You will hear this in startup circles as sage advice: Build “inch wide, mile deep”
Sounds kind of obvious, but there are arguments and evidence to the contrary.
Single product vs Multi Product strategy for a #SaaS Startup
One of the fundamental decisions a SaaS #founder must make is whether to focus on a single product or pursue a multi-product strategy.
Singular Focus: Concentrating on a single product allows your team to devote their full attention and resources to its development and improvement.
Clarity and Simplicity: For both your team and your customers, a single-product strategy offers clarity and simplicity. It’s easier to communicate your value proposition and brand identity.
Rapid Iteration: With fewer products to manage, you can iterate quickly based on customer feedback. This agility can help you respond to market changes and emerging trends more effectively.
Cost Efficiency: A single-product approach can be more cost-efficient, as you can allocate resources more efficiently and avoid the complexity of managing multiple products.
Dependency Risk: Relying on a single product can be risky. If it faces challenges, such as market saturation or evolving customer needs, your entire business could be at risk.
Limited Revenue Streams: A single-product strategy may limit your revenue potential, as you’re dependent on the success of one offering. Diversifying your product portfolio can provide additional revenue streams.
Diversified Revenue: With multiple products, you have diversified revenue streams, reducing your dependency on the success of a single product. This can make your business more resilient.
Cross-Selling Opportunities: Different products can complement each other, leading to cross-selling opportunities. Existing customers may be more inclined to try out your other offerings – higher CLTV.
Market Expansion: A multi-product approach allows you to enter different market segments and address a broader range of customer needs, potentially expanding your customer base.
Resource Allocation: Managing multiple products can be resource-intensive, spreading your team thin and potentially leading to a decrease in the quality of each product.
Complexity: A multi-product strategy can become complex both internally and externally. Communicating your brand’s value proposition becomes more challenging.
Market Fit Risk: Each additional product carries the risk of not achieving the same level of market fit as your initial offering, leading to wasted resources and effort.
There are two Indian companies which exemplify multi-product strategy. Zoho and Freshworks have products catering to various business needs, such as customer relationship management (CRM), helpdesk software, project management, and more.
Of course they achieved some success with one before adding another.