Sonos launched a disastrous app update in May, prompting CEO Patrick Spence to commission an internal investigation led by chief counsel Eddie Lazarus. The software release, plagued with missing features and bugs, has sparked widespread customer outrage and led to a $200 million revenue shortfall. Sonos shares have plummeted 25% this year. Lazarus interviewed about two dozen employees and reviewed meeting recordings before presenting his findings to the board in late July. Bloomberg:
What has happened to Sonos is at its heart a cautionary tale of company leadership ignoring the perils of “technical debt,” the term used by software engineers to describe the compounding threat of outdated code and infrastructure on security, usability and stability.
For two decades, Sonos had allowed its tech debt to pile high. When it undertook in earnest its effort to revamp its app in mid-2022, the company knew it was sitting on infrastructure and code written in languages that were pretty much obsolete. The Sonos app had been adapted and spliced and tinkered with so often, the vast majority of work being performed for the new app was less about introducing new functionality than sorting out the existing mess.
The company could have tackled its tech debt sooner but appears to have lacked a crucial element: urgency. It finally came in the form of the Sonos Ace headphones, the first product in the Sonos range to be fully mobile rather than using home or office Wi-Fi. The app needed to be rebuilt, as did the cloud computing setup underpinning it.
Ace is a critical product for Sonos. Now that Sonos’ pandemic sales boom has subsided, Wall Street has started to question where revenue growth will come from. Sonos Ace is a big part of the answer. Despite the company’s lofty and well-earned reputation, Sonos’ share of the $100 billion audio market is only around 2% because it has not gone toe-to-toe in the headphones category with Apple, Sennheiser, Bose and the rest.
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