Late last year we passed $100M in annual recurring revenue. We’re less than 8 years old so you can do the math on growth rates and figure out that we’re on an elite trajectory. That revenue is in on 75,000 customers, earned through the hard work of 500 employees across six offices on three continents. Every day, 5% of the entire online world visits a customer running on the WP Engine Digital Experience Platform.
This week we closed $250M in financing from Silver Lake, the premier technology private equity firm. The majority of the funds pay back our early investors who believed in us enough to trust us with their money. Of course a nice chunk is primary capital, i.e. for the company balance sheet, to invest in growth initiatives, security and quality, and advancing our existing strategic priorities through acceleration and de-risking.
We have never been in a stronger position. We have never had the caliber of teams we do today, as evidenced by our award-winning 70+ NPS customer service, our historic-low cancellation rates, our security and uptime, our product and engineering initiatives, our global brand leadership, our customer acquisition through both marketing and sales, our hiring and employee experience teams, our finance, legal, and governance teams, our executive leadership, and perhaps most important of all, the strength of our culture which embodies excellence, service, transparency and inclusiveness. We remain steadfast in our commitment to continuing to increase all of the above.
And now, with Silver Lake’s investment and support, we can accelerate our growth investing even more into our strategic roadmap, and placing some new bets on ideas we’ve had but haven’t been able to find the space to explore.
I’ve always said nothing beats the high of getting that first customer to sign up. It’s the heroin-hit that hooks the entrepreneur. (The next sale isn’t quite as sweet.)
That’s still an accurate portrayal, but there are other moments that are even more thrilling. This moment in WP Engine’s saga is one of those.
Thank you to all our customers, who vote for us every month with their pocketbooks, but even more importantly, entrusting us with their brand and online success, which we treat as vitally as we do our own.
And a special thank you to Heather Brunner, our CEO for the past four and a half years. Long-time readers of this (11-year old!!) blog might automatically assume that all this success is due to my prescience and wisdom, but the truth is that although I’ll certainly take the credit for the initial construction and lift-off of the rocket, setting up an impressive and rare trajectory, the reason we are in the position we are today, with all the attributes listed above, is due to Heather’s leadership, strength, vision, and execution. Period, full-stop. And everyone else at WP Engine would tell you the same thing.
So to everyone at WP Engine, let me repeat the message from one year ago:
We’re tired of hearing how small software companies usually fail.
The data show that the two most common causes are: (1) Product isn’t useful to enough people, and (2) Problems with the team.
But what about the companies that die even though they did sell some copies of software, and where the early team isn’t dysfunctional?
I don’t have data for that cohort (tell me if you do!), but informally I’ve observed the following things, which follow a pattern that can be identified and counteracted:
The initial marketing channel quickly saturated, so growth stalled at a non-zero but unsustainably-low rate.
The initial marketing channel was sustainable for a while, but got wiped away due to external forces. Examples: large bidders tripled the cost per click, Google’s SEO algorithm changed, the event organizers changed the rules or stopped doing the event, the link-sharing site became irrelevant, the hot blog lost its traffic, the magazine running the ads finally failed.
The product was built on a platform, and the platform changed. Examples: A popular app drops to zero downloads after Apple builds it into iOS; A Microsoft Office add-on drops to zero sales after Microsoft builds that feature into Office; A Twitter utility breaks when Twitter removes functionality from their public API.
The company landed one big customer representing 80% of total revenue, but that customer canceled. It wasn’t a mistake to sign that customer — it funded the entire company. But sometimes you experience the adverse end of that risk.
A key employee left the company, which caused the company to fail. Early on, a 10x person can mint the company but also could be irreplaceable. A suitable replacement is too rare; it takes too long to find someone, convince them to join for almost no salary, and get them up-to-speed and productive.
When a company has revenue but is susceptible to the fatal afflictions above, I call it “brittle.” It’s a real business, but it’s easy to break.
The pattern, which suggests a remedy, is: Brittleness manifests wherever there is “One Thing.”
A technological example makes this clear. Suppose I have a single server that runs my website. Any number of things can cause this server to break — a power failure, a network failure, a bad configuration change, too much traffic arriving at once, and so on. How do you make this situation less brittle?
Let’s take power failure. Power can fail if the power supply inside the server burns up (typically because the fan inside it failed), or the power strip or power cord fails (maybe a wetware failure like accidentally unplugging it), or the power source running to the power strip could fail. You can address all this by having a second copy of the components — a second power strip with a second cord plugged into a second power supply. This is, in fact, exactly what data centers do! In short: redundancy — having two things that do the same job, instead of just one thing. It’s twice as expensive, but it buys you robustness.
But what happens if the power fails between the main power system in the data center and the cabinet where the two power strips are? That’s another case of “one thing.” So you could have two cables running to every cabinet, from two identical power units. Again this is what advanced data centers do.
But what happens if the city power fails? Data centers have their own gas-powered generators. Which means they have to stock large amounts of gasoline. Gas-powered engines that are used infrequently have a tendency to stop working, so they have to test and maintain those units. Data centers often have multiple generators. Robustness purchased at large expense.
In modern clouds we go yet another step further, because the entire data center itself is “One Thing.” So you have additional servers in other physically-separate data centers that draw power and network connectivity from different vendors.
The data-center example is applicable to all of the causes of failure above.
“One marketing channel” is brittle, because if anything happens to it, that could be the end of an otherwise-healthy company. The solution is to layer on additional marketing channels, so that variation in any one of them is not fatal.
“One platform” is brittle, because if they forward-integrate (i.e. copy you) or just fail, that’s the end of the company. One solution is to be multi-platform (which social media management tools did, and which we did with cloud infrastructure providers at WP Engine); another solution is to only build on platforms where you have a high degree of confidence that the platform owners are committed to supporting their ecosystem by never directly competing with them, and in fact promoting them. (Salesforce is currently the best in the world at this.)
“One big customer” is brittle. One solution is a long-term contract with a serious breakup clause, as insurance that pays for you to bridge to more customers. Another is to prioritize accelerating sales until that customer represents a percentage of revenue that you can stomach. Also, up-front payments, so you have the cash-flow to invest in that growth right now. The typical attitude is, “We now have a large customer, so pour extra money into development to make sure we don’t lose it,” but the right attitude is to use a lot of that money to land other customers.
“One key employee” is brittle. Not only might they leave, but what if they just get sick or need to take a vacation? The usual refrain in the startup world is that none of these are options — everyone has to work 70+ hours/week and never falter. Talk about brittle!
Solving these things takes time and money. These aren’t quick-fix solutions. You can’t just hire three more fantastic developers to create a robust engineering team, and you can’t just snap your fingers and find three new efficient, productive marketing channels.
Therefore, the right attitude is to maintain clarity on these risks and ask which one is best to work towards right now. For example, it’s cheaper and easier to experiment with new marketing channels than it is to find, interview, convince, and manage a second software developer, and plus if you can get a second marketing channel online, that will generate revenue, which in turn means you can afford a second software developer. In this scenario, the best thing is to focus all your energy on getting a second marketing channel running.
As you scale, the size of the “chunks” that create brittleness also scale, which creates new One Things, thus new risks and new investments. For example, with $260M in 2016 revenue, still growing at a blistering 60%/year, with a thousand employees, Hubspot is not brittle in any of the ways outlined above. But they recognized in 2016 that they were a single-product company. That is a “One Thing.” If there were a sea-change in the market for inbound marketing software, that could be fatal to Hubspot. It also limits long-term growth as the market matures and saturates. The way out is redundancy — becoming a multi-product company, but not where one product is 95% of revenue. They attacked that problem, and today (Nov 2017) they’re well on their way, as recognized by the media at large.
Finally, on a personal note, there’s another “chunk-level” that’s even larger than all of the preceding, and it’s a brittleness that almost all founders suffer from, including myself. The chunk of “the entire company.”
This is a component of why founders are almost always sad and sometimes permanently depressed even after a successful sale of a company. This was your “One Thing” for years. This is your identity, your life. You don’t have hobbies or even good friends anymore. You might have sacrificed family or health. Talk about a “One Thing.” Your entire life is brittle.
Rather, the solution is to realize that there were things you did and loved before and there will be things you will do and will love after. This is a chapter in a book. Even if one chapter is sad or has an unexpected twist, there’s still the next chapter which you can look forward to, even if you don’t yet know how that story will unfold.
Robustness, not in many things simultaneously, but in things serially. That’s the wrong attitude for solving tactical problems at work, but it’s the right attitude for thinking about the arc of your life.
Back to today and the here-and-now. Go list all the “One Things” which make your business brittle. Only tackle one or two things at a time — you have to manage risk, not pretend that you can eliminate all of it at once. Be thoughtful, and build steadily away from brittleness.
Forget work/life integration for a minute. How much time do you have, regardless of partitioning?
From your 24-hour daily allotment, the 1950s-style break-down is 8 hours for work, 8 for home and commute, and 8 for sleep and ablutions. So, “work” and “home” are the two things in which you can spend 40+ hours per week.
This is the amount of time it takes to tackle something huge. A career. A parent. A startup.
There are weekends and vacations and sick days and such, but those don’t add up to enough concentrated time to carry off something like a startup without causing work or home to suffer.
Of course “work” and “home” are just placeholders for “Big Things.” If you’re unattached, “home” doesn’t occupy significant time.
The rule of life is: You can have two “Big Things” in your life, but not three.
Big Things include:
Major Hobby (e.g. build a boat in the garage, become a chess master, video game addiction)
You can do a startup on the side while you have a day job, but your family will never see you. You might even lose your family. It happens. This is partly why it’s easier to start a company before you have a family or even a spouse.
You can have a job and a social life, but unless your spouse is fully integrated and agreeable to that social life, there will be strife. “Going out with the guys again?”
Yes, “kids” and “spouse” are on the list separately. Young kids strain marriages because there’s not enough time to invest in the kids as well as be there for each other.
Some people try to “have it all.” Men and women both. But it’s never true. At most two can function well; the rest do not. More often, there’s just one that receives the majority of the energy, and the rest suffers.
Note that “Sleep” isn’t on the list of options, even though it’s mathematically the same in terms of time commitment. That’s because cutting out sleep doesn’t work — then you can’t function at a high level at anything.
No, you are not an exception. That’s egotistical self-deception. Not on sleep, and not on the number of Big Things. Ask the people around you if they think you’re not failing at one of your Big Things.
Idealistic founders believe they will break the mold when they scale, and not turn into a “typical big company.” By which they mean: Without stupid rules that assume employees are dumb or evil, without everything taking ten times longer than it should, without wall-to-wall meetings, without resorting to hiring anything less than the top 1% of the talent pool, and so on.
That is, keeping the positive characteristics of a tiny organization, avoiding the common problems of a larger organization, by preserving their existing values and processes, just doing it with more people, and figuring it out as we go along, exactly as we always have.
Why do they never succeed? Why is this impossible when you have 500 employees? What are the fundamental forces that transform organizations at scale?
From Brittle to Robust
A “team of one” is the fastest, most efficient team, as measured by “output per person.” Communication and decision-making occupy the minimum possible time. And maybe the person working on that thing is a “hero” — working extended hours and experienced with the problem space. Small companies operate this way by necessity, and it works! It’s a big reason why they move quickly.
But, an illness takes the velocity of the product or quality of support from heroic to zero. And if that person leaves, you’ve just lost six months to hire and get back up to speed on that thing. Or nine months because there weren’t any processes and documentation in place — again because it was just one person, who didn’t need that stuff, because after all we’re moving so quickly!
A team of one is brittle, but fast. When you’re small, this is a good trade-off, because speed is critical for combating the things that are constantly about to kill the company. When you’re large, and you might have 15-25% annual employee turnover, not to mention illness, vacation, and family, the same structure would sink you immediately.
So, no project can have fewer than, say, three people dedicated to it, plus people management and possibly some form of Product or Project Management. But that team of four will not be 4x more productive than the one-person team; per-person productivity goes down in exchange for robustness and continuity.
On the other hand, while the small company loses 9 months to the loss of a key employee, or even implodes, the big company is the steady turtle that adds thousands of customer per month like clockwork and wins the race.
When you’re small there’s no need to predict when the feature will ship. Marketing isn’t scheduling a launch and recruiting isn’t timing the start-dates of the next 50 hires in customer service and sales. This means you can — and should! — optimize myopically for speed-to-market.
Small companies brag about their speed as an advantage, but it’s easy to see why the larger company actually has a massive advantage. Sure, when WP Engine launches a new product, the marketing department needs predictability for the launch date, but that’s because it’s a highly-skilled, well-funded group, which explodes with press, events, campaigns, social media, and newsletters, grabbing more attention in a single week than a smaller company might garner in a year. There’s also an armed globally-dispersed Sales and Support teams, so we’re selling to our 70,000 existing customers as well as thousands of new customers per month, which means we’ll end up adding more new revenue in one month than a small company will take in over a whole year.
The tradeoff, however, is predictability. We didn’t line up that press and have those sales materials and ensure code-quality high enough to scale on day one, without predictability. Predictability means going slower. Predictability requires more estimation (takes time), coordination (takes time), planning (takes time), documentation (takes time), and adjusting the plan when it inevitably unfolds differently from the prediction (takes time).
Predictability is also required for healthy team-growth. Consider the timeline of adding a technical support team member. First, Recruiting is casting about for potential candidates. Then scheduling and performing interviews. Then waiting for them to quit their job and take a week off. Then new-employee-orientation. Then classroom training. Then paired up with senior folks on the floor as they ramp up their skills and comfort. Then finally, after (say) four months, they’re up to speed.
Since that takes four months, we have to be able to predict the demand for technical support at least four months in advance, because we have to be hiring for that future demand right now. If we under-estimate, our support folks get overwhelmed with too much work, their quality of life suffers, and service to each customer suffers; if we over-estimate, we have too many people which is a cost penalty. Of course, the latter is a better failure mode than the former, but both are sub-optimal, and the solution is predictability.
“The future is inherently unpredictable,” insists the small company, spurred on by Lean and Agile mindsets. Indeed, blue-sky invention and execution are hard to predict. But this is also a self-fulfilling prophecy; to insist the future is unpredictable is to ignore the work that could make it more predictable, which of course makes it in fact unpredictable to that person.
Small companies don’t have the data, customers, institutional knowledge, expertise, and often the personal experience and skillset to predict the future, so they are usually correct in saying it’s impossible. But it’s not impossible in principle, it’s impossible for them. At scale, it becomes required. Not because Wall Street demands it, or investors demand it, or any other throw-away derogatory excuse made by unpredictable organizations, but because it’s critical for healthy scaling.
If Google launches a new product that generates $10,000,000/year in revenue, is that good? No, it’s a colossal failure. They could have taken the tens of millions of dollars that the product cost to develop, and made their existing operation just 0.01% more effective, and made the same amount of money.
At nearly $100B/year in revenue, Google can only consider products which have the potential to generate $1B/year in revenue as an absolute floor, with the potential to grow to $10B/year if things go better than expected. Things like YouTube, Cloud, and self-driving cars.
This principle is called the “Materiality Threshold,” i.e. what is the minimum contribution a project must deliver for it to be material to the business.
With a small business, the materiality threshold is near $0. A new feature that helps you land just a few new customers this month is worth doing. A marketing campaign that adds two sign-ups/week is a success. Almost anything you do, counts. That’s easy, and it feels good to be moving forward. But it’s only easy because the bar is so low.
The financial success of the larger company dictates a non-trivial materiality threshold. This is difficult. Even a modest-sized company will need millions in revenue from new products, maybe tens of millions in the optimistic case. Very few products can generate that sort of revenue, whether invented by nimble, innovative startups or stately mature companies. As proof, consider that the vast majority of startups never reach a $10M/year run-rate, even with decent products and extraordinarily dedicated and capable teams.
Yet, it’s the job of a Product Manager at that mid-sized company to invent, discover, design, implement, and nurture those products — something that most entrepreneurs will never succeed at. Tough job!
Employee #2 will join a startup for the experience. Even at a significant salary cut, and even if the company fails — the most likely outcome. It’s worth it for the stories, the influence, the potential, the thrill, the control, the camaraderie, the cocktail-party-talk.
Employee #200 won’t join for those reasons. Employee #200 will have a different risk-profile regarding their life and career. Employee #200 will be interested in different sorts of problems to solve, like the ones listed in this document instead of the ones where you’re trying to understand why 7 people bought the software but the next 3 didn’t. Employee #200 will not work for a pay-cut.
Small companies could view this as an advantage, and certainly it’s advantageous to recruit amazing people at sub-market rates. But there are dozens if not hundreds of employees at WP Engine today who are much more skilled in their area of expertise than I’ve ever met at a small startup. Why? Because after developing that expertise, they find it’s only possible and enjoyable to apply their skills within a larger environment.
For example, there are advanced marketing techniques that would never make sense with a smaller company, that are fascinating, challenging, and impactful to the top line at a larger company. There are talented people who love that challenge and would hate going “back to the Kindergarten of marketing” scratching out an AdWords campaign with a $2000/mo budget or assembling the rudiments of SEO or just trying to get a single marketing channel to work or being called a “growth hacker” because they finagled a one-time bump in traffic.
But, this has implications around compensation, how you find that talent, and why that person wants to work at your company instead of the one down the block who can pay a little bit more. Therefore, it’s critical to have a mission that is genuinely important, have meaningful and interesting work to do, connect everyone’s work to something bigger than any of us. These matter even more at scale, because they’re the anchor and the primary reason why talent will join and stay.
With four people in a company, any information that needs to be shared can be told to just three other people. Everyone can know everything. If there’s a 5% chance of significant misunderstanding, that event doesn’t happen often.
With four hundred people, it’s never true that a piece of information can be reliably communicated, in a short period of time. A 5% chance of misunderstanding means twenty people are confused. In software terminology, communication challenges scale as O(n2).
“Slack” is not the answer. “Email” is not the answer. (Your emails are probably misinterpreted 40% of the time, by the way.) Repetition is the answer, in different formats, at different times, by many leaders, and even still it’s never 100%.
Technology & Infrastructure
Managing 10,000 virtual servers in the Cloud Era sounds easy. Automate everything, then any process that works for 100 servers, will work for 10,000 servers just by doing the same thing repeatedly — exactly the thing computers are excellent at.
One is that scale makes rare things common. Rare things are hard to predict and can be hard to prevent. Often they’re hard to even identify and sometimes impossible to reproduce. This is fundamentally difficult.
Another is continuity or compatibility with existing technology. New companies get to start from scratch, but at-scale companies must transform. New companies like to make fun of large companies for how hard it is to transform, neglecting that the cause of the difficulty might also be generating $100,000,000 in revenue.
Another is bottlenecking. All hardware and software systems have bottlenecks. At small scale, you don’t run into any bottlenecks, or at least the ones you do can be solved with simple techniques like increasing capacity. Eventually something difficult breaks and you have to rearchitect the stack to solve it. Even something simple like converting HTTP links to HTTPS or updating “number of likes” in real-time, becomes a monumental architectural challenge.
Not only does this slow down development, it adds investment. There will be entire teams who focus on infrastructure, scaling, deploys, cost-management, development processes, and so forth, none of which are directly visible to or driven by the customer, but which are necessary to manage the complexities of scale.
For a small company, the most likely cause of death is suicide. Usually it’s starvation — can’t get enough customers (distribution) to pay enough money for long enough (product/market fit). But also things like founders splitting up, not getting enough traction to self-fund or to secure the next round of financing, having to go back to a day job, and so on.
At scale, the risks are completely different. There is very low risk that WP Engine will not sign up thousands of new customers this month. Other risks, however, are not only possible, but likely. Addressing those risks head-on, is required for a healthy and sustainable business that can last for many years.
Take the risk of business continuity during a disaster scenario. What if all availability zones of Amazon in Virginia are disabled for a week? How quickly could we get all our customers back up and running? Would that be true even though thousands of other businesses are also trying to spin up servers in other Amazon data centers at the same time? Could we communicate all this with our customers quickly and simply, so that our support team isn’t overwhelmed by repeating the same message to nearly a hundred thousand justifiably-worried customers?
Risk-mitigation can even result in growth. Serious customers want to see that their vendors understand and mitigate risk; this maturity becomes a selling point. That’s why enterprise suppliers are constantly flouting their compliance with SOC 2 and ISO 27001 and all the rest. Small companies make fun of those things as being unnecessary at best or a false sense of security at worst, but while they’re busy making that point, the larger companies are busy signing three-year multi-million dollar clients.
Early on, you do not need a disaster-recovery plan. That won’t be the thing that will kill the business, and your customers will understand if a young business is subject to that sort of risk. Later on, this becomes critical, and worth investing in.
The fundamental challenge of scaling: Embracing and implementing the shift from Small to Large
These forces cause larger companies to be fundamentally different than small ones. This isn’t a bad thing or a good thing. It’s a different thing.
Some idealistic founders believe the root cause of scaling issues is the “command-and-control” organizational structure. But none of the examples above make reference to any organizational structure. It’s universal. This is why Holacracy and Teal Organizations do not solve these problems in practice. It could be a fantastic idea to experiment with organizational structure, but the fundamental forces above will not be eliminated through recombination of roles and organization.
Scaling is hard, the road is foggy and bendy, it lasts for years, the set of people you need might be different, and no one emerges unscathed. So, it is not a sign of disaster if you have difficulty wrestling with these forces. Everyone does.
Disaster is when a company is scaling, but the leaders don’t appreciate these forces, don’t work constantly to morph the organization accordingly, don’t bring in experienced talent, decide they can figure it all out as they go along without help. Rather, it should mean new people, new roles, new values, new processes, new recruiting, new stories, new constraints, new opportunities.
Too many founders and leaders want to believe that “What got us here is what’s important and unique about us, and thus we should preserve all of it. Other companies fail because they ‘act like big companies,’ but we’ll avoid all that because we’re smarter than they were. As evidence of our acuity, just look at our success thus far. We will continue to succeed in the future as we have in the past.”
Many founders and leaders can’t make the shift. This always hurts the company, and sometimes kills the company. The world is full of those horror stories. It’s sad, because it’s an avoidable waste of opportunity and sometimes hundreds of person-years of effort.
Customers demand an improved UX, but they don’t want to learn a new UX.
Team members want consistency but don’t want policies.
Developers want to be more efficient but don’t want to change how they work.
Strategy is ineffective if it’s constantly in flux, but a strategy that remains unchanged in the presence of new information is incorrect.
The right choice is almost always “change.” This is because change is a reaction to uncovering facts, getting smarter, or a shift in the outside environment. Death awaits any organization that chooses the comfort of the familiar over the discomfort of change.
Yet, though inevitable, change is uncomfortable and exhausting. Even we who relish change, who love bragging that “it’s hard but every day is different,” reach a breaking point after years of adaptation and fake-gleefully exclaiming that “failure is how you learn!” Yeah, but all this learning is fricking tiring.
This is important for leaders to understand, if indeed “change is the only constant” as the insipid cliché goes. Even your most stoic, change-loving mortals sometimes need a break from change. Yes “it’s a marathon” but sometimes you need to walk a mile to catch your breath. Look for signs of burnout or decision-fatigue, and address it proactively.
This is equally important for everyone in a startup, whether you manage others or not. Constant change can feel like management has no plan and no strategy. It takes careful consideration to distinguish between being rudderless and a culture of self-reflection and improvement.
This is exacerbated by the fact that not all change is for the best. Sometimes, when we try to solve a problem, we make it worse. Sometimes, when we try to make code faster, we make it slower. The difference is that we can see slow code objectively in the profiler and continue to make changes before we commit the code; it’s not so easy when the change is happening to a whole team, or a major product release, or a cross-departmental strategic initiative.
Even deciding what to change is hard. Successful companies can stall out because they lose sight of the fundamental reasons they earned success in the first place — the key insights and UX of the product, or the key culture and values that attracted their first hundred or thousand employees. But successful companies also stall out because they’re so dogmatic about their strategy or “non-consensus but correct” ideas that when the world changes around them, or scale breaks their previously-correct notions, they fail to adapt. It is not generally true that “what got us here will get us there,” and that means deep change is required.
There’s a mindset that everyone can use to address all of these difficulties:
Maybe don’t judge too harshly if your organization tries to improve and ends up not improving, or where the organization takes too long to implement change. Maybe don’t judge too harshly if the person to your left needs to work on something easy for a few sprints or take a vacation.
Edison had to try thousands of materials before finding the one that make lightbulbs practical. Would you have judged him for “thrashing?” Invention is often frustrating.
You should judge harshly if nobody is thinking about this. If nobody cares whether there’s change or not, if there’s no rhyme or reason to the company strategy, if everyone is expected to act and feel happy and productive all of the time, then you should definitely judge. An organization that isn’t striving to improve, will rot and disintegrate.
There are no straight paths in life or startups. All we can do it keep being introspective, and keep trying the right sort of change.
Product teams have been repeating the MVP (Minimum Viable Product) mantra for a decade now, without re-evaluating whether it’s the right way to maximize learning while pleasing the customer.
Well, it’s not the best system. It’s selfish and it hurts customers. We don’t build MVPs at WP Engine.
The motivation behind the MVP is still valid:
Build something small, because small things are predictable and inexpensive to test.
Get it into the market quickly, because real learning occurs only when real customers are using a real product.
Trash it if it’s a flop, or invest if it’s a seedling with potential.
MVPs are great for startups and product teams because they maximize validated learning about customers as quickly as possible. But it’s a selfish act.
The problem is that customers hate MVPs. Startups are encouraged by the great Reid Hoffman to “launch early enough that you’re embarrassed by your v1.0 release.” But no customer wants to use an unfinished product that the creators are embarrassed by. Customers want great products they can use now.
MVPs are too M and almost never V. Customers see that, and hate it. It might be great for the product team, but it’s bad for customers. And ultimately, what’s bad for customers is bad for the company.
Fortunately, there’s a better way to build and validate new products. The insight comes by honoring the useful attributes of MVPs, which are listed above, while also giving just as much consideration to the customer’s experience.
In order for the product to be small and delivered quickly, it has to be simple. Customers accept simple products every day. Even if it doesn’t do everything needed, as long as the product never claimed to do more than it does, customers are forgiving. For example, it was okay that early versions Google Docs had only 3% of the features of Microsoft Word, because Docs did a great job at what it was primarily designed for, which is simplicity and real-time collaboration.
Docs was simple, but also complete. This is decidedly different from the classic MVP, which by definition isn’t complete (and in fact is embarrassing). “Simple” is good, “incomplete” is not. The customer should have a genuine desire to use the product, as-is. Not because it’s version 0.1 of something complex, but because it’s version 1.0 of something simple.
It is not contradictory for products to be simple as well as complete. Examples include the first versions of WhatsApp, Snapchat, Stripe, Twilio, Twitter, and Slack. Some of those later expanded to add complexity (Snapchat, Stripe, Slack), whereas some kept it simple as a permanent value (Twitter, WhatsApp). Virgin Air started with just a single route — small, but complete.
The final ingredient is that the product has to be lovable. People have to want to use it. Products that do less but are loved, are more successful than products which have more features, but that people dislike. The original, very-low-feature, very-highly-loved, hyper-successful early versions of all the products listed in the previous paragraph are examples. The Darwinian success loop of a product is a function of love, not of features.
There are many ways to generate love. “Minimum” and “viable” are definitely not two of those ways. The current-in-vogue way is through design: Elegant UX combined with delightful UI. But there are other ways. The attitude and culture of the company itself can generate love, such as Buffer’s blog with its surprising transparency or MeetEdgar’s blog genuinely helping entrepreneurs or HubSpot’s blog which early on was at least as instrumental to their customers’ success as the actual product. Another way is through a deep connection to the psyche and work-style of customers, like Heroku who broke with marketing tradition by filling the homepage with command-line feature examples instead of benefit-statements, thereby connecting instantly with their geeky target customer:
These are the components of the correct alternative to the MVP: Simple, Lovable and Complete (SLC). At WP Engine we pronounce it “Slick.” As in: “What’s the ‘Slick’ version of your idea?”
Besides the above, there’s another benefit to SLC when you consider what happens with the next version of the product.
A SLC product does not require ongoing development in order to add value. It’s possible that v1 should evolve for years into a v4, but you also have the option of not investing further in the product, yet it still adds value. An MVP that never gets additional investment is just a bad product. An SLC that never gets additional investment is a good, if modest product.
Although not called SLC, there’s a popular meme in product circles that neatly encapsulates the idea of SLC in a diagram: The Modes of Transportation example from the Spotify product team:
A skateboard is a SLC product. It’s faster than walking, it’s simple, many people love it, and it’s a complete product that doesn’t need additions to be fun or practical. At the same time, you can evolve the skateboard by adding a stem and handlebars, to create a scooter — only slightly less simple, and definitely loveable and complete. Next, you could grow the wheels, add a seat and some gears, and you have a bike. Again, less simple but now you have a product with massive benefits of speed, distance, and energy-efficiency. Complete, but many accessories available if you choose.
Zooming into one of our examples above, Snapchat took an SLC progression similar to the transportation metaphor. The first iteration of the product was a screen where tapping anywhere took a picture that you could then send to someone else, at which time it disappeared. No video, no filters, no social networking, no commenting and no storage — simple, yet Lovable and Complete, as evidenced by its massive adoption. The insight of “no storage” was critical, but many people have theorized that the simplicity of the interface was also critical. The very fact that it was as simple as possible (while not sacrificing love-ability or completeness), caused its success.
Later they added lots of stuff — video, filters, timelines, even video cameras inside sunglasses. It’s OK for products to become more complex. Starting out SLC does not preclude becoming complex later.
With SLC, the outcomes are better and your options for next steps are better. If it fails, that’s OK, it’s a failed experiment. Both SLCs and MVPs will have that result because the whole point is to experiment. But if a SLC succeeds, you’ve already delivered business value and you have multiple futures available to you, none of which are urgent. You could build a v2.0, and because you’re already generating value, you have more time to decide what that should look like. You could even query existing customers to determine exactly what v2.0 should entail, instead of a set of alpha-testers who just want to know “when are you going to fix this?”
Or, you can decide not to work on it. Not every product has to become complex. Not every product needs new major versions every two quarters. Some things can just remain simple, lovable, and complete.
Early in my career, I was indoctrinated with a Cardinal Rule of User Interface:
A user interface should minimize surprise.
Have you always hated tabs inside dialog boxes? Understandable, but users know how they work, so you have to use them. If you put a scrollbar instead, half your users will never realize that scrolling is possible.
For example, this dialog is ridiculous but it’s still clear how to use it:
Is the default system drop-down list not exactly right for your purposes? Doesn’t matter; better to show an interface element that the user completely understands than one that fits the bill but needs deciphering.
This mantra curdles the blood of creative designers. It blocks innovation. The user might be unsurprised, but also will be unimpressed. Maybe even annoyed.
Using common metaphors also makes your product UI identical to all the others. There’s no personality, no brand, solidifying the notion that this product is “just another tool” rather than a new way of interacting with a computer. Surely technology can be better than that!
But this is an egocentric view. Your customers don’t want to figure out some newfangled thing just to navigate a dialog box. In fact, your customers don’t want to think about you at all. They have their actual job to do. They’d like to be able to do it predictably and safely. It’s not “fun” to solve the puzzle of your innovative new way of toggling a binary setting in a dialog box, or a drop-down that “scales to millions of items” except that there are only seven items.
How should you navigate this?
As technologists, we should strive to create better ways of working, interacting, and living. This mandates innovation in user interface design. The trouble comes when we change for the sake of ourselves instead of our customers. Changing a well-known interface because of some personal philosophy or pet peeve is not change for our customers’ sake, but rather to scratch some idiosyncratic, selfish itch.
The question to ask is: What will maximize your customers’ utility and joy?
When a standard user interface element will work, but you foist some fancy new thing on the common person, you are not increasing joy.
Conversely, consider the “opening screen” — the thing a customer sees when they launch the product for the first time. What is that new-user experience like? Could you craft something that accelerates the user becoming successful with the product? If so, that creates both joy and utility. Simply copying the “pick a template” screen from Microsoft and Apple Office products is unlikely to create joy.
One of the things Snapchat gets right is their use of novel user interface. The initial product launched into a mode that was immediately ready for video and then for sharing. Zero extra icons to click or things to type out. This created the perfect experience for their specific use-case — non-professional, non-edited, immediate, temporary image-based messages.
On the other hand, back in the heyday of pre-OS-X Macintosh, a product called Kai’s Power Goo famously failed even though it was an innovative and interesting photo editor because it was so confusing to use. Even simple things like a color-picker or a slider for image brightness was an adventure in deciphering an alien language. Their attitude was: If you’re cool, you’ll get used to it. But customers’ attitude was: This is annoying.
Unless you think it’s awesome to have to navigate to the “Out Room” and figure out which of the five meaningless icons to click on just to save a file, or figure out whether “crop” can be found in the “Goo Room: Liquid Image Tools” or in the “Fusion Room: Mix Image Process.”
What makes Snapchat joyful and Power Goo annoying? The former was different with a customer-driven purpose; the latter was different for different’s sake.
If you’re going to be different, do it because there’s a clear and powerful reason why this will make customers rejoice. If they smile when they first try the product, that’s a good sign. If their eyebrows collapse as their mouth pulls to the side, that’s a bad sign. When you hand your app to a friend for a hallway-usability test, watch their face as much as you watch them swipe.
If you’re going to be different, make it amazing. The goal isn’t to be “different,” it’s to be “better.” If you invent something slightly better, that’s not enough to overcome the penalty of someone having to learn something new. It has to be overwhelmingly better.
If you’re going to be different, select the subset of the product that really benefits from an invention. Anything that can be normal, should be. Save the surprise from those moments where learning a new motion pays off, and is even delightful to discover. Too much difference is overwhelming.
When your customer shows your product to another potential customer, you don’t want them to say “Check this out, it’s different.” You want them to say “Check this out, it’s awesome.”
One thing we’ve learned from the diet crazes since the 1980s is that every single thing has been alternately touted as healthy or poison. No-fat, carb-heavy. Scratch that, no-carb, fat doesn’t matter. Scratch that, it’s only about low-cal. Scratch that, whole-30 and don’t track calories. Scratch that, fast for sixteen hours a day and do anything for the other eight.
Ask any person and they’re equally variable: Which thing worked for them, or didn’t, or worked for a while but it wasn’t sustainable.
So there isn’t an objective answer to the question: What is the best diet?
The right question is: Given that any of this could work, What works best for me?
This is also how start-up advice works. For every clear example that proves “X is right,” there’s another equally compelling story of success where the mantra was “X is wrong.”
So the question is: Which advice is right for me?
In diets, half the answer is physiological — how your body reacts. The analog in startups is: What is right for this company, in this market, with these competitors, with these customers, at this price-point, with this business model, with this team, with their goals. Often the answer is different from what made sense for Steve Jobs or Bill Gates or Mark Zuckerberg, even though those are the stories we constantly hear.
In diets, the other half is sustainability — can you keep this up for a meaningful amount of time? It’s fine to say social media could be the key to your marketing success, but if you think Twitter is insipid and Facebook is fake and Instagram is not serious, will you really be successful if you force yourself to post things? It’s fine to say user interface design is critical, but thousands of successful companies have crappy design, so if you’re not a designer and don’t care to invest in one, you should instead be asking what made those companies successful in spite of poor design.
Not only is there no formula that will always work, there’s not even a clear way of understanding whether a certain piece of advice is right for you. As in the above: Should you suck it up and get competent at Twittering or listen to your gut that says “this isn’t the path for me?”
There are two ways to figure out whether advice is appropriate for you.
First, realize that advice always comes with context. The rule of thumb is that advisors are always giving advice to themselves. Meaning: With their personal goals, their world-view, their experience, the markets and products and customers and competitors that they’ve experienced, they can probably give some great advice. Outside of that, who knows. So ask yourself: Does this person giving the advice align on all those dimensions with me? If so, this could be sage wisdom, even if you don’t like the message. If not, you can either ignore it completely (focus!) or listen with a filter.
Second, your gut often knows the answer. I know you don’t want the answer to be “feelings,” but sometimes feelings are wiser than thoughts. In a world where both “X” and “Not-X” are convincingly peddled as The One True Way, you might need something outside of pure logic to resolve the path. If you find yourself vigorously agreeing with some new idea, that might be all the evidence you need.
But first ask yourself: Do I like this because it’s justifying some behavior that I know is wrong, or because it really is ground truth for me? For example, if you inherently dislike social media, of course you can find advice telling you how social media isn’t important, but do you enjoy that idea because it feels correct deep down that social media is a farce, or do you enjoy that idea because it’s an excuse to avoid the truth that social media is critical for digital marketing. If you ask yourself, even though these are feelings, the answer will often be clear.
Most of all, pay attention to advice when you have an immediate aversion. Usually, your first reaction is correct; you have a certain world-view, and since many world-views are valid, you should select things which allow you to lean into the one that gives you energy and is consistent with the rest of your activities.
But sometimes, that contradictory message is a moment to learn and grow. Sometimes, you were wrong, and you need to alter your world-view. This is an opportunity; don’t waste it!
As you accumulate a set of principles that you have a lot of energy for, you throw yourself into it and run it to the extreme. Doing that is perhaps one of the truly universal rules of success — that you are “all in.” Applying an extreme amount of energy is more important than exactly which path you’re taking.
Applying maximum energy doesn’t mean working yourself to death. It means being all-in, and being thoughtful and specific about what you’re all-in about.
This is what healthy perseverance looks like.
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