When you start out as an entrepreneur, there’s one product idea that you’ll almost inevitably come up with, at some point…
This product idea seems very attractive. Heck, it will seem like a sure-fire winner.
Unfortunately, in reality, it’s a terrible idea. Watch this video to see what I mean and how to avoid one of the most common newbie mistakes you can make:
All of the examples in the video are marketing related. That’s because I live and breathe marketing, so those are the kinds of examples that come to mind. This same principle also applies to any other market, to services, to physical products etc.
Another example to illustrate how specialization implies value can be seen in the area of marketing automation.
Infusionsoft is a combination product. It combines email marketing with marketing automation, a CRM, a shopping cart solution and an affiliate program. Infusionsoft is a successful company, but the principle still applies: many users only use parts of the Infusionsoft suite (e.g. only the email features), because as an affiliate program, CRM and shopping cart, it’s simply not very good.
Also, Infusionsoft’s prices start at $200/month. Compare that to solutions that offer only marketing automation, like Pardot and Marketo: their prices start at $1,000/month and $1,500/month respectively.
As you can see, you can succeed with a combination product, like Infusionsoft did. But the example still shows the value of specialization.
More importantly, the bootstrappier your company, the more important specialization becomes.
If you’re Microsoft or Google or if you have $50M in funding, go ahead and pursue a combination product. If you’re bootstrapping a startup or doing the one-person-company thing, keep a narrow focus.
1 + 1 vs. All-in-One
There’s a bit of a fine line to all this, because combining two elements or combining several very closely related elements can be a good idea.
“The only product that does X and Y” can be a good premise. Sometimes, that can even be your USP.
It becomes problematic if you go for “the only product that does A and B… and C and D and E and…”
With one of my own products, Hybrid Connect, you’ll find that it has a very extensive feature list. However, it’s all extremely tightly focused around adding email opt-in functionality to WordPress. We’ve said “yes” to almost every feature suggestion that fits into this narrow focus. And we’ve said “no” to many suggestions that lie outside of this scope.