Build an early warning system to let you address product scaling issues before it’s too late
In my previous post, I discussed a problem that often becomes the Achilles Heel of many a startup: failure to scale the product. I painted a rather dire prognosis of the situation — virtually no company’s product is going to scale at the company’s level of growth.
Courtesy of Paysimple.com
My goal in this follow up post is to note the common vital signs and reasons why a company’s product might not be scaling as well as the financial and economic indicators are suggesting. If executives are able to recognize these issues earlier on they have a better opportunity to devise ways to address them.
Here are five early signs that your company’s product is not scaling:
1) Technical Scalability and Customer Service Issues
This is a hard one to miss. Increased downtime, customer complaints about product reliability, internal loss of productivity due to fire fighting in the R&D department, etc. All of these are tell-tale signs you have a problem.
Customer service issues might also be caused by an immature customer service organization, which is a crucial element of a scalable whole product offering.
2) Product Scope Creep
The warning signs for this problem, on the other hand, are often easy to miss. However, they can be tracked down with a strong PM organization. Issues include:
- Too many feature requests
- Increased technical debt
- delayed release
- last minute insertion of a “must have” feature
- feature bloat (new releases focus on adding new one-off features instead of pushing the vision of the product)
3) On-Boarding Issues
Customers are taking longer to get on-boarded to your platform, implementation of new customers cause major stress in the on-boarding team, leading to slower time to revenue and lower customer satisfaction
4) Growth of Customization and Implementation Services
This is related to the scalability of the product and product strategy. More customizations suggest that the platform is not evolving fast enough to satisfy the majority of the needs of the market, and you are trying to win by offering one-off features as opposed to showing true product vision and leadership.
5) Pricing Inconsistencies
These are caused by both product bloat (there are too many non-standard features that can be added or removed from the price sheet, making each deal a unique exercise in aggressive discounting and salesmanship), or simply a lack of discipline in the sales process (which, in turn, is a sign of lack of repeatability and scalability in sales).
Ultimately, a product leader will have a lot more negotiating power, and caving under pricing pressure is a sign that the product has not grown enough to meet the broader target market that the company is trying to win.
So your product isn’t scaling. What do you do?
The main thing to take away is that at any given point in a growing company’s life, its product is never fully set to scale along with it. It is always going to be just a few steps away from breaking due to the tremendous strain of growth on the company.
Scaling requires constant vigilance and efforts from the management team to recognize these early signs of failure, and to address them by putting in place the resources and processes required for the product at the next level of growth (note I said next — the fact is the current level of growth is already being surpassed).
Lastly, this is not about throwing more resources into R&D to build the next Dreamliner. The next level might actually require a better customer service organization and/or a more rationalized professional service offering. Each of those is part of a successful whole product strategy.
