Venture Capital in Professional Services and Aquaman v. Batman
I hired a Scrabble coach many years ago. One of the worlds best players to help me improve my game. My word knowledge was excellent and of the 100,000+ words that are acceptable in North American play, I knew every one.
But I was still losing games to players that I, and the ratings system, perceived as ‘lesser’.
The most impactful lesson that day was “scrabble is a humbling game” and by this my coach meant that you have to treat each opponent as a worthy adversary and play at your best. You can’t lower your bar to accommodate your perception of their ability.
Another lesson, perhaps the very next one, my coach said “bluster doesn’t win games’, good play wins games” Talking smack and having swagger won’t win games, in fact it will antagonize your opponent to play at their very best. Rigid adherence to a real, considered strategy, pattern recognition and a comprehension of the ‘total’ game wins, or as there is some luck element to the game, will significantly increase your likelihood of winning.
While these might appear to be obvious wisdoms, they are not.
Adults learn by reiteration, by repeatably doing ‘it’ over and over again. These are great life lessons and can be re-purposed into different frameworks.
Professional service companies are about client acquisition, retention, service and profitability.
In Scrabble and in Chess we use simulators to evaluate, examine alternatives, diagnose likely outcomes and assign equity values to a position. It is a shame we don’t have such precision in the construction of company strategy. But there is still a ‘best’, an ‘optimal’.
Blueprinting of a premium product and a profitable company in professional services requires meticulous detail given to the middle & back end.
Just like in Scrabble and in Chess, there is a much larger selection of possible moves in the early part of a game, but when you’ve made your way into the middle and end game, choices become much more limited and the consequences of poor play is the win/lose.
In professional service architecture, start with the middle and end game. This is where things can go way wrong and to work thru that early will permit the company to scale. There is a sequence to building a new entrant into a mature market and most crucial is synthesizing the middle and back end, where all the processes, yours, the clients and other vendors all commingle: The ‘secret sauce’.
Towards the tail end of this build out, you can snap on an enhanced user experience/front end.
A disadvantage to this sequence is you have less opportunity to prove your system. You have less clients deliberately to work with and you have to be confident that if you build it, they will come. You have to build a perpetual motion machine and anticipate the start of its action.
There is an alternate path/sequence a company can choose, starting with user experience. In this methodology there is much greater failure risk but you will have many more clients. Death may come from a thousand cuts.
The front end is the visible part of the iceberg rather than the mass beneath the surface.
One risk is too much effort and resource drain on beautifying the user experience with pretty (useless) code that likely will inhibit future progress. Like a high school science project volcano: Little geology, lots of chocolate goo.
A good strategy must have surveillance of ‘real’ and relevant companies within their category. Beware the entrepreneur who believes ‘good’ or ‘bad’ op systems is a negligible differentiator and is indistinguishable to prospects and investors. They build a staircase to nowhere.
The greatest risk is building the entrance to the mousetrap and manufacturing the ‘catch or kill’ later. You just don’t get to trial and error when introducing a new company into a mature industry.
On a related/unrelated note, I have been giving this a lot of thought lately: Aquaman is a crappy superhero.
I know he’s nostalgic and there’s a sentimental quality that is offended by the brutal truth, but it is what it is. His superpowers suck. He can ride dolphins, he can talk to fish. He can swim fast.
Maybe someone peeing in the ocean is repugnant, but does it need a superhero and a school of tuna to come to our rescue?
Aesthetically, Aquaman is garbed in an outfit of bright yellow and green. He wears a belt that has a big Texas sized A with no horizontal crossbar line to make it a proper. Instead it is an ‘A’ like a capitalized upside down V. Good superheroes don’t need fancy fonts.
Batman doesn’t need clever typography. He does not have BM written on him. He has a bat. Speaks for itself.
Sometime around the 70s they gave Aquaman a fancy shmancy beard to give him a mythological look, its weird. Perhaps the writers thought this would compensate for useless and impractical powers, a bark worse than his bite.
Batman is way cool. He does what he does ‘better’. He fights better, he runs better, he thinks better, his awareness is better. And, his costume has a simple color scheme.
Batman has no superpowers. He is just a superb human. He fights crimes that occur outside of the water, where most crimes happen (I know water pollution, but the initiation of the crime takes place above water. So stop trying to ruin my analogy)
If they were to fight in the water, I am certain Aquaman could win, but I am not definite he would. He has an environmental advantage that he may squander to a superior strategy.
On land, the place where most of us live, Batman would win.
Batman is cool. Aquaman isn’t