Do product features really matter?

May 29, 2015

An on-going discussion in most software companies is the value of the next release of software. In some companies, these discussions often take on the dimensions of a holy war and can be quite disruptive and distracting. On one hand, a number of sales deals will be relying on the features planned for the next or future releases. On the other side of the argument will be implemented clients, who have just stabilized on a current release and are reluctant to incur the cost of migrating to the next release. In addition, the product strategy team will be focused on what competitors are doing and analyst are saying. Unfortunately in most of these discussions, there is a preponderance of opinion and rarely substantive data to support one view over the other.

I recently helped a client sort through their conflicting priorities and it got me thinking more about whether product features really matter in the success of a product or a company.

Throughout the history of technology, there have been some epic battles between competing technologies where the best technology did not win. As an IBM employee, I lived through the Microsoft Windows versus IBM OS2 wars. I may still be biased on this but OS2 was a better operating system in terms of reliability and security but Windows won the consumer and small business segments of the market and enterprise clients followed. Many would argue that this battle was replayed a decade later between Apple’s iPhone and RIM’s Blackberry, with the same outcome. Other examples include BetaMex versus VHS in the VCR battle of the late 1970’s. Looking at these three cases, an argument emerges that the best technology or the most features, doesn’t win the day.

Arguments can also be made that most features included in technology or software are rarely used. We have all experienced the blinking clock on the VCR or DVD in peoples’ homes, a sure sign that none of the advanced features build into the technology, have ever been used. How much of Microsoft Word does an average user use? Maybe 10% of the features. Probably a lower feature percentage in Excel. When was the last time you wrote an Excel macro, created a Pivot Table or did a mail merge in Word? 

Yet, discussions over adding features into software can lead to heated battles. The former head of software at PeopleSoft, who had been a software engineer on IBM’s OS2, often ended combat at his management team table by loudly declaring that “OS2 is a better operating system than Windows”. This reminder that the best technology doesn’t often win added perspective to the discussion.

A CEO client of mine, who build a $50M software company in seven year and sold it for 5X, argues the key is first to market. He admits he often shipped marginally viable software to gain market lead and then relied on his professional services teams to make the solution workable enough to garner customer acceptance.

Yet, time and time again, I see start-ups delay launch or use product excuses for lack of sales, because they perceive that their solution lack features or doesn’t work to their standard of perfection.

I expect these arguments will continue for years beyond my life but when I weigh into these discussions, I generally favour the argument of “first to market” over “best product”.  I'd rather compete any day with an "okay' product that does the essentials combined with a great sales and services team against a great product with a marginal sales and services team.


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