The following post was written by Ofer Brandes, SVP Strategic Effectiveness at Payoneer, during his tenure as CTO at Viola Ventures (2003-2019).
I have previously stated that in order to succeed you don’t have to own a patent on an innovative, deep mathematical invention. In enterprise software, for example, your secret sauce can very well be a collection of insights or heuristics accumulated from domain expertise and many years of experience.
In such a case, however, it’s not enough to have a general idea. Details matter – a lot.
Can the idea really work?
If your competitive edge does not rely on a solution that no one else has ever thought of, a big promise for a brave new world that will enable things that had previously been considered impossible, then both investors and customers will have less patience for an immature solution.
This is especially true when the solution requires a lot of software development and implementation of many components. In these cases, it’s prudent to question the time it will take to provide a good enough solution for users.
A typical example of this, is the domain of NLP (natural language processing). It is rare to see an NLP-based product that can be implemented quickly in full. Natural languages have many layers, many details and many exceptions. Unless the solution is purely language-blind, there is usually a long delay between implementing a POC that proves the feasibility of the idea and a complete implementation that addresses the entire problem. Furthermore, the possibility that you might need to implement many specific rules that are mutually inter-dependent raises a concern that what works nicely in the initial stages will start to deteriorate as new components are added and change the system’s behavior.
Both entrepreneurs and investors should be careful when trying to estimate the feasibility and the maturity of software solutions.
Not all ideas that ‘sound correct’ at the design phase will indeed function as expected when implemented in real life. On the other hand, not all local problems are proof of failure. Defining the criteria by which the solution is judged and setting the right milestones – is crucial.
Does it work for all customers?
Another common cause for a gap between “working in principle” and “actually working” is the need to integrate with third party systems. Although your solution may be complete and well-functioning on its own, many times it relies on information from other systems and it sends those systems updates. Successful implementation for one customer with the specific interfaces it entails is an important step, but far from sufficient when planning a full scale roll-out.
If you need to integrate with systems that are common in the market, you should have interfaces for the products of all leading vendors. Your market traction will be determined by the coverage of the third party systems for which you have an out-of-the-box (or almost out-of-the-box) integration.
It gets even more complicated when you need to integrate the solution with your customers’ in-house systems. In these cases, there is no standard software that you can prepare for in advance, so each deployment might require special design and implementation for the integration. This is where the flexibility of your design is put to the test: Do you have an API that supports quick integration with practically any system, or will you have to invest a lot of development effort and professional services to make it work for each new customer? It’s a typical situation where you must consider whether you can compensate for problematic quality by increasing the quantity of resources.
Is it worth the effort?
When you look at your product through the eyes of a customer, it’s critical to understand how attractive it is. The fact you have a good solution for a genuine pain is not enough of an incentive for customers to rush to implement it. They have other options – like buying from a competitor (when there are competitors with similar benefits or with a more extensive solution), developing something themselves (mainly if the customer has unique requirements that are not fully answered by your solution), or doing nothing (if the promise is not substantial enough to justify the risks and the effort).
Naturally, you strongly believe in your solution and its benefits. You’ve worked hard to make it as good and complete as possible while paying attention to every little detail, and you don’t have the patience to study your competition at the same level of depth. But your customers don’t have this bias, so they may look at things differently. They might overlook some of your outstanding features and make a decision based on other criteria than those that you might have considered if you were in their shoes. Maybe they are wrong, but they are the ones who decide, so you should understand their considerations and the options they see in front of them.
Is it easy to adopt?
This relates to the integration issue discussed above, but in a wider sense:
What kind of effort is required of your customers in order to deploy your solution? Consider both the technological issues of deploying new hardware and software, as well as changes that might need to be applied to other systems or work processes. The more details there are that need to be changed and coordinated, the less likely it is that your potential customers will be inclined to adopt your solution (and the higher the risk that the implementation will be delayed or even fail completely).
When your solution is a replacement to an existing solution, it becomes even more delicate. Planning ahead for all the implications of the replacement is in the best interest of both you and your customers, because you don’t want to damage existing business processes. Top management doesn’t like crashes (in fact, nobody does).
The same is true for end users. Users who are accustomed to an older system that they have been using for a long time are often grumpy when changes are imposed on them, so they are naturally disposed to comparing your solution with the solution it replaced and to be on the lookout for any opportunity to fault it, so it’s important for you to make it a priority to keep them happy.