Notes on Killing a Product That Isn't Losing Money

“Deciding what to do is just as important as deciding what not to do.”
— Steve Jobs

One of the hardest questions in business is deciding what to stop doing. Sometimes the operations most worth closing are not full of failures. They are often moderately profitable, yet they consume enough leadership attention, talent, technology, and customer support to drag the company's ability to excel at its core.

The decision to shut down a service, product, or internal operation should not be treated as cost-cutting; it's more akin to a strategic reallocation of energy and resources.

Shutting down is not a failure. Many managers, executives, and owners assume that a product or service should be shut down only when it loses money. However, I think this is too simplistic. A product or service can demand a high human capital and productive capital tax on a company. It may demand a separate operational procedure that deviates from the company's core offerings; it may require specialized support, additional unique vendors, more sales training, compliance exceptions, and repeated leadership intervention and attention. It may confuse customers about what the company actually does, or, worse, it may divide the talent and capital needed to make the core product exceptional.

Instead of just asking, "Is this generating revenue?" another key question should be: "Does this product make the rest of our business stronger — or does it make the business more complicated?"

Ask yourself Peter Drucker's question: If I were not already offering this product or service today, would I choose to build it now — with all the people, systems, investments, and trade-offs required to sustain it?

Yet many organizations keep products, services, and internal operations alive long after they have lost strategic relevance or momentum. The answer is, in part, financial — the fear of losing revenue, upsetting customers, or creating short-term disruptions.

But I think there's a psychological component to this. Closing something forces a leader to accept uncertainty. It means that all prior investment to make the offering a reality may not have produced the desired and expected result. People often confuse keeping options open with being strategic, when in fact, too many options can produce the opposite result: slower decisions, weaker commitments, and greater regret after choices are made.

More options do not always improve decision-making. Some people approach decisions as "maximizers" (Barry Schwartz, author of The Paradox of Choice): they feel pressure to identify the absolute best option before committing. Others are "satisficers": they establish meaningful criteria and choose once an option meets those criteria. A maximizer manager may believe that every product could become important one day, or that all products or services are equally important. They may revisit a decision whenever new information comes to light, even if it does not materially change the organization's overall strategic position.

This creates a familiar organizational pattern:

• New initiatives are launched because they appear promising
• Existing initiatives survive because they are not conclusively failing
• Leaders hesitate to prioritize because they fear missing an opportunity
• Teams spread their effort across too many products
• The company becomes less confident about what it is actually trying to become

The search for the perfect product or service mix can be the reason a company fails to develop a coherent one. More options do not automatically make people indecisive. The effect is strongest when the alternatives are complex, difficult to compare, the decision-maker is uncertain about priorities, or the individual feels pressure to find the best possible answer rather than a sufficiently good one.

Sometimes the issue is not that "there are too many products," but rather that there are too many products without a clear understanding of the organization's core focus or what it needs to be. Without this understanding, every product or service's existence can be justified one way or another.

The tendency to keep funding a struggling course of action despite unfavorable evidence is called "escalation of commitment." This often happens when decision makers feel responsible for the initial investment or believe that pulling back will make them appear inconsistent, unreliable, or weak.

So, what do we do? The goal is not to close products impulsively. It is to make deliberate choices about what deserves continued organizational energy. For this we have the FOCUS Framework.

F stands for Future relevance

Start with the future, not the past. A product may have been important to the company's history and may still produce revenue. That does not automatically mean it has a strong future. Leaders should examine whether customer demand, technology, market structure, and competitive advantage are moving in the company's favor or against it.

Ask:

• Is demand growing, stable, or structurally declining?
• Are customers becoming more or less dependent on the product?
• Is our advantage getting stronger or weaker?
• If we were not already in this category, would we enter it today?
• Does this product help us build the capabilities we will need next?

A declining business is not necessarily a business to close immediately. It may remain a useful cash generator. But a cash generator should not automatically receive the investment, talent, and attention reserved for a future growth engine.

O stands for Ownership of an advantage

Every product should have a clear strategic purpose tied to the company's core competence. A smaller service may be worth keeping if it protects an important customer relationship, strengthens distribution, creates a valuable capability, provides useful data, or makes the company's core offering harder to copy.

However, leadership should be able to state that purpose plainly.

Ask:

• What does this product allow us to do better than competitors?
• Does it strengthen our core product or merely sit beside it?
• Does it reinforce our brand promise?
• Does it bring us closer to customers we need to serve?
• Would losing this product materially weaken our ability to compete?

If the best defense is that "we have always offered it," "some customers still buy it," or "it may become important someday," these reasons are not compelling enough to justify the expenditures and human capital costs to keep a side offering on the market.

C stands for Cost of complexity

A product may appear profitable when evaluated on its own and still be detrimental to the organization as a whole. The relevant cost is not only the cost of manufacturing, selling, or supporting the product; it is also the cost of operating around it.

Ask:

• Does it require separate systems, vendors, processes, or compliance work?
• Does it add customer-support complexity?
• Does it require specialized training for sales or service teams, and does it add to the time they spend dealing with potential clients of a niche product instead of clients for the core service or products?
• Does it create exceptions that slow decisions elsewhere?
• Does it force teams to split their product roadmaps?
• Does it make the company's customer proposition harder to explain?

When a company cannot remove a product without discovering that multiple systems, teams, and exceptions exist only to support it, it has learned something important: the product was not just an offering. It's an organizational commitment.

U stands for Unavoidable opportunity cost

Every product uses capital, people, technology capacity, executive attention, and customer access; in other words, a chunk of the company's limited resources. Therefore, the decision is not only about whether a product makes money; it is also about whether those resources could create more value elsewhere.

Ask:

• What would we do with the people and capital released by shutting this down?
• Which core product, capability, customer segment, or strategic initiative would benefit?
• Would this action make our business faster, simpler, or more differentiated?
• Would this action streamline our core services and operations and refocus our capital and resources to better serve our core competency?

It's not about shutting down a product or service solely to reduce costs; you are ending it so you can direct your people, capital, and leadership's attention to the opportunity where you have the strongest probability of winning by wider margins.

S stands for Switching and stakeholder obligations

A product exit is not complete when the executive team approves it; customers, employees, partners, and systems must also transition.

Ask:

• Which customers depend on this offering?
• Is there a migration path to another product or provider?
• Can customers export their data or preserve essential records?
• What transition period is reasonable?
• Which employees should be redeployed because their knowledge remains valuable?
• What contracts, regulatory duties, security risks, or reputational consequences must be managed?
• How will we explain the decision without making customers and employees feel abandoned?

The way a company ends a service shapes trust in the services it keeps. Companies tend to celebrate product and service launches. They announce products, acquisitions, new markets, and growth ambitions with energy and confidence. Yet they rarely give the same strategic thought to ending something.

The ability to end well is one of the clearest signs of organizational maturity.

Apple's decision to discontinue the iPod is a useful example. Apple recognized that the iPhone and broader ecosystem had absorbed the iPod's central role. So in 2022, Apple announced that the iPod touch would remain available only while supplies lasted, ending the product line after more than two decades. On the other hand, Google Reader offers a different take. Google announced the service's closure in 2013 as part of a broader product cleanup, citing declining usage and offering a transition period for users to export their data. The closure was unpopular among devoted users, but it demonstrated that loyalty does not automatically make a product a sustainable strategic priority.

The real cost of unfocused products and services extends beyond money spent on underperforming offerings; it also includes the missed opportunity for a strong product to receive enough focused attention to become exceptional.

Shutting down an operation doesn't mean retreating. It can be a strategic choice to stop spreading resources thin and focus on what truly matters. The true measure of leadership isn't just launching new initiatives, but making the responsible decision to discontinue efforts that no longer benefit the organization as a whole.