Two Different Markets, Two Unique Models
In Can One Business Unit Have Two Revenue Models?, Isolde (Siiquent) and Emanuel (Teomik) lead divisions that sell similar genetic technologies but to very different markets. Isolde focuses on hospitals and diagnostic labs, where budgets are tight and reimbursements are fixed. Her team runs a razor–blade model: they sell instruments near cost and make money on consumables like reagents and kits. Over time, they even introduced a pay-per-test model to reduce waste and make purchasing easier. What really differentiates Siiquent, though, is its regulatory expertise—helping hospitals stay compliant and efficient.
Emanuel, on the other hand, sells to research labs and universities. His customers don’t deal with reimbursement restrictions; they have grants and are willing to pay for high-quality instruments. Teomik earns its profit upfront on these machines, while offering consumables and extensive support as part of the package rather than charging for them. Both divisions rely on service and expertise, but only one monetizes the ongoing usage.
One Model vs. Staying Flexible
Peter, the division head, faces a real problem. A single revenue model could fix the confusion caused by two sales teams pitching to the same customers with different pricing structures. It would simplify operations, align incentives, and bring strategic clarity.
The risk of forcing one model is just as big. Hospitals and research labs operate under completely different financial realities—one tied to healthcare reimbursements, the other to academic grants. Imposing uniformity might kill what made each unit successful: the flexibility, creativity, and responsiveness to customer needs. That flexibility led to Siiquent’s pay-per-test innovation and kept both units competitive even after their patents expired. Still, adaptability can drift into chaos—uneven pricing, internal competition, and what Peter calls “random reactivity.”
So the tradeoff in this scenario: structure brings clarity, but flexibility breeds innovation.
If I Were the PM Mediating the Merge
If I were the product manager tasked with mediating this merger, my role wouldn’t be to decide which model wins—it would be to guide a process where both sides feel heard and data drives the outcome.
First, I’d frame shared goals: sustain growth, protect customer trust, and cut internal friction. Then, I’d lower the social tension in the room. As the HBR article “How to Speak Up When It Matters” notes, speaking up can feel threatening, especially when status and ownership are on the line. I’d make it clear this isn’t about replacing people’s ideas but combining their strengths.
From there, I’d bring both teams—plus sales and service reps—into structured workshops. We’d map customer segments, identify where each revenue model truly performs best, and test hybrid approaches through short pilots. Finally, I’d set clear if-then plans: if one approach falters in a specific market, then we pivot quickly using pre-modeled alternatives.
At the end of the day, merging isn’t about forcing sameness—it’s about building alignment. With open dialogue, shared data, and respect for both histories, they could build something stronger than either alone.
