Lately, have been dealing with specific conversations around new products in the market and and have started to realize this concept is not commonly understood.
J-curve is used in economics, business, and other fields to describe a situation where things initially get worse before they improve, forming a “J” shape on a graph.
There’s a strong correlation between the exploration-exploitation tradeoff in new products and J-curves:
- Exploration Mode (Initial Dip in the J-Curve) : When launching a new product or feature, teams often invest in discovery, experimentation, and innovation to find the best market fit. This phase involves high costs (R&D, marketing, operational setup) with uncertain returns.
- Exploitation Mode (Upward Growth in the J-Curve) : Once the right product-market fit, growth levers, and operational efficiencies are identified, the focus shifts to scaling and optimization. This includes refining the user experience, doubling down on high-converting channels, and increasing monetization.
If teams switch to exploitation too early, they risk premature scaling, leading to stagnation. If they stay in exploration too long, they may burn resources without capitalizing on wins. A well-managed transition between the two phases smooths out the J-curve, accelerating the path to sustained growth.
Longer Exploration = Higher ROI on Exploitation
By extending the exploration phase (without overdoing it), you’d ensure that once your team shifts into exploitation, they can scale faster, retain more users, and create a steeper, more sustained J-curve trajectory.