This article was originally published on TechCrunch+, by Daniel Lereya, Chief Product and Technology Officer, monday.com
All products have a life cycle, from development to introduction to growth and maturity. A fantastic product is not enough. To continue accelerating your company’s growth, you must go multi-product.
The transition to multi-product can be a significant revenue generator when done successfully. The proof can be seen with the best-in-class companies — from Apple to Adobe to ServiceNow — constantly adding multiple product offerings and expanding on their existing capabilities. Most of these companies make significant revenue on products that aren’t their inaugural ones and have managed to sustain a hyper-growth rate by having a multi-product offering.
We were a single-product company when I started working at monday.com in 2016. During my first few years, the company saw rapid growth as customers continued to use our software in new and inventive ways. It was amazing to witness, but it posed the question: How do we maintain this momentum? The challenge before us was as clear as the laws of nature state — the larger your customer group is, the harder it is to grow at the same rate. This is when we acted on our vision to conquer each core aspect of work with new, targeted products. In addition to adding new capabilities to our platform, we launched monday sales CRM and monday dev based on our customers’ needs. We’ve experienced growth from these new products that significantly surpass those of our early monday days, with the annual recurring revenue for monday sales CRM and monday dev growing 22x and 4x faster, respectively, since their wide release.
While going multi-product can bring your business to the next level, leaders face several challenges when taking on this endeavor — from finding the right product-market fit and establishing a go-to-market strategy to timing and more. Drawing on my experience of graduating monday.com from the one-product mold, here are three steps to ensure your multi-product journey is successful.
If the (product-market) shoe fits
We all know that finding a product-market fit can be challenging, especially when you have limited resources and must move quickly to find and serve your target market. But there are a few signals that your initial offering has a wide product-market fit, and it would be easy for you to identify your second product:
Is your product inflated with only relevant features to some of your customers? Or have you started to see different repurposes of your product within your existing customer base?
You’re ready to take on the multi-product journey if you answered yes.
For example, after meeting with some of our customers at monday.com, we recognized a trend: A large portion used our work management platform to create their own CRM solutions. They shared the business value of repurposing our platform for CRM and the alternative solutions they considered while we pieced together the commonalities of the solutions they built. Our current offering was providing our customers more value for several reasons, which gave us the confidence that a CRM solution would be successful as our second product.
The (GTM) signal is strong
Establishing a go-to-market (GTM) strategy might seem costly, but it doesn’t always have to break the bank. People often think you need to splurge on big bets to get good results, but in reality, you can test the waters without burning a hole in your pocket.
Imagine you have an idea of what your second product offering could be. Instead of immediately going all in on new features, why not tweak what you already have, repackage it, and see how it goes? Setting up a simple landing page with a few templates is like creating a welcome mat for potential users. You’re not aiming for a massive influx of sign-ups but rather looking for feedback. It’s about quality, not quantity.
A well-crafted landing page becomes the starting point to gather feedback before diving deep and committing all your resources to a new product idea.
Start small to go fast
To run fast and gain traction quickly, you must remove all the complexities of being a large company, meaning strength is not in numbers when achieving proof of concept. It helps to put together a small but dedicated team for this.
In the initial phase, consider this team an early-stage startup within your company. For example, we started with one developer and one product manager, and they experimented until they had a few dozen paying accounts. Then comes the “growth” phase, where you’ve seen the value your potential second product could have and want to advance it by bringing in cross-department expertise — from marketing to sales, product, and support. If you start with a big team before you have proof of concept, you will be slowed down, and time is of the essence when you start experimenting with a new strategy direction like multi-product.
With all that said, my most significant piece of advice is don’t be afraid to take risks.
More often than not, when leaders have a product that works with a solid revenue stream, they are suddenly afraid to try new things because they want to avoid risking their customer base. Not experimenting or trying new things is the more significant risk. Leaders at some of the largest, most successful companies weren’t afraid to take risks, and neither should you.