Dual Revenue Models?
I’ve been thinking about the Harvard Business Review case “Can One Business Unit Have Two Revenue Models?” and how it captures one of the hardest things in product and business strategy: what happens when structure meets flexibility.
Scherr Pharmaceuticals found itself in that exact bind. The company had merged two divisions that couldn’t have been more different in how they made money, how they served customers, and how they thought about value.
Two Markets, Two Mindsets
Isolde Kraft’s Siiquent sold gene-testing machines to hospitals at cost and earned profits on the consumables. It was the perfect razor-and-blades model, predictable and compliant. Her team’s success came from precision and trust. They helped hospitals navigate complex regulations and kept everything running smoothly.
Emanuel Geiger’s Teomik, on the other hand, catered to research institutions that lived on curiosity and grant cycles. He sold high-margin instruments to labs chasing the next big discovery. His approach was flexible: adjust prices, change bundles, do whatever keeps the scientists happy.
Both leaders were right in their own worlds. Isolde optimized for reliability; Emanuel thrived on agility. When Scherr’s CEO merged the two units, he assumed a single revenue model would bring harmony. But that simplicity was misleading.
The Problem with One-Size-Fits-All
On paper, one unified model means cleaner accounting and consistent strategy. In reality, it can crush the nuances that make each business thrive. Standardization helps with efficiency but can kill adaptability. On the flip side, letting both models coexist invites chaos and confusion.
That tension between clarity and flexibility is everywhere. It’s the same question startups face as they scale: Do you double down on what’s worked so far, or evolve with what the market demands? Alignment breeds focus; flexibility breeds survival.
How I’d Approach the Merger
If I were the PM asked to mediate between Isolde and Emanuel, I wouldn’t start by choosing sides. I’d start by understanding where value truly lives. I’d ask both teams to map their customer journeys side by side: What do hospitals and researchers care about most? Where does loyalty come from?
From there, I’d pilot hybrid ideas. Maybe a subscription-style model for researchers, or a pay-per-use option for clinical labs. Small, testable experiments reveal truths faster than debates ever will.
I’d end by defining shared principles instead of rigid rules: prioritize customer value, price for outcomes, and protect long-term relationships. Those principles give structure without strangling creativity.
The Takeaway
This case isn’t just about pricing models; it’s about identity. It’s about how organizations evolve without losing their soul. Maybe the real answer isn’t one model or two. It’s building a culture that knows when to focus and when to flex.
