Eric Ries, author of The Lean Startup (2011), reinforces this point, “Before new products can be sold successfully to the mass market, they have to be sold to early adopters. These people are a special breed of customer. They accept – in fact prefer – an 80 percent solution; you don’t need a perfect solution to capture their interest.”
And Cerent’s first release of its Cerent 454 was far from perfect. It simply had two transport interfaces supported by non-scalable and buggy software. But Cerent’s role as market innovator and OC-48 price leader was soon to be rewarded with billions of dollars in sales.
Cerent’s first customers cared about being the first to use (adopt) a new product like the ‘454’ and/or they sought to gain a competitive advantage by taking a risk with something new that Nortel and Lucent didn’t offer. These early adopters rarely demanded additional features at the time of their first purchase that could complicate their network evolution. They relished the compact size, lower power consumption, and reduced price.
Vernon Telephone, for example, discovered Cerent in 1997 and the company immediately saw the benefits of the multi-service SONET platform that supported existing telephony traffic with increased capacity while embracing both the need of the State of Wisconsin to carry distance learning traffic in the Coulee Region and expand service offerings by providing Internet access for Vernon Telephone’s 6,500 customers in the Westby area.
Even though most of the entrepreneurial engineers at Cerent believed that “an early, buggy, incomplete product [felt] like an unacceptable compromise,” sales, marketing, and CEO Carl Russo did not embrace this perceived restriction. These Cerent leaders echoed what entrepreneurs like Eric Ries believe, “any additional work beyond what was required to start learning is waste, no matter how important it might have seemed at the time.”
Release 1.0 of the Cerent 454, followed quickly by Release 1.1, allowed Cerent to secure more than 100 service provider customers before Cisco made its move to acquire Cerent in 1999.
Sometimes the most perfect acquisition includes a product with glorious imperfections.