Why Strategic Expansions Fail: Researching the (Blue) Oceans

Today, you want to talk about a topic, Alex, that is usually my topic I like to talk about. So you told me you would like to talk about the project management tool Jira. My first question is, what's wrong with you? I mean, we did talk about Jira a couple of times, right? Yeah, and we never ever used the affiliate program they offer. Do they have one? I don't know. I'm just assuming. Can you simultaneously just like sign up so that by the end of the episode we have a link? Do you think some people will sign up? I'm just Googling. Give me a second. Jira affiliate. Yeah. Okay. Do they have it? So. I mean, do you want to advertise Jira? You're the biggest critique. I used to use Jira a lot, as you know, and back in the days when I was employed, I used it a lot and optimized a lot and was Jira admin even and never got paid for it. However, these days, I'm more a fan of building my own tools quickly with make.com, which I should advertise, by the way, as well. So yeah, I think these tools are not needed anymore. But please challenge me. I mean, if you're a one man show and you can keep yourself organized, you're obviously fine. Right. Yeah. Of course. It's easier said than executed. I know. Yeah. The thing is, I mean, I didn't necessarily want to talk about Jira. I mean, maybe there is some cool tips and tricks that you still remember from back in the old days. But so the main reason why I wanted to talk about it was that in our company, we were using a mix of Jira and some other project management tools. I think Jira was like more the solution for the engineering organization, right? Where you would find your sprints, have your backlogs, track your bugs, and so on. But most other teams that are more on the business operations side would use other project management tools. And now for the sake of simplicity and keeping things consistent, we decided that we migrate everyone over to Jira. And so for me, I mean, yes, I was always using Jira. I was kind of in my normal process of how I would use it. But just today, I happened to start a new project or a new board for the brand's design team, right? Because they were also in another project management tool. I'm bringing them over now. And the first thing that I noticed was that as I started with a new project, Jira gave me templates. And it was like super detailed. There were templates for design teams, templates for marketing teams, templates for project management teams, templates for legal teams, right? So the first thing that I realized is, okay, someone is trying to extend or expand into different verticals. And I would say it's more than overdue. Yeah. And I mean, it makes a lot of sense, right? And I think it's probably 100 episodes ago where we really analyzed more about Jira and so on. But I have been publicly a fan of the development of the design of Jira when they launched NextGen. And I don't even think NextGen is there anymore. I think it's already integrated. Correct me if I'm wrong or don't quote me. But they made massive and huge steps in improving the user experience, the design, it became easier to use, it became easier to set up, you didn't have to study Jira to know how to create a project and to create a workflow. So I think they really made smart moves into improving the experience so that it becomes a productivity tool more than just a delivery tool for tech teams. And I think this was really something that I saw today. And I mean, I got a little bit lost because there's too many templates. And once you create a template, you're like in this workflow and suddenly you have hundreds of different tabs and views and so on. And for example, I didn't manage to build up to activate the backlog view, which I was used to have from past projects. Which seems like it's, I mean, the design is maybe improving, but the user experience isn't. But I mean, that's the thing, yes, it's still a very complex tool. I think it's also still kind of hard. There is definitely some things that were way more complicated in the past, also speaking about like different optimizations and navigation options and so on. So I think it improved. And I think it improved to an extent, and it was where I got lost, that I'm used to the old traditional ways of working with Jira. So certain things that I wanted to use while being in this, oh, this is a template optimized for design teams that only focus on asset creation, which was the template that I picked. So I think it's that optimized for those simple users that if you're coming in with the old knowledge of, oh, I want to do this and I want to have this in my workflow and this is how I want to set it up, that it's not there because it's just not built for someone who's worked with that old system. Because it's built for the marketer, it's built for the brand designer. So I think on one side, I see that optimization and I'm probably a little bit like in between because most scrum masters or Jira experts wouldn't go into creating the project for a design team. But scrum masters shouldn't do anything. I think that's pretty clear, right? I know you don't like that. If you ever forget to lock your screen, I would just go to your LinkedIn and update it saying that you worked as a scrum master. That would be the most terrible thing you could do to me. Hey, community, I started a new job as a scrum master. And then also add a fake certification that you just posted. Oh my God, Alex, I would kill myself right on the spot. But by the way, I would do the same thing to you, right? I would post a random self-designed bootcamp that you have finished. That hurts. That hurts. I was like, I was thinking, what could he say? What could he potentially say? Alex just mastered low-level wireframing. Oh, even worse. So it's my certificate that I participated in a bootcamp. Of course. Of course. I mean, I could even launch my own bootcamp. Yeah, that would work. It's like cheap money for people. By the way, that's actually a good thing to talk about because there is this product management assessment I'm working on. You shouldn't do your advertisements here. It's not advertisement. It's Jira. It's Jira. Okay. Okay. No, no. It's okay. We'll do a separate episode about that. You go ahead. You go ahead. No, no, no. What's the need? No, no, no. Now we talk about Jira first and then we will make a separate episode for that. Okay. That sounds reasonable. I mean, I don't even know what to say about that Jira thing. Yeah. I mean, what is the question? What is the discussion point you wanted to raise? I think it's mostly this point of scalability. It's the point of growing vertically. I think that's generally a topic to talk about and think about. Is it a trend that you see generally in product development if you look at existing products and tools that you're using these days that there are more and more vertical expansions going on? I mean, on one side, think of the Notion episodes that we, or the episode where we discussed Notion and how they generally just have like a tool that's a wrapper for all sorts of different types of users, right? And I think it's the same as me being obsessed with workflow as my task manager, right? Because it's tools that don't follow necessarily a strict process, therefore, you can adjust it to your needs, which also as a side effect means that as a company, you're not limiting yourself to a specific user type, right? And you have a broader market that you can approach. At the same time, it brings in this other problem of we know that the best thing to do when you're starting a company and when you're developing a product is to find your niche, find a specific target audience, find one specific problem and solve that. Target them to the best possible way and build solutions for that audience. It's also cheaper from a marketing perspective because you can target them. So it's a little bit this, and I think that's probably where we'll start with the question. Very specific products versus broad products, I mean, there's pros and cons, right? And I can actually make a very good example on how it easily fails, even if all odds are for you. So in Germany, and I think maybe in Europe, but especially in Germany, there's this brand called True Fruits. Have you heard of them? These are the smoothies. Exactly, the smoothies. So in Germany, they are quite famous just for our audience on the rest of the planet. So these are smoothies in the supermarkets and they have very cool, how can I say, very cool things written on their glasses, right? So they are like very funny things, very provocative things, and they got very famous in 2010. So this company was founded by students. They were traveling across Europe, Ireland, and they had their first smoothie there and realized, hey, wow, that's a great thing. Smoothies should be accessible and available for everybody. And what they did was they made a student project out of it. They got very quickly funding and people were interested, so they went kind of viral in the real world. I mean, they're good. They're good. The smoothies are very tasty, by the way, and I buy them. So very cool thing, very, very cool branding, very provocative marketing messages. Everything is fine. So smoothies work. Back in the days, in 2010, when it started, I would say this is because I was looking into this project deeply and they have also a lot of their product history on their own website, just as a side note. So it was a blue ocean. There were not many smoothies back then in the shelves, if you remember. So that worked. So what did they do? They just thought, hmm, maybe we should expand into other directions. Maybe we should start with juices. Maybe we should start with chips and crisps. So they did that. And you know what happened? They failed. The product failed. The products were failing very fast. So they tried out many different new products and they almost all failed, even though they are so close to the original product. I mean, if you produce smoothies, it's not much effort to also produce juices, right? If you have the dried vegetables, fruits, sorry, you can also make chips and crisps out of it, right? The whole infrastructure is there, but for some reason it didn't work. Why not? Funnily enough, I would be the first to also propose that expansion strategy. It's the same here, but do you know what the big, big difference is? They entered a red market, a red ocean. That's it. There are thousands of juice producers, there are thousands of crisps producers, and you are always depending on the supermarket chains and how they place your products and stuff like that. So even though it sounds logically, it didn't work out. And I think that's very interesting, right? Even all the odds are for it, logistically, production-wise, but for some reason people didn't buy their products. I think this is just something that I would consider if I go into, whether it's horizontally or vertically into new areas with my existing product, whether I want to be more specific, because they have launched new smoothies as well. Some of them went better, some of them not, but expanding their existing product line was working very well. Trying to expand the product line and new products didn't work out. Yeah, no, and I mean, I think that makes sense. On one side, the challenge was working with retail and shops and I mean, I don't envy anyone in that space. But probably they also failed from a go-to-market strategy. Because I mean, yes, it was a blue ocean situation with smoothies in Germany or in Europe. I don't know if it's like a Europe-wide thing. At least German, Austria and Switzerland are covered. And they stood out and still do, right? It starts with the packaging. It's like, it's something you feel like you want to buy it. These glass bottles, nice haptics feel really good in their hands, right? And so I think like even now, they still, yes, they managed to have a brand, but there's like some other juices in there that are probably from purely brand recognition, brand equity as strong as True Fruits. It's still like, there is a good drawing factor to their bottles, whereas probably when you then start like speaking about packaged goods and the normal packages and where you stand in the dry fruits corner, in the juices corner, maybe that's also where they simply had a hard time to find their positioning to stand out or to work well. And in a red ocean scenario, that's like extremely hard. The red ocean is my assumption, right? On their website, they didn't tell why. So for the crisps, they said officially it's a flop after three years. The juices stood in the markets for almost 10 years, but then they stopped producing. So I think there are many, many reasons behind it, of course. But it's just interesting to see that except the smoothies, everything is at some point not selling itself anymore. I mean, and I think it also comes a little bit back to understand your audience and so on, right? Look at, I mean, I don't know what they did. If I would have been in their place, I would have probably spent time with the existing customer base to understand, okay, what are they even consuming, right? Like for example, me, I would buy a smoothie in a shop, but I'm not really someone who buys juices. It doesn't mean that automatically all your clients that buy smoothies just because they like smoothies, they automatically like dried fruit and juices. And at the same time, I mean, even though the branding for the smoothies is very strong, if I think about smoothies in Germany, I have 10 different brands in my mind that I remember. But just by this fact, it's like, okay, is it really easy to access such a new market? So I think it's- You're in quotes, right? I mean, it's an existing market, but you want to- I mean, as a company, you will always try to look for that, right? Because at one point you're saturated, you want to further grow. I mean, every company wants this exponential growth. Once you acquired a market, I mean, you can expand geographically and say, oh, I'm going to sell it in the US now or in South America or whatsoever, or you expand with different products and different product lines. Because otherwise the business is not scaling, which is what the investors want, which is what makes them more successful. And you know what I think, which is maybe also, I mean, for those who are tuning in, we never think about product podcast titles upfront. But just thinking about the product title, that also brings us to a very important thing when it comes to trying to expand to markets, to set up experiments. And if you remember, we were doing this a lot, also working at SumUp, and especially not only experiments, but safe to fail experiments with the goal to, for example, collect data, with the goal to make the first sales, with the goal to expand production lines or create a better infrastructure or whatever it is, right? So the whole idea of experimenting in product development, especially trying out something new before you really go live, which costs you so much money, especially physical products, to maintain, to keep them up, to produce and whatever it is, the whole supply chain not to mention. So you need to have safe to fail experiments and also a safe to fail culture that allows you to do experiments in a way that you can at least make sure that you are not bringing yourself into financial problems. Yeah. I mean, you need to find ways to test these without completely building a new factory. You also need to have the right culture. I think, like, shout out to True Fruits, if they say, OK, it flopped, it didn't work, it means that, OK, they also know when to kill their darlings, right? Yeah, totally. So you need to try it, but you also need to know, how far am I going to push this investment? How much am I going to invest also in trying to then acquire that market? And when do I draw the line and say, OK, it didn't work? Is it a few months? Is it one year? Is it two years? Is it one million of marketing spent, 10 million of marketing spent, 100K of marketing spent? That brings you into the experimentation culture. And by the way, have we ever had someone in our podcast as a guest who works in a – or who produces physical products? I don't think so, right? No. Maybe we should reach out to them. We should. We should and we could. I think that would be interesting. Yeah. Because the life cycles are just, like, so different and the cost of experimentation is so different and there's just another layer to that. So long story short, make sure you create your safe-to-fail space, your safe-to-fail environment before you go live. And if you're interested in an interview with a physical product manager, make sure to leave a subscribe or a like and maybe you see us there in the future. Yeah. Reach out to us if you want to talk about an interesting topic. Take care. You too. Bye-bye. This was the Product Bakery. All links can be found in the podcast description and make sure to follow and subscribe for weekly episodes on all podcast platforms as well as YouTube.