Internal Tools Become Products

A strategy of taking internal tools built for company operations and turning them into standalone commercial products. This approach has led to several successful businesses.

Key Examples

• Palantir ($50B company)

  • Originally built as internal PayPal fraud detection system
  • Transformed into government counterterrorism tool after 9/11
  • Expanded from fighting financial fraud to broader security applications

• Beehive (Newsletter platform)

  • Built inside Morning Brew ($100M/year business)
  • Internal tool for newsletter operations and growth
  • Now approaching $10M ARR as standalone product
  • Features built-in growth tools like referrals and recommendation systems

Why It Works

• Proven Product-Market Fit

  • Tool already validated internally
  • Clear use case and value proposition
  • Real-world testing completed

• Reduced Development Risk

  • Core functionality already built
  • Understanding of actual user needs
  • Known technical requirements

Success Indicators

• Tool was critical to parent company's success
• Multiple companies facing similar challenges
• Internal tool required significant engineering resources
• Tool provides competitive advantage
• Solution applies to broader market beyond original company

Implementation Strategy

• Identify internal tools that solved crucial problems
• Look for tools that required significant engineering investment
• Evaluate if other companies face similar challenges
• Package internal solution for external use
• Add features needed for commercial deployment

Benefits

• Lower risk than building new products
• Clear understanding of value proposition
• Existing proof of concept
• Faster time to market
• Built-in case study from internal use