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Bruce McCarthy is Founder and Chief Product Person at UpUp Labs, where he and his team are at work on Reqqs - the smart roadmap tool for product people.

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Monday
Sep102012

What Can We Learn from Ryma's Fall?

As many of you know, the assets of Ryma Technology Solutions, makers of FeaturePlan requirements management software, were acquired by OneDesk in July of this year. There hasn't been a lot written about Ryma's demise, so I spoke with people at OneDesk, with former Ryma employees and with some customers and industry observers. After listening to everyone, I've come up with three lessons to take away.

1. There is little enterprise market for product management software

"PMs have no budgets," a former Ryma executive told me. People at Ryma believed that product management is one of the major keys to success for companies, but "as soon as budgets get cut, you're the first one out."

Ryma started back in 2001 to provide a simple tool for product managers. Former execs explained that they "just wanted to improve the lives of PMs." The tool expanded and became more complex over time, though, and many PMs found it was more work than it was worth to use. Ironically, the complexity was the direct result of feature requests from product managers. Ryma made an ongoing practice of interviewing its customers and incorporating their feedback. That's good practice, right? This can serve as a caution to us all. It's the classic conundrum of trying to please everyone leading to not pleasing anyone.

After the recession led to the loss of half of their customers, the company discovered a surprising phenomenon. Use of FeaturePlan at many companies who had stayed with them was not being driven by product people but by upper management. In fact, PMs often resisted using the tool but executives insisted because it gave them visibility into their whole product portfolio and, among other benefits, helped eliminate duplicate efforts.

2. A product needs to provide value to its buyers

So it turned out Ryma's customer wasn't the product manager at all, but the executive team. That's who was getting value from the tool, so that's who was willing to stand up and say it had to be part of the budget even when costs were being slashed.

The Ryma team ran with what they'd learned and built an in-house consulting practice to help executive teams establish consistent processes and get the most out of their product development efforts. Increasingly, according to people I spoke to, the sales mix changed to larger, more services-centric deals and FeaturePlan accounted for only about half of the revenue mix. The company was constrained by the thinner margins of a service business and by their ability to hire and train consultants, but they were growing once again.

3. VCs will happily fly you into a mountain

The success of Salesforce.com has spawned a lot of venture-backed imitators, and many investors have looked at their growth and valuation with envy. "Investors wanted an exit, not dividends," confided one insider. So despite positive changes, it seems Ryma's long-time investors hired a new CEO with the mission to make Ryma into that kind of SaaS company, changing the focus to large numbers of seats and a very lean organization without a lot of in-house consulting staff.

Ryma's dreadnought-class product, long sales cycle and existing pipeline of consulting work, however, didn't fit that model at all. And Michel Besner (the new CEO) seems to have remembered too late Guy Kawasaki's advice about cash being "what keeps the doors open." I heard from more than one source that the new management simply "spent all the money."

4. Bonus lesson: know what you're buying

A number of people have said that OneDesk got a great bargain buying Ryma at a fire sale. I am not so sure. Another interpretation of events is that the product they bought had become so complex that it simply does not provide sufficient value on its own. It requires a large investment in consulting services to make it usable, and OneDesk is not as well equipped to provide those services. Spokespersons for OneDesk indicate that they have retained contracting relationships with 3rd party consultancies and with a small number of former Ryma employees, but this seems very much like the model that didn't work under the previous leadership.

Initially, OneDesk's acquisition made no sense to me. OneDesk offers an inexpensive cross-departmental suite for small companies while Ryma had built a high-end point tool for enterprises. I think I get it now, though. The thing they share is a central (though not exclusive in the case of OneDesk) focus on the product manager. Brendan Walsh, former Marketing Manager for OneDesk, said their goal is to be "the Salesforce of product." That's ambitious. If you look at Ryma's failure in building enterprise value from the PM out, though, it may be unrealistic to build a large enterprise business around the PM.

So what does all this mean for Reqqs, my attempt to provide value to product people? Not much, I think. I've never been interested in building an enterprise tool or a cross-departmental suite. Reqqs is meant to focus on the needs -- and modest budgets -- of the majority of product people (most of whom work in smaller teams) by providing a simple, affordable roadmapping tool.

A former Ryma exec said, "Somebody will come one day with a tool that is so simple and flexible but will actually truly help the PM." That is what I am aiming for with Reqqs. If you'd like to be in the loop on development efforts, stop over to reqqs.com and weigh in.

Let me ask for your help, up front, though, in keeping it simple so it stays accessible and useful for everyone, even if it doesn't do everything everybody might want.

Reader Comments (3)

Interesting discussion about Ryma on LinkedIn here: http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&discussionID=123913367&gid=3781385&commentID=94884962&trk=view_disc&ut=3EeMgFeRokIBo1

September 13, 2012 | Registered CommenterBruce McCarthy

Bruce, thanks for providing some informative background to the Ryma story. I think it's interesting to all of us that a product presumably made "by product managers, for product managers" ultimately failed. Your insights on the reasons behind the fall ring true. We can only wish OneDesk more luck, but I can't say I'm optimistic about their prospects.

In the meantime, please keep driving the Reqqs vision! I truly believe you have a great product concept.

September 20, 2012 | Unregistered CommenterBarry L Smith

Thanks, Barry! Simplicity is the word!

September 20, 2012 | Registered CommenterBruce McCarthy

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