Let me illustrate this insight with a personal story. As my enterprise computer software company which produced innovative lodging systems for hotels and resorts grew quickly, we found ourselves straining to keep up with the hiring and training of good customer support representatives, a critical part of the equation then and still so today in the 24 hour environment of hotel front desk operations. If a front desk clerk called support at 11.00 PM in the evening, it usually meant that there were guests lined up waiting to check in, anxious to pass beyond this necessary but inconvenient bottleneck between a tiring plane ride and a comfortable bed. The result would be very frustrated clerks facing angry guests if the wait were to be long. It was simply not acceptable to be backed up in customer service, forcing either a ten minute wait or a call back from support.
[Email readers continue here…] It took several months to hire and train enough new support reps to keep up with the rapid growth of our company. But the problem was solved, and response times returned to “immediate” for at least this class of customer call. There was no wait, and the quality of response was rated as “excellent” by callers later surveyed. But “There’s the rub” (the snag) wrote Shakespeare in Hamlet. It took two long years for the company to fully recover its lost reputation after the actual problem was fixed to the satisfaction of all. Aided by salespeople from competitors and long memories from unhappy customers, the myth of continued quality problems in customer support bounced around the industry for those years, until finally good press, great experiences and a marketing campaign together overwhelmed bad memories to put this issue to bed.
If the problems had been in product stability and customer service together at the same moment, there might not have been enough time and resources to recover. There are plenty of young companies that died trying to recover from such a combination.
Your reputation hinges upon delivering a quality product at the moment of release, and maintaining product quality throughout its life. The smaller the company, the more is at stake. There are fewer resources and much less of a reserve of good will among the customer base to absorb a problem release or in the example above, inability to fill the void in customer service created by rapid growth.