Remember that movie 127 Hours? You know, the true story of Aron Ralston, the climber who had to cut off his arm with a jackknife in order to live? (There can't be that many movies with that pitch.) As founding CEO at my previous company, I was faced with a significantly-more-creampuffy version of that dilemma back in 2006. We were churning out a profitable $9 million annually in sales and growing at 50 percent a year. Things were peachy. I didn't know it yet, but I would have to kill off our entire business in order for it to survive.
A little explanation. Since 2001 when we started, the market we were in, collaboration software, had seen as much innovation as silverware. We were successful in our niche, but efforts at new collaboration models weren't resulting in sales. This is the tough part about the collaboration market: It has to be both brain-dead simple AND a 10X improvement over the current model. Anything else will die a slow death.
Then along came Facebook. Suddenly everyone from tractor salesmen to stockbrokers to CIA spooks wanted to get social with their work. Collaboration could actually be enjoyable. This trend was an oncoming freight train, and after five years striving for something new, there was no way I was going to miss it.
The problem:Building the product would mean moving over the whole team for almost a year to ship even a minimum viable product. Our existing customers would feel ignored. People would stop buying our old products. But then again, that would probably happen anyway if we missed this trend.
So we could stay on our path and die a slow death, or cut off the old business and hope that we would be reborn into a much stronger company.
Clearly we needed to make the hard move. I would have to become a knife-wielding maniac of a leader. Metaphorically speaking, of course--I learned the hard way that you shouldn't start all-hands presentations with images of bloody knives.
We would have to say farewell to all that sweet revenue from the old products. We would upset thousands of early customers. We would freak out the employees. We would need to raise outside funding, which we had never done.
For the next nine months (rebirth metaphor!), we all toiled away on the new product, working nights and weekends to get it out the door. While old customers got frustrated, most understood, especially since we agreed to support them for the next two years. The new customers? We kept most of them on the hook by selling the promise long before the product was ready. It was like a restaurant host telling patrons to wait patiently at the bar for seven hours while they got the table ready.
Then finally, exhausted but exhilarated, we launched the new product. It had some bugs, but it was out.
Slowly at first, customers showed up and sniffed around. Then, after we proved it could work at some big companies, the demand hit. We could barely keep up. We worked crazy hours. We hired in a frenzy.
It was a whirlwind period, but in a little over a year we had almost replaced the old revenue completely. More importantly, we had reinvented ourselves as a leader of an exciting new space for business communication.
It was tough to kill off the old products (well, tough in a creampuffy way), but I found that reinvention is only possible if you are willing to sacrifice that which you hold dear. Especially in this era of rapid technology cycles, organizational death and rebirth needs to become a common practice. So keep asking the tough questions. And keep a jackknife handy.