By Ben Cohen

The most peculiar business calamity of the past year started when millions of people suddenly discovered that something was terribly wrong with one of their favorite pieces of technology.

It just stopped working.

Sonos, the company that makes premium audio equipment, rolled out a redesigned app last year that was supposed to improve the user experience and accelerate the company's pace of innovation. Like other Sonos products, the idea sounded great.

Until it led to one of the most disastrous software updates in the recent history of consumer technology.

As soon as the glitchy app was released in May, the complaints from Sonos customers came in loud and clear. They couldn't use its basic features. They couldn't access their own audio systems. Their speakers had become sleekly designed bricks -- and they couldn't help but feel completely infuriated.

Sonos has been dealing with the fallout of its botched launch and bungled response ever since.

It cost the chief executive his job this past week -- and the company says it has also cost at least $100 million in revenue. But if you measure the financial hit by the company's market capitalization, the real cost of this whole debacle was closer to $500 million.

That's roughly how much Sonos's value has plummeted since the company unveiled what it called "our most extensive app redesign ever."

As it turns out, it was also the company's most expensive app redesign.

To understand why so many Sonos customers are so frustrated, it helps to understand why they're Sonos customers in the first place.

Millions of people buy Sonos's wireless speakers, headphones and other home equipment for the company's elegant blend of hardware and software, so perfectly integrated that you can't tell where one ends and the other begins. It's simple, reliable and seamless. It just works.

The company's new interim CEO knows all of this -- because before he was the leader of Sonos, Tom Conrad was a loyal customer.

He listens to music through his Sonos home system. He watches television with his Sonos soundbar. He travels with one kind of Sonos portable speaker. He brought another kind of Sonos portable speaker into the delivery room when his daughter was born. He is such a fan of the company's products that he even has a tattoo of Sonos headphones.

"I know as well as anyone the incredible power of what we can do," he wrote to employees this past week. "When it all works, it's absolute magic."

So what happens when it doesn't work?

"Our customers are taken out of the moment and are right to feel that we've let them down," wrote Conrad, who was already on the Sonos board when he was tapped for the interim job. "I think we'll all agree that this year we've let far too many people down."

That's because people expect baseline functionality from the tech they welcome into their homes. They want it to do what it's supposed to do. That's it -- and that's enough.

For these products, stability is success.

Sonos hasn't been stable since the day it pushed out a flawed software update. When users opened the new app, they found it was missing essential features of the old app, like the ability to edit playlists and set alarms. For some, entire libraries of music were inaccessible. For others, there were inexcusable lags and speakers that vanished from audio systems in the middle of a song. For most Sonos users, the product was simply worse.

This is an existential conundrum for all kinds of software. The apps that run our lives demand constant improvements -- and they can't have any disruptions. This sort of tech isn't like a car that you can replace every few years. It's more like maintaining a house. You have to figure out a way to fix the plumbing while you're still living at home.

Sonos executives said they had to upgrade decades-old systems that were holding the company back. But the problem wasn't what they did. It was how they did it -- and what they didn't do.

At first, they defended their decision to overhaul a critical piece of aging infrastructure all at once, even as they acknowledged the app had issues.

The day after it was released, the company's then-chief product officer told the Verge: "It takes courage to rebuild a brand's core product from the ground up, and to do so knowing it may require taking a few steps back to ultimately leap into the future."

But it soon became clear that Sonos had actually stepped off a cliff.

Before long, the buggy new app had become as pleasant as a termite infestation. There were so many complaints from disappointed customers that executives seriously considered just going back to the old app. But they couldn't. After rigorous testing, they determined the previous version of the app was no longer compatible with the rest of its software.

All of these problems were compounded by a lack of communication. It took until July for the then-CEO, Patrick Spence, to apologize. Even when Spence detailed his plans for repairing the app, he cautioned that it would take more time. And today, it's still not entirely fixed.

But at that point, there was almost nothing that any CEO could have said to quiet the uproar.

People buy Sonos products so they can listen to what they want, when and where they want it. They don't want to hear why they can't.

Since the mishandled launch, the company has shipped 20 updates to restore missing features and exterminate "stubborn and esoteric bugs," Spence said.

And the company is trying to win back the trust of customers by reassuring them that it has learned valuable lessons from its very costly mistake.

The first lesson? It was way too slow in responding to irate users.

The second lesson? It should have been slower in rolling out new technology.

"In hindsight," Spence wrote in a Sonos forum on Reddit, "we shouldn't have introduced such a big change so quickly."

When he was CEO, one of his priorities was getting the company moving faster. But there's a crucial difference between moving fast and speeding. And when companies move too fast, it can end up slowing them down.

It did for Sonos. The company delayed two product launches to devote attention to this crisis, which could have been avoided with iterative testing, phased releases and other tweaks to its software-development process. It plans to implement them so that this never, ever happens again.

After all, for Sonos and so many other companies, there are three words that sound even better than it just works.

It still works.

Write to Ben Cohen at ben.cohen@wsj.com

(END) Dow Jones Newswires

January 17, 2025 21:00 ET (02:00 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.