These days, every CEO knows a scalable business is better than one that is not. But there is a big misconception out there about how to build a scalable product.
THE BIG MISCONCEPTION: You need to figure out how to scale your product from the beginning.
That is just not a realistic way to grow a business. Building a scalable product works much better when it is more iterative. This is particularly easy when it comes to B2B products, but even the best B2C companies do it iteratively as well.
Trying to digitize or automate everything at once can take years and lead to a lot of analysis paralysis. We see this often when we help people -- they can only see the whole forest and can't zoom in on one tree. They get paralyzed and don’t make any progress. Singling out unmet needs keeps things moving and minimizes this analysis paralysis.
Deliberately and systematically scaling your product one step at a time as a response to the most pressing needs of your customers allows you to efficiently use your time and resources.
More importantly, you will avoid spending weeks or months building a set of features that you’re not sure if your customers will want.
Apple is a master at this. They are so good at creating MVPs people love that their customers will put up with annoying inconveniences and wait patiently (for the most part) for issues to be fixed in later releases.
The secret? Well designed MVPs that solve specific problems leave customers wanting more.
At the same time, a well-designed MVP will give you time to get insight into how to solve your most important customer problems one at a time, and be building a fully automated version of your product in the most efficient, cost-effective way possible in order to make your business scalable.
It’s just smart.
Here’s how it works.
The Lean Innovation Model for Scaling
- IDENTIFY AN UNMET NEED:
Whether you already have a product out there and you want to scale it or you’re building a new one from scratch, the most important first step is identifying an unmet need that customers will pay for. Learning what product to create and what features to build is a creative process that requires a lot of intuition and empathy, which comes from spending time with actual human beings.
Finding unmet needs is not a guessing game you can win with a brainstorm session at your office. It requires a lot of interaction with your current and potential customers, and understanding what is impeding them reaching their goals faster, better, and cheaper.
- DEVELOP A "WIZARD OF OZ" VERSION:
This step is about creating the fastest and cheapest way to solve a customer’s unmet need in a way that is superior to the competition, if there is one. In a B2B setting, this will often be making something that takes a lot of time and has a lot of value to their business easier, faster, cheaper. So the first step is to offer that solution by delivering a quick and inexpensive basic version to a few customers. (Keep in mind, basic doesn't mean badly designed or poorly supported.) You may not even need to build any product for this offering yet.
Why shouldn’t you build out full-fledged features right away? Because the goal of this step is to learn as much as you can about the operations rather than spending too much time and money building the perfect feature before you know if it does what customers want.
- TEST & LEARN:
By delivering the feature as a Wizard of Oz, you are able to zoom in on each step of how people your solution works in the wild.
Before offering this feature to everyone, start by offering it to a smaller group of a few dozen or a few hundred customers who will give you honest feedback. Conduct remote validation sessions and use the feedback to make it better and better over time. If they like the feature, start using it, and are asking for improvements, then you know you know where to spend your design and engineering time later. If the usage is low for that new feature or offering, you’ve saved yourself time and money building it in the first place. And you can adjust the feature based on what their real needs and problems are.
Once you have verified that the solution solves a true pain point for your customers with minimal investment, and it’s something they want, need, are asking for, and even pay for; it’s time to automate more and more of your solution to make it scalable to deliver. You might ask, how do I know what to make scalable? Once you get a product into your customer's’ hands, make sure you visit them and ask them to show you how they’re using your product. Create both in-person qualitative ways and asynchronous quantitative ways to get feedback. It will be very clear 1) what is painful for your team to deliver as demand goes up for particular features/service offering? And 2) What your customers are asking for the most and how to automate so it’s more efficient for your team to deliver it.
Moving through these steps, sometimes more than once, is the basic process of systematic digitizing your solution and the march toward scalability.
You can also see this kind of automated, scalable solution at play with some of the startups that have disrupted and revolutionized industries, like Airbnb.
When Airbnb was first starting out, their user base was small and a lot of their service was manual. At that stage of growth, it was an advantage because they could get a lot of in-person feedback.
The founders realized that they had to talk to their customers and learn about them, but how? One of the things they tried was offering free photography to their hosts. When a new host signed up, the founders offered to travel to their apartment or house and photograph the property. That gave the founders a great opportunity to hear about what the host wanted out of the service. As it turns out, having beautiful photography also became a key feature to boost bookings on the site.
In the early days, the founders would personally travel to host cities like New York, and visit new hosts, photographing their property and talking to them about Airbnb. As Airbnb grew, the founders couldn’t personally visit every host, they started hiring freelance photographers in key markets to take the photos, and bringing on interns to process host requests for photos and then manage uploading the images themselves.
Over time, the time and energy it took to process all the requests and manage all the photos started clogging up internal workflow, and it became obvious that they would need to automate pieces of the process.
For example, rather than having hosts request a photographer by email, give them a button that automates the request process right on the site and eventually app. Another example, rather than manually uploading photos to a host account, automating a way for photographers to upload photos and directly show up in the host’s account allows the Airbnb team to be more responsive to requests and get listings up and running with beautiful pictures a lot quicker.
These pieces didn’t all happen at once, but they happened over time as they were needed and the pain point became acute.
The team would do it manually, learn about it, see traction with it, and then automate what had become painful bottlenecks that stood in the way of growth. The automations allow the process to become more efficient and the business to scale. And taking the time to let automation opportunities to emerge helped the team spend tech resources on the right features and all of that learning by manually doing it helps them to get the features right.
Piece by piece, task by task, action by action, they were able to automate an entire process over time, and eventually it became a fully automated gear in the overall experience that makes hosting on Airbnb easy and delightful.
Discovering unmet needs, building simple or manual versions of one feature at at time, and testing and refining those solutions before automating them.
That is the most effective way to systematically scale your product and efficiently use your time and resources.
By automating the host photography process, Airbnb found a way to simultaneously learn about their customers and streamline their business offering in the early days of the company.
Are you ready to get started with your scaling your business? If you have any questions about how to scale your offering is a leaner and more methodical way, drop us a line!