Editor’s Notes: In this post, the CEO talks about Invisible’s approach to Building Unfair Advantages In Delegation UX & Incentive Design.
Building Unfair Advantages In Delegation UX & Incentive Design.
I’ve committed the company to a strategy which makes certain assumptions. One of those assumptions is that our approach is difficult to replicate.
What’s our approach? Superficially stated: we’ll beat outsourcing companies because we’re an automation company, and we’ll beat automation companies because we’re outsourcing company.
But that obscures the insight. The insight is that it is too hard for customers to buy existing solutions. In theory, outsourcing and automation solutions already exist that could, if used in the right combination, eliminate most, if not all, repetitive business processes at small, medium and large companies, across all teams and functions. So why isn’t everything perfect yet? The insight is Coasian: buying friction is too high, therefore the solutions do not penetrate the market opportunity.
It’s a simple before and after story.
Before, buyers had to either outsource or automate their business processes, or some combination of the two. For large, departmental processes they could buy from a Business Process Outsourcing (BPO) company, with high minimums, a fixed cost model, and no incentive for efficiency or ability to automate. For small processes affecting individuals and teams, they could buy labor from Upwork or another labor marketplace, but then run the security risks, and incur the friction of hiring, training, documenting, QA checking and coordinating labor. Alternatively, they could research expensive, technical, rigid, and scale-dependent automation tools, none of which would provide an end-to-end solution. If, on average, 20% of a process is automated then the buyer is left to use internal or external labor to solve the rest, or to build proprietary software. The bottom line is that the “build or buy” decision is a headache, and even the most sophisticated buyers with the biggest problems arrive at suboptimal outcomes.
After Invisible, buyers just delegate. That’s the magic. They don’t have to worry about all of this complexity. They don’t have to learn how to use another tool or set it all up themselves. They can focus on the end-to-end solution and the bottom-line business outcome. All they have to do is screenshare and show us their business process, and no matter how custom it is, if it is procedural in nature, we’ll have it running on our Digital Assembly Line within 24 hours. And because all of the work is structured in our Process Builder, and we capture all the system and screen recording data from our Amazon Workspaces, we have everything we need to automate: beginning with 3rd party tools, then with our own automations. Our pricing is simple, flexible, and splits automation gains with our clients — clients on annual plans not only get a results based price, unit prices go down steadily as we automate. This eliminates a client’s incentive to automate work in-house, after they’ve delegated it to us: it becomes our problem to deal with permanently, and we split the profits with them. This aligns incentives and positions us as their long-term automation partner: they no longer have to worry about adding business processes that are not core to their product to their product roadmap — they can just delegate… to automate.
Incentive design has been one of our unfair advantages for a long time, and we’re getting better at it. The corporation is an alignment technology: aligning the incentives of clients, partners, agents and investors. So pricing is only one part of the story. We’ve been making steady progress towards automatic, instant and dynamic agent pay. And we just updated our partner pay framework to directly align incentives with increasing net income, sales, and gross margins.
Invisible is not going to win just because we have the most convenient solution, or just because we have the most aligned incentives. These are pillars of our strategy, not our whole strategy. You can have all the demand in the world, combined with motivated supply, and all you have is a good marketplace — not a managed service, powered by technology, capable of delivering end-to-end solutions better, faster and cheaper than competitors.
Invisible is going to win once the whole machine is cranking: incentive design in our pricing, delegation UX in our Client Portal, and operations powered by our Digital Assembly Line workforce coordination and orchestration technology, then structured and automated by Process Builder.
All the pieces are falling into place. That machine has begun to crank. By the end of the year it will be cranking. The more it cranks, network effects will emanate outwards. The more a client uses Invisible, the better it will get for that client. The more a team uses it, the better it will get for that team. The more a company uses it, the better it will get for that company. The more companies use it, the better it will get for all companies. The more processes we build, the more capable we become and the more structured our work is. The more units of work we deliver, the more data we have to automate.
It takes a long time to build a warmachine. But momentum is a force of nature.