As we all know, creating a successful start up is much more of an art than science. While classic business disciplines may be helpful, there is a tremendous amount of intuition that distinguishes truly great entrepreneurs from the rest of the pack. While I could discuss many of these dimensions, I’d like to focus on one in particular: when and how to systematize your product development process. One venture capitalist friend coined a terrific phrase that is the title of this post: “From Cowboy to Machine.”

Having been involved with well over a dozen technology start-ups, I feel confident saying that they generally start out in cowboy mode. In particular there is usually a great product idea that needs to be cobbled together into some sort of proof of concept release. Rarely are there detailed specs, full vetted architecture or highly refined user requirements – that being said, we have seen entrepreneurs who come to us with 400 page product specs saying all they need is money to build the homerun solution.

The goal with early products is to determine how potential customers will react to the new offering. Unless one is omniscient, there would be no way to effectively develop the perfect product the first time out so collecting feedback from early prospects based on a proof of concept product makes total sense. This rapid cycle learning loop is a common hallmark of great entrepreneurs. Obviously as the company matures, it should implement more heavy weight product development methodologies that include more detailed specs, use cases, QA test cases, user documentation, marketing plans, etc. In these cases, the companies usually have an installed base of customers and somewhat developed brand positioning that needs to be taken into account.

While the extreme cases are pretty obvious (early-on go simple and rough vs being more systematic in a well established business), it is the middle cases where entrepreneurial intuition is so critical. Not enough structure and you can lose control, disappoint clients and jeopardize the stability of the business model. However, too much process and control and you can drastically limit the business’s ability to quickly learn and adapt to evolving market feedback. By definition, intuition cannot be taught, but as a general guideline, I would suggest that a company should move those processes from cowboy style to machine precision when you feel like you have clear/static understanding of requirements and a solid sense of the appropriate solution (i.e. you have a high confidence level about what needs to be done & how to do it and now want to achieve consistency and scale) while you should maintain a more nimble approach for those areas where the parameters are less clear and you are still trying to determine the best solution. While this seems obvious (most things are), it is the nuance of balancing the need for innovation and creativity against that of consistency and scale that eludes many entrepreneurs. It may be helpful to look at the key processes in your own business and determine if you have effectively achieved that balance between cowboy and machine.

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