Digital is not a house

Most of us know how to build a house. Very roughly it looks like this:

1. The architect will design a concept,
2. the designer projects it and creates a list of requirements,
3. the construction company creates a detailed plan, including budget and time,
4. He will build the house,
5. your construction supervision gradually takes over the individual finished units,
6. when something is not up to requirements, then you let the company redo it.

The house is predictable. The oldest house found is in the Olduvai Gorge and is 1.8 million years old. We understand in detail the needs of the inhabitants of the house. We really know houses as a human being. In your lifetime, you've seen and maybe built a few of them.

With this knowledge, you will plunge into the digital world. And you try to apply the same procedure. Logically. The architect works at first glance as a graphic designer. So what you want, you have to be the first to draw.

1. The designer will make the concept to your liking.
2. The business analyst will do a technical analysis. The agency will develop a detailed plan including budget and time.
3. The agency produces software.
4. You gradually take over the individual planned milestones of the project.
5. When something is not up to requirements, you let the company redo it.

In the course of the work, you find that a digital project is not a house.

1. You want the concept to your liking, so you describe your requirements to the designer and then fine-tune it to the last pixel. It's nice.
2. The requirements you delivered to the agency ahead of time are proving insufficient. You can see it at a glance. In retrospect. The moment the agency delivers something to you. So you let them redo it until you're satisfied.
3. Logically, the agency does not want to redo everything for free, so you pay to multitask. It's their business model. Designer doesn't want to do it for free either. You will exceed the original budget three times.
4. After a great deal of mental strain, the project ends. You run it. Nothing is going to happen. Your app won't earn you a single crown. You are not Steve Jobs. I'm sorry.
5. After a year and a half of hell, you close the project with the fact that the agencies and designers are k*k*ti.

The second time you say to yourself, “I'm going to be smarter”. You go to the agency and you tell it something along the lines of, “Hey, I know how houses are built. When I build a house, it just stands. How will you guarantee that my app idea will make money? “. The Agency replies:

1. We can't guarantee you that.
2. We will guarantee you X, while X is definitely not money. (and at some point if we skew the metrics so that X comes out...)

You decide to take risks. You choose the same procedure as last time. It will turn out the same as last time. A digital project is not a house.

“The definition of insanity is doing the same thing over and over again and expecting different results. “
‍-- Albert Einstein

A digital project is not a house. The future inhabitant of the house pays for its construction. He wants the house to meet his needs. The client of the digital project pays for its construction. And that's where the similarity ends. Software has to meet the needs of customers and users out there. You are not addressing your needs. You solve their needs.

The problem is not with the agency. The problem is in your head (I know, they're k*k*ti, you're angry, now even at me). Forget that a digital project arises just like a house. Forget about transferring your business risk to suppliers.

At the same time you want your minimizing risks. So you have to start doing things differently than with millions of years of proven concept of building a house. Software has been around for 200 years, cell phones for 20 years. You must be smarter than last time.

What's up with that? Let's go through a few situations in the lifecycle of digital projects and products.

1. We have an idea, we don't have a business, we don't have customers.
2. We have an idea, we have a business, we don't have customers.
3. We have an idea and a queue of customers waiting for the first version.
4. We have software, we have customers and we want more of them.
5. We have software at the end of the life cycle.

1 ️ ⃣ We have an idea, we don't have a business, we don't have customers

Your idea must work on paper in the first place.

Sit down to excel and calculate gross business model. What people are going to pay us for. What will be the cost. When do we get to the plus? Is it worth doing?

If it pays to do it... what is our new business really better at than the competitive ones? How do we break through in the market? To do this, we need to navigate the situation.

When we are oriented... in what way protect our future margins from the competition? There are several ways, we need to at least start talking about them.

Let your thoughts be answered by someone experienced. I like my ideas... and at the same time they are all not worth it for us to switch to 2 ️ ⃣. Each subsequent stage is significantly more expensive than the previous one.

We teach market orientation & long-term competitive advantages at Strategic thinking.

2 ️ ⃣ We have an idea, we have a business, we have no customers

Don't program anything. Don't program anything. Don't program anything. The current “agile” approach says you need working software to know if you're delivering value. Forget about it. You don't need to build an app to get an idea of whether people will want it.

“If you're product actually exists when you start selling it to your first customers, you've done too much. “

-- Alex Lieberman (dollar billionaire)

There's a high chance it won't work out. You don't want to spend one euro cent more than you actually have to. Before you program anything, you need to start reduce 3 product risks:

1. Do customers have a real need?
2. Is our idea understandable to them?
3. Are they willing to pay for it?

Until you get crucial signals in these three areas that you are solving for people out there a real problem for which they are willing to pay the price that will feed you... don't program anything.

Signals will give you customer research and design probes. We both teach Strategic design.

3 ️ ⃣ We have an idea and a queue of customers, what are waiting for the first version

Customer queue = they already paid us something and now they are waiting. Make that first version. You have several options for how to do this.

1. Suddenly — the so-called waterfall. You specify all the requirements and someone will do it.
2. Incrementally -- you specify the minimum requirements, someone does it, then you specify the next, someone does it...
3. Iteratively -- you specify the minimum requirements, someone does it, you verify with customers, you improve it, and when it's good enough, you add the next bit, you verify with customers...

Software isn't here to make you like it. The software is there to meet the needs of your customers. The waterfall at innovative ideas hurts your wallet. Increments to your liking as well.

So you want an iterative approach. Having the signals that you are solving the right problem is cool. Now he's still you need to solve it right for your customers. NOT FOR YOU. For your customers. Leave the ego behind the door. Better take your money away.

For an iterative approach, you need your own team of programmers and designers. You started a startup. In theory, the agency can help you with some proof-of-concept solution. If it's going to work in the long term, you need to build your own team.

That's really expensive. That's why you have that queue of customers, calculated math, and signals that everything is going in a good direction. You're no greenie.

4 ️ ⃣ We have software, we have customers and we want more of them

Roast. Your software is a money factory. You develop what you have. You do ongoing research. Agile to complement functionalities. You strengthen marketing and business. You have a built up team of people to deal with it.

Your CEO has a vision that he communicates to the team. You make investments so you don't need them anymore. You scale. You solve completely new ideas using the methods described in 1 ️ ⃣, 2 ️ ⃣ and 3 ️ ⃣.

Sunshine.

5 ️ ⃣ We have a business at the end of the life cycle

The sun has gone down.

Someone has solved the needs of your customers in a way that you can't compete with. You can't even catch up with him. You fell asleep on your laurels.

Slowly but surely you fall into oblivion... maybe your customers, or business partners don't know it yet. Because of your knowledge of the market, you are clear about this. There won't be a dog barking at you in a few years. An example is the strategic situation of European automakers outta Past Newsletters.

Looking for a new direction. You are getting to point 1 ️ ⃣. Forget about the gradual development in point 4 ️ ⃣. If you are to thrive again, you have to start all over again. Your inner inertia will be terrible. Fight it, because otherwise the sun will never rise again. Inertia kills companies.

Thoughts in conclusion

• 80% of digital designers will design a concept according to your ideas. They're not designers, they're documentarians of your design. You don't need them unless you're a designer yourself and you're looking for someone to draw it really nicely. If the designer asks you, “What do you want there? “, so just fire him. Or become a designer yourself.
• 19% of digital designers know how to solve phase 4 ️ ⃣. Developing something that already works. It can be an application, an e-shop, a website... when they iteratively improve an already working state. A typical example is the corporate design-research team at a bank.
• 1% of digital designers can solve phase 2 ️ ⃣ + 3 ️ ⃣. Search for innovative solutions. The methods used in 2 ️ ⃣ + 3 ️ ⃣ are completely different than those from phase 4 ️ ⃣. They need a completely different mindset. It is an order of magnitude more challenging to create something new than to optimize an existing one.
• 95% of agencies will provide you with outputs according to your requirements. This may be relevant in stages 3 ️ ⃣ + 4 ️ ⃣. At the same time, nowhere else. If you have a new idea, you first need to go through stages 1 ️ ⃣ & 2 ️ ⃣.
• Phases 1 ️ ⃣ and 5 ️ ⃣ do not need designers. They need strategists. My advice is: “Be your own strategist.” You have to execute your strategy afterwards. Only then will you know if it works. We will empower your inner strategist Strategic thinking.

Thanks for making it all the way to here. I keep my fingers crossed for your digital projects!

“You can recognize a good idea by having a queue of paying customers asking when it will finally be launched. “
‍— Jan Řezáč‍

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Reading for the weekend

Apple slashes Vision Pro production

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