After reading “Can One Business Unit Have Two Revenue Models?” I found myself rooting for Isolde and Emanuel’s united front against Peter’s push for a single revenue model. Their defiance wasn’t necessarily stubbornness; it was a strategic survival instinct.
Isolde and Emanuel are targeting very different markets. Isolde targets hospitals and large diagnostic labs focused on gene-based diagnosis for patients. In turn, her customers require regulatory compliance, reliability, and cost efficiency in diagnostics. On the other hand, Emanuel is targeting academic and industrial research institutions conducting genetic research. These customers are willing to pay premium prices for cutting-edge instruments that help them publish in prestigious journals. In this regard, his customers need advanced technology, expert support, and precision instruments. Siiquent’s model aligns with recurring revenue and volume-driven markets, while Teomik’s aligns with high-margin, capital-intensive sales.
Pros and perils
When evaluating the pros and perils of a single versus flexible revenue model, I think of people who want to standardize everything across academic departments, ignoring that what works for engineering doesn’t work for the humanities. In the same way, the supposed “clarity” of a single revenue model would be constrained in a market where customers’ needs blur across both units.
The risks of imposing one revenue structure are complex: lost customers when the chosen model doesn’t fit their needs, decreased employee morale, and competitive vulnerability when rivals offer more flexible arrangements. As Isolde warned, a “single, rigid structure” might “hamstring” them when they need to be “nimble, flexible, and ingenious.” Remaining flexible is part of keeping up with the fast-paced market by allowing tailored offers to specific segments and ongoing innovation.
Notably, Peter is right about one thing: the moral hazard in pay-per-test pricing, which leaves customers with no incentive to be efficient and leads to waste that could erode profits. The lack of clear strategy may make it harder to forecast revenue, allocate resources, or train new sales reps. Ultimately, the minimal standardization could lead to inefficiency and internal competition. In this regard, there might be more strategic clarity and consistent KPIs in a single revenue model.
Scaffolding a Fair Process
If I were mediating this merger as a PM, I wouldn’t search for the “right” answer immediately. Instead, I’d focus on a process.
First, I’d want to facilitate an opportunity for both teams to map their customer journeys to identify where there is overlap in the market versus what needs are fundamentally different. This would allow teams to start identifying mutual goals and potential conflicts. Most importantly, I’d ask questions like: Who are the target customers? What are their needs? What problems do they face?
Second, I’d establish clear metric criteria before debating solutions. We’d create a basis for agreement on what metrics are important for the company, such as customer retention, profit margins, revenue predictability, and competitive positioning. Getting alignment on how to evaluate options prevents the conversation from devolving into territorialism.
Third, I’d pilot hybrid approaches in controlled markets. Rather than imposing top-down structure, let teams experiment. For instance, have the sales and marketing teams use consistent communication about the brand but allow them to adapt pricing or product offerings depending on what specific markets or customers’ needs.
The goal isn’t finding a perfect solution; it’s building a process where the teams feel heard and can collectively experiment to find what works. The most important part is to document the process, iterate, and then improve. Sometimes the best structure is permission to stay structured-yet-flexible, while acknowledging that markets don’t always fit into neat boxes.
