Don’t Do Several Independent Products in a Web Startup

After a product’s reached a modest level of traction, there’s an entrepreneurial tendency to start thinking of the next product to build — don’t do it. Too often I see startups with multiple products where the first one was a winner and the next two haven’t gone anywhere. Now, one web app segmented by functionality for different buyers is great and is not the same as separate code bases for truly independent applications.

Here are a few thought on multiple products within a startup:

• Startups are inherently resource strapped, such that spreading people thinner reduces the effort on everything
• Complexity grows exponentially as there’s more than expected overhead constantly figuring out how time will be allocated
• When talented people are transferred from the cash cow product to the new product, they get pulled back to the main product as soon as things aren’t going well or a serious challenge is encountered
• Sales and marketing systems, sites, etc become much more difficult to manage and execute well with multiple products

There are always exceptions to the rule, but entrepreneurs should avoid doing several independent products in a web startup.

What else? What are some thoughts on the challenges with having multiple products?