PRODUCT CONNECTION

            The Saga of FizzBin Tech
                                              
                                             Part 1


This is the story of a start-up company that did almost every conceivable thing
wrong while trying to develop its first product.  It is offered to you here in the hope
that you can profit from their mistakes since they, unfortunately, did not.  

Background
Right from the start, FizzBin Technologies (www.fizzbintech.com) had seemed
poised for start-up stardom.  It seemingly had everything going for it.  The titanium-
tantalum nickel carbide (TiTaNiC) material technology it had licensed from
Wossamotta University had already demonstrated extremely high efficiency
producing almost twice as many fizzbins per watt as any other material available.  
The technical team was to be headed by TiTaNiC’s inventor, Professor Irwin Corey,
who had taken a leave from WU to found FBT.  He was confident that the fizzbin
density could be increased still further.

Corey had done his homework.  He knew what it would take to get funding.  His
business plan was a thing of beauty clearly showing how the telecommunications
industry depended on devices that could produce lots of fizzbins and that demand
was growing at more than 5x per year.  Without question, FBT was looking at a
market that was well north of $500M.  Their only real competition was Fizzbins
Unlimited (FU).  But with its IP position, FBT effectively blocked FU from using
anything but the older (and less efficient) rhenium-technetium hydride (ReTcH)
material to make their devices.  And to help him raise venture capital funding,
Corey had recruited the well-known (and more importantly, well-connected) serial
entrepreneur, I. Khan Singh.  

With a great technology, a large market, weak competition and an experienced
CEO in place, raising money was not much of an obstacle.  FBT’s A round was
oversubscribed and was headed by a first tier VC firm with a stellar track record,
Raptor Partners.  It seemed that there was nowhere they could go but up.  

Sadly, FBT never lived up to its potential.

Off On the Wrong Foot
FBT’s initial product was to be called, naturally, the Titanic.  Aware of the
unfortunate connotations, they immediately rebranded it the Hindenburg.  Parts
were ready for sampling to customers right on schedule exactly.  True to his word,
Corey had improved the technology to the point that the Hindenburg device was
achieving more than three times the efficiency of the early prototypes.  
Expectations were high and when the feedback came in the customers were quite
enthusiastic about those efficiency numbers.  Unfortunately, they found that when
they used the device in their systems, their oobleck performance was significantly
worse than when they used the competing FU parts.  This effectively negated any
overall performance advantage that could be gained from the Hindenburg’s better
efficiency.

FBT had been so focused on getting the most fizzbins per watt possible they had
not even bothered to measure what effect their device optimization efforts might be
having on oobleck performance.  In fact, when they went back to analyze what they
had done, they found that many of the changes they had made to improve
efficiency had inadvertently been degrading oobleck levels.

The FBT team had committed one of the cardinal errors of product development.  
They had focused on optimizing their technology without considering carefully
enough what the customer really needed.  

Often, a start-up’s proprietary technology is the key to its value proposition.  The
tacit assumption is usually that if some is good (in this case fizzbins/watt), more is
better.  What truly matters is how that technology can be used to improve the end
customer’s value proposition.  Frequently this has more to do with how the
technology can be utilized by the customer rather than how good it might be when
compared to some arbitrary benchmark.  It is critical for the product development
team to understand all of the customer’s needs and requirements so that they can
make the proper trade-offs when developing the product.  The goal should not be
to just make it “better”; it should be to make it right for the customer.  

FBT blindly worked to optimize the Hindenburg’s fizzbins per watt value without
even considering its potential impact on the equally important (from the customer’s
point of view) oobleck level.  The result was a product the customer could not use.

What, if anything, can FBT do to recover from this disastrous start?  Find out in the
next installment of “The Saga of FizzBin Tech.”