Tuesday, October 9, 2012

Nail It Then Scale It and Chick-fil-A

This semester I have had the opportunity to take a class from Nathan Furr, co-author of "Nail It Then Scale It" (NISI). The basics of NISI are that start-ups fail because they are doing the right things, but in the wrong order. Often entrepreneurs focus on building the perfect product before involving the customer. They come up with an idea/product and jump right in to raise capital and build a company around it, only to find that their customers are not buying the product. Either the product is not relevant or the customer wants something else. The entrepreneur has now invested so much time and money that they can no longer pivot or change, and ultimately go out of business.

In NISI, the process is rather simple but often overlooked. You start with a pain, not a solution--identifying the pain through getting out of the office and testing and validating it with customers. Once you have nailed the pain, you can start on the solution. That does not mean to invest a lot of time and money building a perfect prototype or final product, but to conduct rapid tests with customers with minimum feature sets, virtual prototypes and tangible prototypes. By getting the hypothesis and minimum feature set in front of the customer early and often, it will help you nail the solution and provide you the opportunity to pivot and change before it is too late.



At NSHMBA this last weekend I received a copy of "How Did You Do It, Truett?" by the founder of Chick-fil-A, Truett Cathy. In his book, Cathy talks about how he started and grew Chick-fil-A to where it is now, a $4 billion company. As I was reading on the flight back home, I was amazed to read that Cathy built his company and his products on NISI principles. A few quotes from the book:

"We had to take special care...to make sure fried chicken was prepared properly, especially drumsticks. If you didn't cook it just right...customers would send it back and ask for another piece. So the problem wasn't the chicken, it was the bone." 

"So when I tried various ways of preparing the boneless, skinless chicken breast, I always offered samples to customers and asked for their opinions. I tried a lot of different seasonings, and each time I changed the recipe, I asked customers how they liked it and what they thought I might change to make it better...As I closed in on the right recipe for the meat, customers told me they wanted just a bit more zest. Instead of adding more spice to the seasoning, I tried two dill pickles. My customers loved it." 


"We take advantage of out biggest opportunities when we keep it simple."


Truett Cathy, unknowingly, was applying NISI principles 60 years ago. He understood that by looking at the pain/problem he could then build the perfect solution. If he kept the customers involved in the process from the start, he could develop exactly what they wanted. Anyone who has had an original Chick-fil-A sandwich knows how perfect it is, and it is not by chance. In addition, he understood that by keeping things simple, he could pivot and take advantage of opportunities he could not see. Originally he started a restaurant called "The Dwarf House." As he saw peoples food consumption shift to chicken, he was able to pivot because he was not so fully invested to another idea or product that he couldn't shift. I think one of the reasons that Chick-fil-A has been so successful over the years is that they understood the correct way to innovate and start with the customer and their pain and to get out of the office/kitchen and get the ideas in front of customers.

I spoke with Nathan Furr about this and he made the comment that the NISI principles are not new principles. After reading Cathy's book, I see that it is true. I think that anyone who reads NISI would say that it seems like common sense, but it's in the execution and application of the principles that people make mistakes. People often get too excited for their solution and don't stop to consider the pain.