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The 70-Percent Rule: Why You Should Move Fast and Break Things

"Unless you are breaking stuff, you aren’t moving fast enough." — Mark Zuckerberg.

Zuckerberg’s line is the most well-known example of a common piece of advice on how to get ahead at work or how to get ahead in life more generally: to “move fast.”

There is a tradeoff: move fast and break things or move slow and don’t break things. There is no move fast and don’t break things.

If the answer is as simple as moving faster, why don’t most people subscribe to Facebook’s motto of “move fast and break things?”

Perhaps, it’s because moving fast has only recently become a good strategy. It used to be terrible advice for how to get ahead in life or at work.

The ETTO principle

The Efficiency-Thoroughness Trade-Off (ETTO) states that people (and organizations) choose between being effective and being thorough, since it’s impossible to be both at the same time.

Let’s say you are editing articles. If you have 10 hours to edit and it takes you two hours to edit an article, you can make a decision between editing one article five times and being extremely thorough or editing five articles one time and being more efficient.

Resources are always scarce and so you’re always making a decision between more efficient, doing more tasks, and being more thorough, doing less tasks more thoroughly.

If you are launching products, you can either be super thorough and make to cross all the T’s and dot all the I’s for one product or you could launch four products in the same time period.


A brief history of the 20th century and ETTO

In the industrial economy that dominated the 20th century, it was generally better to err on the thoroughness end of the ETTO Spectrum. It was better to move slow and not break things because the cost of breaking things was high.

If you built the factory in the wrong place, it was there for a decade. If you rolled the product out to Walmart and Target too soon, you had to issue a massive, expensive recall.

In a world that is eaten by software, it’s more important to move quickly. You can always move the button around. It’s just a few lines of code.

The same product that might have required a million dollar roll out to Target and Walmart 20 years ago, can now be rolled out for $10,000 on Amazon. The cost of being wrong is much lower.

But exactly how fast should you move? What’s the appropriate spot for your company or project on the ETTO spectrum? Enter the 70-percent rule. The 70-percent rule is this: Once you’re at 70 percent, just do it.

The book is 70 percent done? Launch it.

The project is 70 percent finished? Ship it

You’re 70 percent sure about the decision? Make it.

Why 70 percent?

A brief foray into standard deviations

“If everything seems under control, you’re just not going fast enough”, — Mario Andretti.

You can think about it in terms of standard deviations. In a normal distribution, about 70 percent of the data will fall within one standard deviation, 95 percent will fall within two standard deviations and 99 percent will fall within three standard deviations. The reasons standard deviations matter is that when it comes to your work, it takes an equal amount of resources for each additional standard deviation.

For example, if you’re editing an article, you’ll usually catch 70 percent of errors on the first sweep, 95 percent of errors on the second sweep and 99 percent of errors on the third sweep.

In computer programming, there is a rule of thumb called the the ninety-ninety rule which explains the effect of standard deviations on software projects: “The first 90 percent of the code accounts for the first 90 percent of the development time. The remaining 10 percent of the code accounts for the other 90 percent of the development time.”

This is true of any project I’ve encountered.

When you’ve got 90 percent of a book written, you’re probably about halfway.

When you’ve got 90 percent of a product design nailed down, you’re about halfway to a final design.

Intuitively, this makes no sense, but given what we just looked at with standard deviations, it does.

Ninety percent is about 1.5 standard deviations. If we define finished as 99 percent (nothing ever gets to 100 percent) then that’s three standard deviations.

If it takes you 10 hours to get to 90 percent completed, it will take you 10 more hours to get to 99 percent.

As you get closer and closer to finished, it starts taking much longer to make progress.

The mistake most people and organizations make is that they think “Well, I want to do my best work so I want to get it to 99 percent.”

What this ignores is the opportunity cost. If it takes you 3 months to get 70 percent of the way finished, are you better off spending another 6 months getting to 99 percent or getting two other projects to 70 percent?

For entrepreneurs and startups, particularly early stage, the answer is almost always the latter: Getting three projects to 70 percent is better than getting one to 99 percent. Quantity has a quality all its own.

When does the 70 percent rule not apply?

Toyota was famous for their six sigma (that’s the symbol for Standard Deviation) manufacturing — they produced perfect units with a 99.99966 percent probability.

Shouldn’t you do what Toyota did and get things to near perfect? Yes, but only when you’re as big as Toyota.

Toyota knew they were going to sell 10 million cars in the next 12 months because they sold 10 million cars in the previous 12 months.

This is more obviously true of software projects, but it’s also true for physical products, which might seem like the antithesis of software.

Twenty years ago, the minimum order to a Chinese factory might have been $500,000 dollars. Today it’s in the $1,000s because software has reached manufacturing as well. You’re better off getting a 70 percent good enough product on shelves in a third of the time it would take you to get a 99 percent product. You can always make improvements and it’s likely that the final product will be better and you’ll get better marketing out of it.

The 70-percent rule is based off an entrepreneurial principle called affordable loss. Simply put, can you afford to be wrong? If you are making a decision about where to put the factory, you can’t afford to be wrong.

If you run a nuclear reactor facility, you should take 10 times as long and get to 99.9999999999999 percent before anything goes live. The costs of being wrong are catastrophic and impossible to reverse.

You’re better off getting it out the door at 70 percent and learning what people think than you are are trying to get to 95 percent if you’re making a decision that is either:

  1. Cheap to be wrong about, OR
  2. Easily reversible

Real vs. perceived risk

The wrinkle here is that you have to figure out whether the potential loss is real or perceived.

One of the big lessons of evolutionary psychology is that our hardware is a few millennia behind our culture. We still have the neural circuitry that our ancestors did 10,000 years ago even though we live in a dramatically different world.

That means we fear social exclusion, and for good reason. If you lived in a tribe of 150 people and 99 percent of them either didn’t like you or didn’t care about you and one percent really liked you, you were going to get thrown out of the tribe, wander around and die.

However, that exact same ratio is the recipe for how to get ahead in life today. If you sort the potential market for any successful product into two categories, it would be something like:

– 99.9 percent of people — I don’t like and/or I don’t care about them.

– .1 percent of people — I like them!

If the market is only 10 million people (it’s more than that, 10 million is .1 percent of the global population) and only .1 percent become customers and they’re each only willing to spend $100 per year (many have spent more), that’s $1 million per year. You can play with the numbers but even a $100 million business reaches a tiny percentage of people.

However, the thought that 99.9 percent of people won’t like or care about your work still feels us with terror. That’s perceived risk, not real risk.

If you ask me during any product launch whether it’s risky, my emotional reaction is always “yes.” However, that’s rarely the reality.

Real risk is that it’s going to cost you $1,000 to launch the project and it’s your last $1,000 and you have no other way to make money and if it doesn’t work you’re going to starve to death.

If you’re hesitating to go at the 70 percent mark, write down all the worst-case scenarios that could happen and how you could get out of them.

Speed: how to get ahead in life

“If you are not embarrassed by the first version of your product, you’ve launched too late,” — Reid Hoffman.

Whether it’s time, money or anything else, resources are always scarce. We are always making a decision about where on the ETTO spectrum we fall.

Most entrepreneurs fail because they focus on not breaking things instead of moving fast. Of course we do — we were raised in an industrial world. Our school system was designed by industrialists, and so it rewards us for thinking that way.

If you turn your math homework in at school and it’s 70 percent of the way there, you get a C. You should get some suggestions on how to make it a 95, and have the chance to take it back and work on it again. Or, maybe, your teacher should tell you that math isn’t your subject and you should take more history classes.

You don’t have to be good at everything. You don’t even have to be good at most things. If it costs you $1,000 to launch 10 projects and nine fail and one makes $100,000, that’s good enough.

If the project you are working on is cheap to be wrong about or if being wrong about is easily reversible, 70 percent is a good heuristic for finding the optimal point on the ETTO spectrum: moving fast and likely to work.

The foundations of the 70-percent principle is this: What feels risky is safe. What feels safe is risky.

At 70 percent, press go.

This article was written by Taylor Nelson from Business2Community and was legally licensed through the NewsCred publisher network.

The information in this article is presented as-is and does not necessarily represent the views of First Republic Bank.

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