Is it better for Onfido to focus on improving our core identity verification product or diversify into adjacent services like fraud prevention?

Introduction

The core trade-off we're examining is whether Onfido should focus on improving our existing identity verification product or diversify into adjacent services like fraud prevention. This decision will significantly impact our product strategy, resource allocation, and market positioning. I'll analyze this trade-off by examining our current product, market dynamics, potential impacts, and experimental approaches to inform a data-driven recommendation.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm assuming Onfido's core product is well-established, but I'd like to confirm. Could you give me a quick overview of our current market position and the maturity of our identity verification offering?

Why it matters: Helps determine if we're operating from a position of strength or need. Expected answer: Market leader with a mature product. Impact: If we're not the market leader, it might suggest focusing on core product improvement.

• Business Context: Based on our industry, I imagine we're seeing increasing demand for fraud prevention. What percentage of our current customers have expressed interest in fraud prevention services?

Why it matters: Indicates market demand and potential revenue impact. Expected answer: 30-40% of customers interested. Impact: Higher interest would support diversification.

• User Impact: I'm thinking about our user segments. Do we primarily serve enterprise clients, or do we have a significant small business customer base as well?

Why it matters: Different segments may have varying needs and priorities. Expected answer: Mix of enterprise and SMB clients. Impact: If heavily enterprise-focused, might lean towards diversification to meet complex needs.

• Technical: Considering the complexity of fraud prevention systems, what's our current technical capability to develop and maintain such a service?

Why it matters: Assesses feasibility and potential development timeline. Expected answer: Some capability, but would require significant investment. Impact: Low capability might suggest focusing on core product instead.

• Resources: Given our current team structure, how much additional headcount would we need to allocate for a new fraud prevention service?

Why it matters: Helps understand resource implications and opportunity cost. Expected answer: 20-30% increase in relevant teams. Impact: High resource requirement might favor improving core product.