Makers often focus on the shiny object—the product they’re building—and forget about the rest of the journey until they’re almost ready to deliver it to the customer. But customers see it all, experience it all. They’re the ones taking the journey, step-by-step. And they can easily stumble and fall when a step is missing or misaligned.

3.6. Three Generations

“After companies find product/market fit, they can start to focus on profitability. Businesses that build with atoms are focused on COGS—cost of goods sold. Aside from direct labor, the main thing they spend money on is actually making the product. So they need to lower the cost of producing their product in order to reach profitability.

Companies that build with electrons are focused on CAC—customer acquisition costs. Aside from direct labor, their money gets spent selling and supporting their product.

Companies that build with both atoms and electrons have to worry about COGS and CAC, but generally should focus on one at a time. First knock out COGS, then move on to CAC. Build the product, then add the services.

If you want to build a great company, you should expect excellence from every part of it. The output of every team can make or break the customer experience, so they should all be a priority. [See also: Chapter 3.1: Making the Intangible Tangible.]

There can’t be any functions that you dismiss as secondary—where you casually accept mediocrity because it doesn’t really matter.

Everything matters.

And it’s not just about you.

These days, I’m wary of seemingly simple incentive rules that promise amazing results. They are rarely simple, and often leave collateral damage. Usually, a better option is to have a frank discussion about what we should value and why. Why should we care about exploring more designs early on? Why should we aim to speed up engineering velocity? Once people understand and buy into those values, they can make the best decisions on how to apply them.

For example, a widespread rule in the construction business states that a customer can expect two of the following three things: speed, quality, and price. You can get good quality built quickly, but it will cost you. You can get something built fast and cheap, but the quality will suffer. Or you can get good quality for a competitive price, but the wait will be painful. This is also known as the impossible triangle. It’s considered irrational; to ask for all three.