W16 - Reverse Work Method

This week I read Amazon’s "Working Backwards" and found the roots of many methodologies we use at my company. All of Amazon’s methods revolve around the company’s core reason for existing, keeping everyone in the organization constantly aware of why we exist, focusing closely on controllable processes, and treating relatively uncontrollable outcomes with rationality.

The "working backwards" approach means starting from the user: take what needs to happen at the final delivery point of a workflow and move that step to the start of the process. Often the last action before a product goes to market is its announcement, so working backwards means bringing the announcement forward. The beginning of every product or idea is the press release plus FAQ. The PR presents the customer experience highlights to readers. The FAQ provides all important details of the customer experience and offers a clear, thorough assessment of the company’s costs and challenges in building the product or delivering the service. Spend time upfront to think through every product detail, identify which products will have the greatest impact for customers and the business, and only then commit scarce development resources.

Working backwards is like a technical upgrade to the MVP concept in lean startup thinking, enabling a more intensive, efficient idea-generation process. If MVP elevated widespread, high-cost experimentation to targeted trials, working backwards advances that further into precise, concentrated drip-testing.

Input metrics vs. output metrics. Input metrics make everyone focus more on what benefits the user rather than only on the company’s P&L or their own department’s performance. Here’s a deliberately exaggerated example: if you look only at profit and loss, the margins of leading chains like Haidilao or Starbucks largely stem from their far-below-industry-average rent costs. At Haidilao’s 2018 IPO, rent accounted for less than 4% of total costs in the financials. Starbucks’ average store rent is about 15% lower than its peers. Low rent is an output metric, but if you treat rent reduction as a guiding metric you’ll likely spend most effort cultivating relationships with landlords. In reality, low rent is earned through brand, service, and the “third place” value proposition — those are the controllable roots and the input metrics you should focus on.