Mark Zuckerberg’s most famous quotation is “Unless you are breaking stuff, you aren’t moving fast enough.” It’s become common advice for entrepreneurs looking to get ahead. It's insightful because it lets us know that there's 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 to how to get ahead is as simple as moving faster, why don’t more people subscribe to the Facebook founder’s motto? Why aren’t you moving faster?
The ETTO principle.
The efficiency/thoroughness trade-off (ETTO) means that entrepreneurs 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.
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Resources are always scarce, and so you’re always making a decision between being more efficient (doing more tasks) and being more thorough (doing fewer tasks more thoroughly). If you are launching products, you can either be super-thorough and 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.
Enter the 70% rule.
Mario Andretti said, “If everything seems under control, you’re just not going fast enough.” 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? You can think about it in terms of standard deviations. In a normal distribution (AKA a bell curve), 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. If you’re editing an article, you’ll usually catch 70 percent of errors on the first sweep, 95 percent on the second sweep, and all but one percent on the third. But, importantly, as you get closer and closer to done, it starts taking much longer to make improvements.
The mistake most entrepreneurs make is to think, “Well, I want to do my best work so I want to get it to 99 percent.” This type of thinking ignores the opportunity cost. If it takes three months to get 70 percent of the way finished, are you better off spending another six months getting to 99 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. I’ve never met an entrepreneur who failed because they were too fast launching products. I’ve met many who failed because they were too slow.
When does the 70% rule not apply?
The 70 percent rule is based off an entrepreneurial principle called affordable loss . Simply put it means, based on the nature of the enterprise, can you afford to be wrong? If you run a nuclear reactor facility, you should take ten times as long and get to 99.99999 percent before anything goes live. The costs of being wrong are catastrophic and impossible to reverse.
On the other hand, entrepreneurs are better off getting a product out the door at 70 percent doneness and learning what people think, than trying to get to 95 percent, if they’re making a decision that is either A.) cheap to be wrong about, or B.) easily reversible. Therefore, if they are building a software product, an error only takes a few minutes to fix by updating the code, while finding one takes hundreds if not thousands of man-hours if programmers don't already know it's there. Let the beta-testers find it, then have the programmers fix it. Follow the 70 percent rule.
Real vs. perceived risk.
The wrinkle with the affordable loss principle 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.
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That means we fear social exclusion, and for good reason. If you lived in a tribe of a hundred fifty 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. That's bad when you rely on the tribe to survive.
However, that exact same ratio is the recipe for success today. If you sort the potential market for any successful product into two categories, it would be something like: 99 percent of people would say they don’t like it, or don’t care. And only about one percent would say they like it. Most people don’t use Apple products, and Apple is the most valuable company in the world.
However, the thought that 99 percent of people won’t like or care about our 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 affirmative. However, that’s rarely the reality.
To become real, a completely different fact pattern would be required: The launch is going to cost you $10,000, and it’s your last $10,000, and you have no other way to make money, so if the product doesn’t work you’re going to starve.
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. For example, before my most recent book came out, I wrote down, Everyone will think it sucks and that I am a loser. Then I wrote, Solution: Refund everyone their money, go back to my consulting business.
There was no real risk, even though it felt emotionally terrifying. Counterintuitively, the riskier thing would have been to release it later. If I had spent three years working on it, and it had flopped, that would have cost me a huge amount of time and money.
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Speed: The secret for how to get ahead.
“If you are not embarrassed by the first version of your product, you’ve launched too late,” says Reid Hoffman, cofounder of LinkedIn. Most entrepreneurs fail because they focus on not breaking things instead of on moving fast. If the project you are working on is cheap to be wrong about or being wrong is easily reversible, 70 percent is a good heuristic for finding the optimal point on the ETTO spectrum. It means you're moving fast, and it's likely to work.
The foundation of the 70 percent principle is this: What feels risky is safe. What feels safe is risky.
So, at 70 percent, press Go .