Startup losing its focus, is there danger in overextending?


4

I am a software engineer working at a startup of less than 5 years that has a mildly successful software that brings in enough money to keep the lights on and everybody paid. I am currently the only software development employee at the moment.

I work pretty closely with my manager who was actively seeking opportunities to expand new software product ideas with a focus on our core competencies and proven technical solutions that we do well.

I feel lately that things are flying wildly off track. I am being brought into sales pitch meetings with customers for ideas that only vaguely resemble the original business plan and enter into areas that are not our strengths. The sales guys all have a positive can-do attitude so I hold back on my fears until I get time for a followup meeting with them and they do not seem to understand when I tell them that they are overcommitting and downplaying the complexity of what they are selling. It is all new ground too so we have little to build off of from our original products.

Further when I present the hurdles to them they just assume that their is some "third-party component" that can be easily plugged in so that these ideas can be implemented quickly. Most of the time there isn't.

On top of that, they are talking with MANY different potential customers, which is good because you want to hedge your bets, but what if they all want to sign tomorrow and they all want what they are promising in less than 6 months? It would be a disaster, they don't have enough money to hire me a team or even the very necessary hardware I need in house to do the kinds of work they are committing ourselves too. I understand venture captial can make these happen after a deal is signed, but if you have to deliver in 5 months and there is still no team, it would be at least 3 months to get a SD team together and fully trained to actually tackle the project!

I won't even get into how terrified I am by the "quality" of the customers they are talking to. Over the phone their needs are simple, you meet with them in person and suddenly what they are asking for morphs into PeopleSoft and the sales guys don't know how to say no.

I am having a lot of anxiety lately and was wondering if I am just worrying about nothing. The sales guys seem disgustingly optimistic about this all but I can't seem to shake this sense of a painful foreboding in the company's future. Do you feel that the sales guys are making the best choice for the company, or should they be more conservative?

Is it better for a startup to focus on its core competencies and vision, or wildly swing at every possible opportunity that vaguely resembles the company mission?

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asked Oct 27 '11 at 22:41
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Maple Shaft
323 points
  • This question belongs more on **programmers** than here on startups... It has more to do with business of software than it has wit startups. – Robert Koritnik 6 years ago
  • @RobertKoritnik, I am not so sure... if I replace 'programming' with 'commercial office construction' then it does fit in Startups. Surely there is some overlap. – Maple Shaft 6 years ago
  • Fair enough... But this one is about software development. And marketing in software development is often selling horse s... to customers knowing (or not) they can't deliver it. Maybe other fellow developers have a better idea how they tackled it in the past themselves. – Robert Koritnik 6 years ago
  • @RobertKoritnik My technical problems right now are offtopic here, which is why I am not delving into them. A short history, the company is in trouble, they had terrible widget makers who all left at the same time. They hire me to save them, a guy with a LOT of experience building widgets. I start from scratch because the old guys were idiots, build and deliver the widgets BEFORE the deadline single handedly. Manager appreciates and respects me. Now potential customer wants gadgets, I am not so experienced at building gadgets. Manager thinks I am being modest. Feel in over my head suddenly. – Maple Shaft 6 years ago
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3 Answers


2

I think you have a good grasp of the situation, and likely already know what decision you need to make.

It sounds like your upper management is realizing that their business model is flawed, so they are flailing around trying to bring in more business to keep things afloat. This isn't bad in all cases, but it seems like they don't have a good grasp of their resources.

For a startup with limited resources there is a very real danger in overextending yourself, just as there is danger in growing too fast. If you don't have the resources on0hand to absorb the costs associated with changing and expanding the business, you shouldn't be trying to.
And like you noted, relying on VC or angel money to bail you out isn't going to cut it. The deal cycle for VCs can be upwards of 7 months, Angels around 2 months. So that wont work.

As the software guy, you need to sit down and have a very frank talk with your management about what resources you have, and hopefully get the salespeople reigned in. Like I said, looking for other opportunities isn't too bad of an idea, but you need to focus these really well.

I would suggest a big meeting with sales staff, management, and technical staff. At this meeting you need to pull out all the prospects you have, and vet each one individually. As a company, I would guess you're trying to develop a product you can continue to sell to other customers. So when you're vetting the customers, find the products with the best potential, and don't require a lot of extra resources (or of they do, plan on how to get them earlier on). And find out which ones mesh well with your current business.

You guys need to communicate more, or you're never going to get past this point. Hope this advice helps you out a bit.

answered Oct 28 '11 at 00:14
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Bwasson
1,162 points
  • This helps a lot thank you... I have resigned myself to not look for new opportunities because my resume upon first glance makes me look like a flake. If the ship starts to go down I will grab a violin and start playing. I also like the fact that I am given technical leadership and for the most part my opinion matters greatly. I like it here and believe in the vision and feel if they become successful that I would be rewarded. I suppose I should have this talk. I would feel better if they let me start interviewing and purchasing hardware now so we can hit the ground running if needed. – Maple Shaft 6 years ago
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2

If a startup realizes its business model is flawed, or that there are bigger opportunities in another market, it can pivot and modify its original vision. But "swinging wildly at every pitch" is not pivoting.

It's not only a burden for the development team, but it's bad for the company in the long term. What's going to happen when all of those customers decide to buy, but they're all expecting a different product?

Some tips that come to mind:

  • Try to push back when asked to sit in on sales calls or meetings. It's too easy to get "trapped" between your sales guy and the potential customer: "Sure! Of course we can implement that feature for you... can't we?" <glares at you >

    Say that you're busy working on all the other features they've promised. ;)

  • Ask one of the founders or executives out to lunch and ask them about the company's vision. Encourage them to keep talking about the future for as long as you can. If you get a sense that they have a handle on everything, maybe your worries are unfounded. But if they seem unsure, then there might be signs of trouble.
  • Bring some of these concerns up with your manager. While you've got your head down writing code, he or she is supposed to be focused on strategy, and acting as a shield for you so that you can focus on what you need to get done. They'll be a good resource for asking questions and brining up your concerns. In fact, that's their job.

Basically you need to figure out if people in power know what's going on with the sales team, and have a handle on what they're doing. If they're unaware of the problem, make them aware.

If they know about it and think it's okay, then it might be time to start looking for another job. It might not be if you really have faith in your founders, but that's something only you can figure out.

Good luck!

answered Oct 28 '11 at 00:47
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Hartley Brody
1,317 points
  • Just a comment, the sales team IS my manager and the VP/Comptroller and both are executives and have at least some stake in the company. I am paid very well and get bonuses at their discretion but have no stake. – Maple Shaft 6 years ago
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1

Your paragraph that starts with "On top of that, they are talking with MANY different potential customers, which... " sums it all up nicely. You should make company owners aware of these facts and your manager should be very well aware of this since they're marketing. They should be aware they're selling false promises.

If they dismiss your arguments then I can think of nothing else than that:

  • they're either stupid/blind/both
  • they're very well aware of the customers and their (un)seriousness to get involved; hence they can sell them anything because customers eventually won't buy the product

If the first one is true, then your arguments should be convincing to your manager (when sitting at the same table with company owners)

If the second one is true, you have nothing to worry about.

answered Oct 28 '11 at 01:36
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Robert Koritnik
308 points
  • What they are selling isn't absurd, but the timelines the customers want are tight and if more than one of them sign then we are in trouble. – Maple Shaft 6 years ago
  • @maple_shaft: hence the *false promises*. Each can be done, but not more. They're not selling to one customer but many. So they're making false promises. So basically this is not a question whether they'll pull it off but **when** will it break... – Robert Koritnik 6 years ago
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