Painkillers or Vitamins?

Fundamental to every new product is whether you are a painkiller or a vitamin. Put simply, painkillers’ are those that solve an acute and immediate problem for your customer where a vitamin tends to be a feel good improvement of an existing line or service. We could argue back and forth about the over use of pain killers in today’s world vs. preventative and holistic life methods, but that wouldn’t be a great use of this particular discussion. What we can do, though, is review the relative merits of this approach as we define our solution and determine if we should be focusing on one versus the other. I’ve broken this down depending on the stage our business is in currently to review the two different types of product classifications and draw some conclusions that I believe will help any new product or service as a first offering or a new product in a mature business focus for success.
Pain Killers:
As mentioned above, this is the solution you go to when you have a headache. There are typically moats and barriers to entry for other participants (ex: brand trust, patents, technical expertise), which provide time to help any new product succeed. Conversely, the challenge here is also the amount of branding effort to differentiate the offering, credibility building that must be done to prove your solution works and development investment to break through to the solution. Depending on the maturity of your business, there are some nuances you should consider when approaching your “pain killing” solution:

• Startups should only be focused on painkiller developments. This is the only way to differentiate in their chosen field and attract VC money to feed the burn rate of the product offering. With a clearly defined target market, customer segment and sales channel the only focus should be on the final design and delivery of the solution. Focus on the end state and the path to get that first innovation out the door!
• Small companies, on the other hand, are going to need to allocate resources being mindful of the balanced between their existing product or service growth with the investment required to deliver the next product. Move too fast away from something that is paying the bills and you risk alienating your existing customers as you focus elsewhere. Don’t invest in the next S curve development and you risk becoming the latest one hit wonder. We’ll cover the S-curve conundrum in a different post. For now, you need to ensure you really look deep at the opportunity cost associated with developing the next painkilling product against spending time nurturing your existing customer base with new loyalty building features or improved services.
• A midsized company is one that is now prioritizing across multiple funding opportunities jockeying for position as the business becomes more successful and complex. Each product or service is going through a different phase of maturity potentially in multiple market places and sales channels all needing resources to maintain velocity.  The best recommendation I can provide here is to plan for success. You must allocate a portion of your resources into new product innovation to develop your next pain killing idea. Consider this a sunk cost to the business that is untouchable. I have never had a real problem finding 5% or 10% efficiency in my existing product line as they mature. This can be through service cost negotiation, product BOM costs for physical goods to overhead costs related to office space. Everything else must be on the table except the product innovation painkilling funding engine or you will not continue to evolve your growing business.

Vitamins:
As children, we are told to take our vitamins. They will help build lasting health and support you as you grow. If we all just listened to our mother! From a product perspective (hardware, software or service) a vitamin is something that represents a feature improvement or service offering tweak, not a new platform or vertical market. With this understanding, let’s discuss the relative merits of taking our vitamins based on the relative business maturity for our operation:

• Based on our definition of a vitamin, startups should not be devoting resources to vitamins. Vitamins are about feature tweaks for existing customers of a product already in market from the startup perspective. A startup is trying to raise their profile in the market, attract funding with great innovation and deliver a killer solution to a customer. None of these are vitamin things. Given a dollar, it all goes into the caffeine budget for the designers or service providers innovating and providing deeper moats!
• Small businesses need to absolutely be investing in vitamins based on our earlier definition. We typically have a limited number of products/offerings in our mix for customers and digging for gold in defined spaces with existing customers is a great return on our investment at this phase of our business maturity. Consider the vitamin idea a tool for building loyalty and relationships with your existing customer base. These early adopters of your product or service are going to help you refine your product through feature improvements that will allow you to grow to new markets and segments down the line as well as pay for those painkiller developments we need to consider as we mature.
• Medium sized businesses really need to carefully consider the tradeoff’s of investing in vitamin type feature improvements vs. a long term investment pipeline as discussed earlier in our painkiller section. There is a clear effort segmentation that needs to be differentiated internally. Your best sales person who got you your best client is going to scream loudly that the most important thing to do is a feature tweak today for your best customer and she may be right. As a business owner, you need to balance your existing customer loyalty efforts with new customer acquisition, product line investment and vertical spaces for tomorrow.  Don’t lose sight of the next innovation by continuing to spin your wheels polishing your existing product.

All told, there is never an easy answer for a business owner to decide on whether a painkiller or vitamin strategy is the best use of precious resources. Only you can decide. My recommendation is to start by taking a hard look at what phase your business is in today and consider the opportunity cost of the resource investment with different filters.
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Don is a new product development executive with 20 years of experience delivering great solutions to customers globally. If you would like to learn more about how we can help you with your product or service, please contact us at info@prismaticglobal.com or visit us at www.prismaticglobal.com