Navigating the Nuances of Product Expansion

Market fit can be really hard to find. Sometimes, it requires zooming in so much, that you end up hitting a growth plateau sooner than anyone expected. We won’t get too much into the process of finding real market fit in this post, but it’s worth acknowledging that it is hard to find and harder to maintain. As companies seek to expand their TAM to open up new growth opportunities, they tend to look at two major things:

  1. Growth levers – marketing, pricing, packaging, etc.
  2. Product expansion – new features, feature expansion, new use cases, etc.

I have a personal framework that I’ve developed over the years that I haven’t written out in detail (yet). The closest thing to it is  Porter’s Five Forces. This allows you to explore the market from every possible angle and choose the biggest opportunities and advantages for your product to motion towards.

Product expansion – it’s the double-edged sword that can ignite growth or, if handled poorly, disrupt market fit. So, how do we ride this wild stallion successfully? By looking beyond the traditional advice and examining the road less travelled, we can discover more precise strategies for broadening our audience without losing our product’s essence. Let’s deep dive into this nuanced landscape.

Decoding Market Feedback

Sometimes you need to pay attention to the market and what is happening outside of your product. Let’s consider Instagram, who noticed its audience’s appetite for ephemeral content– Snapchat’s realm. Instagram didn’t shy away but instead adopted the Stories feature, which has since flourished on their platform.Sometimes you need to think objectively and critically about whether or not your feature is actually adding value, and the right kind of value, for your users.

Are they looking for something that’s already there — or a better version of it?

Slack, for example, realized that their search function was underused because it wasn’t user-friendly. So, they improved the search functionality, making it more intuitive and thereby expanding its appeal.There are some scenarios where competition may force your hand. Had Instagram chose to let Snapchat own that format, they would have continued to loose users and see a significant decrease in activity from those who stayed — resulting in a major drop in ad revenue, engagement, and overall value of the platform. Other times, you should take the opportunity to think critically and honestly about your own product and the experience it provides. Throughout my career, there have been several occasions where a team started down the path of building a new feature, only to realize that most of the functionality already existed in the product and just need to be polished.

Behavioral Data – Your Silent Informant

   While user feedback gives you subjective insights, product usage data offers an objective lens. It’s your silent informant, highlighting user behaviors that may not be vocalized. It’s not just about whether or not a feature is being used or if your users are falling out of an intended flow, it’s about being able to understand the scale of impact for very specific opportunities. Netflix leveraged this brilliantly, using viewing habit data to shape their content strategy, offering a wider variety of shows and films that resonated with different segments of their audience [3].    Similarly, Spotify’s “Discover Weekly,” a personalized playlist feature, was a product of mining listening data to understand users’ craving for music discovery.    As I mentioned earlier, It’s essential to marry both feedback and behavioral data to get a holistic view of your users. You may get 80% of your feedback from 20% of your users — which may not accurately represent your customer experience.

To Branch or Not to Branch – The Feature vs. Product Dilemma

   Here’s where it gets tricky. When you stumble upon a potential opportunity, do you expand your current product or launch a new one?    Consider the market overlap. If your current users would readily benefit, it could be a feature addition. Adobe Cloud’s inclusion of cloud storage is a prime example of how a new feature served the existing user base.    If the functionality targets a different audience, it might justify a new product. Look at Google’s decision to separate Google Sheets from Google Docs, each catering to distinct user needs.    The complexity and resources involved also play a role. Trello, acquired by Atlassian, required a significant shift in user interaction compared to their primary product, Jira, warranting a standalone product.   For a structured approach to prioritization decisions, the RICE scoring model is a helpful tool, weighing Reach, Impact, Confidence, and Effort to prioritize product opportunities. Conclusion:The journey to product expansion is intricate, laden with subtle details that make a world of difference. By delving into the nuances of user feedback, leveraging behavioral data, and making informed decisions on feature additions vs. new products, we can ride the dragon of product expansion without losing sight of our market fit.

I’ll probably write more things and you might just want to read those too.

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