The flashy new features that might kill your application: lessons from Skype’s fall
In 2013, the BBC called Skype the revolution that is changing lives. 11 years later, the software that once had a 40% market share and more than 80 million concurrent users ceased to exist.
What did go wrong with Skype?
I still recall when Skype was the go-to software for international calls. For many other international students of the early millennial years and me, Skype offered an attractive alternative to telecommunication companies that used to charge a fortune for every single call minute. With Skype, someone can call their family and friends for a fraction of the cost that telecommunication companies used to charge, while enjoying decent voice quality. Therefore, no wonder that in a few years, Skype had more than 40% of the international voice market share and more than 80 million concurrent active users.
But what happened to such a pioneering software that became a history in just a decade from its peak?
There is no shortage of recent articles that point toward business factors such as increased competition and changing market dynamics. While these are important reasons, I think many analyses tend to ignore — or underestimate — some key software management reasons that lie within the boundaries of technology and business.
Skype: What did go wrong from a software management perspective?
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In my opinion, one of the main reasons for Skype’s downfall is the assumption that adding new features is the means to expand the customer base and increase revenues. In other words, more features lead to more customers, which is then translated to bigger revenue. While this assumption might not be wrong as a starting point, its practical realization very often leads the company to become a feature factory. Everyone in this factory, from business owners to product managers and developers, becomes obsessed with adding new capabilities that might be appreciated by potential future customers. However, at the same time, everyone in the feature factory ignores what current customers appreciate and value. As a result, the feature factory approach leads to:
- Increased software complexity as a result of the increasing number of features.
- Prioritizing new feature delivery over existing customers’ experience, leading to a high customer churn.
- Answering the question of “who is your customer” becomes very difficult to answer, which leads to losing focus on existing customer needs.
Let’s illustrate these three consequences via some examples:
In 2018, Microsoft released a new version of Skype with several features that mimicked Snapchat to attract more young users. The update caused a storm of criticism from existing customers, leading Microsoft to rollback these features and redesign the application. Existing customers were more business-oriented and didn’t see Snapchat-like features as interesting in a business context. Furthermore, many existing users liked the simplicity of the design, and with many new features aimed at future customers, the application has become more complex (ZDnet article). As a result, users’ experience has also deteriorated, leading to a two-point drop in rating from 3.5 to 1.5, as highlighted by Forbes.
This past year, we explored some design changes and heard from customers that we overcomplicated some of our core scenarios. Calling became harder to execute, and Highlights didn’t resonate with a majority of users. We needed to take a step back and simplify.
2018 Skype press release (source)
Another example is a bit older; it is from 2014. During that time, Microsoft wanted to move Skype's backbone to Azure and ditch the peer-to-peer communications that were Skype’s foundation technology. However, as the focus was to complete the migration, the company forced its users to upgrade without prior notice or a grace period. In addition, the new update required a minimal OS support in the case of Linux, which didn’t resonate well with many users who — for one reason or another — didn’t want to upgrade their OS version.
There are MANY more examples… and many more in the Windows community as well. All in all it seems that this “forced upgrade” is not going down well with many people.
From the Distributive Telephony post, 2014 (source)
More examples can be found, including discussions on Microsoft’s support pages. Nevertheless, the common dominator is that Microsoft was more focused on expanding the customer base by adding more features and that didn’t work well at all.
Takeaway
Focusing on adding features as a means of revenue growth and expansion of the customer base might be a dangerous strategy, as it might lead the company to become a software factory. It is important to balance the potential future customer needs with a deep understanding of the current customers’ experience and needs.
