Evolution, Not Revolution
Building a brand new software product is tricky and uncertain; success can never be taken for granted. Most entrepreneurs recognize that you need courage, resilience, and infinite patience before your product gains market traction and acceptance.
I remember TEOCO’s early days with SONAR, our analytics platform for margin and revenue assurance. We knew that it was a strong solution but SONAR had managed to attract just one customer in two years. Fortunately, I am a patient person and did not lose heart. Our eventual success was, therefore, rather satisfying.
Most start-ups use a very different modus operandi for technology development, especially if the projected market size is huge. Instead of being patient, companies, often egged on by their VC sponsors, choose to join a frenetic race in developing technology as fast as possible. They throw enormous sums of money at technology teams to speed up development. This approach is wasteful – because the cost of making mistakes can be debilitating and often fatal.
I guess that’s what happened when our former competitor, Vibrant Solutions, tried to leapfrog from their Cost of Access (COA) cost management solution to web-based ViewLogic. They were in a tearing hurry and lavished money on product development. Sadly, while they ended up with a good software product, everything around it was wrong.
When they introduced ViewLogic, Vibrant’s strategy was to freeze all development on their old COA product. What they didn’t realize is that their customers would be reluctant to migrate to a new – and unproven – platform. Vibrant then compounded this error by asking customers to pay almost a million dollars more to upgrade. To no one’s surprise, most of their customers decided to walk away. Vibrant’s revolution failed.
An evolutionary development cycle usually makes more sense. Sure, you will still make mistakes, but you now have a high probability of recovering. Consider TEOCO’s strategy to migrate our customers from BillTrak Pro (BTP) to our web-based BillTrak on Demand (BTOD): we did not freeze, or prematurely, retire BTP because we knew our customers were comfortable with this product and trusted it. We did everything slowly: we created a small development team, spent a year creating concepts and prototypes, demonstrated our prototypes and dashboards to our existing customers, and used the feedback to craft a better product.
When we eventually migrated to BTOD, the change was largely unobtrusive and seamless. Customers evolved from BTP to BTOD at their own comfortable pace.
We faced a similar challenge several years later with our RF Optimization product suite, Mentor, but we got it wrong this time. We tried to build a new product called Mentor Sparks with a modern technology stack. After 18 months of investment, it was clear that we still had a long way to go until we had a marketable product. We abandoned our focus on this effort and went back to evolving our existing product suite instead. Today, Mentor is a 5G-ready, advanced analytics platform with built-in geo-location capabilities and a modern GUI. In software development, evolution, not revolution, is the way to go if you want to protect your existing customer base.