3. Portfolio Grading by Horizon

This is our first issue on portfolio management. I spent 5 years as a PM for a single product before I even had to think about a multi-product situation. Hopefully this play helps you make the transition more gracefully than I did.

Context

You have a lot of offerings in your product portfolio and your spending on them is based on a mixture of tradition, emotion, and advocacy. Older offerings are hard to maintain and offer declining returns, but are demanding increasing investment. Cash cow offerings are still producing value but customers are repeatedly issuing the same complaints. And competitors are beginning to move into the space and grow faster, but you can't manage to allocate capacity to new offerings.

The story is not new. It dates at least back to the sixties, when Everett M. Rogers first wrote about the diffusion of innovation. Sit too long on Horizon 0 or 1 and you'll get disrupted. We all know this, but in an established company it can be surprisingly difficult to steer your investments towards the future.

I learned this play from Eric Willeke, who advised us when our music tech company was struggling to manage a sprawling portfolio of beloved hardware and software products. Many of the older products had been used in the production of famous tracks that people still loved to hear, and it was hard to put those products behind us even when usage was dwindling.