The Risk of Building the Wrong Stuff

In a lean business model, we need to manage our risks. We sound very intelligent when we do this, but it occasionally leads to incredibly stupid behavior.

For example, we might insist on stealth mode development so that the risk of a competitor stealing our super special sauce is mitigated. But here’s how the folks at LUXr represents the Time Spent Building Stuff vs. the Risk of Building the Wrong Stuff:

Building the Wrong Stuff

Risk from Building Wrong Stuff vs. Time Spent Building Stuff

Of course, if we build the wrong thing we get the joy of going back to the start. And since the only point at which we realize we built the wrong thing is at the end of our super long development cycle and PR blitzkrieg launch, we’re kind of screwed at that point.

Contrast that with working in…

Small Iterations

Risk from Building Wrong Stuff vs. Time Spent Building Stuff with Small Iterations

We can still build the wrong thing, but in this case, we only need to revert a little bit of code and/or marketing before we can proceed in the right direction. So our project never accumulates too much business risk.

Hyperbolic Risk

You may object that even if you work in one year long waterfall development cycle, you’ll only make some small errors and in that case, you can just go back a little bit and fix that one small problem. Then there wouldn’t be that much risk, right? Just like the small iterations. you’d just need to tweak your product.

Without getting into the deep technical reasons why this is going to be completely impossible if you’ve made a fundamental architectural error, let’s just look at it from an experimental point of view. How do you know which part of your product is screwing up the user experience?

The more features you build, the harder is it to tell what your users hate.

Do your users want more buttons and widgets? Do they want less? Does widget A plus button B make a bad user experience but both together are confusing?

Put another way, the more variables in your equation, the harder it is to solve.

But even worse, as we build stuff for years in the basement, the market moves on.

The risk in our long development cycle looks suspiciously like this:

Risk from Building Wrong Stuff vs. Time Spent Building Stuff with Real Risk


The risk of building the wrong product isn’t a linear function. It’s hyperbolic.

The actual risk may approach infinity as we compound the risk of building the wrong thing, the risk of being unable to debug the user experience, the risk of running out of funds, and the risk of feature creep.

The biggest risk is that you’ll never launch at all.


So…what should I post next? Tweet to tell me what to write:

Show me how to test product market fit!


How can I do lean startup in my friggin' huge company?

Discussion (1 comments)

  1. Micah Alcorn says:

    This is the story of my life. As an idea/business-guy-turned-developer, I tend to creep into waterfall because of the perceived technical risk. I feel like I have to learn how to build the product, prove that I can build it, and then I’m comfortable launching. Of course the result is “up and to the right”, but on your chart, not a revenue chart.

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