A second SKU feels like progress. It means you’re growing, right? Serving more users, unlocking new revenue, expanding the roadmap.
But done too early (or for the wrong reasons) it’s a distraction masquerading as strategy.
So when’s the right time to launch a second product SKU?
And what traps should you avoid?
Signals You’re Ready
1. Clear demand segmentation. If customers are actively hacking your current product to serve distinct use cases (SMBs vs. enterprise, devs vs. analysts) you might be under-serving both. A tailored SKU gives each group room to breathe.
2. Pricing strain at the edges. When your entry-tier is too cheap for power users but too expensive for casual ones, it’s time to split. A second SKU lets you anchor value properly.
3. Support bottlenecks. If one segment eats 80% of your support time but only delivers 20% of revenue, a differentiated SKU can rebalance effort and margin.
4. Expansion paths are blocked. If your upsell path requires product changes that would confuse or frustrate existing users, you’re not scaling, you’re duct-taping.
Pitfalls to Watch For
1. Launching before you’ve nailed the first. If retention is shaky, NPS is middling, or onboarding still breaks, a second SKU will multiply your problems, not solve them.
2. Splitting your team’s focus. Two SKUs mean two roadmaps, two go-to-markets, two sets of enablement material. If your team is already stretched, this can quietly kill velocity.
3. Confusing the buyer. A second SKU only works if the value difference is clear. If prospects can’t tell which plan is “for them,” you’ll slow down sales, not speed it up.
4. Pricing drift. Keep a tight frame around what’s included in each SKU. “Enterprise” that just means “expensive” won’t fly.
Second SKUs aren’t about complexity. They’re about clarity. When you’re pulling in different kinds of users with different needs, a clean split can drive growth.
But if you’re just bored with your first product?
Don’t expand. Fix. Then scale.
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