How Falling In Love With My Product Killed My Business


Photo by mpclemens

The following is a guest article by Dave Rodenbaugh of Lessons of Failure.

Shortly after the Millennium dawned, I was itching for something new to sink my teeth into.  Software development wasn’t giving me the satisfaction I craved from working, and I had recently been part of a startup that was now a smoking crater after the Dot Com crash.

While attending a local art show, I walked along perusing all the photography booths, as nature and landscape photography has always been a passion of mine.  Most of the photographers had similar kinds of work but there was one guy whose booth stood out from the others.  I stopped in and started up a conversation with him about his photos.  They weren’t just beautiful, they were striking.  To the point where people would audibly gasp walking by, “Oh wow, look at THAT”.  Knowing a little about the subject, I probed him a bit for his secrets.

The trick, as he related to me very candidly, was to use large format photography.  Large format was very old-fashioned (think Ansel Adams kind of cameras) but created huge negatives from which you could create extremely large prints without losing details.  Creating these kinds of pictures was fairly difficult to learn, let alone master.  He had spent a good decade working in the medium and his work showed it.

The details, the color, the sheer size of his prints–they were monstrous!  30″x40″ was a common size in his display and they looked awesome.  The other photographers would take their 35mm and medium format prints (both creating much smaller negatives) and try to enlarge them to similar sizes.  The results were just not comparable.  To top it off, this guy charged a huge margin over other photographers at the show just because he had such high quality large prints.  There were few other guys that could work in this medium and he was making some fat cash doing it.  Large format photography captured my interest immediately.

At the time (2001), digital cameras were very much maligned by “real photographers”, and certainly by the general public.  Moreover, the output of digital cameras was barely cracking the single-digit megapixel range and no one was taking them super-seriously outside of perhaps the wedding photographer business, which needed the fast turnaround these cameras could deliver.  I felt like I had a good niche to work in (large format landscape photography), that was lucrative (making $5,000 in a weekend was not out of the question, if you had the right show and weather).  I was hooked.

I ended up befriending this large-format photographer and learning the ropes.  Within a year, I had a large format camera of my own, a growing portfolio, and a long list of tricks he taught me from his years in the art show business.  I felt like I had a shot at a decent side-business and so I took up the mantle.  By 2003, I entered my first show and in 2004 I had a full-fledged business running.  I was finding the right shows and hitting my stride.  I loved this product.

The Curse of Love
Rogue Wave Software loved their product too.

If you ever coded in C++ during the 90s, there’s a good chance you used their core product:  Tools.h++.  It was integrated with almost every major UNIX C++ vendor as the core string and collection library.

Their products were second-to-none.  The implementations were practically bullet-proof and hundreds of C++ programs relied on this library to handle their most basic functionality without having to reinvent the wheel.  While you could get the basics for free, their extended libraries gave you vast amounts of power without having to write it yourself.  Their license fees were reasonable for the time, but certainly lucrative for the company. In short, people loved their product and Rogue Wave prospered accordingly.

The problem was, Rogue Wave loved their product too much.

Rogue Wave’s fall began during Java’s rise to power in 1997-8.  When everyone took notice of Java and abandoned C++ in droves, Rogue Wave’s revenues plummeted.  They tried to push their products higher in the food chain:  enterprise software, large company site licenses, and even a few failed attempts at replicating their products in the Java space.  One such disaster tried to recreate their successful DBTools.h++, a C++ object/relational mapper that acted like Hibernate does today, using JDBC.  It sold miserably.

Their product love blinded them to the fundamental shift in the market:  Java was free.  Java’s libraries were rich and powerful.  Developers didn’t have to buy expensive add-ons to create client-server applications like they did only a year or two before.  Developers were interested in the shiny new language that offered so many things at such a great price.

Rogue Wave was too in love with their product to see any of that.  They remembered the droves of developers who gave them high praise in trade rags and word of mouth recommendations.  They still saw their license revenue coming in, albeit a little lower each quarter.  They didn’t want to use their Professional Services Group to create new Java applications, only C++ ones, because those projects drove product revenue.  Their smart engineering team hunted for C++ products to build and market.

As a result, Rogue Wave’s revenues continued to decline.  Layoffs happened several times.  They were eventually sold off to a company that had heavily invested in Rogue Wave’s technology.  A few years later that same company spun Rogue Wave back out on their own.  Today, Rogue Wave is a shell of its former self.

Same Trap, Different Day
I fell for the same trap with my photography business.

As digital camera quality improved, professional photographers took notice and started using them in earnest.  More people started to take digital photography seriously as a medium and suddenly there was a huge amount of competition at the shows for nature photography.  When I first started, nature photographers would represent about 5-7% of the total number of artists at the show.  Suddenly, photographers were 20% of the artists at the show.  Competition was brutal.

At first, my niche served me well.  Large format was a great selling hook and I could easily take on other competitors at the shows and win sales.  But that didn’t last for long.  Sensor improvements meant the digital guys started making shots as big as mine, but charged much less for their work.  They completely undercut what used to be a premium market.

Within 2 years, the flood of competition dried up that premium market and the art show consumer’s tastes had changed radically.  They expected good AND cheap, not just good at any price.

Stubbornly, I continued to market my work in the same way I did in the past.  If it was good enough for 2001, it was good enough for 2007.  I touted the superiority of large format over and over.  I pointed out the great details in my prints.  The customers nodded and smiled, agreeing with me, but walked on to spend their money elsewhere.  My sales continued to slide as I watched my competitors produce cheaper work via digital negatives.

My last year as an art show attendee was 2008, when my sales barely covered my hard costs.  Profits were gone and the amount of physical labor required was far beyond what I thought was worth it.  I decided to hang up the business.

Had I paid closer attention to the market and what the consumer really wanted, I might not have missed out on the change and could still be selling photos today.  Digital photography revolutionized the business because it eliminated many fixed upfront costs (like film, developing) and by creating a digital file, they eliminated a step from my workflow (scanning the negative, which was either laborious or expensive, depending on which way you did it).  They were able to take more pictures, produce them more quickly, and satisfy the consumers with a less expensive product that looked “nearly as good” as what I offered.

Lesson Learned
The lesson learned is that whatever your product is, don’t love it too much.

Rogue Wave’s stubborn attachment to Tools.h++ left them blind to the tide of Java.  My own love of large format made me ignore the digital revolution.

Pay attention to what your customers want, and more importantly, watch the competition closely.  If the market experiences some fundamental shift and you ignore it because you think your product is superior, your company and products will wind up collecting dust in the storage room, like my pictures do now.

About the Author
Dave Rodenbaugh is a serial entrepreneur dating back to his high school days when he started a lawn service business.  He writes enterprise Java software for a living but loves the thrill of starting and managing new businesses.  His software development blog has insights on project management and software development from two decades of work in the field.  And maybe some bad humor too.  He lives and works in Denver, Colorado.

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12 comments ↓

#1 Pawel on 10.27.10 at 4:57 am

Great post, Dave, thank you.
Speaking of photography business: Same happened to quite big company, Kodak, which clung on to the traditional technology refusing to notice and accept the change and act accordingly.

#2 Off By One # 1 | Off By One on 10.27.10 at 7:47 am

[...] How Falling In Love With My Product Killed My Business – A guest post on Rob’s blog from Dave Rodenbaugh. [...]

#3 Al on 10.27.10 at 10:43 am

Very well-written and enjoyable post. These are great examples to really drive home classic business principles. Thanks!

#4 Jim Chiang on 10.27.10 at 11:55 am

Great post. I think the world would be a better place if these stories of how startups really work and the problems that people face are honestly told. Thank you

Jim

#5 Guest Post on SoftwareByRob: How Love Can Kill Your Product | Lessons of Failure on 10.27.10 at 12:42 pm

[...] I have a guest post on Software By Rob (Rob Walling’s blog) today about my former photography business and how my blind love for the product ended up being the reason it tanked. [...]

#6 Mike Lewis on 10.27.10 at 4:41 pm

Ouch! Been there, still doing that to some extent. I fell in love with the simplicity and clarity of C 23 years ago and stuck with it a little too long as I’ve seen more job ads for COBOL than C programmers. I’m scrambling to learn the morass that is C++ before I run out of money and have to relegate programming back to a hobby while I do something else for a living.

#7 Tim Parkin on 10.27.10 at 6:56 pm

Interesting that it’s still Large Format that most of the ‘great’ photographers are using. It’s true that you can’t compete just on the platform level (i.e. just being C++ won’t help) you have to find out what your product is first.

Large format photography isn’t about the big print, it’s about a way of working. If the results look no different than digital then that way of working wasn’t working for you and hence when digital looks ‘similar’ the customer couldn’t tell the difference.

You certainly can’t sell large format as a commodity, or use the fact that you take large format as a usp.

Sounds like the software company thought their usp was c++ when in fact it was their developers and what they had learned through using c++..

Your thought your usp was large format, in fact it should have been your compositional skills and creativity and what you had learned through using large format.

Oh – and sometimes working with what you love is worth losing a bit of money ;-)

#8 incognito on 11.06.10 at 5:00 am

I think this is bad advice. Yes, in hindsight it is very easy to point out when you screw up. But honestly, it is not always easy to predict what is the next big thing. There are a lot of next big thing technologies that never pan out. And if you are always chasing the next big thing you will never be able to focus. The lesson here I think is that sometimes you just lose. Nobody wins all the time. Rather pick yourself up and start again. Remember, hindsight is 20-20. How am I suppose to recognize when is time to shift direction?

Another lesson is that you have to recognize in what business you are in. You thought you were in the business of creating pictures using large format cameras when in reality you were in the business of creating beautiful pictures. Had you recognized that then maybe you would have shifted to digital, since regardless of the camera your aim should have been to produce beautiful pictures. This is the article:

And this is a quote of what from that article:

“The railroads did not stop growing because the need for passenger and freight transportation declined. That grew. The railroads are in trouble today not because that need was filled by others (cars, trucks, airplanes, and even telephones) but because it was not filled by the railroads themselves. They let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business. The reason they defined their industry incorrectly was that they were railroad oriented instead of transportation oriented; they were product oriented instead of customer oriented….”

I like your articles but I think that in this case you are incorrect [editor's note: this article is a guest post].

#9 incognito on 11.06.10 at 5:02 am

Sorry, forgot to include the link to the article from were I took that quote. Here is the link:
http://hbr.org/2006/10/what-business-are-you-in/ar/1

#10 Dave Rodenbaugh on 11.08.10 at 11:42 am

Hi incognito,

Dave (the author) here…Thanks for your comments everyone. I wanted to respond to your insights, specifically incognito…

While the article might have a tone of “hindsight being 20/20″ the reality in both cases presented is that the next big thing was staring us in the face (Java for RogueWave, Digital for me). In RogueWave’s case, they stuck to what they knew because they didn’t know how to execute in that new market. It’s not that they didn’t want to, they just didn’t see a strategic advantage in doing so. This wasn’t a one-time decision either, it was an ongoing policy from their tech management. I watched it for *years*…they could have changed at any point. They had (and probably still have) some of the smartest developers around…just poor visionaries.

As to the photography, I was always in the business of making beautiful pictures. That was never in question, regardless of the medium. I specifically stuck to large format because of the “niche quality”, which I thought would allow me to charge higher prices for higher quality monster-size prints. Digital brought monster size prints in the form of stitched panoramas quicker than I thought the digital sensor size would catch large format’s quality advantage. I wasn’t paying close enough attention to that aspect, and suddenly, my niche market disappeared underneath me. The competition was providing prints that were “good enough” but at much cheaper prices…That’s very different than your railroad analogy.

I loved that large format advantage to the point where it blinded me to that market shift, that’s the point I was trying to make…

#11 igorbrejc.net » Fresh Catch For November 21st on 11.21.10 at 2:01 am

[...] How Falling In Love With My Product Killed My Business | Software by Rob [...]

#12 ivan on 11.24.10 at 8:49 am

i think you guys missed key point of topic – i call it field of view. many have very narrow vision of future, because of every day tasks that consume almost all of our energy and time.

so i think secret formula is something like this:
do what you love + create a test lab (look around and analyze and test modern trends)

sorry about english, my russian also not very good ^_^