Startups must balance process, innovation, and speed

Process is all too often overlooked in a startup’s rush to get funding and customers, but it’s often a strategic asset.  This post from the HBR blog caught my attention, primarily because my work involves working with companies to find that magic balance between innovation and stable processes:

Companies that insist on building a world-class infrastructure before shipping a product are doomed to “achieve failure,” because they’re starved of feedback for too long. I learned this lesson first hand in a previous company (read the sad story here). On the other hand, companies that take a “just do it” attitude without any process at all are also taking a major gamble. High-profile startup Friendster had first-mover advantage in the social networking space, but created openings for competitors when it could not scale to meet demand.

Finding the right balance requires an understanding of the fundamental feedback loop that powers all startups. It begins with an idea, which is translated into a product via the “build stage.” When customers interact with that product, they create data, which startups harvest in the “measure stage.” And, with any luck, that data will inform the company in the “learn stage,” and that learning will influence the next set of ideas. This three-stage feedback loop sounds simple, but it’s powerful nonetheless. It gives rise to this heuristic for evaluating any process or infrastructure change in the context of a startup:

Always choose the option that minimizes the total time through the feedback loop.

That last bit captures it perfectly.  When I work with a startup, one of the first imperatives is to identify core processes and streamline the hell out of ‘em.  ”Solid” and “fast” are not incompatible; in fact, the former enables the latter.  Any process that takes team time and rework is suspect, and it’s a damn drag on your business.  If you can’t tell, I’m very passionate about getting this part right.

It’s very clear:  do this right and you are far better equipped to get funding and customers.  Ultimately, that’s the point.

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