Future Work/Life is a weekly newsletter that casts a positive eye to the future. I bring you interesting stories and articles, analyse industry trends and offer tips on designing a better work/life. If you enjoy reading it, please share it!
This is the second part of the article, ‘Don’t fail fast, learn fast’, which was published earlier this week. Thanks for all the feedback from part one, it’s always great to hear from readers. And welcome to all you new subscribers!
Focus on what you can control
While the hypotheses I outlined above may have been fictional, AirBnb's founding story and their unerring focus on creating a personalised experience for hosts and guests is not. And neither is the flywheel effect that has driven the company's growth:
- AirBnB's favourable terms and easy-to-use technology attracted hosts to the platform, so the increasing number of available properties drew in guests.
- The two-sided review system created a level of trust that encouraged hosts to open up their homes and visitors to book their business trips and holidays in private accommodation rather than hotels.
- As the volume of people using the platform grew, Airbnb invested their rising margins into better tools for hosts and improved search functionality and support for guests.
- All of which led to increasing volumes of data, which is used to further optimise pricing and recommendations, resulting in more listings and more guests – and so on.
One point to consider as you apply these lessons to your business or work/life is where to focus your efforts. While you can hypothesise about the likely result of your actions, the nature of experiments is that they don't always work. So, instead of obsessing about the outcome, concentrate on guiding principles and what you can control.
In Airbnb's case, their mission is to create a sense of belonging for tourists. If every idea they test has this outcome in mind, positive financial results are much more likely to follow. If you flip that around and obsess about outputs and financial metrics, you create the conditions for bad incentives, known as Goodhart's law – "when a measure becomes a target, it ceases to be a good measure".
Amazon is also a proponent of this approach, fundamentally believing that testing the parts of the customer experience they control will ultimately lead to its financial success. As Jeff Bezos said in his April 2010 letter to shareholders:
"Senior leaders that are new to Amazon are often surprised by how little time we spend discussing actual financial results or debating projected financial outputs. To be clear, we take these financial outputs seriously, but we believe that focusing our energy on the controllable inputs to our business is the most effective way to maximize financial outputs over time. Our goal-setting sessions are lengthy, spirited, and detail-oriented. We have a high bar for the experience our customers deserve and a sense of urgency to improve that experience."
By emphasising that all experiments are made to improve customer experience and testing only inputs under their control, Amazon has created a psychologically safe environment - a vital ingredient for great innovation.
Scrappy can be good
None of which means there isn't room for a 'scrappy' approach to how you test new ideas either in your work or personal lives.
Even Airbnb still advocate being a 'cereal entrepreneur' in their brand values after a stunt in which they created branded cereal boxes of the Democratic Presidential candidates in 2008. At the time, they were only receiving a couple of bookings a day on the platform, but the cereal unexpectedly sold out. The money raised not only cleared most of their debt, in the process, the story was covered in the national press, and their fortunes turned around.
Starting new projects often depends on doing new things and learning on the job. What's critical is remembering to keep that long-term vision in mind and ensuring your experiments are measurable.
The question is then the scale of the test. There are times for taking large, calculated risks like pivoting your company or career, but you only do it when you're basing the decision on informed judgement. Otherwise, you should start by making smaller bets and ask yourself these questions:
- What's the itch that you want to scratch?
- Why do you think that it presents an opportunity for you or your business?
- What's the worst that can happen if it flops?
We're living and working in an ever more complex world, and things are evolving fast. Mistakes will happen, and not every test will go as expected, but a determination to learn quickly will give you the knowledge and inspiration to create bigger and better things.
As Scott Adams, author and creator of the world-famous cartoon strip Dilbert put it:
"Creativity is allowing yourself to make mistakes. Art is knowing which ones to keep."
This week’s podcast episode also touches on some of the themes I discussed in today’s article. Listen to my interview with Marc Effron, author of 8 Steps to High Performance: Focus on What You Can Change (Ignore the Rest), HERE.
We had a fantastic conversation in which we discussed the importance of big goals., what changes managers need to make now that they're working with remote teams, and the difference between evidence-based advice and management fads.
He also offered some incredibly useful insights about how to build up a network from scratch and how to keep your connections engaged by LinkedIn and by email.
We also discussed the connection between physical health and performance. As you'll hear, there isn't much evidence to prove the link, but one vitally important thing is a good night's sleep.
Have a lovely weekend,
Ollie