Three phases and attitudes of Product Development
By: Simón Muñoz
Tags: Product, Development, Product Development, Product Management, Startup

Three phases and attitudes of Product Development

The time the Founding Father of Agile recognized that Waterfall development could work. Two new mental models: 3X (Explore, Expand, Extract) by Beck, and Pioneers, Settlers, Town-Planners by Wardley. Learn how to combine them to enhance alignment in your teams. Simón Muñoz Dec 10, 2020·7 min read

Kent Beck and the 3X Model: Explore, Expand, Extract

The year 2016 is when Kent Beck, founding father of the Extreme Programming and the Agile Manifesto movements, published a changing paradigms article: The Product Development Triathlon.

Beck begins the article with this first paragraph:

25 March 2016. Because I keep careful notes these days, I can identify the precise moment when I asked the question I should have asked twenty years ago: what if those waterfall folks are not wrong? What if they are solving a different problem than I am solving? What problem is that?

This epiphany does not come to him by chance. Beck is working for Facebook at the time, where he founds successful teams working with the most diverse methodologies, including the classic Waterfall development model.

The question then arises. What if there is no model (Agile, Waterfall, etc.) that works for all product development phases? What if in each stage, some models behave better than others?

From there, Beck introduces a Sigmoid-type curve and goes on describing three stages that each product goes through during its evolution: Exploration, Expansion, and Extraction.

Explore, Expand, Extract — Source

In his own words:

Product development proceeds in three phases: 1. Explore–the risky search for a viable return on a viable investment. Successful Exploration is unpredictable, so the highest expected value strategy is to reduce the cost of experimentation and put a little investment into many, uncorrelated experiments. If you are lucky, one of these experiments turns out to be unexpectedly successful, which leads to: 2. Expand–now things are going nuts (think Pokemon Go or Facebook Live Video). Unanticipated bottlenecks appear. All you have time for is to eliminate the next bottleneck just before it derails you. Once growth becomes routine, it is time to: 3. Extract–now the shape of the problem and solution spaces are clear. One euro in equals three euros out. Playbooks emerge: here is how you roll out the service in a new city. Economies of scale matter: delivering the service at lower cost is more profitable.

For Beck, each of these phases presents different problems and, therefore, require particular approaches. We can’t expect to operate the same way during Exploration as when we are in Extraction.

If we assume this postulate, the classic Waterfall so vilified by the Agile Manifesto followers can work. But it works in a particular phase, Extraction, in which you have eliminated all the uncertainty and your future is predictable. This stage is characterized by 1+1 equals 2, allowing you to correctly estimate and lay down plans with a high degree of confidence.

By contrast, in Exploration, where most Startups live, 1+1 can be equal to 0; Or 17; Or any other number. In this phase, the uncertainty is maximum, and your only objective is to optimize the number of experiments to find those growth levers that allow you to reach the next one. Most experiments will fail (1+1=0), but the ones that succeed may be exponential (1+1=17).

In other words, there are no right or wrong models. A model will be more or less successful depending on the phase in which our product is. And this is important because it also affects the profiles, the people, who will stand out (or suffer) in each phase.

Pioneers, Settlers, and Town-Planners (PST)

Therefore we arrive to Simon Wardley, currently a researcher in technology, with experience managing development teams. In 2015, Wardley wrote a post on his blog in which he stated that not only aptitude but also attitude is key when building a team.

Wardley raises three types of profiles according to their mindsets: Pioneers, Settlers, Town-Planners.

Pioneers are those who are better suited to deal with uncertainty. They are the adventurers not afraid of entering uncharted territories. They enjoy exploring, paving the way for the next to come, and have the ability to correct course quickly, even if it means retracing their steps back.

Settlers are those profiles that pick the paths pioneers have successfully opened. They improve, expand, and make them useful to be traveled on (or commercialized).

Town-Planners, pick what the Settlers have enhanced and the market validated, and then industrialize it. Their specialty is optimizing costs by taking advantage of economies of scale. There is little to no uncertainty; each euro earned from the margin is one euro more of profit. Their way of thinking is structured and long-term.

Pioneers, Settlers, and Town-Planners — Wardley

Merging 3X and PST to improve the productivity of your teams

We have seen two mental models, Beck’s 3x and Wardley’s PST. It is easy to see how the phases of one and the other’s profiles overlap almost entirely.

The consequences are not trivial, and it is that, depending on the stage in which your company or product is, some people will fit better than others. Similarly, we must pay special attention to phase changes because the profiles and models you used in one won’t probably adapt well to the next.

For example, if your company is in Exploration, you’ll need Pioneer-type profiles who are comfortable with uncertainty and can withstand or even excel in chaos. However, if those same Pioneers reach the Extraction stage, they will find themselves lost.

Likewise, if you try to explore with Town-Planners-type profiles, you will make them terribly unhappy. Their mental models are not prepared to open new paths; they need certainties and precise plans. And since this is their natural tendency, if you do not identify the problem soon, you may end up building in excess to do any experiment, which in the initial phase of any product can kill you.

I have just introduced an essential concept that of happiness. It is no surprise that your employees’ satisfaction is key to productivity, and this is closely related to having each profile at the right place.

Suppose Pioneers have to act as Town-Planners, or Town-Planners do the job of Pioneers. In that case, unhappiness will grow, productivity and motivation will suffer, not to mention the costs derived from staff turnover, etc.

Use the 3X curve as an alignment tool

Not everything is lost. Fortunately, human beings are smart enough to adapt to different contexts, but it is essential to understand where we are and how it affects what is expected from us.

For example, as a recently graduated engineer, my profile was that of a Town-Planner. I had little adaptability and was easily disturbed by uncertainty. However, over the years, and after having gone through different and varied professional experiences, I learned to embrace change as part of my daily life.

It is that experience that I try to transmit to my teams every day, clearly explaining the phase in which we find ourselves and what the company expects from us. I do it out of self-interest because I need a motivated team, which is impossible to get if we disagree with the game we play.

For this purpose, the Kent Beck 3X curve is an ideal tool. A good team exercise would explain the different phases, draw the curve on a board, and then have each team member point where they think the product is.

The more the team agrees on the stage, the more alignment you will have, and the easier it will be to achieve your goals. If you find yourself at opposite ends, you will need to dig deeper and understand why you think differently until you get to the root of the discrepancy and fix it.

You can do the same exercise at the company level. Misalignment does not only occur between teams but also between departments. Believe me; there is nothing sadder than seeing two areas pulling the company in opposite directions, both believing they are doing the right thing.

A company can have products in several phases

An important note is that while generally, a company is in a single phase at a specific point in time, its products can be in different stages. A good example is Facebook, which we could probably position in Extraction, but having products in various maturity grades.

And this is relevant because it means that all profiles can fill a gap. If an employee has a Pioneer profile, take them to a front-line team where everything is yet to be discovered. On the other hand, if you have a Town-Planner, transfer him/her to those teams that work more long-term and need more structured thinking. Both will be happier, but above all, also more productive.

Conclusions