Software Destinations

A lot of start ups formed from refugees from other companies often fall into the trap of thinking that sales is someone else’s job. In large companies, you’ll find employees who think this part of the company codes; that part of the company sells. It is a sickness that can cripple the big boys and kill start ups.

Big companies packed full of highly competent (and well paid) people can get away with this. There are plenty of coders, product managers and leads that work at Intel, Microsoft, IBM and Oracle and all they think about is quality of code. Then they come home and forget about work, even though they may have some built up good will they would like to share about the products they make. Some big companies harness that good will and encourage corporate blogs, like Macromedia .

Start up CEOs who tolerate bureaucratic thinking may be secret bureaucrats themselves. I have seen this often in companies run by Engineer CEOs (CEOs who developed the product or, came fresh out of engineering to start a company). They maximize the resources allocated to engineers and do their best to isolate the engineers from the rest of the company. The result usually is:

1. Reducing the overall creative value of your entire team. Anyone involved in the company can become an influencer and spread good will. Because of their specialization (accounting, logistics, coding) they may have a special spin on a creative use for your product. You dont want to tear your coders away to look at mock ups. Instead, keep them involved in total milestones and create new channels of communication. This kind of involvement promotes sales.

2. Dumb fixes. If employees arent engaged in thinking about sales, they arent thinking about what turns a potential customer into a real customer — what makes them buy. For example, any software product must meet overall usability (ease of use) expectations if the software is going to sell. Engineers who think only about technology and not saleability can come to expect that usability problems can be solved solely by clever documentation or a really hot marketing campaign. When has this ever worked? Engineering has to deliver marketable and sellable product AND believe in it.

3. Arrogance followed by humiliation. Pack a group of big company escapees into a start up, and they often carry with them a bureaucratic mindset and a perspective grounded in deep pockets and mature infrastructure — the very things that a start up doesn’t have. For example, during the late ’90s a major graphics software company transformed themselves into a dot com and sold or licensed off all of its shrinkwrap products. At least one of those companies picked up and ran with one of the most popular titles; the company was made up of corporate escapees, mostly middle managers that never made serious strategic impact on the parent company. Initially flush with cash, they overhired and overpaid, they ignored serious opportunities with potential partners of similar size and mostly spent time planning but not following through on licensing to companies unwilling to listen. For lack of real involvement, the company was forced through several rounds of lay-offs, followed by eventual but necessary acquisition.

Another reason why Engineer CEOs are vulnerable to this is sin is that they may mix up the process (creating software) with the goal (making a profitable business). This doesnt mean ship lots of useless but provocative products. This is where a pure business CEO is different from an Engineer CEO. A pure business CEO measures success by sales, market growth, meeting milestones towards exist strategy, and more. In other words, the same practices that every company must follow. They do not see the technology as an end unto itself. For the pure business CEO, you make a great product as a stepping stone towards making sales. They do see sales and marketing as life support systems alone for creating technically superior products.

This article now available in a revised form on The Technology Tribe.

This entry was posted on Friday, August 26th, 2005 at 2:22 am and is filed under New Vendor, Engineer CEOs. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.