Brain Drain update

I haven’t updated my followers about Brain Drain lately, and we were supposed to have released to market at the end of July. What has happened?

Well, we did soft-launch on Monday 8th September, a fraction over 5 weeks behind schedule. Given the aggressive pace of the overall plan and commitments made to investors, this isn’t at all bad. However we’ve launched with a very thin feature set, a true MVP, whereas we expected to go live with a fairly robust suite of functionality (rightly or wrongly). In essence, the troublesome technology partner I’ve previously referred to failed to deliver in a fairly spectacular manner. I’ve described in a previous post what my issues were with them, but since then things went from bad to worse:

  • Everything they delivered was riddled with bugs – and I mean big bugs, not the sort of thing one could ship with;
  • They kept promising they needed “another week” to fix the bugs, but they only fixed 50% of them and then created more bugs, which they then said they needed “another week” to fix;
  • Their BA spoke out (late) and said she thought they needed another month, but was slapped down by her boss;
  • They drove us to reduce our launch scope (something that they should have done far earlier in the project if they’d understood what we wanted), but having committed to deliver on the reduced scope they simply failed to do so;
  • We commissioned a third-party code review, and the report wasn’t pretty. I can’t give anything away, but the product basically wouldn’t have worked under real-world conditions;
  • They wanted to charge us for their remedial activities on a time-and-materials basis, including doing QA on layers and layers of bugs they created (Granddad and Iron Man take the blame for rushing through an inadequate contract).

All in all a disaster. In the last couple of weeks of July we realised that the partner was never going to get us to market. We scouted around for a replacement, lined one up and pulled the trigger at the end of July, sacking the original tech partner and bringing on a new one. I spent much of my holiday on calls dealing with the fallout of that exercise and getting the new partner up to speed. We are now in negotiations with the old partner over how much of the outstanding invoices we will pay (Granddad doesn’t want to pay anything at all, bearing in mind we’ve already paid a tranche of bills for something unusable, and they’ve merely offered a paltry discount, so this promises to be fun).

The new partner is a breath of fresh air: small, nimble, transparent and operating a truly agile methodology. They have a strong project manager and architect. They have a healthy dollop of common sense and don’t need us to define bog-standard ubiquitous features to the Nth degree. They took on the risk of plunging into the project feet-first, without the usual planning and elaboration phase, and were happy to put in some long hours and weekends alongside us. They are also significantly cheaper than the bad guys. So in 5 weeks they built us a true MVP (I mean really really ‘minimal’), more than good enough to put out there, so we did.

Now we are entering a normal agile development process based on 2 week sprints to layer in that rounded feature set we’d originally envisaged. Unfortunately, having poured quite a bit of our development budget down the drain with our original development partners, we find ourselves struggling to stretch what we have left to get us to our destination. However, though it is true that our original expectations were far too ambitious, we do have a good sense of what we need to have in the product in order to make money.

The latter point – “make money” – is quite a bone of contention around here. Granddad is not called “Granddad” for nothing. He has a refreshingly old-fashioned view of his business in that he wants to prove the revenue model ASAP and he wants to be in the black inside three years. If I strolled down to Google Labs, where I started this blog, and related this philosophy to the clever hipsters who hang out there, I suspect I would get a lot of blank stares. After all, they have grown up in a universe where it is user base, audience and reach which drives valuations and investment, not anything so mundane as making money (just witness the uninspiring multiples attached to highly profitable established businesses versus the insane multiples attached to new social media businesses with no revenue). Let private investors and VC fall over themselves to give you millions of dollars in funding then go out and spend. Make mistakes, the more the better, and learn from them, unencumbered by revenue targets. Build up a ludicrously large market value on the back of little or no sustainable revenue and get bought by someone, then let them worry about monetisation.

Even the most casual perusal of CrunchBase reveals how much investor money is sloshing around the market right now and how much is being invested in ideas which, by themselves, won’t make money (though they could be strategic fold-ins for a larger portfolio). To focus on revenue as we are is quite refreshing. But it is also limiting. Granddad recently raised some additional investment and was quite proud that he’d beaten his self-imposed target, but compared to the potential investment, what he has brought in is pretty small. He wants our investment in tech to slow down, not accelerate or even be maintained, and we are nowhere near being able to do that. He thinks we’ve spent huge amounts so far, but he’s wrong – even with the disaster of our failed dev partner, we haven’t spent very much. Developers are in demand and their rates have gone up, after all. I think he is concerned about diluting his share of ownership, but 0.1% of something huge could be better than 10% of something tiny. It is good enough that we even have a proven business model; I feel we should maybe stretch out that profit target over a few more years and accelerate spending in the mean time to get to our product goals (and respond to user feedback when it starts to flow in). We have a long way to go before we have a competition-beater.

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