What really makes software product development shine?

"Speed up! Enhance quality!" It's the mantra in the halls of tech companies worldwide. But let's hit pause on the hustle for a moment and ask: What actually works in software product development? A problem and the skill mix to solve it.

I've seen a few examples that aren't just buzzworthy; they’ve become my gold standards. And from these, I've distilled a two-step "success formula” that I believe is the key to the business holy grail, reaching the 1 + 1 = 3 of team work.

TLDR;

Step One: A business visionary identifies a problem and places a bet. Imagine a product manager or a business owner sizing up an opportunity and deciding how much they're willing to invest in trying to solve a problem. It's not about certainty but the courage to bet on a vision.

Step Two: A designer and an engineer take the reins. This duo is handed a problem. They dive deep into the problem, iterating, testing, and debunking until they find a solution. It's a race against time and budget, but with the right mix, magic happens.

If that’s not persuasive enough, consider the story from "The Trillion Dollar Coach" about Bill Campbell at Intuit. He once chided a product manager for dictating features to engineers. Instead, Campbell advocated for presenting the problem and letting the engineers innovate the solution.

...“if you ever tell an engineer at Intuit which features you want, I’m going to throw you out on the street. You tell them the problem the consumer has.” - Bill Campbell

Case Studies in successful product building

The examples I return to are Instagram, Apple and 37Signals. To highlight that their formula leads to better business outcomes, here are some rough numbers about the value generated by their approach. Hopefully these business results help open your mind to “hey, maybe there is something here”.

Instagram, with just 13 employees, sold for $1B to Facebook in 24 months from seed investment to sale (March 2010 - April 2012, reference). In other words, a value generation of $34M per employee per year. Apple has 161,000 employees and generated $99.8B in net income in 2022 or $620,000 net income per employee (Google Finance).

The last example is 37Signals, with 80 employees and? “double digit millions in profit” (reference). Let’s assume the minimum of $10M in profits, this business generates $125,000 net income per employee per year.

How do do they do it?

1. Instagram:? The founders weren't typical techies; they didn’t have computer science degrees; they were problem-solvers with a keen eye for human-computer interaction. Their mantra? Focus on the problem and prototype your way to a solution, a trait of design and agile thinking.

2. Apple: Ever wonder how the iPhone's touchscreen keyboard came about? In "Creative Selection," Ken Kocienda shares the tale of a small team's big impact. No complex methodologies, just a duo of a designer and an engineer working to solve a problem with feedback from their colleagues.

3. 37Signals: This lean team has a mighty punch. The process they use is called "Shape Up”, and their teams pair a designer with a programmer or two to craft solutions (Lenny’s Podcast).

Conclusion:

So, what's the secret sauce? Don't dictate tasks; inspire with purpose. Share the problem, not (what you believe) the solution might be. Add the necessary skills for the job - design and engineering. And remember, while pairing up a designer with an engineer might sound simple, it's hardly easy. It's about blending different perspectives, working styles and skills into innovation jazz.

It's not about the buzzwords or the methodologies. It's about understanding the problem and crafting a journey to solve it. I do not mean to say that agile, Kanban, Scrum and whatever hyped framework and philosophy comes up next do not have value. That’s not the point. Having processes and structure for organising the work helps. But there is a difference between organising the work and doing it! There needs to be a form and function match between problems and the skills needed to tackle them. Without the right skill mix, a process won’t get you far.

So what’s next? Here are some questions you can ask yourself. When you look at how your organisation works, how is your skill mix working out? When you work with customers, how does it feel? Like a co-creation partnership or a dictatorship? When you work with your external product building company or internal software development department, what are you sharing? Problems or solutions?

Hope it helps!