Is it better for Andela to focus on enterprise clients or diversify into small and medium-sized businesses?

Introduction

The trade-off question at hand is whether Andela should focus on enterprise clients or diversify into small and medium-sized businesses (SMBs). This scenario involves evaluating Andela's current business model, market positioning, and growth strategy. I'll analyze the potential impacts, metrics, and experiments to determine the best path forward for Andela's product strategy.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm thinking Andela primarily serves enterprise clients currently. Could you confirm Andela's current client base and revenue distribution?

Why it matters: Establishes baseline for evaluating diversification impact Expected answer: 80%+ revenue from enterprise clients Impact on approach: Determines risk level of SMB expansion

• Business Context: Based on market trends, I assume there's growing demand in the SMB sector. What's driving the consideration to expand into SMBs?

Why it matters: Aligns strategy with market opportunities Expected answer: Untapped market potential, faster sales cycles Impact on approach: Influences resource allocation and go-to-market strategy

• User Impact: Considering Andela's talent pool, how might serving SMBs affect the types of projects or skills required from developers?

Why it matters: Ensures talent alignment with new client segment Expected answer: More diverse, shorter-term projects for SMBs Impact on approach: May require adjustments to talent acquisition and training

• Technical: I'm curious about our platform's scalability. How easily can our current systems accommodate a potentially higher volume of smaller clients?

Why it matters: Assesses technical feasibility of serving SMBs Expected answer: Some modifications needed, but core platform is scalable Impact on approach: Determines timeline and resource needs for technical adaptations

• Resource: Thinking about our sales and support teams, what's our current capacity to serve a more diverse client base?

Why it matters: Evaluates operational readiness for expansion Expected answer: Limited SMB-focused resources, would need to build out Impact on approach: Influences hiring and training plans for SMB segment