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Why did Borland fail?

Borland lost its way when executive management decided to change the company to pursue a different market.

The company was founded on the idea of making mass-market software – products that can be used by a large number of people in a variety of different scenarios, and at reasonable prices.  Turbo Pascal did not become a worldwide sensation just because it compiled thousands of times faster than other compilers – it was also priced hundreds of dollars less than other compiler products, and provided a level of developer tool integration never before seen.

A few years after Borland went public, founder and CEO Philippe Kahn began to have increasing disagreements with the Borland board of directors. Kahn wanted to continue building products for the mass market, but the board of directors wanted to shift gears and pursue the “enterprise” software market. I get the impression that this difference of opinion simmered for years. Ultimately the board fired Kahn and threw the company headlong into the pursuit of the enterprise market.

I’m sure there were several motivations for this change of company direction. In the early 90’s, Microsoft had a firm foothold in mass market software, but was still relatively unknown in the enterprise market. Was the board solely drawn to the high price tags of the enterprise market?  Or were they also attempting to run away from Microsoft’s shadow?

In the height of the enterprise transformation, I asked Del Yokam, one of many interim CEOs after Kahn, “Are you saying you want to trade a million loyal $100 customers for a hundred $1 million customers?”  Yokam replied without hesitation “Absolutely.”

And that, in my opinion, was the core of Borland’s downfall. The executive team decided to take a talented development team with lots of experience building innovative consumer products and retask them to build enterprise software. On paper this may seem like a fairly minor adjustment, if you have the attitude (as Borland executive management had) that developers are a dime a dozen and any developer can be applied to any product or problem space. That may work for technical programming skills but it doesn’t work for passion.

The reality is that the enterprise market is a radically different beast from the consumer market. “Turning the ship” to pursue enterprise customers requires a lot more than just changing the project requirements given to the development teams. It requires a different skillset and mindset in the development teams, a different sales force, and ultimately a different corporate culture.

For many of Borland’s talented developers, enterprise software was the antithesis of their interests and passions. Hot rodders, hackers, and modern day makers were tasked with making things they had no passion for – building the software analogs of sewer systems, utility poles, or synthetic hairballs for ceramic cats.

Borland’s long slow death spiral began when it turned away from what it knew best to chase a unicorn it knew nothing about.


 

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