Identifying and Making Trade-Offs as a Product Developer

Hosts

Identifying and Making Trade-Offs as a Product Developer – Transcript

 

Bob Moesta

Tradeoffs are basically constraints that you’re pushed between where you can’t have both sides, Francis Frei says it best; price, quality, and speed, you can’t have all three, you’ve got to pick two. And one is going to have to not be what you want, because it’s just not possible.

 

Bob Moesta

Welcome to the circuit breaker podcast where we challenge the status quo of innovation and new product development. We’ll talk about tools and skills and methodologies used to build better products and make you a better consumer. I’m Bob Moesta, the co-founder of the rewired group, I’m one of your co-hosts and we’re joined by Greg Engel, who is my co-founder and chief Bob interpreter. Join us as we trip the circuit, and give you time to reset, reorganize and recharge your brain to build better products.

 

Greg Engle 

So today, we’re going to do another continuation of deep diving through your book. We’re going to land on tradeoffs. First, what is a tradeoff?

 

Bob Moesta

Tradeoffs are basically constraints that you’re pushed between where you can’t have both sides, Francis Frei says it best; price, quality, and speed, you can’t have all three, you’ve got to pick two. And one is going to have to not be what you want, because it’s just not possible.

 

Greg Engle  

And who should be making tradeoffs? 

 

Bob Moesta

It’s a great question in terms of whose tradeoffs are we making? As opposed to what tradeoffs do we need to make? Because I can make it from my perspective about the product? But in the end, it’s what’s the tradeoffs the consumers are going to make about the product or the service? And ultimately, how do we understand and mimic their tradeoffs into how we design the product?

 

Greg Engle 

I asked a question because it’s a trick question. Because whoever’s problem it is, you have to start making tradeoffs, or start doing things. This is where the two skills intertwine, empathetic perspective and trade offs work hand in hand, because you have to understand from a different perspective, what it is, and two of the big perspectives are for developers, or business leaders are between supply and demand. How do you make sure when you’re faced with this tradeoff, that could be margin and all those different things for that, and then adding a feature or benefit that adds cost? How do you go through and make sure you’re thinking of both sides? And what’s the practice you should be giving yourself to say? Am I looking at it from both sides before I make the trade off?

 

Bob Moesta

And so ultimately, we have to be able to see it, like you said, empathetically through the different perspectives of am I willing to pay more for that feature? Or is that feature going to be something that helps me ingrain the habit? Part of it is to understand it from the demand side? The supply side is how much does it cost? How technically possible is it? Is it something that is going to be something we’re going to build upon? There’s a whole bunch of different objectives from everybody’s different side. And part of it is then being able to see that whole picture. So tradeoffs can only be taken from almost like an omniscient or a big picture perspective, you can’t do it from only one successfully.

 

Greg Engle

And then the other thing that I think we run into a lot is the cascading effect of tradeoffs.

 

Bob Moesta

Yeah, the way I would tell them tolerant stack, it’s multiple dimensions. So you realize sometimes you’re willing to give up one thing to get the other and they add up. It looks like they’re making one trade off but they’re actually making five or six.

 

Greg Engle  

And then if I have to look through time and think of these tradeoffs, or how it’s going to affect the next thing, what skill is that?

 

Bob Moesta

So that’s still empathetic perspective around being able to play things out through time, but you have to realize, part of the reason why I like identifying or managing tradeoffs is the fact that it’s literally the combination of all four other skills, I can’t actually make a trade off if I don’t have contracts. I don’t know where the thresholds are. I want to know where it breaks? Because where it breaks gives me a notion of how far I’m willing to go? It helps me with the tradeoff. And so without that information, it’s pretty hard.

 

Greg Engle 

How soon in the process of developing something should I start thinking about the tradeoffs I need to make?

 

Bob Moesta

I think there’s two steps. First is identifying the trade off, identifying the contradiction if you like, we can do this, or we can do that but it’s going to be hard to do both. And, technologically, those are places where we want to start where maybe we can decouple it and make it lighter and stronger, for example, that’s all the TRIZ methodology. The fact is, when we can’t, we ultimately have to be able to frame it and say, What are the things that are diametrically opposed to each other? And which one is more important to satisfy? 

 

Greg Engle 

One of the things that we see a lot is people that are good at this skill, or the skills in general, are people that can bubble these things up very early and maybe not have to make the decision, but at least understand the tradeoffs they might have to make down the road so they can learn more. Because it’s about learning and understanding and seeing things sooner and sooner through your development process. So that you’re ahead of the curve of making rash decisions at launch, because that’s the worst time to make.

 

Bob Moesta

That’s the worst time to make the tradeoffs. My experience, I’m least clear because it’s not panic, but it’s the point of ‘we just got to get this out here’. 

 

Greg Engle 

Before you start making an irrational decision. 

 

Bob Moesta

I’ll say from a micro level, they’re very rational. But from a big picture perspective, usually that is wrong.

 

Greg Engle 

I want to fix that because you’re giving somebody the out. And we don’t want to give people the out if they are irrational decisions, because you are up against that time wall that you think you have to launch. And then you say, we’re going to fix it later, what we know is it costs us a lot of time, and a lot of money and a lot of efficiency on other things we’re trying to do. So why not try to frame those things up earlier and that’s our challenge to people if you can identify trade offs. You don’t have to make the decision right now to get more information, but just know they’re coming, know what other things happen. Because that cascade effect, I’m going to make the tradeoffs and say, my margin is more important than anything. Well, that affects a gazillion things down the road. So if you are beholden to a line pricing strategy or something like that, it’s good to know that upfront, it’s going to affect all the other tradeoffs, you make your decisions because that’s going to have to be a decision that’s anchored. 

 

Bob Moesta

So as a developer, what you and I are always trying to do very early on is identify where are they? Where are we going to have to make tradeoffs, (we’re not trying to make them we’re just trying to say where are they?). Then what we do along the way, we’re prototyping to learn, and we’re framing why does the contradiction exists? We’re using causal structures to understand it. When we get to the point where we’re ready to prototype and integrate, integrate the prototype, or make decisions about what to go do next. Ultimately, we’ve been thinking about it for a while, we spend time on these contradictions or on these tradeoffs to say, where should it be? And then we’ll prototype; if we go this way what would happen? If we go that way what would happen? So, it’s teaching yourself to make sure that I’ve got enough perspective on the tradeoffs 

 

Greg Engle

What’s important there is we have to understand and make sure we’re unpacking our supply side really good. What is our business model? How do we make money? What channels are open to us? Who is our customer? And we have to know the demand side? What does that customer really want? How do those people buy? How important are those people? We also have to understand our technical capabilities, what can we really do, because sometimes I have to make a tradeoff between my technical capabilities. If I have to go buy something, because I can’t do it, that might screw up the other two things. So I might have to make a trade off to do something that’s less optimal, but within our capabilities, and know that it will satisfy the two other buckets, but not completely. I have to work on something for phase two or wave two or whatever you want to call the next improvement. It’s one of these things of, make sure you have all the information in front of you before you make a decision as well.

Bob Moesta

As much information as you can have.

Greg Engle

And you have to get it from those three buckets don’t make it from one silo. Because a tradeoff made by one decision by one silo is a tradeoff that is wrong.

 

Bob Moesta

IT will be revisited 1000 times, the whole point is you want to make the trade off and you want people to understand that’s what it is and when we make this trade off we’re going to get these complaints and we’re okay with it because we’ve made this decision. As opposed to everybody complaining about this, but we chose that. So this is where the whole back end of the process of where people react to a whole bunch of things is part of it, because they don’t actually make those tradeoffs explicit and accept the fact that there might be some things that people will complain about, and it doesn’t matter. 

 

Greg Engle 

So Katherine wins the bet. She said, you were going to bring that one up. And then when you bring that one up, I have to ask, that quote confuses the hell out of me every time you say it. Because how do I know what a kick ass half is? And how do I know what a half ass hole is?

 

Bob Moesta

What I would say is, it rings true to me from my experiences of working in big corporate, where they want to keep adding more and more and more features. And I can’t get every feature, in their mind I’m better off having eight things, eight features that are okay, then four features that are awesome that they’re willing to look past the four I don’t have. Time and time again, when you’re launching new things. It’s not about getting everything right, it’s about getting the essence right, the right things. That’s where the demand side comes in to say, what’s the essence of the job.

 

Greg Engle

That’s why that quote confuses me because if you know demand, you don’t have to half ass anything, you have to make tradeoffs of what to give them in the first phase. But it’s still an awesome thing to them because you understand them.

 

Bob Moesta

The real point you’re making is that when I say it that way, I’m saying it from the supply side. The way I was taught on the supply side is you‘ve got to get it all done by this time, the fact is, if I’m going to get it all done, it might all not be great, but it’s all going to be there. And that’s what we end up running at the end to get just the things we promised in as opposed to what are the essential things we need to do? That’s the power of jobs helps you with trade offs because it starts with what the customer really want? What are they willing to trade off? And then ultimately, how do I mirror those tradeoffs back into my product? Based on what they’re trying to do, not based on what I want to do?

 

Greg Engle

Yes, I think demand, we talk so much about nonconsumption and understanding, and jobs is about finding the people that got through the wilderness and decided to change. We’re trying to help people that haven’t made that leap. That’s where you get your growth from the people that are trying to follow people that hack their way through this wilderness. They don’t know what’s possible, so doing something that has four or five really good features that solves the struggle for them, is immense progress for them. Then knowing that I can then add other things that I made tradeoffs on today, to make sure I’m balancing supply and demand, I almost tell people air on the side of demand, but not so much as you don’t have a business. 

 

Bob Moesta

Exactly, you have to be able to profitably service the job. If you can’t profitably service the job, Clay would always say, you’ve got to seek profit first, because if you can’t do the job, it’s really hard to reduce costs afterwards, because you don’t know the true value code. Taguchi would always say, what you want to do is figure out what’s the absolute minimum cost you could do, and then only add things that add value. That’s how he will describe prototyping to learn as, I want to figure out the absolute base I can do it, then what are the things I need to add cost and performance. Otherwise, to go back and rework the product afterwards is not the approach (that’s the way I was taught).

 

Greg Engle

That cost you millions of hours.

 

Bob Moesta

The thing I’m realizing is for a long time in my life, I raced to a deadline that somebody else chose that was not rational and it forced me to make tradeoffs. At the same time, I didn’t realize that time was something I can also use as a tradeoff.

 

Greg Engle 

I want to talk about that a little bit because we often tell people (and it’s one of your favorite things) is create a time wall. I think a time wall is important, I think it’s a tool and you have to have it, but you can’t be totally driven by that time wall either because if you find things that you need to rework or you need to do things, you have to be a little flexible. It’s a curse and a blessing all at the same time. But know that’s also a tradeoff. 

 

Bob Moesta

Using that tool is forcing you to make a trade off and it’s forcing you to think about it in a different way. I like the notion of a time wall where an expiration date forces me to eventually go. I’ve got to take a step back. So instead of trying to pack everything in, if I can’t do it, then maybe I shouldn’t launch it right now.

 

Greg Engle  

In our coaching that we’ve talked to people about is, go ahead and create that time wall. But make sure it’s grounded in realistic expectations; realistic time and you have some measures or metrics attached to that time wall. Just because you had the time wall, doesn’t mean you have to launch. I have to make sure I’m hitting this part of my business strategy, or I have to be hitting this mark, you have to have some kind of metrics in there to say, yes it’s time to do something.

 

Bob Moesta

The interesting part to me is the metrics themselves, which is actually a big key because it gets back to empathetic perspective where most people have metrics based on what they planned. What we think people want for example. I always have a very different reference point, instead of trying to look forward, I look back and say, how much progress did we make? How much progress is this for the customer? So the metric to me is about the distance they’ve traveled, not the gap between what I said I was going to do, and what I’m going to do.

 

Greg Engle 

When we’re developing, it’s different between developing and launching, when you talk about metrics. When we’re developing, I often think of the metric being in erasable ink, it shouldn’t be gospel, it should be a guide, not gospel. It’s things we’re trying to get to, and the management gets to decide how hard or how soft that target is. I often see people put this metric out there and it’s some ridiculous thing that they just made up, and they make it permanent ink and there’s no way to ever get there.

 

Bob Moesta

Well, the other thing is we never explore beyond where that limit is. What if we were to do this, but it’s like we could never do that. Part of that understanding where those limits are. So, prototyping to learn is a lot about finding the limits and what happens and where they are and how to pick the best target.

 

Greg Engle 

I think the reason why I bring it up is because I think about the milkshake story, (I know you hate the milkshake story) it’s very important, because the milkshake story has been told in such a way that it seems easy. But one of the metrics, or things that were important to the to the restaurant was productivity or labor. They didn’t want to increase labor. That was a that was a hard line. And it was a tradeoff they made? 

 

Bob Moesta

Well we didn’t even see it. That was the whole thing is we didn’t see that until the end, that’s the point.

 

Greg Engle

That’s the point is there was this thing out there that we that was in hard ink, that if we would have actually thought about it a little bit more, and able to quantify (and that’s the hard part) quantify what this new innovation would lead to, nobody knew it was going to be however many billions of dollar industry it is today, nobody knew that. Nobody could see that far in the future. But that hard metric is that one thing destroys a new opportunity, a huge opportunity for the first entrant into that thing. That’s my point is, I think sometimes we have to realize that as we’re developing, we’re crawling along, and we’re trying to figure out things. And it’s important to have time as a constraint, it’s important to have metrics as a constraint. But having open dialogue between management, and the developers of what those things mean, and how it impacts and being able to help developers frame tradeoffs for the executives, is a very important thing. We had an example of a product that was launched, and they had to go through a certain pricing strategy. The pricing strategy was broken and the product did really well, it was gone for a year. And the reason it was gone within a year was because it actually didn’t create any profit, because of the strategy of I couldn’t be more than this. 

 

Bob Moesta

They wanted to get so much volume, and they thought the price point could only be a fixed price point. They were trying to please the investors in terms of how they wanted growth. They had all these different things but, in the end, there was no money. Making tradeoffs is like the integration of all the other four tools, the skills. At some point, it’s hard to start with making trade offs but once you have these other four building blocks, it’s actually really easy to see how to make tradeoffs.

 

Greg Engle 

I think all the tools blend together and work together and that’s why it’s important to try to hone them and know that you’re going to be stronger in one than the other, it’s not something that you’re going to get, you’re going to get some equilibrium between all of them. That’s the important part of having a team, that maybe somebody’s really good at empathetic perspective, the other person’s good at framing the tradeoffs, or whatever. Those are important things that as you grow your team, especially as a entrepreneur, or somebody in a startup, to understand where people might fit in the tools, and how to help them get up but also just know that if you’re not good in one, you should get a partner that’s good at the other one.  

 

Bob Moesta

That’s why we’ve been partner for 20 years.

 

Greg Engle 

That’s the important thing of balancing those out, you don’t want to be overextended in one and weak in the other where you can’t actually do something because that actually causes stagnation. 

 

Bob Moesta

So what’s the assignment? 

 

Greg Engle 

I think today, really all it is, is looking back, we talked about a postmortem before, (if you haven’t heard the postmortem one, it’s the last one of the first season, go back and listen to it). I want you to now take a tradeoff you’ve made in the past and I want you to do a postmortem on it, that I have all the information that I should have had to make that trade off. What other information would I’ve asked for now that I saw what that trade off did. Do a postmortem on a tradeoff you made in the past. And it can be personal, it could be professional, it doesn’t really matter. Because we make personal tradeoffs all the time, especially if you’re in a family, or making tradeoffs between everybody doing a bunch of different things. So take one of those and I want you to post mortem to what information that I have at the time? What information do I know now that I wish I had then? Could I have used somebody else’s sounding board? What are those other things I could have done to make that decision better?

 

Bob Moesta

Yeah, if I could do it over what would I do differently? 

 

Greg Engle 

That’s it, perfect.