Course Correction:
Last Minute Decision Making for a
Pre-Launch Product at LapLink.com
Donald Speirs
Management 330
Workshop #2
Mr. Ron Siddell
June 25, 2000
Last Minute Decision Making for a Pre-launch Product at LapLink.com
���� In the
fast-paced world of the Internet software industry, a product strategy
originally conceived six months ago might be made obsolete by changing market
conditions.� At that point, a company
must decide whether to stay the course, shift to accommodate the changes, or
abandon the current project entirely.�
In this paper, I will examine a recent decision by LapLink.com to change
the course for what had been envisioned as a future core product to adapt to the
changing Internet marketplace.
���� Originally founded as Traveling Software
in 1983. LapLink.com created the concept of file transfer software and
dominated this market for years.� According
to a March 20, 2000 article in The Wall
Street Journal, founder Mark Eppley decided to change the company�s focus. ��
Mr. Eppley has cut staff and focused the company on the Internet.� (Lublin, 2000,
p. B1)
���� To implement
this strategy, the company�s name was changed in September 1999 and it released
LapLinkFTP, designed to enhance the performance and usability of the Internet
standard File Transfer Protocol.� The
original LapLinkFTP was free to users, with revenue derived from the sale of
advertising space within the product.�
Customer reaction was lukewarm, but it was viewed as an important
transitional step internally.
���� At the same
time, a new paradigm emerged on the Internet: migrating desktop functions to
the Internet.
���� Names
like Desktop.com indicate the degree to which new Web sites are aiming to
replace the PC desktop on the Web.� A
corollary from the year’s start-ups was the attempt to replace the PC Hard
drive, offering free storage space through a Web site.
���� Sites
offering storage on the Web include My Docs Online, FreeDrive,
Freediskspace.com and Web application veteran Visto. (Festa, 1999)
���� Management at LapLink.com saw this
emerging trend and decided that LapLink FTP could be migrated to serve it.� Additionally, LapLink could leverage its
patented technologies for file compression and delta comparison to speed up
these transfers.� This vision led to the
birth of the Express Loader project in December 1999, with a scheduled launch
for June 2000.
���� The original revenue model for the
project was similar to the one in use at Real Networks.� Partner companies such as Driveway and My
Docs Online would purchase a back-end LapLink server to provide the host
connection needed for the LapLink core technologies.� LapLink would then provide a free client product that would have
links to the various Internet File Management (IFM) partner sites.� If the consumer was not already signed up
with the IFM partner, then LapLink is paid a royalty for delivering a new
customer.
���� Less than a week from its official launch,
the management team modified its original plans for Express Loader.� Instead of a single LapLink branded product,
LapLink would now provide a customized, �skinned� version of the product to
partners for their own distribution.�
Some of the factors leading to this decision included:
�
Rapidly
deteriorating financial markets.� The
April financial market corrections, coupled with analyst reexamination of the
true financial state of many dot-com startups, has led to a slowdown in the
amount of venture capital available, resulting in a cash crisis for many
emerging dot-coms.� An InfoWorld.com interview on June 21, 2000
with Enrique Carter, director of the investment firm Price & Cooke
(Argetntina) stated:
Approximately 50 percent of these sites have money
reserves for about two months, while 25 percent have enough to last them up to
the Christmas season� Specifically, the financial limitations apply to business-to-consumer
companies and those that are pure content providers, relying solely on revenues
from advertising for survival. (Calabia, 2000)
Faced
with chasing royalties from partners with potential cash-flow problems, it was
decided to switch to a subscription model, similar to contracts with OEM
computer manufacturers.� Partners pay in
advance for a number of licenses to the client, and then can distribute them however
they wish fit to their Web site customers.
�
Exclusivity for
each partner. Potential partners expressed reservations, according to project
manager Chris Juneau. �Since the IFM list order was fixed on a first-come,
first-serve basis, there was less incentive for later companies to use the
technology. Consumer psychology would drive them to whoever was first on the
list.�� By shifting to branded versions
for each IFM Web site, LapLink allows the customer control over where and how
they compete in this market. Additionally, LapLink now has improved revenue possibilities
from multiple partners.
�
Customization.�� Potential partners noted that they were
looking for a less complicated utility than Express Loader.� By changing to specially branded versions
for each customer, LapLink can now customize the product to be as feature-rich
or streamlined as each partner desires.
���� Overall, the management team at LapLink saw
the adoption of this model as a positive step. As noted in the text, �Very few
decisions are forever; there is more �give� in more decisions than we realize.�
(Dessler, 1998, p. 125) In fact, this decision was made after most of the
product materials for the launch party had been printed, and the launch announcement
event was scheduled.� But the sacrifice
of these materials and the additional work required to meet the announcement
deadline was seen as a small sacrifice compared to the potential gains.
��� Viewed externally, the decision-making
process appears to be relatively free of the biases. �By adapting to the existing market conditions and not rigidly
presenting a single model to the customer, the management team did not exhibit
a cognitive bias toward its original plan.�
However, by making a late change, the internal stakeholders at the
company have not yet been sold completely on how this will benefit them. Issues
management team members are considering:
�
Ability to
respond to a changing market.� As a brick-and-mortar
software company, there has been a longer development cycle. �Internet conditions are different, requiring
a more rapid time-to-market period.
�
Technology
issues.� Express Loader is dependent
on JAVA, which is still an emerging technology.� According to one technical support specialist there are currently
22 known versions of Microsoft Java Virtual Machines released into the public
Internet, as well as a number of Sun versions.�
However, the developers only built the project with one version, and the
rapid time-to-market requirements preclude exhaustive testing with all the JAVA
�flavors.�
�
Support
Boundaries. �With Express Loader now
being customized for each partner, each change will modify the product�s
feature sets.� This increases the
workload on the support personnel, who must learn and master each version.
���� In the end, the major factor in assessing
this success of this decision will be whether it continues the company�s
progress toward meeting its stated goal to be the Internet leader in file
transfer technology.� While this
decision will now provide more immediate benefits to the bottom line
financially, it does not present to the public a LapLink Internet product.� Additionally, if the partners in this field
who choose to implement this product do not survive the inevitable market
consolidation, then Express Loader is doomed to be just another Internet
curiosity.� If that happens, we may be
left to wonder if the dot-com in LapLink�s name will ever be anything more than
just wishful thinking.
References
Calabia, H. (2000, June 21). Rough road ahead for dot-coms. New York: InfoWorld.com. Retrieved
June 23, 2000 from the World Wide Web: http://www.infoword.com
Dessler, G. (1998). Management: Leading people and organizations
in the 21st century. Upper Saddle River, NJ: Prentice Hall
Festa, P. (1999, December 22). Start-ups storm the net. San Francisco: CNET Nets.com. Retrieved
June 23, 2000 from the World Wide Web: http://news.cnet.com/news/0-1005-200-1503115.html
Lublin, Joann S. (2000, March 14). A Fortysomething Founder
Finds It Hard to Kick Back. The Wall Street Journal, p. B1