Note: Today's post is a bit of a ramble that I wrote in pieces as I got a free 10 minutes throughout the day. I could have sent it to the draft bin to live the rest of it's days next to such unfinished gems as "Web 2.0 Redux" and "A Universal Theory of Cobra Kai", but I decided to publish it as publishing it as it relates to an underlying theme of this post, sunk costs. This post was loosely inspired by this paper I read about the Sunk Cost Fallacy Fallacy which is much more interesting and you should check out.
One exercise I've always found helpful in prioritization is asking the question "If I were starting from scratch today, knowing what I know now, how would I build this product/company/team?"
This week I used this exercise to help me reach clarity and get to a decision on something that had been nagging and eating away at me the past week. One month ago when we sat down and defined what we wanted to bring to market, the market was different. As a rule, I try to strike the balance between paying attention to these types of changes but not let short term distractions get in the way. With every week that passed, however, the distraction became more difficult to ignore and I started to worry that I was stubbornly focusing for the sake of focus, which is one of the more sneaky, underrated mistakes you can make. I went through the exercise, realized that if I was starting today I would certainly make that change. I discussed with my cofounder, who I realized not only has been wisely nudging me towards the decision for weeks but was already working on it. We decided it was not only important but would be relatively easy to make such a change.
In my case, our company is early stage company and pre-product, which makes this exercise fairly simple and straightforward. The lack of both customers and revenue eliminates many constraints right off the bat and you're left with a fairly simple decision framework. It may seem counterintuitive but at such an early stage, when you have such little room for execution error keeping your blinders up could be what ultimately kills you. Execution ultimately isn't just "doing the thing" but "doing the right thing".
When your company or product is larger and more mature, it's a much harder exercise. You have established customer or user base with locked in behaviors that you think you understand, but likely do not fully grasp. You have backend systems, legacy codebases, and front end interfaces locked into the way things current work and teams that make up an entire company that gets paid twice a month from it all. You could go through that exercise, have the most no-brainer takeaway, supported by all the data in the world, supported by every major stakeholder in the organization, and still tank the company trying to do it. They even wrote an entire book celebrating IBM's ability to pull it off.
That doesn't mean the exercise is not helpful. Often times how you would do things different can get at the heart of where you need to invest, simplify, trim, or optimize. It can also inform an acquisition strategy. Facebook bought Instagram, which is how Facebook would have built Facebook in 2012 - mobile, photo focused, and with follows instead of friendships. Facebook knew it couldn't do all three things easily on Facebook, but saw a product with those features as an existential threat. They were right.