Then vs Now
Whenever we have a look at a successful business, it’s easy to admire how all the moving parts, features and services seem to work in harmony to make a great company. Food companies like Nestle have an incredible set of related product formats. Their giant range has similar pricing, similar distribution channels, which provide incredible synergy, scale and financial power. And Nestle is not too dissimilar to Google which has an incredible array of search products: web info, maps, images et al. which are mostly free and distributed in the same location. Both companies have incredible complexity and an almost infinite amount of moving parts and resulting revenue and profit. And while they are from different eras, there are clear patterns that come with such scale and size.
Complexity is the free prize inside
In the world of business, success and complexity are inevitable partners. In real terms a business is a just a system. A system which is used to make money through solving a problem. But it is a system none the less. So too, a startup is just the building of a new system. Therefore we ought pay attention to the principals of system design. There is one great principal in system design known as Gall’s Law.
Put simply Gall’s Law states:
Complex systems cannot be designed from scratch. You start with a simple system and you get to complexity for free if you’re successful.
It means that we can’t be an all encompassing enterprise with a zillion features from the start. We generally can’t solve more than one problem at a time, and we must resist the temptation to do all that is possible, in order to make initial success at all possible.
None of this means that creating something simple will guarantee a successful outcome, it does mean that built in complexity reduces the probability of success significantly, and probably impossible.
The problem we often face is that it seems that in order to be better, we have to do more. In order to get people to switch our promise must be bigger. But in truth we are fooled by the size of the incumbent.
Biology and Startups
There is also a lot that can be learned through biology. New species never arrive as complex structures, rather they evolve into them, cell by cell, iteration by iteration. Likewise, no city (the most complex of all human built structures) was ever launched fully built. Every single city started as a simple aggregation of humans around one natural resource. This was most often a reliable source of fresh water – a single feature. This single benefit of access to water is what attracted people (users), allowed other features to get built around it, and was the catalyst for all the complexity that goes with large populations. In other words, systems complexity arose as a function of the reliability of that killer feature – the water.
And so too startups
Sometimes it pays to have a long memory, and be a champion of economic history so we can understand the truth of early success. We need to remember the truth behind our favourite success stories and let them guide our own entrepreneurial efforts.
Nestle: Launched with a single product – a milk based baby food.
Google: Launched with a simplified search engine based on the number of back links a website had.
So when designed the V1 of anything there are 4 things we should remember:
- It should be a solution to a singular problem, not a related multitude.
- It should be easy to build & test against that problem.
- It should be easy to explain.
- It should be easy to adopt and use.
Answers to these questions tell us the truth about where we sit on the simplicity / complexity scale.
In order to have a chance at complexity (read here success) we need to think of the smallest possible problem we can solve, the tightest possible target audience we can serve or the smallest geographic boundary we can survive in. If we can manage to do this then we’ll have the principals of successful system design in our favour.