The Worst (and Most Popular) Kind of Product Idea

March 17, 2013 , 28 Comments

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:

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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.

Value Example

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.

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About ​Shane Melaugh

I'm the founder of ActiveGrowth and Thrive Themes and over the last years, I've created and marketed a dozen different software, information and SaaS products. Apart from running my business, I spend most of my time reading, learning, developing skills and helping other people develop theirs. On ActiveGrowth, I want to help you become a better entrepreneur and product creator. Read more about my story here.

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  • Hey Shane,

    Lot of great points in this video. I couldn’t agree more on how all on one products are a bad idea.

    One of my favorite marketing books is the 22 immutable laws of marketing and this is a point that’s drilled into the reader over and over again in that book. I’t also much easier to remember what a product is for if it only does one thing.

    Anyway, awesome video :)

    – Mark T.

    • Thanks, Mark! I read the 22 laws a few years ago. While it’s squarely aimed at big brand marketing, it still contains some really good advice and I agree that it’s a good read for any marketer.

  • Your video may have touched on one of my major problems, namely, that I’m interested in nearly everything. My approach has been to segregate my interests, and I have over a dozen blogs which I don’t even bother to cross-link, and I don’t mention any of my other blogs in any of my articles.

    OTOH — Back in the days when I used to put on funny clothes and go play my fiddle at Renaissance Fairs, I noticed an interesting phenomenon. As a friend once put it, “two mediocrities make an act.” The thing we were discussing was a fellow who played the fiddle while riding a unicycle on a slack rope. He was raking in about 20 to 30 times the amount in tips that I was getting. And I was a *much* better violinist. This guy wasn’t particularly good on the violin, and was definitely not the best slack rope artist, or even the most impressive unicyclist at the fair — but he was the only one who did all three at the same time.

    I was just basically getting back my expenses. He was making a better living than I was at my “day job.”

    I guess to every rule there is a glaring exception.

    • That’s an interesting point. It may be that the same rules don’t apply when the value in a “product” is entertainment value.

      Someone combining a few mediocre skills can be entertaining (and there’s the “will it go horribly wrong?” effect). But if you are looking for a product with value in its utility for improving some aspect of your life, then a jumble of mediocrity is less attractive.

  • This time I don’t agree(at least partly) with you, Shane.

    As a customer, I’d always prefer all in one products. Because, integrating different products to my online business is a nightmare. In fact, you wrote a post about it sharing similar views:) It was about how painful it is to put your online business together piece by piece(payment, membership, affiliate program,etc.).

    For example, I’d rather get Office Autopilot/Nanacast/etc. than buying and integrating different products to keep my membership sites, affiliate program, payment processing and thousand more things in place and making sure they work with each other “correctly”. One “centralized solution” would have been a lot better! I could maintain my membership sites, affiliate program, all my products,customers, etc from one central location.

    However, you might be right if you were referring to creating and maintaining such a product as the owner/developer of the product. May be it doesn’t worth the hassle to maintain all aspects of it and focusing only one aspect might be a better strategy for a product creator.

    Just my 2 cents

    • You’re absolutely right that integrating all the moving parts can be a nightmare. Things are getting better with companies putting more care into their APIs and integration methods, though.

      The problem is that (as a consumer) I’ve had equally bad experiences with all-in-one solutions.

      Like the Infusionsoft example in the post: I would love to manage my sales/shopping cart, my affiliate program and have a CRM all in the same dashboard with the email features.
      Unfortunately, I don’t want that dashboard to be the Infusionsoft one, because their UI is terrible.

      More importantly, there are such glaring flaws in the shopping cart feature that I wouldn’t dream of using it for my business. The CRM and affiliate program are okay, but just don’t compare to competing specialized solutions.

      In my experience, being caged in an all-in-one solution that doesn’t offer good integration is far worse than having to piece together disparate services.

      Btw. I’ve also been a customer of Office Autopilot and Nanacast and ended up dissatisfied with both.

      • Frankly, I don’t have that much experience with all in one solutions such as Office Autopilot or Nanacast. Unfortuantely, I found out that they don’t support different languages, therefore they turned out not to be an option for me.

        But integrating WordPress, shopping cart, coupons, membership sites, affiliate program,etc. is a huge nightmare and almost impossible to integrate them the way I want to. Worst of all, I hate managing all my products and members from different platforms.

        When it comes to information products, yes I guess the more specific you get the better it is, but when it comes to software products I still have doubts:)

  • I cannot stop thinking of MS Office or Adobe Premier. Each is a bundle of several powerful programs, is expensive, and (in my opinion) sells good and expensive.

    I see your point in creating one best product, and I would go to a specialist rather than a generalist doctor for a medical problem, but to me, it seems there are different situations, and one should chose accordingly.

    It’s just a thought – I am not an expert but a student.

    • Packaging components up into a bundle is quite different to building an “all in one” product.

      In fact, it actually reinforces the point in question.

      Using your example: Microsoft Word aims to be the best word processor in the market. It doesn’t aim to have the spreadsheet capabilities of Excel, the slideshow capabilities of PowerPoint and the database capabilities of Access.

      You’ll notice that the marketing and branding for each of these products is completely separate – Microsoft are simply making a deal to ship their software by bundling separate entities into one package.

      Same thing with Adobe – Photoshop doesn’t do the same stuff that Fireworks does. Each product has its own focus.

      We could do the same by bundling Hybrid Connect, WP Sharely and a few other products up into one deal, add an attractive discount and market it. That’s not the same as building an “all in one” solution.

  • Hi Shane

    Yes, individual products are better for those that know how to use them all and can either get them to work together or have the time to swap between them.

    However, in many businesses fully integrated systems can often be better for them. If the purchasing, manufacturing processes, stock control, invoicing and accounts etc were all separate programs in a business then data entry would be one of the biggest tasks in the company. It’s also a big advantage to them if their Word docs and Excel spreadsheets can also operate with their main program. Not a difficult task for a programer to sort.

    So while your ‘individual’ theory is ok for many applications we marketers use, there are many people that need completely integrated programs. We seem to forget that we are the minority of users and big business is where integration is essential for efficiency.

    I created a book cover sample the other day for a client. Including the graphics it took nine different programs that I could name to create it. Heaven only knows how many programs were also running in the background.

    However, for us mere mortals I do agree with the points you were making as it applies to what we marketers do on-line.

    Enjoyed the podcast too.


    Tony C

    • Hi Tony,

      I’m just curious what 9 different programs you have used to create a book cover.


    • Hi Tony,

      Thanks for your comment!

      I’m writing this from the entrepreneur’s perspective and specifically for bootstrapping. I added a note about this to the post, after reading your comment.

      There are two points that I think are important here:

      1) If you have millions in funding, the game changes and a combination product might become a viable solution, if there’s a real gap in the market.

      2) Creating a product that does (almost) everything you need to generate a book cover would not be an all-in-one product, as I see it.
      I wouldn’t want to try and replace something like Photoshop in an integrated solution, but maybe all other steps could be combined intelligently. “Creating a book cover” is a very tight focus and very different from the combo-product pitches I often receive.

  • Hey Shane – couldn’t agree more. And the same is true of creating books. My first published book was specialised, easy-peasy to describe, had a clear market and sold over 50,000 copies in four languages.

    My current book covers every aspect of emotional and mental freedom, and really is all anyone needs. But because it covers so much territory it is almost impossible to describe and sell.

    Big lesson learned and I’m now in the process of chunking the same info into clearly defined topics for books and ancillary products that have a clearly defined market. I anticipate these being infinitely easier to sell.

    Just wish I learned all this a significant number of years ago. Still, better now than never!



    • 50K books sold?! Holy cow, that’s a bloody good result. Congratulations!

      I didn’t consider this when I was making the video, but I can see how the principle would apply to writing books, as well.

  • Well Shane, I’m sorta on the fence with this one.

    I would agree with you if the combination product aimed to paint walls, vacuum floors and lay pavers. These functions don’t make sense when combined. You might ask why it doesn’t make lunch too.

    But, if it were a product that laid flooring, sanded and finished flooring and THEN vacuumed up after itself… Well!

    I see it as a question of value proposition. There is a perpetual hope that I can ‘get more for less’ and that is enticing.

    How many ‘one button/ one click’ solutions have you seen? None of them seem to live up to the promise, that’s true enough, but they SELL, because the dream of an easy path to success is alive and well in this ‘give it all to me now’ world we live in.

    The fact that scammers take advantage of newbies by selling inferior products is lamentable but it is not proof that a truly valuable combination product can not exist that benefits developer and customer alike. Your point about cost of development is well taken though.

    Once again Shane, as always, thanks for the thought-provoking video.

    • That’s an important point. A tightly focused combination product can make sense and can be successful – but it will still be more challenging to create and manage.

      Trying to build such a product on a bootstrap budget and with little prior experience in managing a team is a bad idea and I wouldn’t recommend it to anyone.

      However, if there’s a real gap in the market for such a product and you do have the money, time and experience to see it through, it might be worth pursuing.

      I mention that I get messages with people pitching me such ideas, frequently. Mostly, they are combinations of really disparate ideas. E.g. video hosting and social media. There’s very little overlap, there.

  • Mark Bradley says:

    Great point Shane…”Too many cooks spoil the broth.”

    Are you into Martial Arts Shane? Thought I saw a set of Thai pads behind you in the video.

    • At this point I have to say I used to be into MA, unfortunately. I haven’t actively trained for a long time, apart from hitting a bag occasionally.

      Martial arts used to be my life from ages 13 to about 25.

      Need to get back into it.

      The pads are just there to add some color to the background, really. :)

  • Mark Bradley says:

    Sounds horribly familiar! I trained for nearly 9 years in JKD,was pretty obsessive about it,now I’ve turned that obsessiveness into IM…not enough hours in the day to do all the things I want to do.

    Will definitely get back to it when I can,I really miss training and the buzz it gave me physically,mentally and spiritually.

    Anyways,the pads add a nice splash of colour!

  • Shane,

    Another great post with some varied comments. For me it’s having the right tools for the job. My background before I got into coaching and on-line marketing was IT Project Management and I realized that less is more. See, software like SAP attempt to be everything and some bits of it they do well, others no good and configuration and testing is a nightmare and costly. So I would always prefer very focused products that integrates well with each other

    • Thanks for your comment, Chris!

      I’ve had the same experience. At this point, I’d much rather have specialized products with great APIs than an all-in-one solution.

  • Hi Shane,
    You only need to look at the huge successes of businesses like eBay, Facebook, Google, and YouTube to see how narrowly focused products, tools, and services usually carry the day. Even in the case of diversified brands like Apple, different products like Macs, iPhones, and iPads are all highly focused. Sometimes features are added down the line, but even then they are usually in line with the products central concept. Thanks for the great video and for sharing this idea with the BizSugar community.

  • Hi Shane,
    What you say is probably true for someone embarking on creating their first product, but many small businesses I work with offer products that can be used in a variety of different ways. The secret is to choose the strong features and benefits which have most appeal to a particular target market and orient your whole campaign around these features. It’s tremendously useful if you can launch other future campaigns around other features and benefits which your product has. The secret is to select your target market segment and then work on presenting your product accordingly. It’s important to choose your USP in such a way that it encompasses all the products you intend to produce, but your quite right when you allude to the dangers of diversification into multiple product areas that don’t correspond to your perceived core competence,
    Sorry this is so long.
    Lastly thanks for consistently providing high quality, useful video training. I always learn something new from your videos.

    • Hi Les,

      Yes, that’s an important point. This advice is mainly meant for startups and especially those on sub-seven-figure budgets.

      I don’t mean to say that all-in-one products are impossible to sell or guaranteed failures. But I don’t recommend anyone ever try and take on an all-in-one product as their first venture.

  • Hi Shane, it’s a real pleassure to follow you and to be a subscriber of your list (also a customer, I’ve got WPSharely). So, I thought it could be interesting (I don’t know) to ask this here to see if it adds to the discussion: In my country, there is a lot of opportunity for helping offline small businesses get online (all type of website services). Statistics say that only 14% of small business have an online presence. However, there are already a lot of businesses (with years of experience) offering an all-in-one solution: website design, content management, SEO, traffic and so on. After reading your post, I thought then that it would be better not to enter the market with the same business proposition, but just focusing on mobile solutions (mobile sites, rank them in mobile search and converting mobile sites to mobile apps). Specializing means quality, right? Or that could also think potential customers. So what do you think Shane? Do you think the same concept of an all-in-one product applies to website services? Or do you think it’s different? Do you think I have the right idea on trying to specialize just on mobile? Well, I guess I will know that by trying :)…Anyway, I really would appreciate your opinion, as I always appreciate your posts and products. Have a great day!

    • That’s a great question, Luis!

      I think there are two things that come into play, here.

      The first is simply “coverage”. I imagine that most offline businesses would be inclined to work with a local agency, for setting up their web presence. If this is true, then there’s an open market until a large coverage is reached. I.e. as long as there are no other providers in the same region, you can simply be the first provider and being first is always a good proposition.

      The second is specialization. As you say, specialization implies quality and that can work in your favor. If you focus on mobile, you will have a different customer base than the agencies with a more general offering. That’s a good thing, though. Most likely, you’ll have a much smaller group of potential clients, but you can command higher rates.

      I recommend you take a look at the post about minimum viable products, so you can test this idea, before making any investments.

      • Thanks for your answer Shane! So yes, there is an open market but the competition is already stablished and some with years of experience behind. Now, I could enter with the “me too + more features + better priced” attitude, but after reading your post about USP I think that would be a bad idea for 2 reasons: 1. Charging less because of competition is a race to the bottom and if I charge for the real value (probably 4 times more than what I was actually thinking to charge), prospects could say “Ah, I saw that service somewhere else and cheaper”. 2. And I think it doesn’t matter if you have more features, because they probably won’t be remembered by people because sooooo many features actually can’t be put into the USP (neither into a 60 second sales pitch) (like the example you gave in that post). People probbaly will say “Yeah, they charge more because I think they offer some other things…but anyway, this other one is cheaper” and the decision will finally be based on the price, which isn’t good for me. However, I think that if I enter that same market but appearing first as an specialist on mobile marketing (which I think right now it’s more important for offline businesses), then I could have 3 advantages: 1. Charge the same or double of what I was going to charge for the other service and for less than half the work (easy to set-up and release, which would be great with the concept of MVP). 2. Way easier to create and communicate the USP. 3. Way easier to upsell existing customers on the other more basic website services to expand their online presence (they now trust me, so now they don’t have to choose between multiple alternatives offering basically the same). So, if this holds, then it could be a great example of “less is more”: my service was simple, direct, without too many complicated features that people needed to understand and then, once a customers, the upsell process on the other basic services (but also with more features and, for them, more complicated website services) would be easier. It could be a way of beating competition without directly competing with them, just because I specialize in one feature that some of them don’t offer and those who offer it, well it just goes totally unnoticed between all the bunch of features they offer…but hey, it sounds as good theory, right? I look forward to your opinion Shane, which is always very appreciated and listened. Have a great day!

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