Avoid a fixed allocation of resources between core products and new initiatives. Instead, treat the investment mix as "seasonal." Periodically and purposefully reassess the balance based on the most pressing business needs—whether it's stabilizing the core for large customers or pushing aggressively into new markets for growth.
Related Insights
Project-based companies operate on a cash flow mindset, accepting any custom work that brings in immediate revenue. A true product company uses an investment mindset, strategically saying 'no' to short-term revenue to invest in building a scalable asset that can win a market long-term.
The tension between growth and profitability is best resolved by understanding your product's "runway" (be it 6 months or 6 years). This single piece of information, often misaligned between teams and leadership, should dictate your strategic focus. The key task is to uncover this true runway.
Instead of choosing between Product-Led Growth (PLG) and Sales-Led Growth (SLG), companies should treat them as a portfolio. Test both motions and continuously invest where you see incremental ROI, rather than treating them as mutually exclusive strategies.
In a multi-product company, horizontal teams naturally prioritize mature, high-impact businesses. Structuring teams vertically with P&L ownership for each product, even nascent ones, ensures dedicated focus and accountability, preventing smaller initiatives from being starved of resources.
Before a major business pivot, first identify what can be let go or scaled back. This creates the necessary space and resources for the new direction, preventing overwhelm and ensuring the pivot is an extension of identity, not just another added task on your plate.
To build a successful product, prioritize roadmap capacity using the "50/40/10" rule: 50% for "low delight" (essential functionality), 40% for "deep delight" (blending function and emotion), and only 10% for "surface delight" (aesthetic touches). This structure ensures a solid base while strategically investing in differentiation.
Achieve stable, linear growth by combining multiple business lines that have opposing cyclical natures. Instead of cutting a volatile but profitable unit, add a counterbalancing one. This "Fourier transform" approach smooths out revenue and creates a resilient, all-weather business.
To prevent rigid plans that break, maintain consistency in your high-level strategic pillars for the year. However, build in flexibility by allowing the specific tactics used to achieve those pillars to change quarterly based on performance and new learnings.
A single roadmap shouldn't just be customer-facing features. It should be treated as a balanced portfolio of engineering health, new customer value, and maintenance. The ideal mix of these investments changes depending on the product's life cycle, from 99% features at launch to a more balanced approach for mature products.
To balance execution with innovation, allocate 70% of resources to high-confidence initiatives, 20% to medium-confidence bets with significant upside, and 10% to low-confidence, "game-changing" experiments. This ensures delivery on core goals while pursuing high-growth opportunities.