This week I kept on going back and forth at a client convincing them to ship a product that was already four weeks late.
Every day someone would find that one little extra thing that would make the product a winner or fix a crucial defect. While the product was ready and possibly superior to any other prior releases done by this customer, it represented a fairly bold call. The kind that sometime leaves you with egg on the face. From this group of reluctant perfectionists I simply kidnapped the product architect, locked him in a room with our designer for a last round of design tweaks and put an end of day deadline for shipping. Despite this extreme push and my rounds of screaming and shouting that I am infamous for we missed the date. It wasn’t the end of the world since we managed to ship it the next morning. Did it really matter?
Sometimes you just have to take a stand and open your doors for business. Especially when you are not ready. At times markets and customers open up only for a short window of decision making time and if you are not visible, ready and out there with your products, you have to wait for the next window to arrive, which maybe never since you might as well be dead as a business by then.
Do markets accept imperfect products? Yes. The demand curve for highly inaccurate North Korean Scud missiles is a case in point. So is the market for badly written self-help books, pills with unpleasant side effects, tread-separating tires, “Star Wars” prequels, and “Star Trek” sequels. Not bad products, just imperfect ones. There is a minimal acceptable feature set that customers are willing to work with. Failed ventures climb higher on the perfection curve than their successful peers, ignoring financially viable product development and rollout strategies that get to revenue generation more quickly.
Is perfection necessarily a bad thing? It depends if it is evolutionary or not. Evolutionary perfection delivers a new generation of better products by building on the work done with earlier generations while those earlier generations continue to produce revenues. Each generation provides the seed capital that can be reinvested in improving the next release. The strategy works best when manufacturers of products can resell each new version to the same customers and charge close to full price for it. Software, laptops, cars, textbooks, flue remedies, new and improved diet pills—the strategy has worked for all of them.
Non-evolutionary perfection introduces the same changes but skips in between releases. Which means that you isolate yourself for longer periods from your customers, throwing away an opportunity to use them as a bearing point. Case in point – hydrogen fuel cars versus hybrids – you tell me which one is a more successful product and why?
Evolutionary perfection has shorter release dates, higher revenues, more visibility, and fewer headaches. The features introduced in each release are a manageable set, the releases go more smoothly, and customers are happier with products that actually get on desks while there is still a need for them. Non-evolutionary perfection tries to do more with less and without exception fails, often repeatedly.
It would be simple if it stopped here, but it doesn’t. Related to this debate is the perfection curve. The perfection curve plots degrees of perfection against effort and market acceptability. Each startup needs to make a choice that balances available capital, market dynamics, and its spot on the perfection curve. The decision is picking which rung of the perfection ladder will lead to most revenues first.
Here are the rungs of the ladder:
The lemon – A lemon requires minimal effort because the product does not work. Not acceptable to any customer. The only market is lemon sales with an aggressive sales team, but no sustainable business model. Customers ultimately get wise. This is not a sane or rational choice but the result of desperation. The justification runs something like this: “The sales cycle is long. By the time we have to deliver it, we would have fixed the problems” or “By the time they find out, we would have a solution and we will offer free upgrades.” The lemon is a last-resort, daredevil strategy used when a venture has nothing left to lose. Once you’re branded as a lemon maker or a lemonade stand, the reputation tends to stick.
The Band-Aid – The product is functional, has minor packaging or quality assurance issues. If the lemon represents 30%–50% completion, the Band-Aid is closer to 80% done. It has to ship because the deadline is here. Band-Aids will normally work with genuine effort, hand-holding, and expectations management and a commitment to get the remaining 20% done before the client gets tired and starts looking for a different pair of hands to hold. In principle a Band-Aid is good enough to hold a sale or a deal. It won’t if the hand-holding function is mismanaged.
The move-in ready home – The odd faucet that doesn’t work, the patch on the walk-in closet that was overlooked, the hidden hole in the utility cabinet, the power outlet without power, the phone line that goes nowhere. Problems that you will find, in other words, if you live with the product long enough. If you look deep enough, you will also find that in 9 out of 10 cases, the product in question is a second- or third-generation edition that has had time to evolve and improve itself just like your new lived-in home that has been around the market a few times.
The Lexus – The minute you step inside a Lexus, you are in a different world. From finish to details, this is a beast well worth the price you have paid for it. The first thing you notice is the silence. Drive a lesser vehicle on the freeway and you will hear the wind rushing by, the grind of the tires, and the crunch of gravel. The Lexus is a sound-proof cabin from paradise.
Real-time software or a product that has been in self- improvement mode for more generations than you can count. You see baby aspirin but do you see the 30 years of product history behind the 80 milligrams? There are two rules to remember when you set out to make a Lexus: You can’t get it right on your first try and you can’t build it on your own dime. The Lexus is a labor of love paid for by a crossed check signed by someone else.
Opportunity cost of perfection
What other features are needed to make your product perfect? The opportunity cost of perfection is the cost of that feature’s addition if it delays the product launch. Ultimately, the incremental cost dictates what you build and what you ship.
You can choose the easy way out by agreeing to everything the customer has to say and then fighting it out internally by taking the “we can’t-go-wrong-by-doing-what-the-customer-says” defense. On the technical side, the decision is complicated by the need to consider the financial, business, and schedule impact of technical and feature perfection. The business side is not aware of all technical issues, and the technical side finds it difficult to accept the strategic nature of decisions that disrupt its schedule or impose impossible deadlines.
Who, how, or what defines the middle ground?
The Market. Of all the things that you would like to have in your offering, you need to decide on the balancing act that the market will accept—the middle ground that will get you to market ahead of competition and clear it in economic terms. A market-visible, revenue-generating product is more important than a Lexus. Timing is more important than features. Getting it out there is more important than perfection. Testing the merit of the idea on a small pilot is more important than an elaborate and expensive rollout.
Don’t get me wrong. Try shipping a lemon and you are just as dead as you were with the Lexus. You aim for a solution that works somewhere between a Band-Aid and a move-in ready home; that doesn’t break the bank; that buys you customers, cash, time, and money; and that allows you to tuck away a handful of small wins that can be cashed later when you need them.
(Jawwad Farid is an MITEF business acceleration plan (MIT BAP) runner up, an Asia Pacific ICT Award finalist and a PASHA ICT Award Winner for the best financial application. He has also served as a judge at the Asia Pacific ICT Awards in Macau, Singapore and Jakarta as well as a PASHA ICT Award Judge in 2006, 2007, 2008 and 2009. The founder of Alchemy Technologies, the author of Reboot (you just read an extract from the book, if you like it buy a copy), an actuary by profession and an MBA from Columbia Business School, Jawwad is a regular contributor at Starup Insights and the Desi back to Desh blog)
