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Alec Levenson's avatar

Outstanding analysis and insights Shonna!

Yetvart Artinyan's avatar

Thanks, Shonna

Your distinction between needing variability while finding the shape and consistency once the shape has been found made me think about where that transition actually happens.

I’m not sure product-market fit, or even the first real traction, tells us that the search phase is over. It may only tell us that something works well enough under the current conditions.

A startup becomes a scale-up, later an SME, customers change, competitors react, technologies shift, and parts of the business model that once worked may stop working. So perhaps it is less a transition from search to execution and more a continuous evolution of the business model, with different parts becoming uncertain again at different times.

And I think there is another tension here. As companies grow, they become increasingly good at business excellence: maximizing and optimizing the existing business model, standardizing what works, reducing variance, detecting anomalies, and eliminating them. That is exactly what we would expect from a well-run organization.

But business excellence also kills variation.

And some of that variation may contain the first signals that customer behavior is changing, an assumption is becoming obsolete, or a different business model could work better. What looks like noise from the perspective of today’s model may be valuable information from the perspective of tomorrow’s.

So I keep coming back to this: how do we know which variation is inefficiency to eliminate and which variation is information we need to preserve and learn from?

Because becoming exceptionally good at business excellence might also make an organization exceptionally good at removing the evidence that tells it when the existing business model needs to change.

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