By Jeff Kupietzky, PowerInbox
In the software startup arena, great companies are built upon great products. Without the strong foundation of a solid product that delivers on customers’ needs, any company will struggle to get out of its own way on the road to success, despite plentiful VC investment and a deep sales bench.
But for some companies that launch product is only the beginning, serving as a stepping stone to other innovations that could have only come about because of that initial offering. And sometimes, those new opportunities may even eclipse the original, leaving founders and company management wondering if it might be time to cut their “baby” loose to go off and grow up on its own.
That’s exactly what happened at PowerInbox earlier this year. After five years nurturing our flagship product, DynamicMail, we began to feel it was time to make a change. As a bellwether of the email marketing landscape, DynamicMail had enabled us to lay claim to a substantial market share, providing a valuable engagement solution for email marketers in publishing, retail, events, and other industries.
It also enabled us to learn just how valuable email would be, despite the meteoric rise of other platforms — especially social media. By providing a basis as a unique and unifying identifier for audience members across multiple channels, the email address — and the data gleaned from users — has proven to be perhaps the most valuable asset in the marketer’s toolbox.
Having determined this, we also confirmed there’s so much more we can do besides deliver bells and whistles. With new innovations in our product lineup, we felt it was time to let DynamicMail spread its wings. So, we divested our initial product to an extremely worthy suitor.
What helped us make the decision to part with our “baby?” These four signs made the choice clear.
- Someone else has more resources to help it reach its full potential. While DynamicMail had once formed the foundation of PowerInbox’s product strategy, the reality is our strategy had evolved. As we moved more heavily into the monetization space, it was clear that DynamicMail as a product served a different purpose. Optimove, with its focus on relationship nurturing, not only already possessed a compatible strategy, but also the resources to help DynamicMail reach its full potential. For us to retain it, wouldn’t have done the product justice.
- Other opportunities are larger. Our customers are at a critical juncture, scrambling to find new engagement and monetization options to overcome the void left by Facebook’s News Feed adjustments and trust issues. We have solutions that can deliver on that need, which right now is larger than the demand for email personalization among our customer base. And so, we’re focusing on those larger opportunities, and leaving DynamicMail in the very capable hands of Optimove where it’s a natural fit.
- We needed to focus. I’ve always believed the key to business success is to deliver on your customers’ needs. Period. And, when their needs change, it’s extremely difficult to satisfy those while still supporting original solutions with the same size staff. Put simply: our resources, our support, our innovation, and our strategy needed to tighten up. So we made the strategic decision to divest a completely successful and still quite viable product so that we could focus on our strategic growth plans.
- They asked. Just as we were busy figuring out how to make DynamicMail fit within our new market strategy, Optimove came forward and approached us with an offer. While I won’t say we hadn’t considered divestiture before this, it certainly solidified the viability of divestiture as an option. The knowledge another company could continue to foster DynamicMail’s growth and success made the decision easy. Optimove was willing and able — it was a perfect fit — so we made the deal.
Making the decision to sell off your foundation product is never easy, especially when it is still quite vibrant and successful. But it’s also extremely selfish and self-centered to hang onto a product you can no longer do justice or devote the resources it deserves simply because you’re afraid to let it go. Like all good “parents,” the measure of startup success in raising a “child” is building it up and knowing when to let go. It is perhaps only through letting go that your labor of love can reach its full potential.
About The Author
Jeff Kupietzky is CEO of PowerInbox.