How to Kill a Product: AirPower by Apple

My one sentence answer when somebody asks me "What is agile?":

• "A value-based decision making model"

You have finite time, money, and human talent. You better select the product most likely to create value. You don't get to spend the same dollar twice.

What happens when you have a product that you have been investing in for months, perhaps years, and the payoff looks grim? (Sunk Cost Fallacy refresher?) Are you courageous enough to "kill" the product? Will you take the lessons learned and the money not spent and move to the next most valuable product?

Easy to talk about theoretically, hard to pull the trigger in reality.  I have heard these comments from Clients:

• “Our stock is going to tank”
• “Our reputation is going to take a huge hit”
• “We will never get funding for another initiative”
• “Somebody will get fired over this...likely me!”

All valid concerns.  But are those concerns based in reality?  Let’s review an extremely recent and relevant experience provided by one of the world's greatest product companies; Apple.?

Quick Recap: On March 29, 2019, Apple announced it was killing the AirPower product. AirPower is a wireless charger capable of concurrently powering an iPhone, Apple Watch and AirPods. What makes it unique is that these three Apple products use different charging requirements. This was to be the “next big thing” from Apple in their quest to make our lives easier (and make Apple more revenue).

Apple originally announced AirPower in September 2017. It set a delivery date of end of 2018. Going in to Q1 of 2019, AirPower was a no-show.

So let’s have a reality check on the outcomes of this decision by Apple:

• Risk: “Our stock is going to tank”
• Reality: Apple's stock price started at $190 at opening bell on March 29. It dropped to $188 around the time of Apple's announcement. On the next business day, April 1, it opened at 191.64. As of Wednesday, April 3 it was at 196.29. Speaking strictly on a stock price basis, the decision to kill AirPower did not have a negative outcome. (Update: today's stock price is 199.64)
• Risk: “Our reputation is going to take a huge hit”. 
• Reality: Let’s start with how Apple announced their decision.

In a statement released Friday, March 29, Apple's senior vice president of hardware engineering, Dan Riccio, said the company had concluded that its AirPower wireless charger " would not achieve our high standards," so it canceled the project. " We apologize to those customers who were looking forward to this launch. We continue to believe that the future is wireless and are committed to push the wireless experience forward," Riccio wrote.

For a few days after the announcement, there was some negative press around the decision. Apple's engineering capability was questioned. But in the end, Apple thought it was better to transparently tell the world about their "failure" then to keep investing money in a product that was not going to meet their standards.

They could have chosen to release an inferior product. I would argue that would lead to a much bigger reputation hit. People would have actually spent money on a bad product.

With making the most valuable decision, albeit it between two bad options, they went with the option where only Apple took a financial hit. They did not pass that along to their customers.

• Risk: “We will never get funding for another initiative"
• Reality: "Apple to invest $1B on Austin Campus". In the second quarter of Apple's fiscal 2018, Apple spent $3.378 billion on research and development expenses. This represented an eye-popping 21.7% year-over-year increase.

It appears that funding for new products is accelerating.  

• And the final risk: "Someone is going to get fired over this...likely me".
• Reality: Dan Ricco was the Senior Vice President responsible for the AirPower product. As of today, he is still listed on the company website. It appears he is still employed.  

In Apple's case, they have a $941.40B market cap which can hide many mistakes. Most of the companies we work with, do not have such a luxury.  

That makes it imperative that we are evaluating our entire product portfolio on a continual basis. What is working, what is struggling, and what is our "next big thing"? How are we measuring value? How are we using analytics to remove emotion and "hope" from the decision making criteria?

Leaders and Product Owners must be asking these questions:

Are we balancing our investments to support our customers today and to create the new markets of tomorrow?

Do we have the courage to "kill" a product and move that money to a different product?

Are we using a value-based decision making model?

This is why you are in a Leadership position. It is time to lead!

Thomas (Tom) Auld is the Founder and Product Owner of Auld Consulting LLC and Auld Real Estate. Feel free to connect with him on LinkedIn or email him at [email protected]. You can find previous articles here and subscribe for future updates here.