In my post on 21st Century Software, I talk about "Platforms, not apps". What is the business advantage of building platforms? In a word: leverage.
Leverage allows you to maximize returns on minimized investment. But there’s never a free lunch, as they say. You have to make an investment of capital, time, or risk in order to gain the advantages of leverage. Leverage often involves getting help from others, and you usually have to do something in return for that. In financial investing that means borrowing capital from someone else to invest more in an asset than you can afford to on your own (mortgages on our houses are the most familiar form of this), but of course you have to pay interest for that capital in return. With a product platform, the leverage works like this: you make an upfront investment in building the platform and in exchange get outsized returns for marginal incremental investment. The product platform allows you to add new capabilities to delight customers more, or to start to delight new types of customers, at much lower cost -- in money and time -- than if you build and operate a brand new separate product to bring those additional capabilities to market. With decreased need for incremental investment, you can try new things out much more quickly, frequently, and cheaply, and the consequences of failure of any of these individual things goes down. Since trying things out lies at the heart of innovation, your ability to innovate goes up. With an open platform, you can get help from others. Customers and partners add value to your platform (for example, by integrating their content and building their apps on the platform), driving increased sales and stickiness for the platform, in exchange for making it cheaper and easier for those partners to innovate and to bring their capabilities to market. Others take the innovation risk and put in the work. And since innovation is powered by trying things out, your platform can benefit at another level by having multiple partners doing similar things and letting the Darwinian forces of the market reward the best one. That moves beyond leverage to something even more powerful: optionality. It costs more (requires more investment) of course, but optionality gives you leverage on the upside plus protection on the downside. It creates an asymmetrical ("unfair") advantage. So if you want to generate outsized returns for low incremental investment, build a platform. If you want to maximize that leverage, go all in on it. And if you want to harness the help of others to increase leverage even further and decrease risk, make your platform open.
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I was reading some of the Greek classics for a high school literature class when our teacher made us look hard at the notions of good pride (Megalopsuchia) and bad pride (Hubris), which we referred to as "pridefulness" in that class.
Basically: Pride = good. Being proud of your accomplishments is caring, and caring is the foundation of quality. Pride is the just reward for a job well done. Pridefulness = bad. Being prideful is being arrogant and closed minded and putting yourself above others. In the Greek tragedies, it leads inexorably to an act of folly (Atë) which brings about destruction (Nemesis). In business, the critical values of professionalism, collaboration, openness, and collegiality are not compatible with pridefulness. The antidote to pridefulness is humility. So be proud of the good work you do, the way you do it, and the results you achieve. Celebrate success with enthusiasm. But be always humble. In the 15 years or so, our interaction with -- and feeling towards -- consumer software has changed dramatically. If we look at what firms like Apple, Google, Amazon, Facebook and others have given us, it is a very far cry from the gray, gorpy Microsoft applications of old. There has been a sea-change in personal technology.
Some of the characteristics of this 21st century software are:
The principle of Occam's Razor, also know as the Law of Parsimony, states roughly that, all other things being equal, the simplest solution is the best. I find that the approach of thinning things down to their essential core, eliminating distractions and side-shows, is a key element of success. It has application in many areas of designing products, running meetings, building businesses, and pretty much any other facet of life that you care to examine closely. Getting down to that core essential is not easy, it's a really difficult thing to do, which is why I think of it as the 'Art of the Minimum'. We humans are natural pack-rats, and we need to act against our natural inclinations to get to state of uncluttered purity. We second-guess ourselves all the time, and this leads us to pile on all kinds of extra stuff to act as a kind of safety net. But this Art is one well worth practicing.
Michaelangelo: "The more the marble diminishes, the more the statue grows." Here's a question: If you need to mail out 100 letters, is it faster to (a) take each letter in turn, sign it, fold it, stuff it in the envelop, seal the envelop, and put a stamp on it before moving to the next letter or (b) sign all 100 letters, then fold all 100 letters, then stuff all 100 envelopes, then seal all 100 envelopes, then stamp all 100 envelopes? Both get you to 100 letters ready to send, but which way gets you there faster? The majority of people would say (b) is faster -- that by focusing on doing a single task across your entire batch, before tooling up for the next task, you are more efficient. Well, the answer is (a). And it can easily be tested. With two equally skilled people doing the task, the person taking the (a) method will finish more quickly.
I got this from reading The Lean Start-up, which calls method (a) a 'small-batch' approach. Get your work done by taking a small batch (such as a single letter) all the way to completion before moving to the next batch. Not only is this faster to get the project done overall, but it also significantly reduces the risk in the project. For instance, if the seals on the envelopes are faulty and you need to get new envelopes, you find this out after 1 letter in method (a). Using method (b), you discover this when deep into the process and you will have to unstuff 100 faulty envelopes, setting you even further back on schedule. The Lean Startup applies this lesson to all kinds of activities in building a product and a business. From my own experience, I know this to be true. It is dramatically better to have a couple of things 100% done than to have dozens of things 80% done. In my startups we had a saying: "If it's not 100% done, it is 100% not done", and we used to say that all the time to each other to remind ourselves that "almost done", "mostly done", "kinda done", "done except..." just don't matter to customers. It has to be 100% done. You need to think binary: done / not done. Frankly I find that kind of binary thinking valuable in many things. So I encourage everyone to focus on taking the 1 or 2 most important things in front of you and get them done, get them out to customers. Focus on the smallest possible version of what you are doing that is viable, that you can be proud of, get it out, and then iterate to add more capabilities. If you have several projects to do, get the first one done before moving on to the next, so you don't end up with piles of half-done stuff. Small batches, completed. I have to admit, I have a few pet peeves. One of them is when a group of people start to speculate on a fact that they do not know, but could simply find out! It happens all too frequently: "it's possible", "no, it's not possible!", "it's red", "it's blue", "customers love it", "customers hate it". Facts can and should be looked up or tested in a simple experiment. No need to speculate about them. To paraphrase the famous Jim Barksdale quote: If we have facts, we'll use facts. If we have opinions, we'll use mine.
A few years ago, I came across a story that seems to have originally been reported in the book Art & Fear but has since been widely cited in a variety of other books and blogs. The story goes like this (my paraphrase): A pottery teacher divides his introductory pottery class into two groups. He tells the first group that for their final grade, they will need to make just one pot and it will be graded on how perfect it is, i.e. on quality. The second group he tells that he will grade them simply on the quantity of pots they make over the semester. The first group spends the course really planning out their perfect pots, thinking of how they will make something truly spectacular. The second group immediately starts cranking out pot after pot after pot. At the end of the term, the teacher in fact judges the quality of all the pots and demonstrates that the "quantity" group in fact had made better pots at the end of the term than the "quality" group. Of course the "quantity" students had spent the entire term practicing. By the end, their craftsmanship and inventiveness had naturally developed. The "quality" group on the other hand had spent all their time thinking about their great pots, but when it came time to make them, they were not that great -- after all, those were the first pots they had made... I find that nothing sharpens the mind and your sense of urgency better than preparing to demo your work to others. Feeling the heat of wanting to make a good impression on your audience really leads you to button up your presentation and think through the details.
When you are in an intense development period, you need to keep a super- tight process. And a key ingredient in keeping things tight is to demo your working software often. Getting the honest feedback that a demo invites is also a critical part of a tight process. I encourage everyone to demo their stuff as frequently as is feasible to whatever audience you can muster. My favorite project status update -- by far -- is getting a demo of working software, even if it is just a small piece of what will be a much larger whole before it is released to customers. Even just seeing that bare heart of your project beating away is magical. Having a customer first mentality has many ramifications.
It means that everything we do should be directed towards the single goal of delighting our customers. If what we are doing right now is not directed towards delighting our customers, we should stop and doing something that is. It means that we need to understand our customers really well, satisfy their wants, and anticipate their needs. It means that in any discussion or argument we may have internally, we should all turn and face the customer. If we are all focused on delighting our customers, then the discussion is no longer about me or you, about my agenda or yours. It is about how we work together to delight the customer. It means standing confidently and developing a true partnership of value exchange with our customers. One way I have of judging things in business is to look at them through the lens of a start-up. I imagine
that I have just started a new fledgling company, one I am funding out of my own pocket, and I ask myself "Would I do things this way in that start-up?", "Would I buy this technology?", "Would I hire this person?". I find this perspective brings things into sharp relief. It is a way of escaping the trap of local value systems, moving beyond incremental improvements, embracing a greenfield approach to thinking, and shunning business-as-usual mentality. |
AuthorPhilip Brittan is the General Partner of Crazy Peak LLC Archives
February 2021
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