Don’t Boil Your Frog (Ask Hard Questions)

It was Winter of 2011 and I was standing on my parents’ front porch at their colonial farmhouse in Stow, Massachusetts, staring through the screen wall out past a row of chopped long-frond grasses, into the darkness that enveloped a birch and evergreen forest. It was so cold that I couldn’t distinguish between breaths of air and smoke. The sound of my breathing was clear over the otherwise dead silence, which made the thoughts about my stalled business a little less heavy.

With a solid low swoosh of its brush-bar footing, the oak door behind me opened to reveal my Father, who walked across the porch over to the Adirondack facing away from the brick chimney wall, and sat down. He removed a cigar from the breast pocket of his LL Bean vest, cut the tip off, and proceeded to light it. “How’s it goin’, man?”

I then complained about standard tech startup issues for five minutes straight, and my Father listened and nodded, and I went down my list, and he remained quiet. Eventually I stopped, and looked at him, and he said something that stayed with me.

“I think it’s important to really force yourself to ask the hard questions. What are you not considering that could improve the outcome?”

That project — a social mobile payment app — failed epically, alas, due to circumstances that may have been avoidable in retrospect.

In retrospect, many of the obstacles we face with past projects could have been easily resolved by taking a step back and reevaluating the core elements of our business model at any time. Aligning what we do with what people really want is a dynamic process, because people change.

Fast-forward four years. A business I helped launch, called Turnstyle Cycle, recently went through a very come-to-Jesus series of strategic changes. In a matter of months, we went from being priced at the top of our market, to becoming the economy option. Our brand identity softened to become less exclusive, our marketing processes changed in turn, and the operations at all three of our locations in Boston and Cambridge were slimmed down. We bought all new bikes, which went from a model that was unique in the market (a “differentiator”), to the most popular (and common) model. Our motto changed from #MoveDifferent to #CycleToThePeople. It took nine months, and there was friction, as one can imagine, but it worked. Just a few months after the changes have been fully implemented, all three locations in Boston and Cambridge are now humming along.

This entire process started with asking a hard question. Do we need to be high-end? Do we need these big expensive bikes? Is that what people really want? Can we make money if we cut costs and drop prices? Will we make it up on volume?

For us, as it turned out, price mattered. A lot. The bikes that we thought were so “advanced” were actually intimidating to many customers. These “Ferraris” as we had been calling the bikes, were indeed distinct and cool to look at, and we had been hanging our hats on this distinction, but the net effect of this BIG piece of our business — core to who we were — was (again, in 20/20 hindsight) not positive.

It’s difficult to describe how elusive these ideas were to us at the time, because it wasn’t about understanding our existing customers — the people who were already happy with our product. We were more concerned about the people not frequenting our business. To be clear, we changed our business model to be further from what our existing customers wanted, in order to provide something that was more appealing to others. These changes produced a lot of friction in the form of customer and employee resistance, and sticking to our guns for so many months, explaining ourselves to so many of the people who were perfectly pleased with how things had been, was the hardest part of the process.

There’s a book that helps us ask ourselves hard questions about our businesses. The book is called Blue Ocean Strategy. It has become an institution, actually. It’s one of the reasons I’m writing this piece, because I was inspired by it. Blue Ocean’s frameworks fit Turnstyle’s turnaround story, and I think the broadness of its relevance is due to the fact that our world is changing at a faster pace, economically and socially, and every business needs to understand how they can bridge the gaps that may have formed between what they and their competitors are providing to the market, and the market’s interpretation of value.

According to Blue Ocean’s authors, W. Chan Kim and Renee Mauborgne,

To break the trade-off between differentiation and low cost and to create a new value curve, there are four key questions to challenge an industry’s strategic logic and business model:

Which of the factors that the industry takes for granted should be eliminated?

Which factors should be reduced well below the industry’s standard?

Which factors should be increased well above the industry’s standard?

Which factors should be created that the industry has never offered?

Why are these questions so hard to answer? Because the answers, if considered honestly, will probably imply that somebody, at some point along the line, was either wrong or has become wrong as the market has changed over time. Further, the person who is being proved wrong is probably somebody in a leadership role, be it ourselves or one of our colleagues. Identifying wrongness, especially in ourselves, is exceedingly difficult, because our brains will play all sort of tricks to avoid such a hit to our egos.

To effectively strategize, to innovate, to simply think clearly, we must strip away as many of our natural cognitive biases as possible. We must lean into the discomfort we feel when we admit to ourselves that we might be less in tune with the world than we originally thought. The longer we’ve held an assumption as “correct”, the greater our mental “commitment” is to that assumption, and the less likely we are to consider its wrongness. Charlie Munger’s lecture on The Psychology of Human Misjudgment is rife with golden nuggets of wisdom about this exact subject.

Here’s a question that may not be so hard to answer: Would you rather be humiliated once, or permanently misguided?

I’ll end with a fun insight from Charlie Munger, found in the video lecture cited above, which speaks to the elusiveness of environmental changes that come on gradually, without any conspicuous contrast.

“If you toss a frog into a pot of hot water, it will immediately jump out. If you place the frog in a pot of cool water, and then slowly heat the water to a boil, the frog will remain there until it dies.”

Don’t boil your frog. Ask hard questions.