Starting with some VC-backed capital, a couple of guys started a small company and hired a group of above average developers. The domain was defined but there was no defined product specification. So, all developers started developing ideas in code instead of exploring designs on paper or on inexpensive mockups to market test them. No arrangements with distributors were investigated, no marketing plan devised, no product sheet made.
Instead of having a clear goal of where to end up and align people, cash and energy where spent going in all directions.
 |
The figure on the left shows that from the starting point, efforts where going in all directions without coordination.
This has several effects:
The cash burn rate was higher that it would have been if the target was kept
Given the fact that cash was going down to dangerous levels for the survival of the business, branches which were the furthest from the real target got cut, meaning a net loss
The branch which was the closest to the target was retargeted but there was not enough money to end up with something as big as the initial target
As such the final product was smaller than expected and was not aligned with anything. The point is that in this case, there were already competitors in the field and the final product could not compete with the other products on the features and usability level.
A lesson that may be taken out of this rather sad story is that having a vision and a plan to work it out and, most of all, find a way to sell it properly are key in finding success on the software marketplace.
