Exponential vs Incremental Thinking
When building products, incremental thinking gives us a fake sense of progress and might prevent our product and company to reach new heights.
I'm back after a few weeks of taking a break and focusing on my advisory practice as I've made it my main job for the next 6-12 months. In this new role, I get to talk to founders and other product managers, mainly from early-stage startups. Although companies and industries vary, I've noticed some common patterns and questions, such as developing a successful product practice and validating if what they're doing is right.
Today, I will not be discussing that topic. However, I would like to share that their product management practices usually tend to favor incremental thinking. While this approach is not necessarily incorrect, if you are still figuring out your product-market fit and refining your product vision in the early stages, it may prevent you from testing different ideas until you face a catastrophic event. In this entry, I will cover the concepts of Incremental and Exponential thinking, the patterns I have identified, and some thoughts on how to escape the incremental thinking trap.
Incremental and Exponential thinking
As always I’ll explain the basic principles for the sake of the length and readability of this entry, but here’s a recommended read by Ken Norton that covers the topic deeply.
Incremental Thinking: Also known as 10% thinking, it is the traditional way of making improvements in a product or process. It sets an anchor on what you have now (product, market, process, etc.) and starts building small incremental changes. It’s a way of making low-risk improvements.
Exponential Thinking: Or 10x thinking, as Ken Norton mentioned in the article above, it’s about thinking about maximizing value for both the business and the user without focusing too much on effort. Effort and risk are shackles that prevent us from thinking bigger as we are afraid of losing what we’ve built now, even if the opportunity looks brighter. And there are ways to think big and execute fast, as a previous number wrote.
Incremental Thinking and the Product Management Process
Let’s say we’ve launched a product and we started seeing some signs of initial traction. Suddenly it’s easier to sell the product and we start getting customer feedback and requests, so we start populating a backlog with cool feature ideas or improvements which build on top of what we already have.
6 months pass and we’ve delivered almost all of our promises but growing is getting harder, we are running out of ideas as many of them are hovering around the problems we were solving what to do now?
Pulling the same levers won’t make it and the problem is sometimes we spend too much time on this zombie phase, burning money, trying new 10% stuff when we should be spending at least some time re-thinking our value proposition
We supposedly can’t spend time thinking for several reasons:
It’s hard to let go of what we have even if it’s not much: covered deeply by the article from Ken Norton. The fear of losing is bigger than the possible reward.
Resources constrained: we are supposed to be shipping not planning, typically in early-stage startups.
Committed roadmap: The other side of the story is, a big company with a multi-year roadmap that no one can change because is tied to incentives.
The pattern observed is that all of these forces tend to make the product team manage the status quo. This is true for big and small companies, with the only difference being that the actions taken differ. In one case, the team keeps inertia by doing a lot within the same problem-solution space, and in the other case, the team keeps the backlog order without challenging it.
What can I do then?
Set time aside to review the strategy, the bigger the company the lesser the frequency.
Small companies: Basecamp’s Shape Up methodology has some nice principles around six-week iterations. The idea is to set focus topics in 6-week cycles where your teams ship, learn, and challenge direction.
Big companies: The usual cycle of a 1-year strategy with a 6-month review works pretty well.
Promote a culture of outcomes in your product team and company instead of outputs. Product strategy reviews should focus on how teams will ‘move the needle’ and create value for the company, also important to encourage teams to change plans if they find better ways to produce value. Here’s a great article from Gibson Biddle on this topic.
Align incentives: start rewarding your teams for ‘moving the needle’ instead of just shipping features. This holds true for the majority of projects, but there are some exceptions e.g. platform work, refactoring, etc. where you need to ensure the output as it’s usually an enabler.
Think about product strategy as a company-wide responsibility, not just Product. We are just enablers and the glue that holds things together.
If you've been dealing with any of the problems I talked about in this article and want to chat about potential solutions, hit me up for a free consultation call. Let's talk about how we can team up and tackle these challenges together!