Technical Debt: Every Startup Needs to Know When to Cut its Losses

We’ve mentioned before that we took the concept of “hidden debt,” or debtbergs, that is the main premise for our book, The Titanic Effect, from the idea of technical debt – work is done that has to later be re-done because it has too many internal flaws. We see these same expeditious decisions being made, not just in product design, but also in choices about who to hire, which investors to seek out, and what marketing activities to undertake. We want to share our own story of technical debt with the development of our audiobook. 

The challenge of accumulating technical debt is that of wasting resources. Fixing things takes time and money. Most startups already know they need to fix something. They just don’t want to invest the time and money now. And sometimes it makes sense to keep moving forward with less than perfect quality because deadlines are looming. And then, we’ve all heard Voltaire’s “perfect is the enemy of good.”

A second challenge is the sunk cost fallacy. People tend to escalate their commitment to an existing path simply due to loss aversion and the status quo bias. These are two well-known decision-making biases from behavioral economics. We hate that we’ve lost our investment (loss aversion). So we continue to invest in the less than perfect (status quo bias) to avoid coming to terms with the loss. Moreover, we believe that investing more money, time or people on the current path can fix the problem. 

Like many startups and larger organizations, we suffered from this same challenge when developing the audiobook for The Titanic Effect. We decided to read the book ourselves. While we are not professional voice actors, our logic was:

  • People tell us that they hear us talking when they read the book themselves.

  • We really enjoy when the authors have read their own book.

  • Our passion for the material would make up for our lack of training.

  • The recording engineer was willing to catch and help fix any mistakes.

With that plan in mind, we each took turns reading a chapter. The audio engineer added some sounds to indicate each of the icons in the book – Titanic stories, icebergs, red flags, and navigation plans. And British voice actors read the Titanic stories for authenticity. Then, the audio engineer put it all together.  

We originally recorded the audiobook in July/August 2019. When the first version was available in September, we were not happy with the audio quality. There was a hollow echo and tinny sound on the parts that we read. It was consistent throughout all of our parts. There were two options: re-record it or try to fix the effect digitally. 

Like many startups looking at their technical debt (because that is what a bad recording is), no one wanted to re-record the entire book. That was both a lot of time and a lot of effort. So the audio engineers spent the six months from September through February “fixing” the audio. We knew we had a technical debt. We discussed re-recording several times. But we kept deciding to try “one more fix.” 

Cut Losses.png

Sadly, even in the final version, the tinny hollow persisted. So there was only one thing left to do – record it all over again. It was time to pay down our technical debt, which is exactly what we did in March and April of 2020. The team spent May making minor tweaks and rendering the final version. Once we approved the final version, it still took two months to get it into distribution. Audiobooks are our favorite way to consume business books. For those of you who were waiting for the audiobook, now is your chance…give The Titanic Effect a listen.

This incident was a good object lesson for us – sometimes it’s better to pay down your hidden debts early. Try to avoid escalating commitment to an existing solution. And be vigilant - don’t let loss aversion keep your startup from making the improvements it really needs.