In December of 2022, I shot a short tweet thread out into the abyss that quickly summarized my POV on platform consolidation tailwinds in software. Since then, I’ve continued to study and, candidly, have formed a bit of an obsession with true, multi-product software companies.
While the aspiration of almost any software company is to be a multi-product or platform company, very few successfully (either in terms of scale or efficiency) make it past their initial wedge into a market. However, when you find a company that succeeds in being multi-product the results are pretty remarkable — these companies seem to have ever-consistent, if not improving, unit economics and remarkably persistent growth that is efficient at scale, ultimately leading to compounding value for shareholders.
On this basis, and with the early growth stage investment landscape looking particularly dry, we formed a thesis heading into this year that finding proven & scaled multi-product companies at ‘ok’ prices would be better investments than single-product companies at ‘great’ prices but with an unproven ability to expand their product offering. This thesis led to two investments this summer with teams I’m incredibly excited to partner with for years to come (TeamSystem and one unannounced).
The tweet thread below outlines some resources I found to help me understand the economic and mechanical advantages of true multi-product businesses. Hopefully it will spark a similar interest in, or even obsession with, these businesses for you.
