Mechanical factories vs. complex systems
Or, "how to build a differentiated, efficient, fast-growing company"
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A few weeks ago, I wrote about “triggers” in the customer acquisition process, which generated a lot of response and questions about implementation.
Since then, I’ve been thinking about why the concept of “triggers” seems so foreign to so many people. Why isn’t a go-to-market system designed around “triggers” the norm?
Doesn’t it just make sense that we’d (1) figure out what causes someone to be a likely buyer and (2) find a way to get in touch with them and help them when they’re a likely buyer?
As opposed to whatever we call marketing / sales today -“Spray and pray,” maybe?
Today I am exploring the root cause of why today’s Go-To-Market processes are spammy and annoying. And I think it’s the same underlying thing that causes a lot of businesses to be boring and unsuccessful:
We approach our businesses as if they are supply-production systems. Like factories.
When I tried to read Andy Grove’s book, High Output Management, I couldn’t get past its approach to the “business system” that used a mechanical factory as its starting point. We treat our organizations like they are factories - feature factories. Building product, selling it. Building more product, selling more product.
When you view your business as a supply-production system, you believe you can isolate the different parts of your business - sales, marketing, product - set goals for each, measure the efficiency from each, and manage from on high.
The problem is that this mechanical “factory view” ignores three critically important things about business:
Businesses are complex systems, not simple mechanical systems. Complex systems are non-reducible, which means you can’t understand the whole system by understanding each part in isolation.
Businesses are inseparable from their ecosystems. Per point 1, you can’t understand the business by understanding each function in isolation. This point goes further - you can’t understand the business by understanding only what’s within the factory walls. Businesses are shaped by external things - alternatives, customers, etc. These external forces create an opportunity space - an ecosystem within which the business can exist. The business doesn’t make sense without understanding the ecosystem. (More abstractly, “supply” is only relevant in the context of “demand”.)
The “subsystems” within a business (e.g., the customer acquisition system) MUST include customers / users. These subsystems don’t make sense unless you include the external world. Your “sales activities” only matter in the context of - and as a response to - customer demand. Your “product roadmap” only matters in the context of - and as a response to - customer demand and the opportunity space.
There is more to write on this. But that’s enough theory for one day. What do you need to know and do differently?
Implications
Successful businesses are designed as a response to demand and the opportunity space, not around “my product idea”.
Reality doesn’t care about your vision for the future. Reality just is.
If you understand the shape of today’s reality for your customers - what causes them to change, how they make decisions - you understand demand.
If you understand the shape of the ecosystem of alternatives - which choices customers have, how each alternative competes, and the players’ strengths & weaknesses - you understand the opportunity space.
If you understand both demand and the opportunity space, you can figure out what is missing and how to approach building it. You can test REAL, STRUCTURAL DIFFERENTIATORS - not “simpler”, “cheaper”, “better”, or “the future of X”. You can build a real strategy and a real company.
Without rooting your product and company in reality, your business achieves nothing, and you spend your days spouting meaningless buzzwords that confuse potential customers. You squander your potential to change the world.
It is a sad existence when the only place your business makes sense is in your mind - trust me.
Designing your business as a response to demand means your customer acquisition organization primarily focuses on waves & triggers.
As I wrote in my first piece on triggers, today’s go-to-market orthodoxy wastes time and effort trying to sell to people who don’t want to buy today.
When you think of the customer acquisition system as one that INCLUDES buyers - and the waves that cause them to experience triggers that cause them to turn into likely buyers and be open to purchasing your product - you design a highly efficient go-to-market engine.
Or you can launch on Product Hunt and pray for virality.
Thinking in (complex) systems is a cure to a lot of what’s wrong about business today.
Misalignment? People not seeing the “big picture”? Bureaucracy? Excessive time in meetings? Perhaps you’ve designed your organization like a factory, inside-out, and organized people based on what they do instead of what system they’re part of.
Confusing customers? High acquisition costs? Low response rates? Slow growth? Perhaps you’re designing your acquisition system without considering what triggers people to buy.
Losing deals? Perhaps your strategy doesn’t consider your customers’ actual alternatives.
Churn? Perhaps you’re not considering what triggers customers to stop buying, what prevents them from reaching a “stable system” with your product as part of their status quo.
What do you think?
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