When to “Kill” Your Product

It’s a sad truth:  not every product lives forever.  As product managers, we eventually wind up being in charge of wrapping up a product that is no longer serving the needs of its customers, hopefully by putting something better in its place (though we don’t always have that luxury either).  Sunsetting a product poses unique challenges, and most product managers have limited experience there. From deciding when to pull the trigger all the way through turning the lights off, taking a product out to pasture is a unique experience.

Signs It’s Time to Prepare

First, and most importantly, a product manager needs to be aware of the warning signs to start thinking about how to bring your product’s lifecycle to an end.  While these signs are going to vary greatly between companies, there are a few product situations that are nearly universal tip-offs that it might be time to create a sunsetting plan.

Broken Hockey Sticks

We often talk about “hockey stick” performance as product managers — this is the expectation that growth will continue in an upward trajectory, often at a steep curve.  While we all know that these hockey stick projections are largely aspirational, they’re also a good benchmark that we can use to watch for signs of decline.  As the growth rate of the product begins to decline, that’s as sure a sign as any that your product is experiencing challenges. When you’ve tried multiple experiments to get back into that hockey stick, sometimes you have no other choice than to realize that you’re not merely in a slump,  you’ve slipped into an unrecoverable dive.

But there’s more to our metrics than just the hockey stick projections — if we’re doing our jobs as a data-driven product manager, we should have our OKRs and KPIs to guide us.  And those metrics are going to be solid warning signs.  Are your acquisition numbers dropping?  Have your retention metrics declined significantly?  Are there fewer referrals from existing customers coming through every month?  Obviously, one downward-trending KPI isn’t sufficient to make the case to close down the product as a whole, but when there’s a cross-metric trend that can’t be easily corrected, sometimes the better choice is to retire the product rather than throw good money at a bad target.

 

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Speaking of money…

Perhaps the single most important warning sign that your product might be soon visited by the technology version of the grim reaper is to be found in your revenue and profit/loss data.  Simply put, products that cost more to build and maintain than they bring in on a month-over-month or year-over-year basis cannot be maintained indefinitely.  While there are a very few situations in which a loss leader can boost your overall portfolio, most of us are not fortunate enough to exist in such a world, and watching the revenue numbers drop while the cost side of the balance sheet increases should be the biggest, brightest red flag in the world that it’s time to consider cutting losses and putting the product to bed.

Coming to Grips with Reality

The decision to sunset a product can be a really hard conclusion for a product manager to reach, and one that brings with it all kinds of uncertainty, discomfort, and fear — all the way from the bottom of the company up to the very top.  As product managers, we need to approach the decision to sunset a product in the same way that we approach any other strategic effort — with a clear understanding of the strategic goals to be served, a tactical plan to begin the process with whatever resources are available, and with sufficient data to back the decision in a way that makes it impossible for a rational stakeholder to oppose the decision.

Most importantly, remember (and remind your stakeholders) that the end-of-life process is part of the overall product development process.  We come up with the idea, we execute it, we maintain it, and at some point we have to bring it all to a close.  This is all part of the natural progression of a product’s life — some products live longer than others, but no product exists in its original form forever.  While it would be ideal to be considering end-of-life planning for your product as part of your everyday work, that’s probably just not something that most people want to think about until it happens — and positioning it as a natural progression helps to calm some of their natural fears.

 

Any recycling?

That said, the question that you should always ask when considering sunsetting a product is whether or not there’s a pivot for the product or technology that you can execute to try to recoup some amount of investment beyond its “natural” life.  At one company I worked at, we had a dial-in/out system that connected our users to court systems.  The costs to maintain this on both ends began to outstrip the revenue that this product was bringing in, so we had to decide what to do — fortunately, we knew that the dial-out portion of our product was still valuable, and we’d recently acquired an online-only solution.  The natural pivot was to connect the new, web-based frontend with the old modem-based backend, and create a whole that was better than the sum of its parts.  It’s often the case that even if the product as a whole is no longer viable, some core component of the technology might still be leveraged going forward.

This isn’t always an option, however, and if you’ve looked at all of your metrics, all of your key indicators, reviewed all of your possible pivots, and still reach the conclusion that the product must be laid to rest, it’s incumbent upon you as the product manager to simply accept the inevitable and start to put together a plan that you can pitch to the other stakeholders, leading them through the stages of grief that they’ll inevitably have to pass through.  Then, on the other side of the tunnel, you’ll need to make the plan actually happen.

 

Making the Commitment, Following Through

Let’s be honest, nobody wants to hear that the product that they’ve been working on for years, that they have created from the ground up, that has kept money rolling into the company, needs to be shut down.  It’s a tough pitch.  It makes people massively uncomfortable.  It introduces uncertainty and risk that wasn’t there five minutes ago.  As a product manager, making a pitch to close down a product might be the hardest thing that you do in your career.  But it’s not impossible, it just takes the right amount of preparation and positioning.

Most important to the process is having a plan already in place, so that there’s a clear beginning, middle, and end that your stakeholders can visualize.  You’ll need to consider as many possible impacts as possible, from revenue to cost structures to personnel, all the way to customers.  But if we have the right data, all of this should lead from that — and if we keep our customers in the forefront of our minds when creating this plan, it’s really not terribly different from any other strategic goal that you’ve pitched in the past.  It’s just that this one has a really hard stop at the end.

The plan is likely the hardest part, mostly because few product managers have actually had to create this kind of plan in the past.  The key components of such a plan are pretty straightforward, though, and might be laid out something like the following:

  • Make the decision to sunset official.
  • Communicate the plan to internal resources.
  • Communicate the plan to customers.
  • Keep customers updated at regular intervals.
  • Provide customers with viable options.
  • Set a deadline for the sunset of the product.
  • Keep to the deadline.

Unlike many other plans that we might make, it’s critical that the plan remains as consistent and constant as possible, for the ease of the customers involved.  This is one area in which an Agile approach will not suit the needs of the project.  There will be sufficient uncertainty throughout the organization and in the minds of our customers, that we simply cannot afford to add to it by changing the plan as we proceed.  Once we make the decision to sunset the product, that decision cannot change, nor can our target dates.  While it might be tempting to continue to milk the little revenue still coming in, it’s far better for everyone involved in the long run to stick to the plan.

The Hardest Choice a PM Ever Makes

Put simply, the decision to sunset a product is likely to be the single hardest decision that you will ever make as a product manager.  It’s likely that you’ll get pushback on this decision from all sides at the beginning, and only through consistent, rational, data-driven discussions can you convince your stakeholders to do the right thing and make the final call.  It’s also one of the more interesting processes that you’ll ever go through as a product manager, and one that will leave you changed significantly when you come out the other side.  It’s never as scary as it seems, and as long as you realize it’s a natural part of the product lifecycle, it makes the overall process that much easier.

About the Author

Cliff Gilley
Cliff Gilley has been a Product Manager for nearly 12 years, working in a variety of industries and company sizes. He has assisted several of these companies in their transitions to Agile development and Scrum methods, and is a firm believer that agility is a value you must have, not something you just do. He currently blogs and consults as The Clever PM, providing providing tips, tricks, and hacks to make people better, more clever Product Managers.

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