Troubleshooting Agile

Ulrik Lehrskov-Schmidt: Commercial and Technical Debt

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Jun 14, 2023
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ANECDOTE

Missed Price Hike On 600 Customers

  • Ulrik recounted a scale-up with 600 enterprise customers that could have raised prices by 85% but didn't.
  • They couldn't reprice because contracts were fragmented across documents and people, creating heavy renegotiation cost.
INSIGHT

What Commercial Debt Means

  • Ulrik defines commercial debt as the future sales and marketing effort needed to fix past pricing and contract choices.
  • He links commercial debt to lacking disciplined packaging, pricing, and contract frameworks across the business.
INSIGHT

Debt Creates A Vicious Loop

  • Technical debt and commercial debt fuel each other in a vicious loop that slows growth.
  • Product design choices can force sales to create discounts and custom deals, spawning both debts.
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