15 What if this digital product cannibalizes our existing products or services?
You have interviewed stakeholders and customers, you have designed and built an amazing experience, you have tested and tested again. Your product is as good as it will ever be.
And yet, your board is suddenly afraid to launch it.
There’s a real chance that your product or service will lead to reduced interest in your existing offering. Is it worth risking existing customer relationships for a well executed but yet unproven product?
What you’re experiencing is self-disruption, and it doesn’t feel great. Here’s the deal: if you’re not willing to cannibalize your own business, someone else will do it for you. And trust us, they won’t be as gentle about it. So, let’s tackle this head-on:
01 Embrace the inevitable
If your new digital product is cannibalizing your old ones, it means you’re probably onto something. Would you rather have your outdated products slowly wither away while competitors eat your lunch?
02 Evaluate impact
Don’t just assume that cannibalization is necessarily bad. Calculate what this new version of the future will look like. Are you expecting to actually lose revenue, or are your customers just moving over to spend their cash on your new offering? Could it be that – right away or over time – the product will actually be more profitable? Does it enable you to reach new customers and markets? Will it make you more efficient in doing what you are doing already?
03 Listen to your customers
Are they asking for this new product? If so, wouldn’t you rather meet their needs than have them go elsewhere?
04 Think long-term
Sure, you might experience a short term hit but what’s the long game looking like? Maybe it’s worth paying the price for a bit of cannibalization now if this new product positions you better for the future?
05 Reframe the narrative
Internally and externally, position this as evolution, not cannibalization. You’re not killing your old products; you’re making them obsolete with something better. You might need to sunset entire product lines or restructure teams. Make sure to get in front of the discourse.
Apple killed the iPod with the iPhone. Netflix killed its DVD rental business with streaming. And Amazon cannibalizes pretty much everything, including itself.
Some of the most successful companies in the world have cannibalized their own products. Cannibalization can be a sign that you’re doing something right. It means you’re not resting on your laurels. It means you’re pushing forward, even when it’s uncomfortable.
Of course, there’s the other side of the coin. If your new digital product is cannibalizing your existing business without offering any real advantages – just a shinier interface or a trendier name – then you might have a problem.
Our take
It’s human nature to resist change. Change is scary, to challenge the status quo is seen as unnecessarily rocking the boat. And rightfully so. When trying something new, then failure is often not only probable but likely. But unfortunately that’s what innovation is all about.
We tend to forget however, that failure can come with secondary consequences. Failure often helps reshape how an organization perceives itself. It helps us to rethink how we collaborate, where we place emphasis, how we do what we do. Failure sheds a bit of light on a part of our operation, letting us see what’s usually not visible a bit more clearly. Failure shows weak points in the way we work, communicate, ideate, build, and test.
Embrace failure – even when a project is a complete writeoff, it’s never a zero-sum game.
