CHAPTER 2

PRODUCT DISEASES

When Good Products Go Bad

Without a clear vision and strategy behind iterations, products become bloated, fragmented, directionless, and driven by irrelevant metrics. They catch what I now call product diseases.

Most of us learn to build products through trial and error and develop an intuition for building products. Using intuition to keep your vision connected to your strategy, priorities, and tactical activities is like doing algebra in your head. It works well for easy problems, but for more complex problems you can easily make a mistake. Products become diseased when the vision becomes disconnected from the execution. This happens often, which is why product diseases are ubiquitous across industries and sizes of companies.

Diagnosing a disease is the first step to curing or preventing it. The vocabulary around product diseases was designed to be memorable so that as you self-diagnose diseases, you’ll be able to help others in your organization recognize them and buy into the need for a new way of thinking.

DISEASE 1: HERO SYNDROME

Hero Syndrome strikes when you focus exclusively on the scale of your impact at the expense of creating the change that genuinely inspires you.

Because of the business model of venture capital (VC) pushing companies toward higher-risk, higher-return decisions, VC-funded companies are especially susceptible to this disease. Here’s the story of my own brush with Hero Syndrome early in my career.

The first company I cofounded, Lobby7, began as a VC-funded company. From the moment we raised funding, we were encouraged to “go big” and scale. Our sales efforts targeted companies with recognizable logos, our offices were in the financial district in Boston so we would seem big to our clients, and we were burning more money than we should have.

That was 20 years ago, but Hero Syndrome is still rampant,¹ and several very public failures have been caused by leaders focusing on the scale of their impact rather than on the impact itself. Cofounder and CEO of Beepi, Ale Resnik, raised $147.7 million to build a marketplace for buying and selling used cars. The management team was focused on creating a big impact and scale. As a result, their priorities were fundraising and valuation, followed by a great exit, rather than actually solving a problem for their customers. For example, customers would often get pulled over for having expired temporary license plates because the company didn’t have its operations sorted out—getting titles and license plates to customers in a timely manner was an ongoing problem. The fundraising side, however, was looking better—Resnik told the Wall Street Journal in 2015 that the company was looking to raise a “monster round” of $300 million at a $2 billion valuation to fuel its national expansion.² Resnik was focused on the scale and public perception of his impact rather than its content; going big didn’t result in a better product. While the idea of Beepi was great, the company was sold for its parts in 2017 when it failed on execution.

Hero Syndrome is especially alluring because some “heroes” do actually succeed in changing the world in highly visible ways and command a large share of media attention. In the business world, the giants may make the most noise, but small businesses are the engine of the economy.³ Small businesses make up nearly half of private sector employment, and in the aftermath of the Great Recession, they led job creation, accounting for 67 percent of net new jobs created.⁴

When we let ourselves be consumed by Hero Syndrome, we end up focusing on the need to do something “big”—need implies coercion. Be kind to yourself and make the change that you want to see instead.

DISEASE 2: STRATEGIC SWELLING

Who hasn’t suffered from the fear of missing out (FOMO)? It’s easy to say yes to one idea or request after another, until you can’t quite remember what you set out to do in the first place. Through this process, our potential for impact gets diluted. We spread ourselves thin across many areas and don’t achieve any one goal at a breakthrough level. We call this Strategic Swelling.

By the late ’90s Yahoo’s home page was packed with features it had accumulated over the years—flashing pictures, horoscopes, financial news, groups, and much more. The company didn’t want to miss out on any feature that a consumer could even remotely desire. The problem, however, was that most consumers had a measly internet connection at the time and the packed home page took ages to load. Google focused on just one offering: search. With its minimalistic home page, Google was infinitely faster to load and quickly overtook Yahoo as the dominant search engine because of Yahoo’s Strategic Swelling.

Yahoo continued to expand its offering with a gluttonous appetite for acquisitions—it had caught an acute form of the disease. Here are a few of the 53 companies bought under CEO Marissa Mayer:

• Aviate (a smart home screen app)

• Polyvore (a Pinterest-like social commerce site)

• Tumblr (a blogging community)

• Skyphrase (a natural language processing startup)

At some point, so many features were packed on Yahoo’s portal that you had to click on “More” to get an alphabetized list of all its offerings. When you need to alphabetize your offerings, you have a serious case of Strategic Swelling.

Prayag Bansal, a student in my innovation class at Northeastern University, insightfully summarized his learnings on Strategic Swelling at the end of a group project:

As we defined our strategy, our product went from having many capabilities to having only one, well-defined capability. This was an eye-opener for me as sometimes doing more does not necessarily provide better results. Moreover, trying to provide a wide array of capabilities also leads to competing on more fronts and makes it harder to clarify your offering against the competition’s.

A scarcity of resources can sometimes help you achieve more by preventing Strategic Swelling. When Bruce McCarthy was vice president of product at NetProspex, he saw an imminent danger from Strategic Swelling when the executive team gave him a list of 75 initiatives that they wanted his team to work on. But McCarthy had a small team of six people and got agreement among the executives to focus on just three initiatives that year. Over the course of two years the team launched a series of products, but each was deliberately related to the company’s core product. By doing less, the team achieved more. They doubled their revenue each year and eventually sold the company to Dun & Bradstreet.

To recover from Strategic Swelling, organizations need a clear purpose that translates into priorities.

DISEASE 3: OBSESSIVE SALES DISORDER

Obsessive Sales Disorder was first diagnosed in the corporate world. Anyone involved with quarterly revenue goals will recognize these fateful words: “The customer is ready to buy. They just need us to add one small feature to our product.”

It’s a tempting proposition that sounds mostly harmless. I remember uttering these words myself. But by the end of the quarter, while the sales team is popping the champagne over their thick stack of contracts, the poor engineering team has a road map a mile long that’s completely driven by one-off customer requests rather than by the long-term strategic goals of the company.

Making this trade-off occasionally is one thing. But when we frequently give up long-term benefits to satisfy short-term demands, we’re likely to be suffering from Obsessive Sales Disorder.

Looking beyond the business world, Obsessive Sales Disorder manifests in politics too. The phenomenon of global populism represents politicians trading off long-term thinking for short-term voter satisfaction. Take the populist agenda of curbing immigration as an example. Without immigration, the working-age population in the United States is projected to decline by 2035. With boomers retiring, the country needs foreign immigration to balance this decline in the working population and keep funding Social Security and Medicare.⁵

Funding the system is a long-term problem. An election, on the other hand, is a more immediate concern for a politician. So, while we have clear data on the need for immigration, politicians suffering from Obsessive Sales Disorder will make promises to restrict immigration, trading off the future in exchange for votes today.⁶

This is not to say that you shouldn’t try to satisfy your constituents or that such a trade-off is always unacceptable. Such a stance would not be practical—you can’t always work toward the long term without thinking about what needs to get done in the short term. In politics, it would limit what you can get done because you could never get reelected. In business, when you run out of cash, you lose your potential for impact. In fact, you quickly stop being a business at all.

Trading off progress toward a long-term goal occasionally so you can survive the short term is not unreasonable. But if you do it too frequently and you feel like you’re losing your way, then you might be suffering from Obsessive Sales Disorder.

DISEASE 4: HYPERMETRICEMIA

Should a button on your website be red or blue? Test both options and see which one gets more clicks! While measurement is a powerful tool that can help us make better decisions, overreliance on measuring everything—rather than measuring just what you should—can lead to the dreaded disease of Hypermetricemia.

Hypermetricemia means focusing on “measurable” outcomes to determine success without sufficiently understanding whether these are even the right ones to measure to help you achieve your impact.

In the world of startups, vanity metrics such as venture capital investment raised, growth rate, or even the number of media mentions can become misleading indicators of the state of the business. Business has its typical “customer engagement” metrics: who wouldn’t want customers to spend more time on your website more often? But if your goal is to help your customers finish a task and get on with their lives, maximizing time-on-site is taking you away from that goal rather than toward it.

To know what to measure, you need to understand what you’re actually trying to achieve. When we choose to measure everything, we may end up measuring everything—except what really matters. Here’s an example where that happened.

I was working for a company where we had a few hardware components that were failing. The company decided that to track what was going wrong and whether we were making progress in reducing failures, we would have video monitoring of all these components 24/7.

Six months later, however, we were no closer to knowing whether our efforts were reducing the number of failures. The videos were taking up so much data storage that we were keeping only one to two weeks of video feed and purging the rest! As a result, we could review hardware failures this week, but we didn’t have videos from six months ago for comparison to tell if we were successfully reducing hardware failures.

In trying to measure everything, we didn’t take a strategic approach to measurement to get the one metric we needed—a time series of logs from specific components that we should have designed the system to capture.

To overcome or prevent Hypermetricemia, we needed to derive the metrics we were measuring from a clear understanding of what we were trying to achieve (a vision and strategy).

DISEASE 5: LOCKED-IN SYNDROME

Locked-In Syndrome strikes when we commit to a technique, technology, or approach just because we have related expertise or because it has worked in the past. This can prevent us from exploring alternative solutions that might work better to achieve the impact we’re hoping for.

When leaders at a large, successful company suffer from Locked-In Syndrome, it is commonly known as the Innovator’s Dilemma. Since leaders are unable or unwilling to disrupt their own successful product lines, the company finds itself unable to compete as new technologies enter the market.⁷

In the ’70s, IBM’s dominance in the computer industry, with its industry-standard mainframes and hardware components, led to Locked-In Syndrome, which blinded it to the vast opportunity in software.

At the time, Commodore, RadioShack, and Apple had released personal computers (PCs), and every month IBM was falling further behind in an exploding consumer market. John Opel, IBM’s CEO at the time, wanted to see IBM release a PC within a year. To achieve this goal, instead of building the components in-house, from scratch, the team decided to use off-the-shelf hardware components.⁸

To build the operating system, IBM engaged a software startup that was very willing to agree to all of IBM’s requirements and the aggressive timelines. Under Opel’s watch, IBM signed a nonexclusive license for the DOS operating system with the startup, now known as Microsoft.⁹

IBM was so locked in to the hardware business, executives failed to recognize the opportunity to become a leader in the software business as well. Ultimately, IBM’s PC division was sold off to Lenovo in 2009, while Microsoft’s profit margins ballooned over the following decades.

Getting locked in means forgetting about the actual problem you’re trying to solve and instead focusing too much on your particular solution or approach. When you shift your focus to the problem, it becomes easier to recognize that there’s more than one way to address a challenge, and it won’t always be what worked in the past.

DISEASE 6: PIVOTITIS

A common refrain in the tech startup world is once things start getting tough, declare a pivot and take your company in a different (but related) direction. This face-saving maneuver allows companies to avoid problems rather than having to push through them. However, it often results in wild swings in product offerings and customer segments and leads to exhausted, confused, and demoralized teams—all sure signs of Pivotitis.

I experienced Pivotitis firsthand at a startup where I headed up marketing. We started out as a payment platform. Our vision was to be the next Visa, and we were tackling a really hard problem of acquiring both merchants and consumers. So we pivoted—we became a loyalty platform for merchants. But we soon realized that it was a crowded market, so we pivoted to a credit solution for small businesses. After some time I didn’t know who we were and what we were asking anyone to sign up for on our website.

Like other diseases, Pivotitis is often justified by the cases where everything seemed to work out just fine. Business communication tool Slack, for example, started off as a gaming company and then jumped into team chat, a completely different product and market. Keep in mind, though: when it entered the chat space, Slack shed all its baggage and preconceptions about being a gaming company. While this move is often called a pivot, the founder was really starting a new company.

If you lose confidence in the desirability of the change you envision, or if you decide it is simply unachievable, this should be a major decision that is acknowledged with adequate gravity. It would mean redefining your vision, strategy, and action plan. Recognizing this as a reset and a fresh start has a healthy side effect: it’s no longer so easy to pivot wildly when things get hard or the next shiny object looks more attractive. It encourages you to push through challenges until they are proven to be truly insurmountable.

When we are inspired by the change we’re working toward and driven by a clear vision, pushing through becomes more manageable. This helps us avoid Pivotitis, and keeps us from losing our way as we take detour after detour in pursuit of an easy path to success.

DISEASE 7: NARCISSUS COMPLEX

Narcissus Complex happens when we’re looking inward and thinking about what we need to such an extent that we forget about the change we’re trying to bring to the world. For example, when Boeing was focusing on its financial goals and conceived the MCAS to manage the 737 MAX’s aerodynamic instability, that was Narcissus Complex.

A similar inward focus on company goals rather than on the customer was evident in early 2020 at the beginning of the SARS-CoV-2 pandemic. When some doctors and nurses wanted to wear masks in hospital elevators and hallways, some hospital administrators strongly discouraged the practice. They feared that healthcare workers wearing masks around the hospital would scare patients who might think that the hospital had a COVID problem.¹⁰ When we look inward, we measure ourselves only by our results and the benefit to us instead of the impact on the customer.

This is not a call to be altruistic, but if we lose focus on the customer’s needs, we focus on the local maxima and open up opportunities for competitors to find the global maximum.

COMORBIDITY

Most likely, you’ve recognized or experienced a few of the diseases in this chapter. It turns out that comorbidity is common with product diseases. In fact, the Berlin Brandenburg Airport (BER), which earned the nickname “ghost airport,” has caught all seven of them.

After the Berlin Wall fell in 1989, the German government authorized plans for the Berlin Brandenburg Airport to mark Berlin’s status as the icon of the reunification of Germany. BER was conceived as a world-class airport that would help restore Berlin as a global destination. Instead, it has become a monumental failure.

It was originally scheduled to open in 2011, but nine years later, it finally opened in October 2020. There were over 550,000 reasons for the delay—this is roughly the number of faults and failures that needed to be fixed before BER could open to the public.

What went wrong? I interviewed Martin Delius, who was a member of Parliament and the chairman of the inquiry committee. Delius read my article about product diseases and had already begun to diagnose BER when I interviewed him.

In diagnosing Hero Syndrome, Delius shared, “BER’s vision was filled with superlatives.” When the BER project started, agreement was reached on the broad vision: to build the most modern airport to mark Berlin as a global destination. I often see similar high-level agreement in organizations after teams spend a full day in an off-site meeting to craft a vision. Yet too often organizations come up with a fuzzy vision statement like “to be the leader in data storage and backup.” The vision for BER was similarly vague, not detailed or actionable enough to uncover important misalignments.

These misalignments led to Pivotitis, repeated changes to the design after construction had begun. For example, the architect who drew the initial plans had a strong dislike for shopping, so he designed the airport without any duty-free shops. For the developer, this was a fatal flaw because a large percentage of airport revenues come from the stores. As a result, an additional floor dedicated to retail was added to the design.

BER had also caught Narcissus Complex—instead of focusing on market needs, the project focused on internal needs. BER was designed as a hub, which added to the project’s expenses, even when all the airlines had said that they didn’t want a new hub and didn’t plan on switching.

Delius also recognized Strategic Swelling at BER: “Because the vision for BER was packed with superlatives, stakeholders including politicians in the federal government and the city of Berlin felt justified in adding on to the project to make BER bigger and better. In catering to these wishes, the project began to swell further.” Delius came from a software development background and drew parallels from his experience of Strategic Swelling in software: “Often in companies with Strategic Swelling, features are all deemed ‘high-priority.’ Without a disciplined approach to prioritizing features, engineering teams are pressured to work harder and deliver more features. This happened at BER too.”

Having caught Hypermetricemia, the team running the project often saw success as getting the contractor to absorb the cost of many of the changes. This in turn led to Obsessive Sales Disorder and trading off the long-term vision for short-term gains. “For example, a major contractor went bankrupt under pressure to deliver all the additional features requested without any additional resources.” The pressure on the contractor may have produced short-term gains, but ultimately the bankruptcy led to further delays.

Lastly, BER had also caught Locked-In Syndrome—at some point it became painfully evident that demolishing the already constructed portions and starting afresh would be cheaper than pushing forward. But politicians were locked into the project and felt that they needed to show the public something for the money that had been spent. When BER eventually opened almost a decade late, it was more than $4 billion over budget.

Without a clear and actionable vision and strategy at the start of the construction, BER iterated its way from idea to implementation and caught every product disease along the way.

These seven diseases are the most common ones that you’re likely to recognize in your organization—I’ve found symptoms of them in most industries. But this list is by no means exhaustive. You might be experiencing a disease in your organization that’s unique to your industry and getting in the way of creating your impact. Calling a disease by name is the first step toward a cure.

Talk to your colleagues or have a group discussion about the diseases you’re seeing in your organization. You can then begin to address each disease’s root cause—either the lack of a clear vision and strategy or a break in the chain when translating the vision into action.

Part II of the book will help you avoid or cure these diseases—you’ll learn how to craft a clear purpose through a vision statement and systematically translate it into your daily activities through your strategy and priorities.