Making the Most of Legacy Products and Platforms
When addressing a new customer problem, or need, start-up companies often have an advantage in that they can define and build a solution from scratch. Tailored to the specific problem. Finding the right solution may take several iterations to get to a “Product-Market Fit” but these small, nimble organizations can move quickly and adapt to new information and a changing environment with little overhead.
Large companies were once small companies and have often achieved great success through successive levels of continuous innovation. However, at times this success can make it difficult for some organizations to maneuver and capitalize on new growth opportunities. So how can a technology company manage legacy product portfolios and solutions to take advantage of new growth opportunities?
Understand the Customer Problem – To start you need to fully understand the problems your target customers are trying to solve, the market dynamics, value drivers and competitive environment. Carve out a unique position for your platform where it can help address the customer need. Identify your competitive advantage(s) - performance, price, features, ease of use, delivery and support, reliability, brand etc.
System Integration – As opposed to selling a specific product or technology that is a component of the solution, explore ways to integrate your offering into a more comprehensive, system level solution. This can save the customer time and money which can translate to more revenue for your piece of the solution. A system solution might be developed by working with third party partners and resellers, or through internal support efforts that help customers develop a more complete solution based on your product.
Pricing – Experiment with pricing in adjacent markets, both higher and lower. Lower pricing might help uncover new high-volume opportunities while other markets might be able to support a higher price point and better margins for the same technology.
Smart Modifications – Due to the characteristics of the legacy platform, or market size constraints, significant modifications may not be viable from an ROI perspective. But a few modest modifications or improvements – packaging configuration, interface options, other features, cost reductions etc. could make a significant impact on fit and relevance for a new market.
Know When to Move On – At some point a legacy platform will reach the end of its useful life. Existing markets will decline and it will be difficult to find new opportunities with a strong value proposition for a specific customer problem. At this juncture larger, more strategic investments, possibly M&A, will be required to develop new growth engines in existing or new market opportunities. These decisions are difficult, and inherently more risky, but if executed correctly can yield significant returns and new growth opportunities for years to come.