All-in-One Product Ideas Are Difficult To Execute. Here Are Reasons Why.
Bringing several smaller software products together to offer a powerful all-in-one product often sounds like a great idea. However, if you are a startup to execute such an idea, here’s what you want to know about all-in-one product challenges for B2B offerings.
“All-in-one product” as a marketing term usually refers to the combination of multiple features or products bundled into a single offering.
Think of a “Swiss pocket knife.”
Here’s a metaphor I heard among B2B companies:
“We are going to combine features X, Y, Z, and we will become a Swiss pocket knife of market category ABC!”
“The all-in-one offering eliminates the need for customers to go to multiple vendors, and we can offer the added value of a tightly integrated solution.”
That’s the example of abandoning intuition in favor of an all-in-one.
I understand the excitement of B2B startups offering “Swiss knife” software. It’s easy to get charmed by the popularity of successful all-in-one consumer products such as multi-purpose shavers or Swiss knives.
However, consumer bundles are usually designed for a single persona; B2B bundled offerings are more likely to combine solutions for multiple personas or use cases.
A Swiss knife serves a backpacker, business bundles usually try to please users from different parts of the organization. If you’re a startup with limited resources, it’s a big bite to build a valuable solution for multiple personas. Here’s why:
You lose focus on what’s essential
Combining three products into one means understanding three problem areas and designing, developing, and improving three solutions.
You spread yourself, or your small team, too thin. To keep juggling between three problem areas, you lose focus on what’s essential for your business. You’ll start making compromises on quality and limit your options for competitiveness.
You lose the ability to compete on value
Once your focus is diluted, how will you compete against the top best-of-breed vendors in each problem area? They’re likely to have teams of the same or greater size focusing on one problem area while you’re chasing three “priorities”.
Eventually, you lose the ability to keep up with the top players in each category. You lose the ability to compete on value, so you can only compete on price.
Small profit margins will restrict business growth
Competing on price results in smaller margins. Low margins will restrict your growth and pull you into a vicious circle. With fewer resources, you’ll find yourself stretched even thinner, losing competitiveness with each passing day. Before you know it, you’ll be left with a subpar service that barely stands out from the crowd.
You make your target market even smaller
Combining three products into one may seem like you can triple the market size by solving three customer problems simultaneously. Let’s look at the Venn diagram representing your realistic addressable market.
When you bundle products together, you’re limiting your market to only those companies that face all three problems at once and want a single solution. Plus, you can only attract companies that favor lower prices or convenience over quality, making your target market even more petite.
You will make your product harder to sell
Selling an all-in-one product in B2B is tougher because each part may appeal to a different champion who favors the solution and budget holder.
For example, selling a suite that combines a Software Licenses Manager, Vacation Planner, and Desk Reservation System would require approval from IT Admin, HR Manager, and Office Admin.
Each of these people may have separate budgets and approval processes, making it harder to sell the product compared to selling each part individually.
Perilous market positioning
When it comes to positioning, you have two options to position a bundled product idea:
- Create a new market category, and
- anchor yourself towards the existing market category.
Suppose you create a new market category, like calling a product that combines a content management system (CMS) with extra marketing features a Digital Experience Platform. In that case, you face the challenge of educating the market and delaying your first sales.
Prospects don’t know whether they should be looking for some Digital Experience Platform. You have to spend time and resources to raise awareness about the new category first.
On the other hand, if you anchor your all-in-one product to an existing category, like selling a CMS with added marketing features, you face the challenge of competing with established players in the market. Your product may be perceived as a limited option with extras that may not be desired compared to the competition in the existing category.
In either case, positioning your all-in-one product becomes a hurdle.
Identify the most promising part of your bundle
Be mindful of the challenges associated with all-in-one product ideas. Consider whether you are in a position to overcome these challenges.
If you’d like to minimize these hurdles, take the whole all-in-one product idea more as a vision, a future you could achieve one day.
Identify the most promising part of your bundle that addresses the pain points of one role only and focus on solving these customer problems first.
This will be the initial market you’ll land on. Only expand your solution once you have steady, repeatable sales for the given market.
When you are a startup or a small team entering the market with a digital all-in-one product idea for a B2B market, pay attention to the challenges that an all-in-one software bundling brings in, and evaluate if you have the resources to tackle them.
If not — the smart strategy is to scope your solution for one user role only.
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Special thanks to Tremis Skeete, Executive Editor at Product Coalition for the valuable input which contributed to the editing of this article.
