Kelvin Hartnall

Customer Focus

When starting this blog, one of my goals was to reflect on the different business lessons I have learnt in my professional life and attempt to articulate them. My first lesson-learnt appears to be self-evident: customer-focus. In my opinion, customer focus is a critical factor for a successful company, though it is often missed. How is it that something that is so obvious is so often missed?

My first job out of university, back in 1996, was for a company called Dialogic. Dialogic had invented the computer-telephony hardware market, had approximately 80% of the market-share, and was a global NASDAQ listed company employing nearly 1000 people. The division of Dialogic that I worked for was based in Auckland, New Zealand, where we were developing a middleware product for the computer-telephony industry called CT-Media. It was a product that made a lot of sense for the industry, and even now on reflection it was a compelling solution that should have been successful given the resources we had available. The concept of the product held so much promise that even prior to wide-spread adoption of the product, Microsoft signed a partnership with Dialogic for $20 million USD and purchased a 10% stake in the company, and it was a factor that motivated Intel to acquire Dialogic out-right. So you would imagine, with the resources available to us and the compelling market opportunity, this should have been a success. Unfortunately this is actually a tale of woe as we failed abysmally. Over the years I have reflected in hind-sight and I have considered the various lessons from this experience. The most critical and influential lesson for me was customer-focus.

A few years ago I enrolled in a marketing course at the University of Auckland, and in one of the very first lectures we discussed the development of the marketing concept. The model put forward was about the move from the ‘product concept’ to the ‘marketing concept’. Under the ‘product concept’ a company attempts to build a better mouse-trap; under the ‘marketing concept’ a company attempts to find a better solution to the customer’s mouse problem. I was able to immediately relate this to Dialogic and CT-Media where we were building an elaborate mouse-trap without any attempt to actually consider the problems that our customers really wanted to solve. When I consider the approach that we took I can see many examples of the problem that led to this:

- The majority of engineers didn’t have any customer contact at all. Initially customer-support was performed by the QA department, which tended to be the most junior of engineers straight from university. It was felt that having them deal with the customers would free up time for the experienced engineers to develop the software. When the product gained some publicity and a number of customers were trialling the software, Dialogic decided that dealing with customers involved too much of the junior engineer’s time. Therefore this support role was transferred to New Jersey.

- Requirements analysis was not performed by the development group. The New Jersey head-office had the sales and marketing functions and hence took complete responsibility for requirements analysis. This further freed up the time for our engineers to do what they did best: develop wonderful software.

- We actively discouraged customer interaction. Occasionally some particularly important and high visibility customer would interrupt our work by scheduling a conference call. To try to avoid this we would block out days of the week when we couldn’t be disturbed.

- We assumed that our customers just really didn’t get it. They just didn’t understand how brilliant this complex product was and they failed to appreciate the intricate beauty of its internal design. Therefore, on the occasions that engineers were involved with an actual potential customer, the objective wasn’t to listen to the customer and their unique problems. The objective was to educate the customer as to how they should structure their solution or modify their requirements.

- Some initial customers had issues with the software. In general, we’d point out that version 2.0 would fix all their problems and that they should just wait for the next release. Version 2.0 was released approximately three years after the initial version and didn’t actually resolve the issues that the customers actually had. However, it did contain additional clever abstractions, and clean beautiful code.

In summary, our focus was on building a beautiful product, but we didn’t really understand the customer problem that we were trying to solve, and we didn’t listen when the product failed to solve their problems. So it isn’t surprising that customers didn’t use it. Therefore after spending tens of millions of dollars in development, the product was canned with only a handful of customers.

This blog entry begets another. How can you organise a software development effort to ensure that it is customer focused instead of product focused?