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In order to grow, just say “No”
[caption id=”attachment_460" align=”alignright” width=”228" caption=”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.