You Are Spending 3x-5x More Than You Should

In carpentry, the rule is “measure twice, cut once” because once you cut, you can’t go back. If you get it wrong, you end up wasting a lot time, money, and materials.

Somehow, that concept has not made it into the vast majority of software projects. Even though “lean startup” has become a popularized term, most people don’t practice it, and most executives don’t get it — even though they should be the ones most worried about waste.

The High Cost of Outsourcing

If you have to outsource your product design and/or development, this issue is magnified. You have hired a high-quality production team to help you. You are likely paying dearly for it (and god help you if you hire a cut-rate team).

The result is that every change, every pivot, is extremely expensive not just in time but in cold, hard dollars.

You can’t solve this by *not* iterating, because that just leads the company off the cliff at high speed. Splat.

You would think that people would jump at the prospect of taking a small, cross-functional team (which by definition is cheaper than a full-on production team) and doing some lean validation work ahead of time. The more lessons you can learn cheaply and quickly, the better off you will be, no? (obviously this applies to startups doing everything in-house too)

What I Often Hear

The reaction I actually hear often is: “it will take me 6 months and a lot of money to build my product, but you want me to take 1 or 2 months first, which means more money, and do a bunch of experiments focused on learning? I’d rather save the time and money and get my product faster!”

In other words, “Forget measuring twice. Forget measuring once. Let’s just cut.”

Agile/lean has helped people debunk the “big upfront design” phase, but far too many replace it with nothing. I agree that waterfall-style, big-upfront-design is a waste of time and money. I *do* believe that getting into the market with a designer and an engineer and *learning* is a critical use of time.

3x – 5x More

I am convinced that companies, whether startup or enterprise, that do not aggressively build learning into their processes will spend 3x to 5x more time and money to get the formula right for their new product.* By formula I mean product-market fit, and business-model-market fit.

Humans are stubborn. They tend to need to learn lessons the hard way. It is a shame that this particular lesson has to be learned over and over at the cost of wasted money and months, if not years, of people’s working lives.

* It is impossible to do an empirical test (unless you have a few extra millions sitting around), but this is my guess based on almost 20 years in the world of software-based innovation.