Launching a startup is much "easier" these days, compared to the 90s. Incubators, crowdfunding platforms, business angels, venture capital, and public aid are multiplying and considerably facilitate the start of the adventure. And if you are a good negotiator, you can also attract all kinds of investors. Many startups are launched, but as we know, the vast majority of these startups disappear within 3 to 4 years. Having an idea and getting started is not the hardest part. The real challenge is to know how to transform a good idea into a good product — and few succeed.
Among these entrepreneurs, some manage to find a market, but as soon as their start-up starts to grow, they turn into administrators under the pressure of the number of people to manage and the objectives set by their investors. By chasing Key Performance Indicators, they gradually lose their passion for the product and the customers and spend more time exploiting their idea than enriching it. They lose the desire to explore and learn, and create (too soon!) bureaucracies where people can no longer think. But to let go of the product is to let go of growth.
There are two classic mistakes that lead to this dropout.
The first is to delegate product design to teams of developers and product managers. The responsibilities are then divided between different people, each with a specific skill and limited influence. Product Owners or Product Managers collect and prioritize requests from customers and different departments of the company, and the product activity becomes a machine for creating roadmaps and feature backlogs without cohesion or vision. The product gradually loses its magic and becomes too complex and expensive to maintain. By the time this starts to weigh on revenues, it's already too late.
The second mistake is to imagine that the product is only a digital tool. Many startups integrate a mobile app, a website, or a digital platform in their model, and the "product" thinking is only done on these elements. This is the case, for example, of a startup that offers a renovation service for primary residences via a digital platform. Once registered, homeowners get several design proposals from the company's architects, then are put in touch with various builders to do the work. Problems piled up as the company grew and the founder moved away from the comprehensive service she had originally conceived. Today, the "product" activity within the company is handled by a team consisting of a product owner, developers, and a UI specialist who creates the application's user interface mockups. The team is overloaded with requests to evolve the platform while visits to the gemba show that the majority of customer complaints come from the plans and designs provided by the architects. The founder's initial intuition was right: from the customer's point of view, the product is indeed a combination of a digital platform and associated services.
For our startups to go further, our entrepreneurs must learn to keep and perpetuate the passion for the product within their company, as they did themselves at the beginning. And to do that, they need to learn to think like Chief Engineers and spread that mindset internally.
The Chief Engineer thinks and lives "product". Steve Jobs, Walt Disney, Linus Torvald (creator of Linux), Stan Lee (the father of Marvel comics), and Coco Chanel were all Chief Engineers par excellence. They were visionaries, and had a visceral obsession with quality and customer satisfaction. They were responsible for the creation of their product from A to Z and its evolution over time, and they knew how to make people adhere to their vision. With a sense of artistry and eccentricity, they worked tirelessly to turn their concepts into products that customers still can't live without today. In fact, at Toyota, where this role was born, the Chief Engineer is considered the CEO of the product, although he has no hierarchical authority over the technical teams. However, he has a great deal of influence and is generally well respected within the organization.
Behind this image of an ingenious artist and trendsetter, the Chief Engineer masters a real practice that can be learned if one has at least a passion for the customer and the product. First, it involves frequent visits to the field to look for opportunities to create value for customers, suppliers, and operations. Then, with the help of the team of technical and functional experts, rely on a few key tools like the Concept Paper and obeya to:
- Define a clear and compelling product vision
- Translate customer preferences into a set of measurable performances
- Make innovative architecture choices without risking product distortion and customer disappointment
- Ensure product consistency by resolving interface issues
- Implement a pull flow to facilitate collaboration between all project stakeholders
- Respect the target cost and the planned launch date (the product takt)
So instead of keeping their noses to the grindstone and delegating their product too quickly to people who don't have the required know-how, our startup leaders need to learn to appropriate the Chief Engineer practice and then pass it on. They need to always continue to deepen their understanding of their product, the problem it addresses, the customers' preferences and reasons for buying, the emotions the product makes them experience, the effect of this or that technical aspect on their satisfaction, which aspects are the most expensive and why, and what is their vision to make it even more interesting in the coming months. These questions are vital to sustaining growth because the business is the product.
This story was originally published in French by Sandrine on institut Lean France.