Why your business strategy is not defined by what you make
Many projects I work on begin with this rough scenario:
Company launches product – sales grow – sales start to plateau – company doesn’t know what to do next
The most obvious solution in this situation is to find some sort of “hack” (generally via marketing) to restart growth, but often this isn’t a realistic option. I strongly believe that most products have a “natural” size that they will grow to without effort, and then simply stop, and cruise at that scale indefinitely. Just like how a mouse is the size of a mouse for a reason, so too can we say the same for a product. It fills a market gap, and once filled there’s nowhere left for it to go. Sure, contextual conditions might change, expanding the gap and thus growing the product – but you don’t control that. Chances are that once growth begins to slow, you’re done.
Now clearly this is a big problem for a lot of brands because they make the mistake of conflating their company and their product. When asked what they do, they will say that they “make X”, thus completely tying their fate and business strategy to the performance of X. If X plateaus, then so does the business, leaving them spinning their wheels.
Clearly, this isn’t ideal, so let’s get this straight right here: your product is not your company.
The correct way to understand the relationship between these two things is like this:
- The company is an organisation that specialises in providing a certain value to the market.
- The product is a tool they use to deliver that value.
Understood this way, we can see that far from being the centre of the business, products are actually somewhat incidental. You might be able to deliver your value to the market in dozens of ways, represented by dozens of products, and in principle, these can come and go without actually changing the core nature of the business or business strategy.
Airbnb is a tidy example of this, hence why I’ve referenced them here a few times. Their main product is of course renting out people’s rooms and apartments. However, the actual market role of the business at large is “helping people feel like locals when abroad”. As you can see, their core product is a manifestation of this, but so are their secondary products – which include alternative tour experiences run by locals, dining in people’s houses as well as staying in them, and various other ideas they’ve toyed with over the years.
It’s incredibly unlikely, but theoretically, in 10 years’ time Airbnb’s core product may have completely disappeared but with the business still ticking along quite happily – still “doing the same thing”, just doing it through a different selection of products.
The bottom line then: the value stays the same, the manifestations change.
What this means for brands who have plateaued is that, although there might be a way to restart growth on their core product, their priority should be understanding the true market value their product delivers and then finding other ways to deliver it. This high-level business strategy, if correct, should instantly yield:
- New product ideas which are aligned with the existing one
- New applications of the existing product
- New category plays
A lot of my projects boil down to this challenge.
I’ll give you one example in MOJU, which I was delighted to learn now have not one but TWO products in the UK’s top 5 grab-and-go juices and smoothies.
MOJU’s product innovation – as you may be aware – was “juice shots”: highly concentrated doses of certain functional plants in a shot format. This was a great idea, and thus achieved rapid organic growth, but it didn’t answer the fundamental question: what does MOJU actually do?
Clearly, the answer is not “make juice shots”, because:
- 1) this leaves them with nowhere to go beyond that, and moreover
- 2) doesn’t actually speak to the value the shots deliver.
Our main insight on the project was realising something obvious but easy to miss: juice shots aren’t actually juices. (Yes, I know the data reported above frames them that way, but that’s just supermarket category bumf, not a representation of the real world, as explained here). What I mean by this is that although juice shots are “made of juice” people do not buy them as substitutes for regular “drinking juice”. Instead, they actually buy them as substitutes for pseudo-medicinal products like Berocca, Lemsip, energy drinks, and the like: a loose category we labelled “performance products”. Now the thing about that category is that it is extremely chemical, and unnatural – which made MOJU an outlier proposition: the only all-natural performance products brand.
This then became the overarching value proposition of MOJU the company, “natural performance”. This simultaneously reframed the existing products, thus helping them to continue their growth, as well as providing a blueprint for how MOJU can expand in the future, attacking all those non-juice sub-categories which comprise the “performance products” space.
In a sane world what I’ve just described above would be described as a company’s “purpose” – but as it is that’s come to mean something different, and thus most businesses are left with very little idea of what they do at a company level.
So, if you want to open a path to continuous business growth, don’t be one of them. Know how to say what you do without leaning entirely on the product you do it with. You are not your product; you’re something much bigger.