Product Development: How to Set Your Product Strategy

One major fork in the road for technology companies comes with the choice to either expand the product offerings or stick to refining one core technology. The two choices have imiplications for the exit strategy of the company -- a relatively short-term acquisition by a larger corporation or a longer-term push to expand the business (for a larger acquisition, IPO, or continued exapnsion). But how does a company evaluate these options? Do you know which track your own business is on?

Software Testing Solutions (STS) is a small software company that has produced one primary product: The QualityAdvantage solutions for Sunquest. This software product helps hospitals verify their Sunquest lab and blood bank applications are functioning correctly and has helped STS grow into a company with $1.1 million in revenues in 2007, an increase of 110 percent from 2006. Yet the company's path in the coming years is a concern for advisor David Finkel, who is consulting with STS as part of their transformation through the BIG Business Contest. With a product line that only works in conjunction with Sunquest applications, the market for STS’s software has been limited and potentially tenuous, according to Finkel.