In the world of tech startups, there is a simple truth: If you want to survive, you must build and iterate quickly. This truth is grounded in the clear logic that every startup is trying to carve out a chunk of a market by doing something different than what everyone else has done before them. Of course, if the correct way of being “different” were obvious, then someone else would have already come along and done it. So the aspiring startup must learn, test, build, iterate, and refine its way to success. And this whole process must be fast. If not, then the company will run out of money before finding its success.
This speed of execution is one of the primary identifying traits of early stage startups. It’s why early adopter customers seek them out. It’s very alluring to be at the forefront of a new industry adoption curve, and to have a company’s attention so focused on quickly solving your problems.
Similarly, many top employees seek out early startups for the fast pace and exciting problems that they can work on. Fast environments are often fun environments, full of trial and error, learning, and risk-taking.
Quality Wins Out in the Long Run
Of course, rapid development and iteration doesn’t come without a cost. There’s a reason that the largest and most successful companies in the world don’t place the same kind of premium on speed of execution: doing so incurs a massive cost in quality.
Rather than push new products out the doors as quickly as possible, large companies sacrifice nearly all of their speed in a tradeoff for quality and consistency. This is because large companies thrive on being a known entity — there is much greater risk from breaking customers’ expectations than there is from not innovating (at least in the short term).
As with startups, employee preferences often align with the customer’s: Large company employees enjoy having a specific role in a well-defined process. They don’t want to be in an environment that’s rapidly changing and introducing uncertainty or risk.
When Does Quality Replace Speed?
If startups are defined by speed and large companies prioritize quality, then we know that somewhere between the first dollar of revenue and the billionth, a company must make a major transition. When does that happen and why?
This is a question I’ve been wrestling with a lot recently as the co-founder and CTO of 4Degrees, a three-and-a-half-year-old enterprise software startup based in Chicago. Speed has been the name of the game for us for much of our first few years. But now we’re finding that our fast mode of operating isn’t serving us as well as it used to; changes are becoming more gradual and customers’ expectations for quality have increased greatly since those first few contracts. Is it time to transition?
There’s no simple answer. In reality, the transition point (or period) varies substantially from company to company and is greatly influenced by factors like industry and target customers. For instance, a company working with a lot of sensitive data or serving more risk-averse customers (like in finance or healthcare) may find more external pressure to navigate the transition sooner than the flavor-of-the-month mass market social media network.
One thing is clear: A company shouldn’t undertake the transition to replace speed with quality until it has solved a clear market need. The whole point of executing quickly is to get to that solution before your resources run out. If there’s not a clear, compelling reason to choose your product over the competition then it’s too early to take your foot off the gas pedal; doing so at this point would increase the risk that you never find your way to a differentiated, successful solution.
On the flip side, it is also clear that you must undertake the transition before you can expect to achieve major penetration into any given market. The “why” of that is the topic of the book Crossing the Chasm by Geoffrey Moore. In the book, Moore explains how the bulk of any given market is composed of customers who aren’t willing to take on significant risk with young, rapidly changing products. Instead, they value quality, consistency, and low-risk outcomes.
To serve these customers and gain substantial market share, a startup must set aside the move-fast-and-break-things mentality in exchange for a measured, circumspect approach to development.
What the Transition Looks Like
Just as the timing of the transition varies, so too does its nature. That being said, there will be some consistent themes that show up as any company attempts to trade out speed in favor of quality.
One of the most obvious strategies for increasing quality is to create a more standardized process for product development. Where a startup can thrive on the ad hoc judgment of any given member of its team, a larger company cannot take the risk that someone is having a bad day and makes a bad call. Instead, clear roles and sign-offs must be determined to minimize the risk of a detrimental change making its way to the customer.
In a similar vein, relatively more time must be spent on review and relatively less on actually building new products. This ensures that what does get built will be of high quality and minimize the potential for damaging experiences for customers.
One of the artifacts of a transition to higher quality production is that major initiatives become the focus of entire teams for long periods of time. In the early startup days, a fundamental transformation may be undertaken by a single employee in the span of a few days. In the pursuit of quality, larger companies want to bring as many perspectives and eyes to the table as possible to ensure that what gets built is good and leads to improved experience.
One example of why this phenomenon is so prevalent is testing and learning. Where startups may deploy daily tests to customers to gain insight as quickly as possible, much of a more developed company’s testing must be done in controlled, safe environments where the fallout of a “failed” test is much lower.
Surviving the Shift
Of course, in some ways making the decision to begin prioritizing quality over speed is the easy part. Actually navigating that reprioritization is a completely different challenge. No change happens overnight, and a large-scale transformation of company culture and processes definitely doesn’t happen fast.
As you begin to navigate the transition, it’s worth keeping in mind that some employees and/or customers who thrived in the previous, fast-paced environment may find themselves struggling with the new order. That is to be expected: Those who were attracted to change and speed aren’t going to do nearly as well with careful process and a focus on quality.
Some of the pain of the transition can be mitigated by making it as collaborative as possible. Involve team members and key customers from the earliest conversations. Discuss the signs you’re seeing in the market, and why you believe change may be necessary. Gather perspective and generate buy-in. Get ideas for how to address trends you’re seeing. Hear people out on what they’d like to see for the future state of the product.
And of course, it is critical to remember that speed and innovation still serve a critical role in even the most conservative of development environments. No business can rest on its laurels indefinitely; eventually it must innovate if it doesn’t want its market share eroded away by other enterprising startups trying out new solutions. So as you navigate the transition to quality, think about where it makes sense to retain the pursuit of rapid iteration and learning.
