Soon
According to Franceschi, businesses fail to endure for consistent reasons. When a promising startup quickly disappears from the marketplace, it can usually be attributed to one of the following reasons or a combination of multiple factors found on this short list:
- The concept or products are a poor fit for the market.
- An organization is counting on the wrong team to move the needle.
- Insufficient funding and/or overspending result in capital struggles.
- The competition gets there first.
The author further asserts that the entrepreneurial qualities needed to overcome some of the challenges on the path to prosperity include willingness to take risks, rebound from setbacks, and make decisions outside one’s comfort zone. To that end, he suggests that once a market match is found with your initial product, it’s time to start plotting your course toward future releases that augment your existing goods and services.
As you turn your attention to developing and marketing a second product it’s important not to lose sight of your initial core business. The reputation you’ve built and the customers served by your first line of goods are valuable tools, supporting subsequent products. Timely action is another key concern; waiting too long to introduce a complementary product gives competitors an advantage, which may delay your ability to build on the momentum you’ve created with prior success.
A Second Product Serves Your Base and Opens New Doors
Your existing customer base can help you develop and refine an enduring second product. Understanding your clients’ big picture concerns not only points you to a second solution they’re likely to embrace, but it also generates insight you can use to break through with new customers.
Thinking in terms of territory can also be helpful, when supplementing your product line. In addition to reinforcing relationships with your existing base, an appealing second product is one capable of opening doors in areas with untapped growth potential.
Serving Underrepresent Markets Provides a Leg Up For New Products
Identifying underserved markets, where there’s a clear need for your products, is one of the most natural ways to expand. Experience with your initial market provides valuable clues, shaping your second product launch. During the developmental stage of a new service or product line, it’s important to recognize patterns and voids, with an eye toward serving known needs.
Author, Franceschi, was an experienced payment processing entrepreneur, when he and his partners became aware of another related need, shared by many clients. Insufficient access to capital, lines of credit, and credit cards, it seemed, was slowing startups, because existing products served established businesses.
Filling the void was a natural extension of their existing business. In particular, the partners identified a need for a new product line serving ecommerce businesses. By offering a credit card with flexible terms, appropriate for ecommerce startups, they stepped in with a built-in advantage, while maintaining the technology and operational infrastructure they’d already built.
Be Wary of Second Product Syndrome
Though launching a second product is often prudent, the No More Startup Myths blog warns of a familiar pattern tempting many startup entrepreneurs. According to blogger, Andreas Aravis, one of the most pronounced business developments setting apart the modern startup process is the rapid pace at which new businesses can now bring goods to market.
In the past, development was blindly done, without any contact with markets, until after products were launched. The oft-failed sequence has evolved, drastically streamlining today’s “lean” approach. Author, Aravis, asserts the ‘second product syndrome’ often sets in early-on, after a business experiences setbacks associated with their initial product launch. Responding to the challenges, first time entrepreneurs believe quickly bringing another product to market will turn things around.
Unfortunately, thoughts of casting a wider net and drawing on limited lessons learned from the initial product launch aren’t always enough to prop up a faltering first product. According to Aravis, time spent on a misguided second product only takes away from the first, exacerbating already difficult conditions.
If your venture appears ready to support a supplemental product launch, make sure to branch out for the right reasons, avoid falling victim to second product syndrome, make timely moves, and serve markets rife with opportunity.