Don't try this at home!
I believe there is a doom cycle that kills B2B companies that goes like this:
- Not hitting commitments. You are not hitting your commitments to some of your customers. You sold the dream, promising to deliver a certain functionality / ROI, but they are not getting it.
- Customer disillusion & churn. As a result, these customers become disillusioned and churn.
- Harder to sell. People talk, and your reputation takes a hit. Your new potential customers hear about the experiences your past customers had, and it becomes harder to sell.
- Overcommit to sell. It's harder to sell, so you overcommit to still try to hit your targets. Harder to keep/grow team. You are not hitting your sales targets, so it is harder for your company to raise / reinvest money to grow the team to help deliver your commitments. Both of these lead you back to #1.
How do you enter this cycle?
Entry point #1: not hitting commitments
You can get into this without any external pressure from:
- Bad communication. Sales simply promises things to get the deal over the line, or to get better terms on the deal. They did not receive enough push back from product/engineering. Or product/engineering agreed but misjudged the complexity.
- Remedy 1: "Innovation is saying no to 1000 things". Don't be afraid to push back on requests. Be transparent and realistic with your customers, they will appreciate it.
- Remedy 2: Be extremely clear about what your product does, don't do, and the maturity of the product
- Overengineering. The engineering team is left too much space to overengineer things, and they are not shipping incrementally to customers (which, by the way, can keep a customer happy even if a project is late overall)
- Remedy: KISS. Keep it simple stupid. Do NOT get lured by the engineers who love the sound of their own voice and building complex things.
If there is one thing product management is in charge of doing, it's making sure these two causes don't happen.
Entry point #4: harder to keep/grow team
You can get to this from creating a stifling, political, bureaucratic company culture which drives away your best engineers and product people. Once you lose them, it is of course harder to hit your commitments and you enter the cycle.
In previous posts I wrote about two examples of causes I see of this, and some proposed remedies. There are of course many more:
Conclusion
In B2B the success of your product and company is predicated on good customer relationships. If you burn these relationships, for example by overcommitting and not delivering on promises made during the sales cycle, your reputation takes a hit. This makes it harder to close new deals, and to raise funds, which in turn makes it harder to grow / retain the team which can help you hit your commitments.
I see two "self-inflicted" ways of getting into this doom spiral. The first is not hitting commitments because you are not clear enough on what your product can do, you let sales overpromise, or you let engineering overengineer. The second is that you lose your best talent because you have made your processes too bureaucratic & stifling, so you don't hit your commitments.
Entering and staying in the spiral is mostly caused by bad communication - and can be fixed by good communication. Product management is a communications job, and it should play a pivotal role in keeping you out of the spiral.
Stay safe out there.
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