Evaluating PMF for Your Second Product - A (Somewhat) Different Beast

I recently chatted with another product leader about the challenges of knowing when a second product is a "success." Having navigated both B2C and B2B at Google, Meta, and Sentry, I've learned that achieving Product Market Fit for a second product is a unique challenge. It requires a different approach and mindset than your first product launch. Here are some hard-earned lessons:

1. Align on Strategic Purpose and Timeline

While any product aims to solve customer problems, a second product carries an additional burden. It needs to demonstrate a higher ROI than simply improving your core offering. This ROI isn't always immediate or directly monetary.

At Google, for example, we invested heavily in travel destination queries. Why? These queries vastly outnumbered hotel searches (where we were already monetizing well) and increasingly went directly to competitors like TripAdvisor. Our strategy was twofold: create a great experience to stop losing this query stream to competitors and ultimately drive more hotel bookings on Google when travelers have done enough research and are ready to book.

When considering your second product's purpose, ask yourself:

• Ideal: Can it create significant new growth in revenue or users?
• Does it strengthen or protect your core product? (Sentry's Session Replay is a prime example, enhancing the core error tracking functionality.)
• Does it provide other strategic advantages? (For example, Nikita Bier suggested somewhat humoristically that Meta investment in Threads is all about text training data)

After you align on purpose, remember to align timelines. They can stretch longer than you hope or than the organization is used to iterating on its core product. You probably need a higher bar than your first product MVP. In my experience, even marking something as alpha or beta doesn’t really reduce user expectations. Set realistic expectations with stakeholders and be prepared for a marathon.

2. Don't Mistake Engagement for Success

One tricky aspect of launching a second product is interpreting early adoption signals. Your existing user base is ready to try new offerings, which can lead to deceptively high initial engagement.

I encountered this at Facebook when tasked with growing an identity sync feature with 100 million users. Despite the impressive user count, deeper analysis revealed high opt-in rates and low retention. I helped the organization understand the lack of PMF (Helping the organization deal with the sunk cost fallacy, and the need for fewer resources is a different story) and scale back to a simple profile photo sync feature, saving significant resources.

To avoid this pitfall:

• Focus on task completion of the core user problem you were trying to solve.
• Evaluate retention with J-Curves, as outlined in Sequoia Capital 's excellent article.
• Utilize PMF surveys like Sean Ellis ' to gain additional insights, especially valuable when you don’t operate at a scale that allows for a purely quantitative approach.

3. Measure Cannibalization Carefully

A successful second product isn't truly successful if it merely cannibalizes your core offering without adding net value to your business. This can be straightforward to measure in B2B SaaS (Are deals with the new product truly additive? Is ACV improving?), but it's trickier for products without direct revenue generation.

At Facebook, my team spent a year developing a content recommendation product based on interests. We launched in four markets with promising quality metrics and positive user feedback. However, it failed to increase net engagement (measured by "good app sessions") for the Facebook app overall. While we repurposed some of the core technology, we didn't achieve our goal of creating a standalone, engagement-driving product.

To evaluate cannibalization:

• Monitor overall engagement and retention metrics for your product suite, ideally via a holdback.
• For B2B, closely track deal sizes and expansion revenue.

Conclusion

Launching a second product is more complex than you might think. It requires you not only to understand that new product but the strategic context of your existing product line. It requires strategic clarity and a clear upfront alignment and measurement framework to evaluate success.

For a deeper dive into the organizational challenges of second products, I highly recommend Casey Winters ' insightful article "Why Second Products Are So Hard."