Epic Waste

Marty Cagan argues that the largest source of technology waste is not government projects or startups but large non-tech companies such as banks, insurers, airlines and retailers. These firms, often run by CIOs or CFOs, rely on stakeholder-driven roadmaps, project-based funding, heavy outsourcing, fake Agile waterfall processes, and little product or UX role. Their belief that offshore engineers save money ignores the much larger teams and slower speed of innovation this creates. Because large companies have capital to absorb failures, they decline slowly rather than collapse, though new leaders who understand technology can sometimes turn them around. The essay matters because it frames a widespread, costly pattern and calls product people inside such organizations to push modern practices.

01Key takeaways

• Outsourcing based on hourly rates can look cheap while inflating team size and slowing delivery.
• Stakeholder-driven roadmaps and project-based funding undermine the ability to innovate quickly.
• Waterfall processes adopted under an Agile label are a warning sign of inefficient technology organizations.
• Large companies can survive long failure periods, so the decline is gradual and easy to overlook.
• Shifting from an IT mindset to a product organization, led by people who understand technology, can revive a company.
• Product people in large enterprises can drive change by introducing discovery and modern practices.

02Key sections

Waste in government and startups

The author notes recent public criticism of a costly government health marketplace project and says it did the opposite of best practice. He positions his real concern as waste inside large non-technology companies.

Symptoms of large IT organizations

He describes common traits of large corporate IT: stakeholder-driven roadmaps, project-based staffing, heavy contractor use, waterfall processes, no product role, and minimal UX design.

Misguided cost thinking

Leaders compare outsourced engineer rates to local salaries and think they save money. Cagan argues this overlooks larger team sizes and the inability to move at the speed of innovation.

Slow decline and possible recovery

Large companies have enough capital to survive repeated failures and die by a thousand cuts. New technology-savvy leaders can sometimes revive them by moving from an IT to a product organization.

Call to action for product people

Cagan encourages those inside large companies to bring modern product practices in, pointing to his article on product discovery in established companies as a starting point.

03From the post

“A partnership dedicated to teaching best practices to product teams and product leaders”

04Frameworks mentioned

Summary and takeaways written by PM Atlas; quotes are short excerpts. © the original author.