Net-Mares: Letters from Cyberhell

Polaris Software was blindsided by bad PR, '90s style. It could happen to anyone

I think your program is a turkey. It is a pile of fertilizer and stinks such that none can abide it." -- Alan Stallings

"I am especially upset because I feel taken. I feel that your company used my resources to develop PackRat 5.0 when it was not ready for shipment and, to top it off, used my time to debug a product that I had already paid for!" -- David Hary

"There is no question that we released PackRat before its time; that was a mistake. We have paid in many ways for that mistake and will not make it again with PackRat or any other product we produce." -- Andy Surber, Polaris Software

One bright summer morning in 1993, a customer-service representative at Polaris Software signed onto the company's CompuServe forum, expecting to find a few messages waiting for him. Instead, there were dozens.

Breaking into a cold sweat, he started skimming the messages. His worst fears were quickly confirmed: customers were furious. "Your product is worse than useless." "Your company's entire technical staff is incompetent, and your senior managers are crooks." Someone had even responded to several of the messages, asking whether people were aware of a competing product and then describing its advantages in detail.

Disaster had struck, and there was more to come. New E-mail was arriving.

Welcome to customer relations, information-superhighway style.

Many companies today provide customer service through a major computer bulletin-board service (BBS). Customers and other interested parties can dial in -- for example, to CompuServe or Prodigy or America Online. They can go to a company's area (or "forum" or "section"); download (copy) information about products and prices; and conduct business. They also can send public and private messages, ask questions, report problems, and offer suggestions. Often considered a great opportunity for drumming up business, advertising, or reaching new markets, on-line services can be a double-edged sword: negative word of mouth can travel just as far and fast as the good stuff, maybe farther and faster.

Intel Corp., the $11.5-billion Santa Clara, Calif., manufacturer of the microprocessor chips that lie at the heart of the vast majority of IBM-compatible computers, knows all about the dark side of the Internet. Last June, a math professor discovered that the company's Pentium microprocessor contained a hardware bug that sometimes produced calculation errors. The result: some users had to recheck months' worth of calculations. The news spread quickly over the Internet after he posted his findings, in late October. The attacks ("flaming," in on-line parlance) began -- and escalated greatly when the news leaked that Intel had known about the bug for six months and had not publicized it. A few days later the flaming escalated again, in response to what many considered a tepid apology by Intel CEO Andrew S. Grove and to his announcement that the company would replace only those microprocessors that it believed were at risk.

When it set up its on-line forum, in the summer of 1992, then San Diego-based Polaris Software never imagined things would get so hot. Until mid-1993 Polaris was one of the software industry's rising stars, boasting $8.2 million in annual revenues, a customer base in the tens of thousands, and a flagship product, Polaris PackRat, that was both a perennial award winner and a market leader in the burgeoning category of personal-information management (PIM) software. (A PIM typically includes an address book, a telephone dialer, a calendar, and other features.) A scant year later, however, Polaris was widely reputed to have lost revenues (the company, which is privately owned, refused to release recent figures), and its market share had plummeted, from 27% in 1993 to less than 10% in 1994.

The chronology: In July 1993 Polaris released an upgrade of PackRat that was slow, erratic, and missing important features, including a calculator and a time-and-billing database. Worse, the new PackRat was guilty of what many consider the unforgivable software sin: it could corrupt data files, causing users to lose valuable information. As the weeks passed, the situation worsened. Polaris issued no fewer than four maintenance releases (aka "bug fixes"), none of which completely solved the problems. Customers rebelled and took their business elsewhere. By the time a bug-free version of PackRat was released several months later, many customers were no longer interested.

What set Polaris's crisis apart from any other company's crisis until that time was that much of it took place on-line, on Polaris's CompuServe forum, in full view of the company's customers, its competition, and the computer press. When PackRat's problems surfaced, many customers posted polite messages asking for help. As it became clear that the problems were fundamental, the tone became angrier, until hundreds and hundreds of messages were posted flaming PackRat, Polaris, and Polaris's CEO, Jack Leach. Overnight, it seemed, the rising star had burned itself out.

While acknowledging that Polaris committed serious oversights in PackRat's development, CEO Leach believes that the CompuServe flames were fueled by a small vehemently anti-Polaris group -- maybe 20 to 30 people.

It's impossible to confirm that number because CompuServe, like most BBSs, permanently erases messages every few days. The number seems low, given the thousands of messages that were posted over several weeks. Ex-PackRat user David Hale, a computer-imaging specialist based in Washington, D.C., and a participant (though not a flamer) in the Polaris exchange, thinks Leach's estimate is not unreasonable.

One thing is clear: the competition will be watching -- and perhaps participating. Without question most, if not all, of the other PIM companies monitored Polaris's CompuServe forum before, during, and after its troubled period: monitoring the competition is a common and accepted practice on-line. Leach suspects that at least one of his competitors publicly attacked Polaris on CompuServe.

One of the most distressing aspects of Polaris's ordeal was the presence in its own forum of numerous conversations that not only derided PackRat but extolled the virtues of competing products. If employees of a rival company promote their product in your forum, that's poaching, according to CompuServe representative Debra Young. If ordinary citizens promote that product, however, it's not considered poaching. But Leach points out that given the ease of assuming identities on-line, poachers can pretend to be nonpoachers and do equivalent damage.

Finally, the press will be watching. The press is probably what did Polaris the most harm, according to David Coursey, a software-industry analyst. "The real damage was done not by people who were actually there on CompuServe but by the disseminators -- people who never saw the messages themselves but became convinced that Polaris was in trouble."

Being on-line on CompuServe didn't cause Polaris's problems, but it did exacerbate them. "The problem was entirely one of a failed quality process," says Coursey. Still, the question remains: If you open yourself up to customers on-line, are you setting yourself up to get reamed publicly before you even have a chance to correct a problem?