Rickerism

I was touring one of the mansions along the Hudson River and noticed a custom-made telephone built into the wall in the foyer. The tour guide said that it was one of the very first telephones. In fact, the phone number was 7.

It made me wonder, what in the world was the owner buying? Certainly nothing practical, for the owner probably already knew the six other owners of telephones in the country. The owner of that Hudson Mansion was buying into a vision.

It is very common for startups to sell a vision in their first phase. When you are just getting started, there has not been enough time and resources to build all the base functionality into the product. The product has only the promise of what it will become. That is enough for some customers. Geoffrey Moore calls these customers early adopters in his book Crossing the Chasm.

In the early life a startup, the company is a research and development (R&D) organization and the CEO and VP of sales are evangelists. The message to the customer during the R&D phase is the vision of what is coming, not the specification of what is available now. A certain amount of tap dancing in front of customers is natural.

Once the company starts to ship product, however, the dynamics change. The leadership of startups usually misses the inflection point and chaos descends upon the company. Once the product ships, customers begin to have tangible expectations and requirements of the product. Tap dancing in front of the customer now leads to consequences. The CEO or the VP of sales has become accustomed to talking about future things as if they were real today, as visionaries are supposed to do. When there is no product shipping, a customer can easily recognize that all that is being discussed is vision, not specification.

In the R&D phase, sells meetings with the customer take on a form of market research. The customers ask a question, “Will the product be able to do X?” The CEO has never thought of X, but in his entrepreneurial spirit he is quick to recognize an opportunity. “Absolutely,” he responds and then returns to the development team and says, “Add X to your list of features.”

Once the product is shipped, a customer can become easily confused between what is in the product now and what is vision. At this point, the customer stops asking if and starts asking when, and the CEO, painted into a corner by his own words, starts committing dates. Chaos descends upon the start up because the sales team is committing the company to deadlines that its meager development resources cannot meet. The developers have no relief because the over commitment is being led by the CEO’s example.

At some point, the start up must change from selling vision to selling what’s on the truck. That is, the sales team must sell the product based on its current features and not sell it based on future capabilities. When a customer asks, “Does the product do X” then the salesman cannot lie. He must bite the bullet and say, “No, it does not.” He must communicate back to the product manager that customers are asking for X and get the feature prioritized in a development cycle.

The inflection point of selling what is on the truck is very painful for most start ups. The start up will destroy itself if it does not change. It usually means a change in leadership in order to transition the culture of the company. If the CEO has a sales background, it usually means that he must go. A sell-the-vision CEO cannot change his stripes. Most leaders cannot accept the fact that what was successful before, what was actually the deciding factor to the company’s success up till now is suddenly deadly to the company going forward.