wandercoding.com

I worked for nine years at a major software company specializing in computer aided design software.  During my tenure there, I worked on three major software products which were sold to end users.  The first one, a diagramming products was priced at $199 (or was it $299) and was competitive, both in functionality and price with our competitors.  Sales were ramping up slowly when our competitor was bought by another huge and pervasive company.  This made our product’s future very bleak and it was dropped soon after.

Our next product was an architectural product.  Our competitors charged $500 for a very cool and fairly functional application.  When we finally came out with our first release, it went to the company’s pricing committee, which decided that we should charge $900 (our marketing guy had recommended $500).  It was a cool product and some functionality was better, some not as good, as our competitor’s.  However, the pricing was totally out of whack.  At $900, the decision to buy needed more levels of approval and couldn’t just be purchased on a whim by most architects.  Conversely, a $500 product was much easier to justify and purchase.  After a couple of years of good reviews and slow sales this product was dropped.

The third product was a view and markup product, priced at $199.  It was just what the market needed and wanted and sales were setting records at the company.  Eventually, however, it was decided that it was an important strategic product and should be used to help the company’s general bottom line.  It was given away for free as part of this corporate strategy.  While this was fine for the company, it wasn’t so great for the group that developed it.  When your group produces a toolkit, utility, or other free product, someone is eventually going to notice a red column on the corporate budget.  This is your group, employing many developers, but not providing any direct income.  It’s difficult to quantify “strategic product” on a balance sheet and the memory of why your product was so important in the first place is soon forgotten.  When lean times roll around, what do you think is the first group that’s going to be cut?

It’s sad and unfortunate, but being attached to strategic and free products/projects in your company may eventually put you at risk for being first on the chopping block.  If you’re on such a team, you must continually remind upper management why you were created in the first place and why you continue to justify your existence.  Failure to do so while only likely result in the decision to strategically eliminate a negative on the balance sheet, making your executive look good in the short term, regardless of the long term.  But, when did the future ever influence an executive’s bonus?

I was talking to a friend, Dave, at a party this summer.  He told me how the company he worked for (we’ll call it ABC Corp.)  was working on a contract for another firm (we’ll call them OtherComp).  ABC spent a great deal of time working on the database and software design for this very large project.  They wanted to be sure that they got it right.  However, 6 months into the contract, a competitor (EnemyCorp) approached OtherComp and said they could do the job better and quicker.  OtherComp looked at what ABC had produced so far, mostly design documents, and decided that they’d see what EnemyCorp could do.  EnemyCorp dived right in and started coding.  They produced prototypes and according to my friend were definitely not doing a great job on the whole project.  He suspected that after a while, ABC would be called in to clean up the mess that OtherComp bought from EnemyCorp.

I told Dave that this sounded pretty typical and wasn’t in the least bit surprising, actually.  You have to feel out your customers to see what they’re looking for.  This customer wanted to see something.  Not a document.  A working application.  Something they could look at and “touch” to determine how they liked it.  Something they could point to and comment on.  Tangible progress.

With any large project, there’s a need for solid design work.  However, some customers don’t have the patience to wait months or years to see the real thing.  Plus there’s no guarantee that your design will be perfect either.  For some projects, perhaps a prototype that goes along with the design work (or as some of the design work) would be more appropriate.  This could go a long way to convince your customer that you’re really making progress and keep them from getting distracted by another company.  Watching out for your customer’s best interests should be at the forefront of your activitites, but that might mean watching out for your own interests as well.