Finding the Perfect Balance: Evaluating Startups and Growing Products

Aviral Vaid

Aviral Vaid

Sep 05, 20233 min read

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Finding the Perfect Balance: Evaluating Startups and Growing Products

In the world of startups and product development, there are certain metrics and principles that investors and product managers alike look for. These red flags and magic numbers serve as indicators of a startup's potential for success and growth. Interestingly, the same skills needed to evaluate startups can also be used to help them grow once investments have been made.

One key aspect that both investors and product managers consider is the concept of agile architecture. This approach recognizes the need for flexibility and adaptability in the ever-changing landscape of technology. However, it is important to note that applying this law of agile architecture doesn't always result in lowered operating costs. In fact, it often increases costs while benefiting the time to value.

Consistency and alignment are highly valued in any organization, but they must be balanced against the need for speed and autonomy. This means that sometimes, it may be necessary to deliberately duplicate code to allow for faster time to market. In other words, structuring architecture around teams can lead to more efficient and effective development processes.

Microservices, a modern software architecture pattern, aims to break applications down into smaller decoupled parts. These parts are then loosely bound together to create a cohesive whole. However, one of the challenges with microservices lies in dividing the application into small, logical pieces that can function as building blocks. Versioning plays a crucial role in this process, as it allows teams to build on top of previous versions without causing a snowball effect of changes.

When it comes to evaluating startups and growing products, there is no perfect solution. It ultimately boils down to a trade-off between cost, reuse, and consistency on one hand, and autonomy, adaptability, and time to value on the other. Organizations must decide what they value more and adjust their approach accordingly.

In the past, I have often asked clients whether they want to be the cheapest company or the best. These are competing goals that cannot coexist. While being cheap may be easy, achieving faster value realization and being responsive and adaptable require a different mindset and approach.

Now that we have explored the commonalities between evaluating startups and growing products, let's discuss three actionable pieces of advice that can be applied in both contexts:

  • 1. Embrace agility and autonomy: Encourage teams to take ownership of their work and make decisions independently. This not only fosters a sense of empowerment but also allows for faster iteration and adaptation.
  • 2. Prioritize alignment with value: When evaluating startups or developing products, always keep the end goal in mind. Focus on delivering value to customers and stakeholders, rather than getting caught up in rigid processes or unnecessary complexities.
  • 3. Foster a culture of continuous learning: Encourage experimentation and learning from failures. Embrace a growth mindset that values innovation and recognizes that success often comes from iterating and improving upon previous ideas.

In conclusion, evaluating startups and growing products require similar skills and mindsets. Both processes demand a balance between consistency and autonomy, as well as a focus on value and adaptability. By embracing agility, prioritizing alignment with value, and fostering a culture of continuous learning, organizations can increase their chances of success in the dynamic world of startups and product development.

Resource:

  1. "The red flags and magic numbers that investors look for in your startup’s metrics – 80 slide deck included! at andrewchen", https://andrewchen.com/investor-metrics-deck/ (Glasp)
  2. "Agile Architecture — the rise of messy, inconsistent and emergent architecture | HackerNoon", https://hackernoon.com/agile-architecture-the-rise-of-messy-inconsistent-and-emergent-architecture-e6801ab25b61 (Glasp)

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