Two Revenue Models
The key differentiating factor in Isolde’s (Siiquent) and Emmanuel’s (Teomik) revenue models is that while Siiquent’s revenue follows a “razor-blade” model—selling machines with a low profit margin and making most of their revenue from consumables like reagents and test kits—Teomik follows the opposite model. Teomik makes most of its profits with high margins by selling high-end instruments and equipment. While Siiquent’s products benefit hospitals and labs with a steady supply of disposables, Teomik supplies high-end, cutting-edge technology necessary for research.
To Merge or Not To Merge
By merging to a single revenue model, we could avoid a lot of friction, as this would help internal processes and operations run more smoothly. Having one model not only makes it easier for employees and customers to understand how the business is run and how product prices are decided, but also reduces the resources, effort, and money needed for basic operations, especially in teams like sales. This shared vision allows stakeholders to see the company’s direction more clearly, better defining the company’s place in the market with a unified front. However, that’s not to say there aren’t potential drawbacks. As mentioned earlier, these two companies have slightly different target markets. The risk of alienating one or the other of the customer bases is something we must consider before merging into one revenue model. The two revenue models allow for flexibility in catering to innovation versus necessity, and these different goals require different things from the products of Siiquent and Teomik. However, an ununified model might also stretch the company’s resources too thin, preventing them from executing either revenue model properly.
My Decisions as PM
If I were a product manager tasked with overseeing this merger between Isolde and Emanuel, I would start by meeting with each of them separately, allowing them to pitch their opinions on how the merger should proceed. This would create a safe space for any concerns or goals about the merger. It’s important to understand the perspective of each division to identify any important issues or information only the head of each division might know. When facilitating the discussion between Isolde and Emanuel, it’s important to emphasize the goal is to bring out the best in each division to make the company stronger by leveraging their respective strengths. I would take a data-driven approach with customer feedback. Working with both teams and an unbiased third party, I would study the data (profit, market size/performance, customer satisfaction/retention) to understand which aspects of each division work best and would most benefit the company as a whole through the merger. I would not approach this as having to stick to one existing model or the other, but rather as piecing together the best aspects of each to create an optimal revenue model for this merger. Flexibility is key to ensuring that both parties feel like they are able to retain their goals while unifying processes and the overall vision to ensure the business runs smoothly.
