Controlling Costs in an Agile World

26.06.2019 Comments off

Originally posted on DLabs Medium site by Matt in 2018.  At the time of this posting, there is still not unified thinking in this area.

aka. What every technical and non-technical founder needs to know about running an agile technical team.

Agile Development teams focus on continuous value (to the business) delivery not continuous progress to a fixed feature set. As a result, traditional cost accounting, cost control, and budgeting will not work. This shift to agile changes everything around how founders must do budgeting, cost control, communicating with investors and evaluating progress.

BEST PRACTICES

Understand your unit economics. The team should have a measured velocity (how much progress it can make per sprint) and a basic team structure with a burn rate. Double the burn rate should approximately double the velocity and double the other business benefits the development team delivers (eg. quality of code, usability, feature scope growth, performance, reliability…)

Just in Time Estimations. As the sprint starts, the scope is refined and effort estimation is perfected through a full bottom-up (granular), collaborative techniques (we love estimation poker). Prior to that, larger (Epic) scope stories are estimated in a faster top-down method in larger blocks with less precise descriptions.

  • Work planning (and commitments) need the highest precision and just before work start is when there are usually the fewest unknowns. Detailed estimates only when work is about to start.
  • Overall work prioritization and cash flow planning decisions need less precision and these decisions must be made when there are more unknowns. After a point, more effort spent on estimating does not usually improve the quality of those decisions thus features not in immediate development have only high-level budgetary effort estimates.

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4 Phases of Product Development Re-imagined

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Originally posted on DLabs Medium site  by Matt in 2018, but the concepts are easily generalized.

At D.Labs we’ve looked at agile product development from many angles and written about them on this blog (X Driven Development, When is agile worse?, Controlling costs in the agile world, What marketing agencies can’t offer startups?,…). This is another angle that could get you faster through validation and save you a lot of gray hair.

Most company founders have an intuition about what the market needs and what is wrong with existing solutions. They then start solving a puzzle in their head around what kind of digital product could solve this problem: features, specifications, perhaps even user layouts. At DLabs, we call this “Intuition Based Development”. It tends to be the least efficient and most expensive way to build business value. Not only is the intuition perhaps wrong, but the only ‘good enough’ point is securely in the head of the designer so everything gets built to a relatively high level (Although it never feels that way to the founder in-the-moment).

The high cost of using intelligence and experience instead of being systematic & incremental.

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Raising Prices

13.06.2018 No comments

When and how can I raise prices?


First, let’s start with an assumption that your product is great value and your existing pricing strategy is leaving too much money on the table.  (See other blogs on licensing strategies and setting prices).  Let’s also assume we are talking about a business that has repeat purchasing– like a subscription.

For new customers, you can normally just raise your prices without any unsuspected consequences.  Pro tip: Signaling an upcoming price increase can trigger a sense in urgency in many who cannot otherwise decide quickly.  Legacy customers, however are a more complex Read more…

Be Proud of Your Pricing

15.05.2018 No comments

At the end of the day, the “correct” price is the price where both the buyer and seller agree to a transaction– Everything else is theory, guidelines, and positioning.

Pricing

How should a customer think about price?

  1. Value.  This is the one they teach you in any marketing or sales class.  In truth, if your customer is pushing back on price, the most likely reason (and most easy fix) is to understand how the customer perceives the value and then question if that perception is correct.  When setting a value based price, make sure to Read more…

Customer Communications in 2018

16.12.2017 No comments

We now have many ways to communicate with customers, too bad they never read or answer what we send

Email is still relevant, but it is easier and easier to get lost in the mountain of communications that your customer receives every day.  Here are a few best practices:

Three emails to get one answer

It is now normal that you will need to remind someone 2 times to get a response.  Assume this is the case and plan your reminders in advance.  You want to Read more…

Why Real Salesmen Are Bad at Product Launch

15.02.2017 No comments

I have long since recognized that there were two distinct types of salesmen.  (see https://www.telekta.com/blog/2009/03/production-vs-protype-sales/)  The person that has a business card that says Sales is usually the one that brings in all the money that keeps all the rest of us in paychecks.  New professionalism in startups, has now created some new vocabulary to describe the other types of sales people.  My expertise as a “prototype salesman” can now be described as Discovery and Vaidation Sales in the vocabulary of modern startup and product launch.  While ‘normal” sales is better described as Scaling Sales (also Efficiency and Extraction stage)

Startup Gurus for some time have been warning and now there is real hard statistical data now prove that “premature scaling” is the biggest cause of startup (or breakthrough product launch) failure.  Read more…

Benefit Buffet Fallicy

14.04.2016 No comments

When launching a product (especially when you are a small startup), there is a common mistake that most everyone makes the first time around: benefit inflation.  The problem arrises when someone thinks of a small Buffetchange that could be made to the product that might appeal to a particular group of users.  As they add more and more features/benefits, the hope is that the product will appeal to a larger and larger audience and better justify its price point.  The reality is that additional features/benefits do the opposite: they restrict your market and reduce the perceived value of an otherwise good product.  To explain how this happens and how to avoid it, we will make a few mind experiments: Read more…

Systematic Referral Selling

13.08.2015 No comments

In a previous post I talked about “Referenceability and Introducabilty”— now let’s scale this.Path

In a previous post I introduced the concept of Connectors (people who can introduce you to Targets) and how to think of them in terms of Introducabilty & Referencabilty as well as how to ‘activate them”.

Can this scale?  Most people would say no.  In my experience, the answer is Yes.  How?  Starting with the obvious assumption that you have a great product or service and Read more…

Referenceability & Introducability

06.08.2015 No comments

Take the express lane to getting customers for large, complex products

introEvery salesman is desperate to avoid the dreaded cold call.  People with great networking skills have always been able to get introductions to prospective customers.  Social networks like Linkedin have revolutionized this type networking by making everyone able to find a 2nd degree connection within almost any potential customer.  The technique is simple– it ends with your Connector sending an email to the Target (and putting you on the cc) introducing you as a good guy to know.  In my terminology, your Connector has high “Introduceablity”.  Often such a Connector can introduce you to several others over time if you don’t abuse the privilege.

Introducability gets you the Target’s attention and results in a high probability of a meeting taking place.  Unfortunately it does little to build trust or get you any closer to closing a deal with the prospect.  For this, you need another type of Connector– one with “Referenceability”.
Connectors with Referencability Read more…

3+ Great Books for Sales and Marketing

15.02.2015 No comments

Three books I find useful in launching into new markets  (updated since first posted in 2009)

3 Great Books

3 Great Books

I am not a big reader of sales, marketing and business books.  However, whenever I am working with someone who is interested in further developing their ability to sell and market, I find myself recommending the same three books.

The first is Rob Jolles book, Customer Centered Selling.  It is unlikely that you have heard of this book as Rob is a relatively minor author in the field of spin/consultitive/complex selling, but I find his presentation is by far the best.  He is a veteran salesman and sales trainer from Xerox.  For me, there were two world class Silicon Valley companies in the Eighties: the great engineers came from HP and the great salesmen came from Xerox.  While both have lost their shine in recent years, they were in their time factories for their respective talents.  Rob concisely communicates sales as a science and a process for large complex consultative sales.  Rob also does a great job of explaining why salesmen (real salesmen, not order takers) are a good thing for society.

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