Food for Thought V14: Create and Hone – Don’t fall for too many add-ons

I was reading a recent article from Knowledge@Wharton called “It’s Worth What!? Pressure-testing Companies with Sky-high Valuations” based on a book by Derek Lidow about Startups and what leadership style is needed at which point.  So if you are a stock market punter it is worth a full read.

I was attracted to the article because I remember oh so well the to dot.bomb era at the turn of the century (doesn’t that sound like a long time ago?) and I have been fascinated with valuations of companies like Facebook and Uber.  I understand that the market is backing the intellectual capital within the heads of the founders and their employees, however, this article clarified for me some of the decisions they need to make so they “make it” in business.

One key decision is to create and to hone at the same time.  The article refers to Google as having “…shown itself skilful at creating new products while simultaneously honing existing ones”.  

The process of creating and honing is not just for Startups.  It has a place in most product and service development.  Everyone in business should be looking for add-ons to your offering, however, add-ons bring complexity and so you also need to know when to pare back complexity and hone-in on what you do best.

The way to pare back complexity is to reveal cause and effect.  That is, which of our product or service offering add-ons are causing customer satisfaction, which have become neutral and which are now causing dissatisfaction.  Just because you added it on for good reason a year ago, doesn’t mean it should stay today.