Every damn time in the Dude’s career that he has caved to pressure to build a product based on sales demands he’s been burned.
Every damn time
And it has happened again. Although the Dude didn’t green light this project, he was in the drivers seat.
The Lead In
Where the Dude works, they have a strong catalog of products. We build these for strategic or market driven reasons. Strategic is to support other parts of the company, and market driven is to meet the ocean of demand for his products.
But we can’t build everything. So there is (or was) a small team to build one offs, and customized products for customers willing to pay for the development.
This mostly works. If a customer wants something tailored to their needs, and is willing to pay for it, we are happy to take their money, turn the crank and pop out something for them.
The Dude is barely involved in these efforts. He doesn’t do any analysis, no formal stage gates, hell, he doesn’t even set the pricing. This custom engineering team is structured to do it. Most of the Dude’s efforts in this area is to see if any of the custom developed variants make sense to pull into the product portfolio (hint: this is a rare occurrence. Most of the custom products are far too specialized for the broader market).
But sometimes, the customer doesn’t want to pay the freight to develop their custom variant.
What happens then?
Suppose the customer is being obstinate. They insist that this is a common need. That other customers have the same need. That they shouldn’t be forced to pay for it.
Then the Dude gets involved. He has to do some market analysis. He has to evaluate their ask. He has to gauge the general interest. Is it just this class of customers (think major telecoms)? Or is it more broadly applicable? Can he find some other likely adopters?
Truth be told, our products aren’t that expensive to develop (tens of thousands of dollars) so he has some latitude.
But usually, the Dude finds that:
- This is really a niche requirement, and no two customers will want the same variant
- That this niche has a limited window of opportunity. A technology shift is under way (think 4G to 5G evolution in mobile) and this is for legacy solutions.
- Apart from overly enthusiastic sales people, the Dude finds no support for a general case of this product.
So the Dude says no.
Story over. Or is it …
The Back Door
The sales person refuses to abide by this decision. His customer NEEDS this, and he feels that they shouldn’t shoulder the burden. That we should build it, and the market will come.
Where has the Dude heard that before?
Oh yeah, at EVERY fucking company he has worked at, this is a common paean sung by sales. If you build this feature to compete with X, we will win all the orders. Or “my customers need this version of an instrument, and it will sell bigly”. Or they will line up other assets in different business units. They will fabricate rosy forecasts. They will show a pipeline of orders (and swear that each of these will buy our product in droves). Forecasts that would make the Dude’s volume runners totes jelly (hint: none of these niche-y offers will come close to the 40% of our revenue that comes from just ONE of the Dude’s products).
But this small, dedicated team of developers? They are easy to convince. Is it a technically interesting development? Is it something they would like to build? Do they have time? If these all are ‘yes’, then they can initiate a project on their own.
So they did. Last spring (yes, in the beginning of Covid) they agreed to build it, even after the Dude expressed his findings that the project would be a failure. They bought gear, and began assembling the product. Projected release was Summer 2020. Then it slipped to the Fall. Then it slipped to Winter 2021, then to Spring 2021. It wasn’t ready. A comedy of errors, gaffes and people leaving/retiring, and we are here. Our first delivery of an incomplete product went about as well as expected.
Without getting into details, it seems that we need to rework the whole thing. Some of the components we built it around are obsolete. The tooling is dated, and we will need to make a significant investment in gear to match the product to what the customer needs.
Now, we have several issues to deal with:
- The sales person sold this as something that it is not. The customer was expecting a Cadillac, and we delivered a Lime scooter.
- The product as developed, includes some proprietary information from an early technology transfer that seeded the project. Yes, stuff that is covered by an NDA with someone else is in this product (yikes!!!!!)
- The product is nowhere near finished.
Remember when the Dude said that most of his products are relatively inexpensive to develop? That is because when we do the upfront work to scope and define what a product should be, we pay a lot of attention to the cost to develop. If something can be virtualized, containerized, packaged and deployed on a SaaS or PaaS environment, we do it, and that saves us a lot of up front costs.
But some products that is not feasible, and then we sharpen our pencils, and focus our market research efforts to ensure that there are truly customers who will buy the product. Then, and only then, do we go through the development process, with stage gates, and the usual processes.
So, now the Dude has two problems.
A major project that spent an insane amount of money to develop, that needs another huge infusion of cash to make it meet the commitments.
And, a market that is skimpy, and with an opportunity window that will close in the next 18 months, such that even if we were ready to rock and roll, in a year and a half, there will literally be no market need.
The Dude gets to decide whether we continue or not in this endeavor. Sales has once again circumvented our governance to get what they wanted, and all the reasons why Sales shouldn’t do this have come home to roost.
And the Dude gets to be the bad guy.
The irony? Just two months ago, this sales person tried to convince leadership to expand this project, add more capacity, all based on a wildly overstated demand projection that assumed that every possible interested party bought it in the next 18 months, before the window slammed shut.
Truth bomb: You never run the boards in a market, you never get 100% of the opportunities to close, and your funnel is funnel shaped for a reason, instead of being a big fat pipeline, and the Dude would have to be an idiot to green light this.
But it is what it is. Pass the blunt.