By the time James sat down at the table, he had almost set his software troubles aside. “It’s better to focus on Christmas,” he told himself.
Halfway through the meal, his uncle launched into the same family story he’d told for the past twenty-three Christmases. James’s mind wandered. Two tables over, he heard his nephew’s excited voice and could not help but listen.
“The school actually paid me to track their library on the computer!” Ethan exclaimed. “I made it so that the program can track the most popular books and authors. I even figured out who’s the worst at losing their books!”
James pretended to get up for a second helping of turkey and mashed potatoes. He sidled over to his nephew’s table. “Did I hear that you were building software?”
“Yes,” Ethan said. Then he proceeded to tell James all about what he could do. For the next two hours, James lost track of time as he and Ethan started mapping out what it would take to replace ManuMaker and ERP Express. James didn’t like doing business on Christmas, but he had been so bothered by things that he could hardly stop himself.
A good start starts going downhill
Ethan began the project the next day. James knew that quoting was the most important part of the business, so he had asked him to start with that. He worked throughout his Christmas break. Once school started, he worked on evenings and weekends. That summer, he took off from his landscaping job and spent the summer working for James.
In spite of all the hours, James was worried. It didn’t seem like Ethan was getting very far. Once in a while, he’d ask how things were going. Each time, Ethan reassured him and even showed him small parts of the system.
Halfway through the summer, Ethan told James something had changed. Because of this change, he had to redo half the project. James did not understand exactly what was going on, but he trusted Ethan would get it done.
That fall, they started running the new software alongside ERP Express. Ethan had spent a month making it pull all the contacts into the new software. James started using it to create his new quotes.
At first, everything seemed to work fine. Then, James started running into trouble. Once, he’d finished a big quote for a customer and tried to save it. As he clicked the Save button, the software showed him a message he could not understand. He froze as his quote vanished.
A few weeks later, when Ethan updated the software, he copied the wrong file, and James lost a month’s worth of quotes.
At other times, the software would unexpectedly lock up. James would be on the phone with a customer, and it would freeze for fifteen seconds at a time. It felt like forever. He told Ethan about it, but when Ethan tried to figure out what was going on, he was unable to find the problem.
Ethan made gradual progress on the new software and James tried to be patient. He had never seen anyone develop software before, so he had nothing with which to compare Ethan’s progress. The more he used the new software, the more he missed all the little features of ManuMaker.
One year turned into two, and Ethan started researching software developer salaries. At every turn, he increased his rates. At times, James felt uneasy about the checks Laura kept asking him to sign. But each time James thought about ending the project, Ethan made a little more progress.
All that changed when Ethan turned twenty.
The sunk cost fallacy
Two weeks after his birthday, Ethan showed up at James’s office. “I want to talk about the project. I’m planning to go to Bible school for two terms, and then I’d like to find a place to volunteer for a year. Don’t worry, though. I’ll make sure to keep working on the software.”
For the first few months, Ethan kept his word. Then, James began to notice that he took longer and longer to respond to emails. At first, it only took a few days to get a response. Soon, it turned into a week-long wait. After a while, James had to call Ethan on his cell phone if he wanted an answer in less than a month.
One Sunday afternoon, James picked up a new book he’d bought entitled Thinking, Fast and Slow. His eyes drooped until they landed on a section titled “The Sunk Cost Fallacy.” Intrigued, he became alert and started reading again.
As he read, he thought, That’s exactly what’s going on with ERP Express and with Ethan and his software. I don’t know how much I’ve spent on all this software, but I venture it’s a lot. That might be why I’m afraid to consider another option. Starting over means losing everything I’ve spent, but pulling the plug might cost me less in the long run.
He scratched a quick note to himself, “Ask Laura for the software numbers.” Then he dozed off in his armchair for his Sunday nap.
Monday morning, James bounded into the office with fresh energy and determination. He breezed through the staff meeting, then walked straight to Laura’s desk.
“Laura,” he said, “I want to know exactly how much we’ve spent on ERP Express and on Ethan’s new software.”
Laura clicked a few buttons. “Over the past 3 years, you paid $74,000 for ERP Express and you paid Ethan $328,000.”
James gulped, then reached for his phone. When he heard Ethan’s voice on the other end, he launched into his announcement. “Ethan, we’ve made a difficult decision. We’re stopping development on the software.”
James heard Ethan’s response in the distance. A wave of relief washed over him. He had no idea how to regain the efficiency he once had. He had no idea where to go. He only knew he had made the right decision.
James would meet his peer group at their annual summit next month. One of them will have the answer, he hoped.
The Takeaway
How is your software working out? Have you ever felt like James? We’ve worked with many companies, and we understand the challenges software can create. But your story is unique to you. So wherever you find yourself, we’d like to hear from you.
Call us today, and we’ll listen. We’re happy to help you assess your needs and software options. Silverloom might be just what you’re looking for.
Ellis Miller, CEO