Note: This AMA is closed for new questions. You can check out the existing exchanges below.
This June 22nd, we’re incredibly excited to be hosting WP Engine’s founder, Jason Cohen. Who, as an ardent, discerning practitioner-chronicler, has made the most unyielding SaaS/startup subjects vividly accessible. From revisiting standard industry practices (“‘MVPs’ are too M to be V’) to reexamining individual causes of burnout (“what creates a fulfilling existence?”), Jason has experienced, and rigorously, evocatively, admirably documented it all.
Jason Cohen’s brain-pickings
(Curated excerpts to give you a sense of some of his beliefs and thought processes)
On questioning the long-held advantages of being first:
Most startups insist they’re “first” at something. As they should — what’s the point of a new company that adds nothing new to the world? But is it a good thing? Does it make you better than your competition?
On the surface being “first” sounds impressive, implying innovation and leadership. But upon reflection, it’s not.
In fact, being first is a shackle because you’re stuck with legacy support — features you thought were important but aren’t now, grandfathered customers who are no longer profitable, and a reputation that’s hard to revamp even if your company has in fact changed.
Worse, being first means you make all the mistakes in public, for all to see. New competitors get to swoop in afterwards with the hindsight that you created — in pricing, positioning, marketing, features, design, … anything. They get the running start without all your baggage.
Of course there are situations where being first is indeed a massive advantage. This exception arises when you’re not only first, but able to expand fast and continue innovate. Early mp3 players didn’t do this — they didn’t get huge traction and weren’t creative in hardware or design, which meant Apple had the space to innovate in design while the market was still largely available.
So yes it can work, and a well-funded startup combined with a stellar team and bit of good fortune can occasionally pull it off. But most little companies aren’t in that position, and it’s often not the best risk/reward position anyway.
What this means is that being “first” isn’t an end in itself — it’s not an advantage, not a feature, not a benefit the customer can experience. It’s a means to one of those ends — it can be levered into market dominance or it can be a manacle that locks your company inside a box.
It’s OK to be proud of being “first” at something, and you should be. But like being “disruptive,” being “first” isn’t necessarily desirable.
In any event, it’s not a competitive advantage. It’s just history.
Source: A Smart Bear | 2011
On crossing the predictability chasm
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…
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.
Source: A Smart Bear | 2017
On the mid-market briar patch
The startup graveyards are littered with companies who tried to target this seemingly alluring [mid] market segment — customers small enough to be intelligent and nimble, young enough to embrace new technology, yet big enough to spend real money to alleviate real pain. It sounds like it’s best of both worlds. But the reality is: It’s the worst of both worlds.
They’re not “small enough to be nimble,” because at fifty employees they’ve already established much of the lumbering process and bureaucracy of companies a hundred times their size. Shackled by budgets and internal politics, technology changes require expensive coordination and retraining, and fear of change trumps potential rewards of improvement.
All this makes for an arduous sales process just like with big companies. But although they have the process and controls of a large company, they don’t have the budgets to match; there’s no large reward for successfully navigating the painful, Herculean sales adventure. Worst of both worlds.
Why is it like this? Maybe they’re stingy because they’re still being run by a parsimonious small-business founder (like me!) who is still straightening used staples to save pennies.
Maybe it’s because with a few dozen people, the segmentation of teams, departments, roles, and behavior is inevitable.
Whether because of physical limitations of communication or human tendency towards tribal behavior, we fall into semi-autonomous isolation coupled with formal processes to ensure command-and-control, and a bureaucracy is born, self-generating and largely inescapable.
Whatever the reason, it’s a tar-pit.
Source: A Smart Bear | 2012