I was chatting with the owner of my neighborhood coffee shop last week. Her place is the antithesis of the Starbucks experience: locally-owned, single location, true artisanal approach (roasting done on premises, espressos are pulled by hand). Not only does this shop offer a top-quality product, but there is a definite energy to the place. For its good-sized and dedicated clientele, this is THE spot.
I asked Julie about the opportunity to grow by opening additional locations in the metro: not only would she be able to leverage an incredibly strong brand, but she’d also achieve economies of scale on core operations (not just bean roasting, but also accounting, HR, etc.)
Her response detailed how the the scale works in this market, how large an operation would need to be in order to realize the benefits, and the challenges of maintaining the quality of product and experience across multiple locations. Not that Julie had rejected the idea out of hand, but she characterized her current approach as tending to a Bonsai Tree — meticulously and obsessively tending to a single plant to achieve maximum beauty on a defined scale.
The challenge of building a software company presents an obvious contrast to brick-and-mortar, retail markets. A well-designed solution — particularly those adhering to cloud-based, single-instance, SaaS-delivery principles — has virtually no limitations on the dimension of scale: once it is ready for a handful of customers, it can be pushed out to thousands (or millions) of users.
So, with this in mind, it would make sense that software companies would wait until the product was “just so” before launching, carefully perfecting its design and feature set before introducing it to the market, right? Nope.
The first-order consideration for software startups is time to market — getting a product out fast to beat competitors, hit the next milestone, and not run of money.
Unlike a brick and mortar business, software companies pursue speed over quality in many instances, and even have their own vernacular to discuss the tradeoffs:
“Perfect is the enemy of good” is an often-heard phrase to push “good-enough” code into production.
The concept of “MVP” (Minimum Viable Product, or the most limited set of features which still provides just enough value to be of use to a customer) is the basis for discussions and planning on product releases.
The industry loves to quote LinkedIn founder Reid Hoffman: “If you are not embarrassed by the first version of your product, you’ve launched too late.”
Software companies are not only content to push out imperfect products to customers and then improve them over time, but this is the practice demanded not just by markets, but customers as well. The goal of the first release in software is a stable product, but likely lacking in features and polish. Those follow (hopefully) quickly.
The ultimate goal of both brick-and-mortar retailers and software developers is identical: to delight the customer. While the former market requires quality before scale, the latter market demands the opposite.