In life, as individuals, personal growth requires us to leave our comfort zones to try new things.
For instance, I’ve begun to play tennis. I’m terrible at it, but I enjoy the feeling of accomplishment from (slowly) improving at it. Beyond sore knees and wounded pride, there’s really no downside or risk.
In technology business, as leaders and fiduciaries, sometimes it’s best to be a bit more cautious.
A customer recently approached us about assisting them in developing a software product complementary to their existing software product. They’re a small, successful, growing business with a fantastic product in a growing market.
Naturally, their leadership is constantly seeking new opportunities for growth and expansion.
In this case, I recommended against their developing a new product.
Their current product still offers tremendous opportunities for innovation and increased functionality. A new product runs the risk of diluting that innovation. Although complimentary, the application into which they were considering expansion requires a radically different set of skills and knowledge than their current. Although they can leverage their existing customer base, they will not be able to leverage their existing technical talent.
I also saw no spark – nothing that gave me the feeling that my customer had a newer, better, cheaper alternative that would give them the competitive advantage if they were to develop this new software.
My advice to them: stick to the things at which you excel
Partner, integrate, or acquire to expand your product offerings into things at which you don’t excel.
We live in a containerized world of microservices, middleware, and APIs. Developing an open integration platform to interoperate with the best of breed applications already on the market is likely a significantly less expensive proposition, albeit perhaps less lucrative, than creating your own best of breed application.
By spreading the wealth, you also distribute the risk. Plus, you empower your customers to choose their own vendor, and reward them for choosing you, because your software works with them all.
If one of those vendors turns out to be a far better fit than the others, you can even explore acquiring them with all the development money you saved.
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