Overdesigning a Business

Preface

My first business, Mirror Lake, failed succeeded failed. The business did get to a state of profitability but failed as an investment. That means we were making a profit month-to-month when we sold the business, but never covered our initial capital. I’ve decided to share what I’ve done right and what I’ve done wrong. Each post will be an independent lesson so don’t worry about having read the previous entries.

Mirror Lake is a laundry and press service done differently. It was a new concept in Kuwait. The idea was based on a subscription model where you get scheduled pickups once a week at a fixed time slot. For example, you could be subscribed to pickups every Monday between 7 and 9pm. You don’t have to pick up the phone, use an app, or do anything. We’ll pick up your laundry every Monday, of every week, between 7 and 9pm. Drop offs would be 24 hours later (in this case, Tuesdays between 7 and 9pm). Here’s where things get better: you pay a flat-rate monthly fee in exchange for filling up your weekly laundry in a bag we provide. You don’t have to worry about separating colors from whites or dry cleans from regular wash clothes. We’d take care of it.

The Story

One of the major selling points of our service was punctuality. The timing of our subscription model, we felt, set us apart from the competition. Customers that would sign up to our service got a specific 2hr window. Their laundry would get picked up or dropped off during this time. A pickup slot might be 4 – 6pm for example, or 7 – 9pm. We believed that was a tight enough window to make our customers happy. Any wider time span would eliminate punctuality as a selling point. Little did we know that this constrained – even burdened – our operation. It also affected our profit margins. We were only able to serve a set number of customers per slot. This meant that we had a bottleneck for the number of customers we can sign up, and that we’d have to buy a second delivery van and hire another driver in order to accommodate more customers (ie incur more costs). That sucked. We had constrained our operations, and limited our profits, because of a decision made in the design of our service.

A decision that was based on an assumption, and not linked to a problem.

We assumed customers wouldn’t accept a bigger window. There was really no basis for us choosing to go with a 2hr window. Furthermore, a 2hr window wasn’t even part of the solution to the problem we were solving for.

The Lesson + What You Should Do

Aspects of your solution should always be linked to a part of the problem you’ve identified. In our case, we were emulating the process of washing laundry at home. And in Kuwait, pretty much every household has maids that take care of laundry duties. These maids are like little magic elves that pick up the laundry from several hampers located around the house and, once a week, do the washing. There is an element of punctuality, which definitely needed to be replicated in our proposed solution. However, there was no need for us to constrain it down to 2 hours.

When designing your own solution, be it a product or a service, make sure that every aspect of your solution is linked to a part of the problem. Any added functionality is a form of waste. This ensures that you don’t end up with an overdesigned business that will sap both your energy and profits.

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