While costs have come down for anybody to start a business, it’s actually getting harder for companies to succeed. This is backed by hard data. The average length of time a company lasts in the S&P500 is only 15 years now.
Most people in mobile app development notice the same thing. The AppStore is now saturated with over 700,000 apps in both Itunes and Google play; it’s really hard for the small-time indie developer to get noticed.
This is why now than ever before, if you want to build a long-term sustainable business, and not just a fad, you need to think hard about what competitive advantage your business has over everyone else. This is a strategic question and not a new problem. Competitive industries have been dealing with it for a long time.
Competitive Advantage in the Automotive Industry
For example, the automotive industry has faced extremely fierce competition since the 1960s, both domestically and internationally. However despite this concern, Toyota was able to become far and away the market leader. Working in the context of the 60’s – Japan did not have smarter engineers. They did not have access to more capital. Japan based Toyota was able to dominate all the incumbent players in the industry (Ford, GM) with the help of a relatively simple concept called “Jidoka.”
“Jidoka” which roughly translates to “quality-at-source” is the idea that every employee in a business system is responsible for production and quality control. Defects that are detected at the time of production are not ignored and sent down the line. Instead if someone noticed something was wrong, they had the authority to stop the entire line.
Now of course, Toyota had developed some fairly sophisticated process flows to account for line stoppages. They modularized their production line so a stoppage in one area would not materially affect the work being done in another area. But the important point here is that practicing quality-at-source provided Toyota with an important competitive advantage.
- Toyota made better quality products because with everyone inspecting quality, fewer defects were shipped to customers, leading to happier customers.
- Toyota reduced costs, such as minimizing employee overtime to fix mistakes, meaning they were able to produce better quality products cheaper than competitors.
- Toyota had happier workers because workers cited Jidoka as a tool for empowerment.
Quality as a Competitive Advantage
I read a lot about articles by people who have built a few cool apps, but cite high cost or that the AppStore has become too saturated as the reason why they aren’t more successful.
But instead of building another mediocre app, maybe it’s time we learned a lesson from the Toyota playbook. Consider applying the concept of quality-at-source to your dev team.
- Have daily standups with your team to understand problem areas and reward people for bringing up potential problems and quality concerns.
- Use test-driven development to limit rework and reduce product costs.
- Reference The Lean Startup for a more detailed walkthrough of this methodology.
What Toyota accomplished was not magic. Quality control is common sense. But the deliberate application of these concepts are what sustained their competitive advantage through today.