This post is about making constant and focused improvements on your product or business until you reach breakthrough success. Much like the storied tipping point, any wildly successful business or product optimizes continuously - sometimes in oblivion - until they find product/market fit.

Net Flix, Amazon and Facebook all found their breakthroughs over time. Their successes weren’t obvious bets going in, and I can guarantee you that there were many mistakes and trials that ended in various levels of failure along the way. How do companies and product teams stay focused and encouraged enough to grow their ideas into breakthroughs? The answer is some variation of focused trial-and-error; though it could be referred to as the feedback loop, profile before optimization, or a million other industry-specific terms.

All successful companies subscribe to the feedback loop to deliberately shape their products into something the market (even if it’s not their initial market) will line up in droves to buy. Folklore is filled with overnight success stories of inventors coming up with that lightning in a bottle idea that translated into millions of sales. But, I have yet to meet anyone with such a story about their success.

Instead, true breakthrough companies start with, or eventually find, a clear mission to meet their market’s demands, and then dedicate the resources to find a true fit for those needs and wants. The common thread always turns out to be a lot of deliberate tinkering, analysis, profiling and adjustments being made on a regular basis.

Now that we’ve made the case for constant refinement, we should talk about what and how to refine your products and business. Below are five tactics that can help ensure that your attention and investment are being leveraged to shape your product into a breakthrough:

1) Start by only fixing the things that really need to be fixed. You may have a list a mile long, but fixing the root cause may make many other issues obsolete or irrelevant. As an example, if customers are abandoning your signup process at the last step, zero in on that page before attempting to lower your price. If your efforts aren’t proving fruitful after a few weeks, then you can try adding a time-sensitive offer or changing the price with some A/B tests.

2) Fix something discrete, and wait to see what happens - a week, month or quarter. If you change everything all the time, you’ll never learn anything. Just as important is to actually measure what the impact was in real numbers.

3) Have an overarching goal for why you are tinkering. Are you improving perfomance, converting more visitors into sales, increasing the average size of the sale? If you profile without a cause, you’ll fragment your efforts and see little impact.

4) Subscribe to the 80/20 rule. If there won’t be a high impact result, leave it alone. Forget about squeezing minute percentages of improvement out in the early days. There will be plenty of time for that when you reach mass scale. Time and user feedback are finite resources, spend them wisely.

5) Reflect on the changes you made and discuss/debate why they came out the way they did. This is how you become smarter about your customer, tactics and overall strategy. If you aren’t regularly analyzing your tests, then you’re leaving a ton of value on the table from all this profiling and testing. This tactic multiplies the value you get from the previous tactics.

You should see by now that the underlying theme here is chipping away at success with the help of real user feedback. Too many businesses have gone by the wayside because they thought they had it all figured out prior to launch. Rather than distilling their business into a concrete market opportunity and working relentlessly to fill it with percision, they fall in love with their original solution and are blind to valuable feedback that real users try to give them.

Think about some of the repeatedly successful entrepreneurs and business people you know or have read about. Did they repeatedly invent new homerun products or services overnight, or did it just seem that way because they identified market opportunities and started or shaped businesses to solve them?

In a nutshell: Profile your business, find something of impact to optimize, and repeat. Your new business strategy will become painfully evident within a few months.

Tags: breakthrough applications, feedback loop, lean startups, profile before optimizing

This entry was posted on Monday, June 22nd, 2009 at 5:47 am and is filed under Strategic Insights. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.