The Conjoined Triangles and Startup Success

Business Frameworks haven’t matured much

If you open up any college text book on Business Strategy, you are likely to stumble across the BCG Matrix or the Mckinsey 7S Framework or Porter’s 5 Forces model.

Somewhere around the early 1920’s, when a young James McKinsey was founding the world’s first consultancy, little did he know that nearly a century later little would change. Traditional models such as the ones mentioned above, some as old as the 1970's, continue to be used in 2016, with little effort or rather no effort on innovation by current businesses.

As the world looks at unicorns and startups whose sole business offerings are services that revolve around platforms, algorithms and digital technologies with little or negligible product manufacturing, the relevance of such models comes into question.

So anyone and everyone is taking a stab at them

Last night while watching an episode of Silicon Valley, I was surprised to find not only a business framework on television but also one that was extremely intriguing and relevant to businesses today.

The conjoined triangle framework as envisioned by the writers of Silicon Valley looks something like this:

The model is pretty self explanatory. The two key drivers of any modern day technological product are engineering and sales. However, the two outcomes of each of these drivers are manufacturing and growth respectively. Without engineering, manufacturing is not possible. Similarly, without sales, a company cannot grow.

So the question is — How should businesses and startups in particular overcome this dilemma?

The answer — COMPROMISE.

The technology teams need to work with the sales teams to work out viable products which can be shipped to the market to maintain competitive edge.

As Guy Kawaski sums it up in this wonderful video:

Apple leveraged the ‘Conjoined Triangles’ before most even knew they existed

Take the example of Apple and the iPod. While Steve Jobs would have loved to ship the iPhone before the iPod, he was quick to realize that the technology to support his vision was simply not available in the marketplace. So he set out to engineer and manufacture a product that would be easier to sell in the marketplace and provide Apple what it needed the most — Growth. Starting from less than 5 million units in 2002, the iPod went on to sell over 50 million units in 2008 at it’s peak. By applying a principle as simple as balancing the creation of a forward looking product that was not very complex to engineer and manufacture but would readily ship and provide growth to the company, Apple was able to leverage ‘compromise’ to unlock value that few companies have been able to match.

Source: CNN, Apple

But the Conjoined Triangles may not have universal appeal

Consider a business that is looking to offer a platform as a service. In that case it does not need to manufacture a physical product. Most of the energies would be invested in engineering and designing the product. But sales and growth would still be important components for such a business. A key side of one of the triangles would fail to apply in such a scenario, highlighting that perhaps the model may not apply to a lot of service platforms such as Uber or Airbnb.

To conclude, the model should be taken with a pinch of salt (it was envisioned by a bunch of sitcom writers). But all said and done, it sure as hell is a great one!!