What makes a good product to build an ever-lasting business? While most entrepreneurs think of building good products, they don't necessarily think about building ever-lasting businesses. Products are normally intended for a target audience, and address a specific use. Once this intended use, or the use-case, changes - the product is no longer valuable to the customer. An excellent case of product marketing would be to address a variety of use-cases and long-lasting use cases. This can only be addressed by putting a 'system' into play.
The system of play massively increases the use-cases, and elevates the net value of marketing efforts to the roof. Customers get hooked onto the product after the first-buy, and results in constant recurring revenues. We can also say that the push marketing gets transitioned to pull marketing.
Achieving the system of play is not easy for a product, and in most cases - it needs to be built grounds up. This requires a tremendous amount of thought leadership and the supporting team to think far ahead. As the system has to go through generations of technology, people and processes - this is not an easy process. Whenever these systems of play come into action - there are multiple revenue sources and all the business has to do is to adjust the pricing such that the cumulative revenues are the highest. The key lesson in these cases is not look at every revenue stream in isolation.
This system of play must be done whenever the cost of marketing is very high, and the customer use-cases cannot accurately be predicted. Such as the case of toy industry where the supply chain must start an year in advance to fill the store-shelves for holiday season. How do you ensure to hook a customer exactly an year later? We had done a horizontal as well as a vertical integration, by building an ecosystem of solutions, in my earlier entrepreneur stint and had seen a tremendous success. I recommend this thinking not only the early stage of any business, but also to re-invent an ongoing business.
There is a very interesting video on Lego on how they put a 'System' into play, and transformed the company to run across multiple generations. Watch it here:
