I was recently having a conversation with someone about the impact of their plan for their SaaS product. It was a relatively small impact when framed the way they were looking at it, but didn’t include a very holistic view of things. The solution to this is the Pufferfish. The execution of the Pufferfish is as follows*:
- State the decision, and the delta from the desired state for a small use case. “Well Bob, if you do that, it will cost you $10,000 to implement this for existing customers in this location this year…”
- Expand to include total existing universe “…but for all the other locations it will be the same, so that’s $70,000 a year for your existing customers however….”
- Expand to the expected three year universe “…given your projected growth rate you’ll add another three locations a year. That means that you’ll have sixteen locations in three years, for a total of $160,000 a year in three years…”
- Now talk about sales and impact to margin…. “and your margin is 10% Bob. That means that you would have to do $1.6 million in business to just cover this in three years. But really, this decision will negate $4.6 million in sales over that time. That’s a lot of cheddar Bob. The right decision is to get this right the first time, isn’t it?”
It’s worked for me several times. Why? I think it’s a mental buffer overflow. You’ve thrown a lot of numbers around and they’ve come to the conclusion that it’s a very bad idea. This tactic obviously needs to be used judiciously to prevent them from becoming desensitized to it, but it can be hugely instrumental in select cases.
What do you think of the pufferfish?
*All example numbers are completely fictional and used for illustrative purposes only.