Black Swan Farming

Lessons on patience: the benefit of delay

In an earlier post, I discussed the importance of speed and the cost of delay for organisations that aren’t leading the market. For those who are attempting to lead the market (as opposed to a fast follower strategy, like Samsung) the Cost of Delay is still there, and speed is still a vital ingredient, but the picture is a bit more complex. You also need to consider another angle: the benefit of delaying the point when you go to market.

To be crystal clear, I am not suggesting that slow and methodical is ever an advantage. Large batches, “big design up front”, slow cycletime or “waterfall” are a great recipe for failure. If you want your organisation to suffer and die at the hands of your customers and competitors, then go for it.

What I am saying is that, in some cases, it can be beneficial to continue refining, tweaking and learning. We absolutely still want to be doing these things as fast as we can and the product should still be shippable at the drop of a hat. Developing new products is hugely reliant on the speed at which you learn. Alongside this though you sometimes need to be patient about when to pull the trigger and ship. Fast development and learning needs to be coupled with patience about when to go to market.

A hypothetical case study

Let’s say you are a consumer electronics company named after a fruit and you are leading the market in smartphones. You only have one product in what is a very competitive and dynamic market, but so far your laser-like focus on that one product has been wildly successful. Far more successful than you or anyone imagined. Once they realised this, your competitors have been quick to copy your general design and through incremental improvements have started to catch up. Everyone, customers, competitors and a hungry media waiting for your inevitable downfall wants to know what your next move will be.

The thing is, you yourself don’t know exactly what your next move is going to be – but you sure as hell are working on lots of different options. Will it be a bigger screen version of what you already have? Well, you’re testing and developing some options along those lines, but at this point the result isn’t really that compelling. The reason it’s not compelling isn’t the cost or technical barriers — it’s because of the limitations of the average human’s hand size. In usability tests you’re seeing that one handed operation is worse. If you’re going to have to use one hand to hold and another to operate, well, you have another product that fits that “job to be done”.

Options, options, options…

Consumer behaviours change though – so you maintain options along various lines of inquiry in your development labs. And that is the point with options – don’t back yourself into a corner unnecessarily. Where there is uncertainty you need options.

One of the options in development is starting to look promising. It’s not a bigger phone, it’s a smaller one. Again, there are options for how small: three-quarters size, half size, and some small enough to consider them as “wearable”. Almost like a watch, only it’s a fully fledged computer with an always available connection to the tinternets. Yet another option is to allow your army of 3rd party developers to even design apps to run on it. Another, with voice-control, even works a bit like a Star Trek style communicator. It’s all very exciting.

Getting it right isn’t easy though. Size, weight, style and function are constantly evolving — and as you develop potential options new technical problems arise. Some of these may disappear in the near future, and new technology constantly improves the trade offs.

The Benefit of Delay

What you are sure of though is that you’re not just going to go to market because investors or the tech press are questioning your ability to innovate. Patience requires knowing not just the Cost of Delay, but also the Benefit of Delay. The delay is not for doing more analysis or making more plans. The delay is not for ticking off a list of features that the tech press and gadget geeks expect to be there. You don’t care about “feeds and speeds” or even seemingly essential features (like, say, copy and paste).

Go to Market

No, the benefit of delay is all about improving the “go to market” strategy — understanding the jobs to be done by the product. In the meantime, the Cost of Delay for developing, refining and learning about the product remain as high as ever. If the product was ready you would almost certainly be profiting handsomely. The other key risk is that a competitor gets there first and nails the door shut behind them.

But you have been here before and with a quiet confidence you temper your sense of urgency with the patience of a saint. You can do this because you are focused. You are completely focused on the customer and learning how they will experience the product. Over the years you have gained their trust that your product will “just work”, and when it doesn’t, the results are always disappointing.

The point of being patient is to learn. With each iteration that you produce (in high fidelity) you gain new information. At some point you will have enough information to build the right product and have the right go to market strategy. You will be able to tell a compelling story about what this product does and how it is different. It is at this point that the benefit of delay is outweighed by the cost of delay and you send the latest version to production and prepare to execute that go to market strategy. The value of real options is recognised when you understand the benefit of delay.

Speed is still vital

To reiterate: the cost of delay is still high (at least as high as it is for the fast follower). But there is another aspect you need to consider: the benefit of delaying going to market. This is something that those following you don’t have to consider, they just need to be fast. Incremental innovation is far more driven by the cost of delay.

New products are different. When carving out new markets with new products it is not the cost of delaying going to market that typically dominates, it is the benefit of delaying until you have developed a compelling product. Having a product that just works is not enough. The product must fulfill a specific “job to be done” for a large enough audience so that you can turn a profit.

Whilst this might sound like a strange thing to be reading on costofdelay.com the truth is that Cost of Delay is really not everything. Like most things within complex systems a paradox exists if you care to look closely enough. Cost of Delay is important, but don’t forget the potential Benefit of Delay as well.