“Adjacent” is the most flexible word in a planning meeting: everything is adjacent to something. To make it useful, ask what the new category shares with the core, one dimension at a time. Each no is a step.

The four shared things

1. CustomerDo your customers already buy this category, from anyone? Ask them. If few do, you’re acquiring a new audience with your brand on it. Score 3 if most already buy it, 0 if almost none do.
2. OccasionIs it used at the same moment, for the same need, as the hero? Filters are used every time the coffee is. A sweatshirt isn’t. Score 3 if it’s used with the core every time, 0 if never.
3. Supply chainSame kind of supplier, manufacturing, packaging, shelf life, shipping cost and returns? A new supply chain brings new minimums, inventory risk and ways to be late. Score 3 if current suppliers and warehouse can handle it, 0 if everything is new.
4. ProofDoes the reason people trust the hero carry over? If they buy you because you’re the most durable or the best tested, does that obviously apply to the new thing? Score 3 if it applies without explanation, 0 if you’d earn it from scratch.

A score of 0 or 1 on any dimension counts as a step. No steps means you’re deepening the core. One step is the next ring. Two is a stretch that usually needs a partner or a very good reason. Three or four is a new business, and it should have its own business case, not a slot in the product calendar.

Proof matters most. The brand extension research in chapter 5 found that fit is the first thing customers judge an extension on, and a 2023 meta-analysis of that research found that usage fit, which turns on how the products are used, was the weakest kind Published. So a shared occasion without shared proof is probably weaker than it looks. Filters for a coffee brand pass on both. A coffee brand’s branded mugs pass on occasion and fail on proof: nobody thinks a roaster makes better mugs.

Count the nos. Each one is a thing you’ll have to learn with real money.

The number that decides it

Distance tells you the risk; the launch still has to pay. The quickest check is how many existing customers must buy in year one to earn back the launch cost: development, samples, inventory you may not sell, photography and the team’s time.

Say a coffee brand with 20,000 active customers is weighing cold-brew concentrate. It expects buyers to spend $60 a year on it at a 35% contribution margin, so each buyer is worth $21 a year. Launch costs come to $60,000. It needs about 2,860 buyers, or 14% of its active customers, to break even in year one on the base alone Derived. If its own plan assumes 10%, the launch loses money in year one unless it brings in new customers, and new customers cost money to acquire.

With the defaults, the cold brew scores 8 of 12 and sits one step out, on supply chain. It needs 14% of customers to buy in year one to break even, and the plan’s 10% leaves an $18,000 loss on the base. That’s not a reason to kill it. It’s a reason to run the waitlist in chapter 11 before ordering stock, and let 2,000 sign-ups or 200 tell you which plan is real.

Score candidates as a group, with someone who talks to customers every week. The scores are judgments; writing them down before launch stops them changing after it.

Do this

• Score your top three candidate categories with the tool, in one meeting, and keep the sheet. Anything two or more steps out goes to chapter 12 before it goes to a supplier.
• Test “shared customer” with the survey, not a guess: ask what share of your customers already buy each candidate category somewhere else.