Lemon #114. Seven signs that your industry is for costovation
While reading “Costovation” from Stephen Wunker & Jennifer Luo Law we learned about the seven signs that show that an industry is ripe for Costovation.
As Vogue editor Anna Wintour once said “It’s always about timing. If it is too soon, no one understands. If it is too late, everyone’s forgotten”.
The seven signs that your industry is ripe for Costovation are:
- Expensive features: A significant amount of cost is driven by a handful of features.
– Isolate the features that drive up costs. Cut back or find ways to improve their ROI.
- Expensive customers: A significant amount of expense is driven by a handful of customers.
– Adjust your approach to serve the expensive customers more efficiently or make the strategic decision to focus on other populations.
- Expensive sales: A significant amount of expense is in sales, not in the product itself.
– Find daring new ways to circumvent traditional sales channels.
- Over-standardized product: Output is standardized despite very specialized customer needs.
– Zoom in on the customer subsets that are dissatisfied or under-satisfied with current solutions.
- Over-standardized sales: The offering is sold the same way to all customers.
– Identify customer segments whose needs are being underserved or overserved by the traditional sales mechanism.
- Cost imbalance: The revenue for certain activities is not proportional to their costs.
– Stand out in the industry by adjusting pricing to accurately reflect the value being delivered.
- Contingency creep: The system is built to cover all conceivable use cases, even those that are rare.
– Pick your battles and focus on what is the most impactful.
Remember that the tendency for companies over time is to add, add, add, add, and add to keep everyone friendly.
Stephen Wunker & Jennifer Luo Law @ Costovation