Startup School – Opportunity cost of perfection

< 1 min read

What other features are needed to make your product perfect? The opportunity cost of perfection is the cost of that feature’s addition if it delays the product launch. Ultimately, the incremental cost dictates what you build and what you ship.

You can choose the easy way out by agreeing to everything the customer has to say and then fighting it out internally by taking the “we can’t-go-wrong-by doing- what-the-customer-says” defense. On the technical side, the decision is complicated by the need to consider the financial, business, and schedule impact of technical and feature perfection. The business side is not aware of all technical issues, and the technical side finds it difficult to accept the strategic nature of decisions that disrupt its schedule or impose impossible deadlines. Who, how, or what defines the middle ground?

The Market. Of all the things that you would like to have in your offering, you need to decide on the balancing act that the market will accept—the middle ground that will get you to market ahead of competition and clear it in economic terms62. A market-visible, revenue-generating product is more important than a Lexus. Timing is more important than features. Getting it out there is more important than perfection. Testing the merit of the idea on a small pilot is more important than an elaborate and expensive rollout.

Don’t get me wrong. Try shipping a lemon and you are just as dead as you were with the Lexus. You aim for a solution that works somewhere between a Band-Aid and a move-in ready home; that doesn’t break the bank; that buys you customers, cash, time, and money; and that allows you to tuck away a handful of small wins that can be cashed later when you need them.