As a software developer, I’m used to the concept of vertical slices. They allow to be able to deliver value earlier, to iterate faster, or to create a proof-of-concept for evaluation/presentation. In software vertical slices are superior to horizontal ones (feel free to prove me wrong in the comments).
In other industries, this is not necessarily the case. Imagine pouring the foundation for a living room first, then building its walls, electricity etc. After everything is done you’d do the same for the kitchen. This would not only be ridiculously expensive, but also dangerous during earthquakes.
Despite building foundations though, there must be cases where the vertical slices make sense for non-digital industries, right? And with “make sense”, I mean
- valuable for customers
- valuable enough so that they’d actually be willing to pay extra for it*
* because these small slices create overhead and therefore may be costly
Let’s look at some fun thought experiments. The following examples are from industries I have honestly no clue about, so feel free to correct me in the comments:
Imagine buying a new motorized vehicle. Often these are highly configurable, from extras you absolutely need (a cupholder IN EVERY WHEEL? How neat is that? I can have a refreshing drink while changing the tires!) over colors (anything is cooler with a “metallic”, “matte” or “extra dark” suffix). Imagine a vendor told you that you have to wait six weeks for your new vehicle. After some probing, she’d admit, it’s only four weeks if you take the “boring old grey” variant instead of “red glossy metallic extra dark” because of the careful hand-layered approach of yaddayaddayaddah… I, personally, would just pick the cheaper grey variant and be done with it.
But what if the vendor told me “We’ll deliver the vehicle to you unpainted and we’ll pick it up two weeks later for a day when our paint facilities have an empty spot”. Now this sounds cool and valuable!
- I can drive my vehicle two weeks earlier
- I could even have a look at the real thing in my yard and decide “Oh, maybe green is the better option after all!”
- Ideally I only pay the base price now and the premium for the paint job later
Now we’ve sliced the vehicle into two parts, “base product” and “paint job”, however much smaller slices would be possible. A “do-it-yourself” kit could be delivered that contains all vehicle parts (engine, brakes, tires) and an instruction manual. This obviously reduces the value for me – if I wanted to build it from parts, I wouldn’t have gone to a dealership in the first place. I would have ordered some crap from ebay and amazon, combined it with my power tools (I imagine the process of building something like that a little bit like a point-and-click adventure, and I am very likely wrong) and then thrown the ruined parts away a week later so I could THEN go to the dealership after all. But depending on the target audience, do-it-yourself might be a viable option.
The purpose of this mind experiment is, finding the right size of vertical slices to find a new cool idea to improve a business.
I think I found something small when ordering muesli (cereals) recently. I wanted to give a box of muesli to someone as a gift and chose an amazing company that lets you select the ingredients, mixes them for you and sends them to you. Not only could I avoid raisins (why do people put them in muesli? What’s wrong with mankind?), but I could also add chocolated espresso beans, so that saves one cup of coffee a day. Due to corona the company is a bit slower than usual to mix and send out the mueslies.
During ordering I was told “Because you selected a packaging with a special print on it, delivery will take one additional day” or something like that. Here the slice really jumps at you: They charge extra for the special package and they have an additional delivery step for it – why not send me the muesli in the normal box first and then put a sticker with the beautiful print with custom text in an envelope two days later?
I have the muesli two days earlier – This is a significant bonus for the product, especially when intended as a gift. “I know it’s your birthday today but your present will arrive tomorrow” sounds super lame, however a painted “”Happy Birthday, XYZ!” on the box and “Your custom himalaya package I ordered will arrive tomorrow, but here’s already muesli from your favorite ingredients” sounds cool.
These thought experiments are fun (at least for me), but they aren’t really data-driven: If I told the muesli guys about my idea, they would probably not act on it. Maybe they already had the same idea and came to the conclusion that it is too expensive / not good press / bad for the environment.
I believe that a clue to reasonable slices is analyzing business capabilities first. At first I wondered whether it makes more sense to look at value streams, however I believe that the vertical slices can become values streams of their own and are often “value streams that have not yet been identified”. Therefore capabilities seem a good starting point, because that way you can see what your business does, slice it off and sell it as something special to the customer (“Order confirmation costs 10$ extra, yay!” – kidding of course). Of course before you can analyze your business capabilities, you have to have a solid understanding of your business model. So here’s my – never-tested and therefore highly theoretical – approach:
- Use a business model canvas to visualize your business model
- Translate the business model canvas to business capabilities
- Mark capabilities that aren’t part of a well-defined value stream yet
- Slice them into smaller slices as long as they still offer value to the customer at either a reasonable price for the company (or, even better, try to market them as separate product / extra with its own price point)
- Disrupt your industry
- Profit!
What do you think?
Images:
– T-Shirt: T-Shirt Design & Foto by me
– Sliced muesli: Free-Photos on Pixabay
– Sliced car: jirikraus on Pixabay
– Business Model Canvas: strategyzer.com (click on image for bigger version with license information)