507: Navigating the second product problem – with Greg Coticchia

To survive, your company must sell multiple products Watch on YouTube TLDR In this episode, I’m interviewing Greg Coticchia, an experienced CEO and product management expert. The discussion focuses on the challenges and strategies involved in expanding from a single product to multiple products. Key points include: * Why companies have to expand to multiple products to survive * The importance of portfolio management in product development * Cultural challenges in product expansion * Strategies for building influence as a product manager * Lessons from successful companies like Apple and Netflix * Practical tips for navigating the Second Product Problem The episode provides valuable insights for product managers looking to navigate the complexities of product diversification and enhance their leadership skills. Introduction Your organization’s survival depends on its ability to successfully expand from a single product to multiple products. This episode features an in-depth conversation with Greg Coticchia, CEO of SE Healthcare and product management expert. Greg shares his extensive experience and insights on the challenges and strategies involved in product portfolio management and business growth strategies. The Importance of Portfolio Management As product managers advance in their careers, understanding portfolio management becomes increasingly crucial. Greg explains that while senior product leaders recognize the necessity of portfolio management, product managers often question its relevance to their role. The key takeaway is that understanding how projects are selected is essential for gaining support for new ideas and initiatives. The Challenge of Expanding from One Product to Multiple Products Greg introduces the concept of the Second Product Problem, highlighting the difficulties organizations face when transitioning from a single product to multiple offerings. He emphasizes several key points: * The rarity of creating a commercially successful product * The tendency for companies to equate their identity with their first successful product * The need for multiple products to ensure long-term business sustainability Greg points out that it’s extremely rare for a software product to reach $100 million in revenue. This reality underscores the importance of diversifying a company’s product portfolio to achieve significant growth and longevity. Cultural Challenges in Product Expansion One of the most significant obstacles in product diversification is the cultural shift required within the organization. Greg identifies several challenges: * Company-product identity issue: Organizations often struggle to separate their identity from their initial successful product. * Resource allocation challenges: Deciding how to distribute resources between existing and new products can be contentious. * Risk perception and management: The fear of cannibalizing existing product success can hinder innovation. Greg explains that these cultural challenges often lead to resistance when introducing new products. Employees who have been with the company for a long time may find it difficult to adapt to new directions, especially if they’ve been successful with the original product. Strategies for Successful Product Expansion To overcome these challenges, Greg suggests several strategies: Creating Autonomous Teams Following the example of Apple’s Macintosh development, physically separating new product teams can foster innovation. Greg shares the story of how Steve Jobs moved the Macintosh team to a separate building and raised a pirate flag, symbolizing their independence from the rest of Apple. Addressing Cultural Issues Recognizing the importance of having the right peop...