It's been some time now that Silicon Valley Bank failed, but it still feels relevant in late 2024 with all the unexpected things happening around us on a daily basis...., not just in banking, but in politics, health care, culture, and so many other areas....
SVB was a reminder: even the most sophisticated organizations can fall apart by ignoring edge cases. Despite being a top-20 U.S. bank with renowned risk management capabilities, SVB overlooked vulnerabilities in their asset-liability management, leading to a disastrous collapse. You can read more about the failure here.
This mindset isn’t unique to banking. Product managers often fall into the same trap when we skip over edge cases during feature development. It’s easy to focus on the “happy path”—the smooth, ideal user flow—and dismiss edge cases as unlikely or unimportant. But those assumptions can lead to bugs, failed launches, and firefighting sessions we’d rather avoid.
The Risk of Overconfidence
In product management, as in banking, overconfidence is a killer. Consider these parallels:
“This time is different” thinking: SVB assumed their past success ensured stability. Similarly, PMs often convince themselves that a feature is a no-brainer and edge cases aren’t worth testing.
Failure to test worst-case scenarios: Like SVB’s lack of stress testing, skipping edge-case testing opens the door for vulnerabilities to surface at the worst times.
Bias toward best-case outcomes: Both SVB and PMs fall into the trap of assuming optimistic user behavior and ignoring “unlikely” events. Unfortunately, those events often aren’t as rare as we think.
Breaking the Cycle: Three Practical Tips
How can we avoid these pitfalls and build better products?
Make Edge Cases Routine
Include edge-case scenarios in every sprint’s acceptance criteria.
Create a checklist for “what if” scenarios—unexpected inputs, system crashes, or heavy usage.
Stress-Test Like a Banker
Run simulations of worst-case scenarios. Use System Thinking. Leverage your second order mental model. Ask "...then what?"
Challenge Assumptions
Use pre-mortems: Imagine your feature has already failed and brainstorm reasons why. Build safeguards accordingly.
Conclusion: Don’t Bet on the Happy Path
Ignoring edge cases may save time in the short term, but it risks disaster in the long run. Whether managing a bank or shipping a product, it’s not the risks you did not see coming that sink you—it’s the ones you saw and chose to ignore...
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