Archive | 6:33 am

The Fungibility Myth

3 Dec

Ernest Hemingway wrote extremely popular books that made lots of money. We’ll hire a writer to write more books similar to Hemingway’s. They will be popular. Then we’ll hire 10 more writers and sell more popular books, faster.

At every level this is clearly a stupid and worthless business plan, but substitute engineer or product manager for “writer” and change the product from a book to a consumer device, mobile app, or enterprise service, and suddenly you’re looking at many tech startup and bigco project plans.

When you do those word substitutions it’s cheap and easy to criticize and correct peripheral stupidity. That category is hit-based and customer acquisition is expensive, you’ll say. There are already lots of similar products with established branding, how will they differentiate and become popular, you’ll say. That service needs an expensive hands-on sales team. Hm, is the addressable market really as big as that? Let’s research. And refine. And adjust.

Fine, play some MBA games on it. But what makes the Hemingway business plan stupid at its core is that arbitrary writers are not fungible into Hemingway or JRR Tolkien or JK Rowling. Neither are arbitrary engineers, product managers, or partners necessarily fungible into the resources a specific product needs.

This is why great companies, smart investors, and venture capitalists focus so intently on the individual founding team members, the team leads, or on a team’s ability to hire and create and maintain the culture conducive to its products.

I’m not saying resources aren’t ever fungible. Some products and efforts are routine or well understood, and that’s OK.

But certain products, certain interesting new products, certain great products are great entirely because of the one or two (sometimes hundreds of) Hemingways that are uniquely capable of bring them to life. No amount of wishing, willing, cajoling or micro-managing can squeeze water from the rock. If you don’t believe individuals matter, even to huge projects, you’re falling for the fungibility myth.