In June of 2011 Forbes Magazine published a short article by Bill Fischer on the Forbes.com website: Ready, Fire, Aim!. Bill notes a familiar malady that infects many entrepeneurs starting new businesses, namely, a near compulsion to “move fast, seize the opportunity and even learn by failing“.
It is worth noting that Stanford University School of Business, in 2006, introduced the same concept of a unique and dubious connection between
startups and impatience, but with a suggested remedy in a research project completed by Mark Leslie & Charles Holloway titled The Sales Learning Curve.
I’m personally familiar with this malady, having worked with CEOs who’ve tried to use this approach to literally re-architect products “on the fly” based upon responses received from prospects and customers. Sad to say, I’ve rarely seen this type of strategy work. Sure, listening to prospects and customers makes sense. Nevertheless, the best time to listen is prior to going to market. The safety of operating under the radar, before products have been presented to the market, provides the time required to get products right, not to mention the time to carefully put together a marketing plan, if not a complete business plan. Skipping these steps can prove to be a catastrophic error.
The most common excuse that I’ve heard for utilizing Bill Fischer’s “Ready, Fire, Aim” approach is that a business is under capitalized. When this excuse is coupled with a CEO’s intention to retain full ownership of the business without recourse to outside investors (who, presumably, will want too big a piece of the pie) a spell binding mirage appears on the horizon, which, if left to captivate, can lead the fixated captain of the ship right over a cliff.
Consider, for example, the negative impact of selling hardware devices that are still in development as finished products. Certainly sales revenue is attractive, but at what cost? One client of mine developed a strategy nicknamed “ROM a day,” This “ROM a day” regime, basically a regular process of mailing out processors with bug fixes along with installation instructions directly to customers, did NOT keep the “doctor away.” Fact was that the bugs had been identified by the very same customers who were now being asked to embark, in some cases, for a third or fourth time on a remedy that still might not work. The engineering changes were made too quickly, in complete reactive mode. No one had thought out the big picture, nor had anyone noted the danger of using paying customers as little more than alpha testers without their permission.
The sobering effect of “ROM a day” was the loss of important customers who otherwise promised rich revenue streams. Further the reputation of this customer’s business was tarnished by public comments from these important customers who wielded considerable influence in their markets.
I always counsel to undertake any proof of concept activity from a position that is under the radar of the broad market. As far as revenue requirements go, better line up the funding you need before you go forward or else risk destroying the most important and promising prospects through your renovation process.
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