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  • Writer's picturePaavo Punkari

Product Evolution mindset leads to outcomes

"Economies of Scale is being replaced by Economies of Speed. Fastest learners win."

Software scales with zero cost and delay

Every company is gradually becoming a software company to a certain degree. Compared to physical products, digital services scale (almost) indefinitely without significant cost and can be distributed globally everywhere practically without any delay.

Economies of Speed - Fastest learners win

Due to infinite scalability and instant distribution of digital solutions, those companies that are the fastest to learn the optimal value proposition and business models behind it, win big in business.While ‘economies of scale’ is still relevant, ‘economies of speed’ is starting to replace it as the fundamental success factor.

Product Evolution

The optimal value proposition is tough to identify and changes over time. It simply cannot be formed by a single-shot analysis and plan. Instead we can follow how the nature has been finding the fit since the beginning of Life. The only realistic way of building systematic success is practically through product evolution, series of incremental and systematic trials.

Evolutionary capability can be split to two fundamental elements:

1) cycle speed

2) ability to steer direction (by learning on each cycle)

Cycle speed

Cycle speed is essential for fast learning. Those companies that reach high levels of cycle speed, simply get more feedback and can test more variations in a given time frame compared to competition.

There are many factors that define the cycle speed, some of the fundamental ones are

  • Autonomy and independence of the teams

  • Talent density and coverage

  • Technical debt

  • Level of self-service and automation

  • Management style

  • Flow, often affected by work-in-progress

It’s important to note that beneath the surface there are critical elements in management styles and mindset that affect these factors either directly of indirectly.

Ability to steer direction

Steering direction is the other critical capability. To come up with the optimal value proposition, product teams need to maximise their ability learn on every cycle. Super fast cycle speed alone without steering will take you somewhere for sure, but not necessarily to where you would like to be.

There are many factors that define the ability to steer direction, some of the fundamental ones are

  • Clear problem domain - teams organised around value

  • Clear product vision

  • Solid North Star with related metrics

  • Validation on all levels from early insight and strategy to production

  • Customer centricity and direct contact to customers

  • Feedback loops and quality of data

Build your team for product evolution

The traditional metaphor in business has been the factory. Our less glorious observation is that majority of the product teams are unknowingly in a feature factory mode, at least to a certain degree. They often focus on “efficiency” and output, and justify their existence based on the number of produced features instead of focusing on optimal value.

To benefit from Economies of Speed and succeed in digitally augmented business, which means pretty much any business nowadays, you may want to abandon the factory metaphor and build your organisation to embrace evolutionary approach to focus on value and outcomes.

Paavo Punkari

Co-founder at Fram Partners

Fram Partners is a partnership of

experienced software and product people

who want to take product teams and

their products to the next level.

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