Over Promise; Under Deliver

I’ve had a security camera in our house for a couple years now. I won’t mention the company name (they’re local) as the main subject of this memo is about their announcement that while their cameras came with free storage for their person detection feature, they’ve realized it is way too expensive to provide it (to over 1 million customers). They’re not going back on their agreement but rather asking customers to voluntarily pay for it.

My first thoughts included the title of this memo, over promise and under deliver, plus didn’t they see Apple, Amazon Photo (for videos), and Google Drive offer some free storage and then charge, and did they get caught up in the creative process and not pay attention to the budget?

So, what can and should businesses do? Here are five tips:

  • Plan – a good plan will cover things like this and put them to the stress test, i.e. what if people use a lot of storage?
  • Budget – here’s where I’m a bit baffled by my above example because this company has raised over $35 million and much of it from some pretty savvy investment firms. Didn’t somebody catch this? A good budget will run different scenarios from slow to fast growth and usage.
  • Realize, growth sucks cash – super fast growth can be as bad to a company, especially a new company, as slow growth. 
  • Know your market – as mentioned, if the big players like Apple, Google and Amazon don’t offer unlimited free storage why should this firm. It reminds me of something about 10 years ago in my Rotary Club. When expanding our fun run from a 5K to also have a 10K we discussed pricing. One of the number cruncher types said (and I’m not making this up) we should figure out how much we want to raise and divide it by how many people we think will run. That would have given us a fee 2-3 times the market rate and Econ 101 says price elasticity would have driven those numbers way down.
  • Get help – pilots don’t fly solo the first time out and neither should any of us with a (new) business.

The above is speculation as I’m not privy to all the inner workings of the company. But when a business has to retreat from a promise, which was probably a selling point to some customers, it warrants comment. As always, it often comes down to paying attention to the basics.

“To err is human – but it feels divine.” Mae West

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