Caught a colleague straight-up lying during a demo, exaggerating the product's capabilities. It worked, and they closed the deal. Do I report it, or is this just how business gets done?

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Don’t snitch. I would address directly with the colleague. Shame on the customer for not verifying and shame on the coworker for lying. Whistleblowing this could really backfire on you.

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Depends on your org and if/how much they respect integrity. However, if you were in the demo and didn’t say anything, I’d make sure to reach out to the coworker and ask them to clarify to you and then to the client

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I would reach out personally instead of just “reporting” them.
Figure out why they lied; was it ignorance, or were they purposely trying to mislead them?

It's less than ideal but often items are on a product roadmap and sometimes sales cycles are long....so if that is what happened I'd say it's not being forthcoming with existing vs future state. That said, if sold X and it's Y and there is no line of sight to ever getting those functionality baked in then you are porked. Bad deal, will go down sideways and should come out in a statement of work detailed within the contract.

That’s how it works… once. Tough to build a career this way though…. Run if this becomes the norm.

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