There are so many ways to say it, but none of them are easy.
In the world of agile development and minimum viable product, teams of really smart people can build, test, learn and repeat un-constrained by technical or financial limitations with little to no funding. Powerful learning organizations are being built and the impact on the start-up community has been significant. However, once the corporate mission has been established, the success of any lean start-up depends on the CEO’s ability to say “NO” more than any other factor.
Recently I was working with a company in the First Round portfolio that has fully embraced the lean start-up process. The company has a fantastic team of experienced engineers who embrace the process and actively seek to discover both consumer problems as well as product solutions. They manage their product cycles in hours, not months. They test more hypotheses in shorter amounts of time and with less capital because of their approach, and the result has been extremely high quality product that consumers love. Their development process is a great example of The Lean Start-Up as described by Eric Ries.
Over the past week a competitor identified a new consumer problem and our team immediately saw a way to leverage our technology to create a solution. It was built and tested tested. Consumer response was mixed. After multiple iterations, the team had achieved product/market fit, and the new service showed meaningful user growth—more importantly, it was a major source of new customer acquisition.
But…it was also a major source of difficulty for the company because the CEO did not question the impact of these customers on the rest of the business. The product development team created an elegant solution to a real consumer problem that the other areas of the business depend on ignoring. It is the CEO’s job to protect the team from this type of effort by evaluating the hypotheses being tested and saying, “NO” if the possible answers do not move the business forward in alignment with the mission.
When I was managing product development teams, the challenges of an iterative problem solving process paled in comparison to the effort required to fend off the in-bound product suggestions and feature requests. As these companies grew I had an increasingly difficult role in saying no to the distractions created by new customers, new advisors and new competition. You should always listen to each of these sources, but they are data points to be interpreted. The entrepreneur is the only one who can layer in the complexity of strategic vision, corporate mission and values to the product development process. The more talented your team, the harder this is, but the most successful CEOs are able to filter the signal from the noise and say, “No” when they need to.
The resources required to build and test continue to shrink. While this allows more iterations, it also makes saying “No” harder because it gets easier to test than not to test and the cumulative effect on focus is harder to see. If you have effective strategies for filtering out the noise and maintaining focus in your product development cycles, it would be great to discuss it in the comments.
#1 by Kiril on March 1, 2010 - 3:05 pm
I find that absolute force-ranked priorities (and development queues) are a way to build “no” into the fabric of your product development. Any new input is always ranked against existing initiatives, bugs, scaling, etc.
It doesn't prevent you from strategic “mis-yesses”, but it tends to make it easier to consider the relative value of new ideas as they go into the product pipeline.
Good stuff to think about.
#2 by Keith B. Nowak on March 1, 2010 - 3:09 pm
It is personally hard for me to say no because I feel like I am missing an opportunity. Since there are so many exciting possibilities out there and predicting success of anything (especially anything related to a startup) can be nearly impossible it is sometimes very hard to decide where to spend time and money. This is the ultimate balancing act though since the number of things a company can try is more or less fixed (time and money) but without exploring new things opportunities will be missed. Filtering through all the possibilities is certainly one thing I know I need to learn how to do better.
#3 by phineasb on March 1, 2010 - 3:35 pm
I know you guys are crushing on the product development and think the forced ranking system is a great tool to drive meaningful “no's”
Do you re-evaluate the priorities on a regular basis as well and re-order the forced ranking from time to time in addition to adding to the pipeline? Also, do you ever delete items based on new information?
#4 by phineasb on March 1, 2010 - 3:36 pm
Is it fair to say you need to evaluate the impact of loss of focus on priorities you have already defined vs. the potential loss of opportunity in those yet to be defined? If so, I think the forced ranking exercise could be a good place to start.
#5 by Keith B. Nowak on March 1, 2010 - 3:49 pm
Raking the cost of pursing a potentially new opportunity vs time lost on current initiatives is definitely a challenge. Forcing a ranking does help in terms of product development but I think the main challenge for me personally is accepting this ranking mentally. That is, saying “this is what we are working on now and we are going to crush these tasks first before getting on to other stuff”.
I think this discussion also includes the question of resources. It would be ideal to build a team that is sufficiently lean but also large enough to take on new tasks without taking too much of a hit on current stuff.
#6 by Kiril on March 1, 2010 - 3:52 pm
We tweak priorities constantly, and try to do a thorough re-order on at least a weekly basis. (just did one last night)
We have deleted things, even big things, from the pipeline. We actually dropped a whole line of development just as it was coming up to the top of the dev queue: specifically, building league management tools. That was especially hard, because we had an uber-influencer who we'd promised them to, and marketing concepts based on its existence, but we realized that (a) it wasn't core to our value proposition, and (b) the effort involved to be competitive in that product space was significant, and it would have been a long-term resource suck.
More often, though, things linger around the never-gonna-get-to-it part of the pipeline until it becomes obvious we have no intention of doing them.
#7 by phineasb on March 1, 2010 - 6:37 pm
Thanks for that. Super helpful.
#8 by James Reinhart on March 1, 2010 - 6:40 pm
The key for me as CEO is not necessarily about “no” but about “not now”. Great teams need to know that anything's possible, but in the context of the goal at hand it's not mission critical. Some of the best ideas come from “not now” discussions because the very nature of exploring a different route calls into question some of the assumptions about the current path.
You're driving in a car and someone says, “did we miss a turn?”. You don't say no. You say, let's go one more mile and if we're not there, we'll turn around and try plan b. The key is making sure you have directions (a clearly defined strategy) – otherwise you're just winging it and that just gets everybody lost and frustrated.
#9 by phineasb on March 1, 2010 - 7:30 pm
Thanks james. Agree on the not now approach and the value in exploring. I have heard this described as changing altitude and will write about that tomorrow
#10 by Manuel Martin on March 3, 2010 - 1:56 pm
This is great insight Kiril. I have seen this scenario happen in startups but the same applies to larger companies even if they don't move as fast. It would seem that 'priority tweaking' could be an outcome of one of the iteration cycles but like you point it out in several cases it might be helpful to explicitly incorporated as a separate step. If everyone knows how and when it will happen it might contribute to strengthen the alignment of all the stakeholders (that sounds like a mouthful).
Regards,
-Manuel