Thursday, June 6, 2013

Are you focusing on your Hot Dog?

Always ensure your resources are focused on the epicenter or your “core" and you can outsource whatever is non-core but needed.

A recent tweet by @spencerrascoff about "Sunsetting" product features that are rarely used got me thinking and then Spencer posted a follow-up comment that I thought was equally insightful and inspired this blog post.
"There is no hard and fast rule about how much usage is so little that it's time to kill a feature. At Zillow, it depends on usage data but it also depends, to a large degree, on how much maintenance is required for that feature, and what the opportunity cost is from a Dev standpoint. i.e., what else should that team optimally be working on"
Spencer is absolutely dead on when talking “opportunity cost” as a decision factor. Internal resources are precious and should ultimately be focused on your epicenter or your “core". Anything ‘non-core but needed’ can be outsourced. Anything ‘non-core and not necessary’ should be “pruned” or eliminated.

How do you determine what’s “core”?  Start at the epicenter. I like the "hot dog stand" analogy in the book "Rework" by the founders of 37Signals. It helps me limit scope creep and ensures everything we develop, is focused on our core. 
"If you’re opening a hot dog stand, you could worry about the condiments, the cart, the name, the decoration. But the first thing you should worry about is the hot dog. The hot dogs are the epicenter. Everything else is secondary. The way to find your epicenter is to ask yourself this question “If I took this away, would what I’m selling, still exist?” A hot dog stand isn’t a hot dog stand without the hot dogs. You can take away the onions, the relish, (the soda, etc) … you simply cannot have a hot dog stand without any hot dogs."


When I worked at GE, I made the tough decision to sell-off a very profitable business segment ("segment"), because it was not core to our business.  The fact that the segment was highly profitable was actually irrelevant.  In mind, there were two major decision factors:
  1. Non-core weakened our business. Any time we had to discuss or allocate resources across our business and to this "segment", it meant we were taking away resources from our own "core" businesses.  It meant we were spending less time and money making our core products, better. 
  2. It wasn't fair to the non-core segment either.  When I visited the HQ of this segment in 2007, I saw the evolution of their products in their showroom.  There were four versions of one product lined up against the wall.  In front of each product was a placard that read the date the product was released: in order they read something like: "1985", "1991", "1996", and "1999".   In the roughly seven years GE owned the segment, there was no significant investment into the segments main product line, effectively "starving" the segment.  This in turn hurt the segment's customer-base and sales team culture, and ultimately sales numbers.
It is imperative to constantly ask yourself, are we focusing on the core.  Are you dedicating your precious resources to develop a better napkin? better ketchup? or are you focusing on the hot dog in your stand?  First figure out what your core is and then make sure you're focusing your resources at being the best, at your "core".  You want to be known for having the best ________ (fill in the blank)  Personally I want to be known as having the best darn 'buyer data' around.  This is my "hot dog".  When people think of “buyers”, “buyer data”, and the demand-side of real estate, I want them to think of BuyerMLS. So with every decision, I'm asking our team, how does this help us improve our "core".

And so, a good question to ask yourself:   "Are you focusing your resources on the hot dog in your hot dog stand?" 

 

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