Why Wedges Work
Razor sharp product market fit
Leveraging a narrow product strategy enables you to focus all your resources in one place, making it easier to create a product people love. It may not be useful to everyone, but those who like it will love it.
Most startups have limited resources, making it challenging to build a wide product that everyone will love. If you’re going wide then you’ve got to have strong assumptions that lots of basic functionality is the route to PMF.
Selling to existing customers is cheaper than acquiring new ones
If you can penetrate the market with a razor sharp PMF that means you now have customers. And existing customers are much easier to sell to than new ones.
Did you know that $1 of new revenue costs:
- $1.18 from a new customer
- $0.28 from an up-sell to an existing customer
- $0.13 from renewing an existing customer
if you can acquire a large market cheaply and easily with a narrow product offering then it can make the “land and expand” strategy a powerful one.
A simple value proposition is easier to sell
A simple value proposition is creates less cognitive friction. A simple value proposition usually means a lower risk purchase. If your product is simple and low risk customers will commit more easily.
Wide means shallow
“When you’re building a product that’s 9 inches wide, in reality it’s only going to be 2 inches deep” - Dharmesh Shah Co-Founder of HubSpot
All-in-one strategies usually fail because they don’t solve any one problem well enough compared to the incumbents, making it harder to rip out existing tools.
In the case of HubSpot however, having multiple marketing tools in one place was exactly what the market wanted. Each individual product was no better than the incumbents, but the incremental value of having it all in one place outweighed the value lost from subpar functionality.
Foregoing functionality rarely works in an enterprise sale, the simplicity card is more likely to work in an SME segment.
If you’re going to go wide, then ship quick, and don’t over complicate the product. Speed-to-breadth must be your core focus.
The worst thing you can do is go wide and try to go deep at the same time.
You must choose between them.