Scaling a B2B product by saying no

I recently had lunch with a former colleague and friend who is now CPO at a large B2B company.

To succeed, their product needs to have a lot of customer integrations.

To scale the company and increase the pace of product development he pointed out one important thing as a success factor: guiding the product organization to say no to building anything that didn't help at least 10, and preferably 100, customers to use the product.

That meant that everything they built had at least a 10x factor back from the investment.

The power of multipliers.

And if a specific customer really really really wanted a specific custom solution only of interest to them, a consultant team could build that as a separate layer.

Billed by the hour for development and maintenance.

Apparently not many customers insisted.

Additionally...

Richard Mironov calls the opposite Customization Debt, and writes about The Slippery Slope of Sales-Led Development:

I see product companies succeed by shipping standard products, and selling those identical bits many times to many customers.

I see professional services companies succeed by bringing in custom projects and marking up their developers’ time.

But sales-driven enterprise software companies often stumble into a mixed model: charging too-low product prices for semi-custom work that consumes more and more of their development team until they can’t support any new customers.

Jason Fried from 37signals has an alternative take on the same idea:

If you have a small handful of customers paying you significantly more than most of your customers, you’re no longer a product company — you’re actually a consulting company working for those big payers. You’ll do what they say — often at the detriment of your smaller customers — because the big companies pay the big bucks.