The customer is always right

One of my most vivd memories of our first major software development contract, to support HP’s first color printer for the Macintosh, came with celebratory banquet. We all got little plaques, and mine said: “Keep ’em happy.” (I still have that plaque in my closet.)

To the customer, this was probably a good thing. However, the slogan (volunteered by a subordinate) reflected a tension in our 18-month-old company — between the marketing slime (me) and the engineers (everyone else) over how far we were willing to bend to keep the customer happy.

The reality is that for a small, young and underfunded (particularly self-funded) company, revenue is everything: you won’t keep the doors open without it, and it’s only going to come from one place: the customer.

When we founded the company in 1987, I’d never taken any business classes. However, as the only one who fully understood our financially precarious position (not a good idea), quickly worked to implement the old maxim: the customer is always right. (Admittedly, where possible I would say “you're right, it needs that feature, but that’s not part of this version: let’s put it in the next version that you buy.”)

If you’re venture funded, you have a different imperative: grow fast or die trying. Sometimes that means getting early customer wins, but in other cases it means building as complete a product as quickly as possible — without regards to initial feedback — to have something that will be best-in-class and pre-empt the inevitable competitors.

Apparently, if you are a centimillionaire with an ambition and ego that is out of this world, even these rules don’t apply. How else can one explain the quixotic attacks by Tesla CEO and co-founder Elon Musk on the New York Times, who had the nerve (the nerve!) to publish an article last week describing a long-distance test drive gone horribly wrong. All week, he has been mounting a jeremiad against the newspaper and its reporter, accusing them of lying, lack of ethics, falsifying and just about everything short of kicking a dog and abusing children.

Perhaps — as with a political candidate — he’s trying to dispel any doubts in his base, rather any attempt to appeal to the average buyer. Still, it seems to be a counterproductive strategy; as Nicholas Thompson, a New Yorker editor wrote today:

It seems there are a few things we can learn from this:

• Never escalate a fight about a negative review, unless you're certain to win. The debate has driven a lot of people to Broder's initial review. And there's nothing in that review, or the rest of the debate, that's going to make anyone want a Tesla car.
• Twitter is a temptation. Musk's fierce initial response is artful. The first sentence is clipped and sharp. But, even when he first put it out, did he think that "fake" was the perfect word? Or was it just that it's shorter than, say, "flawed"?
• If your company has a celebrity CEO, use him carefully. Musk has a lot of power, in part because of his position of social media. But by personalizing this battle, he's done real harm to both his brand's and to Tesla's.

But then Musk has a habit of shooting the messenger, exaggerating and even lying in his attacks on reporters who disagree with him. A VentureBeat reporter wrote nearly three years ago:

I don’t believe Musk twists the truth out of malice. Rather, at this point, it may well be out of habit. He’s so used to getting his way that future possibilities just seem like present realities to him. And pragmatically, it’s worked. Whenever Tesla has been in a bind, Musk has spun his way out of trouble.

It’s a character trait of which elements are found among many successful entrepreneurs: the compelling presentation of an alternate reality in the hopes that so many people will sign on to the vision that it comes true. Apple CEO Steve Jobs, for example, is so masterful at this that people speak of his reality distortion field. But Musk may have taken distortion to extremes.

The old Steve Jobs (Jobs I) was like that: a good friend went to work for Jobs (at NeXT) and told me that everything I’d heard about “reality distortion field” was true.

However, in the Jobs II era, Steve had grown up: it was all about surpassing all customer expectations. After firing (or dressing down) the person responsible for such a fiasco, he would have set his minions to work on fixing it. For the sake of the Tesla employees, let’s hope that (despite the bluster) that’s what California’s leading car company is doing.

Meanwhile, for us mere mortals without VC (or personal) millions and a celebrity reputation to save us, there’s only one choice: treat the customer right. Or else. That goes double for reviewers and other opinion leaders to whom our customers turn to for advice.

Tradeshow tribulations

Perversely, as an entrepreneur one of my favorite parts of the year was going to trade shows. They were a lot of work, the prices and labor restrictions were ridiculous, but it was the one time a year when we could interact with the rest of the world and show our stuff.

This morning, USA Today has a great article on Scott Friedman and his experience at the Consumer Electronics Show last week in Las Vegas. Apparently, Scott was the only one in the building not selling a tablet.

Instead, the CEO of SoulR Products in Southern California was peddling a $80 high-fidelity portable iPod speaker, the "WOWee One.”

What I found particularly interesting is that the article runs through the budget for the company and its product. The company has $200k of founder money and $300k of outside money.

Perhaps more relevant to aspiring entrepreneurs everywhere is the CES budget

• $23k for the 20x30 booth
• $27k for booth construction
• $5k for a consultant
• $20k for other expenses — furnishings, photographer, hiring booth bimbos

This is probably 10x our budget for our last booth in 1993, but that was only a 10x10 at MacWorld Expo San Francisco (back when that was the must-see event.)

I think the article fills in a useful gap for new entrepreneurs, in making concrete the process of using a trade show to promote a new product. Columnist Jefferson Graham deserves kudos for his efforts.