No product lasts forever. Consider yourself lucky if your original product is still in the market for five years– we call it a platinum record if it reaches the five year mark. Some of the products we have developed have been in the market for decades, including the Aeron Chair, which is still being sold 25 years after it first came out. How do you stay on top of the game and keep consumers coming back for more from your brand? An S curve is an oft-used tool in product management and project management, a graph that tracks the growth rate of your sales so that you can align your business development plan accordingly and consistently beat the competition. Learn how to future-proof your business by looking at your product growth S-Curve, and knowing when exactly you should start planning for the next big product to launch.
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We are going to talk about stacking S-curves. If you’ve never heard that term before, it’s a little bit of old school product and project management terms. It’s about business growth and business development, and big Fortune 100 companies pretty much use this process. It’s a generalized practice that they learn about stacking S-curves. We’re going to use it here to talk specifically about your product lines. We like the way that a good friend of ours, Ken Courtright, and fellow podcaster of the Today’s Growth Podcast talks about stacking S-curves in terms of proofing your business for the future. Future-proofing your business is the best way to describe it, but first a quick definition on what an S-curve is. An S-curve is that shape that you might see on a graph. Some people call it the hockey stick at the beginning of it. Eventually an S is at the top and then you start to come back down again. For many, that can be a quick plummet depending on innovation and technology or the movement in the consumer retail market. We definitely want you guys to understand that and what we’re talking about is stacking them so your growth keeps happening.
The stacking S-curve stories Ken’s way is about how every product has a life cycle. It has a beginning, middle and an end. Usually the way that product works first, it starts to take off and it’s slow to start. You’re talking about that hockey stick, it’s going up. Eventually, it plateaus and it falls off. That’s the S. The idea is that before your product at the top starts to fall off, in fact, when you’re in that hockey stick growth, when you’re climbing mid growth and it’s taking off right then while you’re fat, happy, excited and everything’s going right is exactly when you should be starting the next product to stack on top of that one. That’s why it’s called stacking S-curves. When the time that product takes off and it’s starting to fall off, your next product is being launched and going up, launched on its growth pattern. You’ve gone through that early stage part already, and that’s what we’re talking about. How soon should you start those things? This is Ken’s story about how this came about.
The story goes back to the 1950s and one of the companies that was a staple of American manufacturing was Corning. They were known at that time for making Pyrex bakeware, those big, rectangular, square, round pie dishes, all types of different dishes. They were the manufacturer making them. They have pretty much a lock on the business until patents expired, other competitors see they’re having success. It’s going to sound familiar to a lot of you Amazon sellers who launched things and have others come and compete and started to take away some of your market share. Maybe even some of you are making Pyrex knockoffs in a way. All of a sudden, they had this incredibly steady business. One Monday morning, the CEO comes in and nobody’s there. Nobody’s in his office. He’s like, “What’s going on?” Forever and ever, every Monday morning they had a sales meeting, reported the numbers, all things we’re doing great, things were growing a bit. For the first time in the company’s history, they had a decrease in sales. It was significant from all this competition selling bakeware like they had that they’re not the only guys in town anymore. They were going to be in trouble fast and having to lay off people. It was a short period of time, something like they had six months cash flow or something like that. It was really small for company of the size that they were.
They ended up having a meeting and realized, “We’re in trouble. We can no longer rest on what we’ve known. What’s worked in the past is not going to work going forward.” They realized that they have all this equipment. They had an executive meeting and then they had a meeting in the in the warehouse floor, the factory floor, with every employee. They decided, “Everybody’s future rides on this. Let’s get all the heads on this that we can. We need everybody to put their heads together and figure out what additional products we can make with the same materials and same equipment that we may think we’re out of in the same labor that we can make nights and weekends because we’ve got to keep making what we’re making during the normal shift during the day. What else can we make? What are the products we make with this equipment, this material, nights and weekends that will give us a new product, a new revenue stream? By the way, we have about 30 days to figure this out or we won’t be able to get it online and selling in time before we have to start cutting back and laying people off.” All the employees did eventually put their heads together and they came up with some ideas. That idea ended up being for fiber optic cable which is made of glass and out of the same glass that bakeware was made of; it’s just a different format of material. They could make it and now it’s one of the biggest product lines that that company makes. It far eclipses the bakeware. There are always some lessons in that, not to just feel that you’re safe where you are and your product is going to last forever.
No product lasts forever. If you get a home run of a product, you might get six years out of it. You might get ten years. We were talking about this recently, Tracy. One of our daughters had a birthday recently. She got a birthday gift and it was the magic eight ball. That one that you ask a question, you shake it, turn it over and it says maybe, no, or yes, r all these different answers.” I was realizing, “That product we had that when I was a kid.” Rubik’s cube is another one, and the slinky. These products have been around for a very long time, but there are few of those that do last a very long time. The Aeron chair, 25 years and going. Most products that you would sell on Amazon or that we might buy on Amazon have a short life. It can be one year, it can be less than a year. It’s a very fast-paced marketing world we live in. In our consumer retail market, if you get five years, you are really lucky. That’s a home run. It’s like platinum record. That’s what we call it when you get past five years on something.
While it is selling and doing very well, that’s exactly when you need to start introducing the next product. You can’t wait until you’re starting to see the sales fall off. If you wait that long, you’ve waited too long and your entire company is in jeopardy. That’s the lesson of Corning and the stacking S-curves. I know that most of us here on Product Launch Hazzards are not manufacturers. Corning is an example of a manufacturer and says, “What other products can we do with the same equipment we’re making things with today?” and all that. You don’t necessarily have to do that because you may not be making it at all, but you do need to figure out what the next product is going to be that you can bring to market. I would say the most important part is what markets do you have access to that you know you can reach? What products would sell to that same market?[Tweet “While it is selling and doing very well, that’s exactly when you need to start introducing the next product.”]
That’s where we start. There is an exception to that and that’s if you see it as a very unstable market. In other words, if it’s a market that had already been in decline and you were tapping in the tail end of it and you happen to sell a great product on it, that’s not the most viable market in that place. Some examples of that might be if you were doing certain types of materials that are not in favor right now or not on trend and things like that where most people don’t want to put BPA into their mouths anymore.
If you’ve got products and things that are in serious decline because of a social trend that’s going on or a mega trend that’s going on, then rethink that as the solution. For the most part, what we find is it’s a whole lot easier for you to go in and say, “I have this channel. I have this access to a market.” If that is, I’ve already been launching pet products or juvenile products or all of these things so I understand the consumer better. I have access to many of them because I’ve done either a direct response campaign or I have a list of people. I know how to ask them the questions that I need in market research. I know what response I can expect is good. I know how to advertise and market to them. These are things I don’t have to learn new. I’ll be able to quickly assess whether or not the new product has viability and will be successful within that market. That’s the part that we want.
You’ve already taken this very long trail up on your products. The next one has a much shorter up quicker because you don’t have to learn as much about the market. You don’t have to learn as much about how to market to them. You don’t have to learn as much about what they like and don’t like. If you can cut that, then your S-curve can go faster and you can keep hockey sticking up until that product loses interest instead of the market. That’s why we suggest that you start from there. It’s the fastest path that makes it the easiest. You start thinking about a little bit wider diversification, like the example about with fiber optic cable being outside of it. A lot of times we get in pet products to like, “I make dog stuff. I’ll just make a cat version,” and some of that is okay but then you do the research and you discover that cat products sell about 60% less than dog products do. It’s not the best idea at that point. You’re not expanding your market share tremendously. Might not be a bad idea, but it might not be the best one either. You have to start looking at that from a broader place.
Another thought it might be, let’s say you have a supplier that is currently manufacturing one of your products from. Let’s say you have a supplier, you’re making something out of silicon. That’s a popular material these days around the kitchen and other places as well. You have one product that’s selling there. The other option might be if you don’t think that you can come up with another product that would appeal to your same market, you can still get an advantage by making a product that would sell with your same supplier maybe, even if you are forging a new market or a tangent market. You have a supplier that’s a known quantity, especially if they’ve performed for you on time. They like you because you’re successful for them. They’re happy working with you and collaborating with you. That helps too. Maybe you have built a long history with them and they’ve given you better payment terms and you have an account with them. There may be a financial advantage to continue to work with them. There could be other reasons to try to determine, like Corning did, what other products could we make and import from the supplier. That takes care of a whole lot of potential unknowns and risky factors. Access to the market is the most important thing. I like to get new products to the same market.
If you can combine those two things, the access to the market and a strong supplier relationship, to create something unique and new out of that, you have a higher likelihood for a winner. You’re not going to have the hiccups of, “How do I sell this? How do I get this going?” You’re also not going to have the hiccups of, “Is this going to be a good supplier? Are they going to deliver on time?” You’ve got all of those things so it’s going to make that hockey sticking goal faster. That’s a benefit as well. When you add in the uniqueness, thinking about how you come from making bakeware to fiber optic, big jump and totally different market but completely innovative and a tradition of innovation that they had going on. They kept that with their new product.
Anyway, we have these things ongoing where you want to take these S-curves and make them go quickly fast, but you don’t want to take what I call the shotgun approach. That’s what I want to end with here. The shotgun approach is what most people do. They’ll go to their suppliers and they’ll go, “What else have you got?” They’ll take anything and like, “What else is selling to this market?” The cat products and they’ll just bring them in and they won’t have any analysis. They won’t have any judgment calls. They won’t be making any consumer product research calls on it. You can at minimum do that, but also you would need to make sure it has brand integrity. You have been building a brand, you have a great product in that brand. Does this meet my criteria of my brand integrity of the value that I want to provide, the uniqueness that I expect that I am going to be providing to my consumers? Does this deliver on all this or is this another skew? That’s where they fall off the path because having a shotgun approach and then seeing what works distracts your business from a complexity standpoint and usually from pretty much every time I’ve seen it, and it doesn’t matter whether it’s a big brand or a small brand, we end up with the lowest profitability possible. It’s not smart growth. We want to narrow in and grow on the things and stack the S-curves on the things that are going to add the most value to our business, and so we need a proper assessment of that.
That’s why we recommend you start early. That’s why as you start to go up, that’s some of your early money spend, not on big inventory, not on any of that, but on the research and design side of things, coming up with what’s new. If that means allocate a resource to it, higher affirm, bring one person in to work on this, make it their job though. We find that organizations who try to do what Corning did in this case, it’s difficult because they have so much going on in their organization that is difficult for them to not be fighting fires and to be able to concentrate on this new development and proper evaluation of it. You need to have someone on that research job, otherwise it’s going to be a nights and weekends thing for you. It will start to fall off and the schedule will fall off.
The real big message and lesson is we don’t need to beat a dead horse. The reality is you cannot wait until the product that is working stops working or starts to show any signs that it is no longer going to work before you figure out what comes next. Otherwise you’re going to be in and out of business quickly. This is about your own business growth, future, even survival. You’ve got to be thinking ahead and working ahead and prioritizing that, not making it an afterthought. Another way we refer to it sometimes is the marketing rollercoaster. Some people, most of yourselves, I’m sure, have a steady stream of marketing. A lot of businesses will spend money on marketing and then they get a lot of sales, they get a lot of business, and they stop marketing. All of a sudden, you are losing money so they start marketing again. It takes a lot longer to recover. The series of roller coaster and old seesaw effect, and you can’t do that. This has to be a consistent and constant thing because that’s how you’re going to grow. It’s how are you going to build a powerful brand and a powerful company that you can sell, get acquired, or somebody’s going to want to license your stuff. There are lots of options available to you as long as you have that consistent growth.[Tweet “There are lots of options available to you as long as you have that consistent growth.”]
You want to look at it also from a balance sheet perspective and from a profit and loss perspective. If you’re constantly growing and there isn’t that big variability, you are a better risk. It means that you’ve got a formula that works that is continuing to grow and you have a continual residual profit ability that is a value to someone. Where you go through the ups and downs, you have lots of hit and misses is how they look at it. “Maybe they’re at the height, maybe they’re not. I’m not sure right now.” It makes you less viable for a buyout or a license. These are some of the things that we’re also considering as we go through and do this. The last thing I want to mention is that as you’re stacking S-curves and doing all of this and thinking about the growth in your product line, it is a matter of what comes next because volatile things happen in the marketplace. Wars happen, tariffs happen, terrorist attacks, 9/11 happened in one of our businesses. These things can also occur. Factory fires have happened. We’ve seen these things happen.
When you diversify too, think of it as a diversification plan. You maybe don’t want to do that until you get five or six products in your category before you diversify into another category. Be thinking about that as you’re stacking. Those things are alternative streams of income. You want to think of them. Those things are important too in terms of continuing that growth and profitability as you go on. First, you’ve got to get a strong base in the category that you’re in, in the market that you’re in, in the access of factories that you have access to. Get that going and get that strong, and then you can look farther out innovation and diversification. Get that base going first.
Thanks again. You can always ask us questions about anything. It doesn’t have to be related to the topic we just talked about. Please do that and check out the next Office Hours that are coming up by clicking the Office Hours tab on your Product Launch Hazzards membership site.
About Tom Hazzard
An inventor with 37 patents and an unprecedented 86% success rate for consumer product designs, Tom Hazzard has been rethinking brand innovation to design in success for over 25 years. Tom’s patented innovations provide entrepreneurs and businesses of all sizes a system to spread their brand, grow valuable consumers, and diversify into higher converting revenue streams without a lot of time, cost or effort. Tom is co-host of the Forbes-featured fast growth WTFFF?! 3D Printing podcast as well as host of two new podcasts, Feed Your Brand & Product Launch Hazzards borne out of his core business, Hazz Design, where he has designed and developed over 250 products that generate $2 Billion in revenue for retail and e-commerce clients.