The Faria WayThe goal of this document is to provide the reader with an introduction to the core principles that underlie our high-quality SaaS products.
In 2017, SaaS Internet development is most mature in the US, Australia & New Zealand – the rest of the world is mostly still working on paper – waiting for the future to be delivered.
Our job is to deliver the future faster and better than anyone within our vertical markets of choice and fully transition them off the paper to an optimal state. Unlike the consumer Internet, SaaS is focused on serving organisations, broadly businesses, governments and non-profits. SaaS represents the fourth and final stage of software evolution.
In the 1970s, software was accessible only through mainframes, in the 1980s through floppy disk & CD-ROMs via the desktop PC, and in the 1990s through the client-server model. SaaS takes this development arc into the 21st century.
- Anytime Anywhere: accessibility from any device with the Internet including mobile devices.
- Efficient: maintaining a single codebase provides a superior quality of service (no need to upgrade versions, ability to patch issues globally, single codebase that is easier to maintain, etc.)
- Standardised: centralising information in a common database model produces clean data, which is a prerequisite for connected systems that can be linked through APIs, webhooks, etc.
- Value-driven: zero marginal cost of delivery enables users to try before they buy, enabling them to derive value first. Paying for usage over time (monthly, annually) enables the cost to be spread over time vs. perpetual license providing greater predictability.
- Serviceable: the centralised model enables a superior level of support and an optimal user experience.
Like the ‘hub and spoke’ model that revolutionised logistics & transportation, SaaS represents a maximum optimum – it is unlikely for software systems to decentralise in the future away from this model.
The economics and capital efficiency of SaaS are superior to most other businesses and unlike the leading software companies of the 1980s (e.g. Lotus, Borland, Corel, etc.), SaaS companies are likely to sustain and compound a permanent competitive advantage over time i.e. they are less subject to obsolescence since they adapt to customer needs daily or weekly through regular releases and frequent interactions with customers (i.e. the service component) – each successive improvement and each positive service experience snowball to create an industry leader.
Lastly, SaaS services are embedded into core business processes & workflows, which result in regular or high-frequency usage, an established & trained process that becomes resistant to change and cumulative data build-up that makes switching more costly (and therefore unlikely) as time passes. SaaS doesn’t pursue customer lock-in through expensive licensing or opaque data formats. Rather, it delivers customer retention through superior satisfaction.
Some of our predictions for the not-so-distant future:
In the first stage, integrated SaaS systems will change daily work, automate data entry & processes, and eliminate paperwork.
The first generation of systems will eliminate positions involving data management or record-keeping in the ‘back office’. They will provide a standardised model for those processes industry by industry.
As SaaS systems are adopted and used, a common harmonised data model will be formed industry by industry, country by country within each vertical market, with real-time structured data and identity being an inadvertent, but critically important byproduct.
In the second stage, the identity and real-time structured data that SaaS systems have generated will be leveraged to enhance the underlying organisations to a new level of efficiency. It will no longer be optional for any organisation to adopt SaaS systems, it will be necessary for their survival and driven purely by competitive necessity.
Identity and structured data will raise the organisations with the greatest efficiency, and the best model of working, and inversely will eliminate those processes which do not work universally. Every process and data point will be codified through SaaS, perpetually refined through incremental feature requests, until reaching an optimal state.
During the first two stages, the companies that reach an optimal state the fastest, who achieve a broad-based scale will become the industry leader within each vertical market or geography. Like musical chairs, there will be changes in ownership and management, from the impatient to patient, short-term to long-term, the bored to engaged, and weak to strong.
Purpose – Why are we here?
We are here to build elegant software, which will deliver enduring efficiency savings, and to provide Four Seasons service in sales & support to ensure customer success within our focus vertical market.
There is no shame in building software for only a million people. We all start somewhere, usually somewhere small and humble.
It is likely more of an error to expend enormous energy and capital in trying to engineer something for a hundred million users and failing to achieve any adoption than to serve those who have not been served at all, and whose needs have been ignored.
“Niche” software for vertical markets should not be derided and are as worthy and critical as large-scale services.
SaaS services are the bridges of the productive Internet powering the information superhighway, and while the math is wrong, the principle behind the Bridge illustrates our purpose.
ERIC: Do you know I built a bridge once?
ERIC: A bridge.
WILL: No I didn’t know that.
ERIC: I was an engineer by trade. It went from Dilles Bottom, Ohio to Moundsville, West Virginia. It spans 912 feet above the Ohio river. 12,100 people use this thing a day. And it cut out 35 miles of extra driving each way between Wheeling and New Martinsville. That’s a combined 847,000 miles of driving, a day… or 25,410,000 miles a month and 304,920,000 miles a year .. saved.
“Now, I completed that project in 1986… that’s 22 years ago. Over the life of that one bridge that’s 6 billion… 708 million… 240 thousand miles that haven’t had to be driven! At, what .. let’s say… 50 miles an hour? that’s 134,164,800 hours… or 559,020 days… so that one little bridge has saved the people of those two communities a combined 1,531 years of their lives not wasted in a car! 1,531 years!”
To build a great bridge, we should first learn the principles of building a small one.
On taxes and morality of purpose:
“If a device would save in time just 10 per cent or increase results 10 per cent, then its absence is always a 10 per cent tax. If the time of a person is worth fifty cents an hour, a 10 per cent saving is worth five cents an hour. If the owner of a skyscraper could increase his income by 10 per cent, he would willingly pay half the increase just to know how. The reason why he owns a skyscraper is that science has proved that certain materials, used in a given way, can save space and increase rental incomes. A building thirty stories high needs no more ground space than one five stories high. Getting along with the old-style architecture costs the five-story man the income of twenty-five floors. Save ten steps a day for each of twelve thousand employees and you will have saved fifty miles of wasted motion and misspent energy.”
– Henry Ford
Pyramid Operating Model & Culture
The Pyramid operating model consists of component layers, which stack sequentially from top-to-bottom to construct a sustainable and enduring SaaS service.
Without each layer, there can be no product and without continuous commitment to the foundation which is Customer Success, the Pyramid cannot be sustained:
- Jobs to be done: this is the pinnacle of the pyramid – the guiding compass for what value the service provides. ‘Jobs to be done’ define the scope of the product, provide the story of the user experience, a reference set of existing and substitute workflows and the business strategy behind the product to ensure that it is both defensible and economically viable. Watch a full explanation from Prof. Clayton Christensen at The Business of Software Conference
- Blueprints: are the translation of the ‘jobs to be done’ into R&D-ready product designs & specifications.
- Product Development: this is the development stack where the blueprints come alive and are translated into a functional product via the tools of software engineering, which are then QA’d and deployed to staging for testing, or production for use by the customer. This process is kept as streamlined as possible to allow quick delivery of true value to our customers.
- Infrastructure, Security, QoS & DevOps: this layer involves the physical server infrastructure that the application is deployed to including application and database servers, monitoring and alerting tools, and other infrastructure. We monitor this layer continues to ensure reliable and secure data delivery within our 300ms Quality of Service (QOS) goal. For more on our infrastructure (physical and compliance) see our Security & Compliance page.
- Customer Success: this layer encompasses all customer-facing interactions: most importantly the quality of support & service, which can be best encapsulated by the Four Seasons philosophy. Our ability to reliably resolve issues according to our SLA and meet our commitments. Tangible aspects of this layer abound, from our ZenDesk ticket system to our call centre, tutorials, and even baseball caps and t-shirts.
The Four Seasons Philosophy
“Our first responsibility, of course, is to be profitable, which means, in a global economy: be competitive. But this no longer depends primarily on wealth creation through physical assets, it calls for wealth creation through human resources: the continuous input of information, ideas and enterprise from our employees. A high-performance company today is one with close cooperation from those who deliver service or make the product, those best able to spot and fix any problems as they arise…
In every area, we push down responsibility, from head office to our frontline people, who have the authority to make most decisions they feel are needed to satisfy our guests. That’s why, early on, we set a mandate of zero mistakes. Inevitably, of course, mistakes occur. But when our employees are trusted to use their common sense, they can, and do turn mishaps into new service opportunities. Then, what the customer remembers is not the complaint but the outcome.”
– Isadore Sharp
- We deliver efficiency. We measure our success by the amount of time saved and paperwork eliminated.
- Great service matters. We take our responsibility seriously. We pride ourselves on our fast e-mail replies and 24/7 accessibility. Whether you are in Hong Kong, Geneva or New York, we are awake when you are.
- Software should be affordable, which is why our service is priced reasonably with no server required.
- We don’t nickel and dime. Our competitors love charging fees for setup, online training, maintenance and upgrades. We do not. There are no hidden fees and no surprises. We operate transparently.
- Customers are our investors. They fund our development by paying for our service and by providing us with new ideas. We answer them.
- We are patient long-term builders. Benjamin Franklin once said, “Energy and persistence conquer all things.” We work hard to build great software and exceed expectations.
Principles and philosophy cannot be applied to practice successfully without the right organisation structure.
While we have been deficient in certain areas at times, we have tried to design (and redesign) the ship’s hull with the right materials to be fit for purpose for the long journey ahead, to withstand the violent sea, and to bring us to our destination successfully.
These are some of the organisational factors that have worked for us:
- We are management-owned and bear the risks and outcomes of our decisions.
- Our business is uncorrelated with the broader economy, enabling us to operate patiently.
- Being remote forces accountability to results, and remote enables solitude and focus that support FLOW: link here and video.
In recent years, the focus of many technology companies has shifted from solving a customer problem and winning the market and generating profits via “free cash flow” to sustaining secondary fundraising that has bore no relationship to the company’s true need for capital (i.e. successive financing rounds at ever higher valuations coupled with higher cost structures) culminating in a sale to provide liquidity for investors. As Henry Ford commented a century ago:
“Everything had to be planned to make money; the last consideration was the work. And the most curious part of it all was the insistence that it was the money and not the work that counted. It did not seem to strike anyone as illogical that money should be put ahead of work—even though everyone had to admit that the profit had to come from the work. The desire seemed to be to find a shortcut to money and to pass over the obvious shortcut—which is through the work.”
“Money comes naturally as the result of service. And it is necessary to have money. But we do not want to forget that the end of money is not easy, but the opportunity to perform more service. In my mind, nothing is more abhorrent than a life of ease. None of us has any right to ease. There is no place in civilisation for the idler.”
This is why the basis of our Pyramid is the customer’s success, without the product & service to enable success, there is no value provided and no remuneration earned or deserved. Honest work never comes to idlers as Ford warns.
The importance of long-term thinking is best illustrated by Amazon’s letter to shareholders in 1997 and Basecamp.
Project Management & Philosophy
Our philosophy on project management follows the principles described in Eliyahu Goldratt’s book The Goal: A Process for Ongoing Improvement:
- Maximise throughput: shipping and launching “complete” products.
- Minimise inventory: avoiding half-baked deploys & functions, and shipping products without validating demand.
- Minimise operational expense: reduce non-R&D costs to the minimum.
Finding and optimising bottlenecks:
What is the bottleneck resource holding things back? Are designs and specs missing? Pull requests not being reviewed with stale branches? QA not testing and giving feedback? Or is distribution & marketing not moving fast enough with campaigns? Not having adequate marketing collateral? What is restricting conversion? Complexity, poorly designed blank slates, an unclear setup process? Our primary job as Product Managers is to find the root cause and fix it urgently.
How can the bottleneck resource be optimised to accelerate the process? What is the most cost-effective solution to addressing the bottleneck? What are the missing inputs (e.g. development, QA manpower, design/UIs)?
Consider Andy Grove’s optimisation analogy (e.g. making breakfast is only as fast as the slowest process – normally making eggs). All other processes (making coffee, toast, pouring orange juice, etc.) can be done in parallel to making eggs to optimise the process.
To read further:
High Output Management by Andy Grove
Building “Complete” Products vs. Devices
In Bill Davidow’s classic book Marketing High-Technology Products – he described the concept of building a complete product vs. a device.
Davidow’s key point was that many companies prematurely launched devices, which failed halfheartedly because they lacked “basic” necessities – this is not to say that M.V.Ps serve no purpose, but they are highly challenging to sell to “enterprise” businesses or any serious organisation.
In 2007, we learned this lesson the hard way, while we were obsessing over icons and building something aesthetically pleasing for ourselves to use as students – ignoring our actual customers – we neglected all the other essential components like support & help tutorials, a structured setup process, etc.
BOTTOM LINE: Incomplete product development wastes engineering time (even if functions are built, all the other elements must be in place and planned properly for the software code to become a usable product providing benefits for a customer).
A handy checklist of what makes a product “Complete”:
- Support: By e-mail or telephone that is friendly, responsive and genuinely helpful.
- Tutorials & Documentation: A clear explanation of how to use all key features with screenshots and step-by-step guides.
- Blog & Twitter, Newsletter: Mechanism to inform users of product updates, company news, downtime, etc.
- Setup & Getting Started: This process should be as clear as possible so that new users can jump into the system smoothly without headaches i.e. it should not be a difficult process.
- Demo Video: A brief guided introduction to the product.
- Print Materials: Marketing collateral including the public website, brochures, e-mail templates, etc. should be designed consistently to support the product.
- Behind the scenes: The stuff no one ever sees, but still really matters. Get insurance, make sure backups are working, have downtime notifications, and monitor application response times religiously.
Caring for the Customer
The principle of successful engineering is the same, beginning with sincere and genuine “Care” for the Product.
Without “Care”, there can be no product, and this feeling is dependent on successful collaboration between R&D and S&S teams working to complement and reinforce each other.
These are some points to consider for both S&S and R&D:
- Think about the issue as though you are the customer. If it’s a bad bug would you expect it to be fixed urgently? How would you feel?
- Be honest with the work, honest in evaluating others on your team and only delegate after the DRI has been proven – never before. More stress, anger & frustration and lost sleep have been caused by premature delegation than almost any other cause.
- Remember that S&S is the bridge to the customer and a shield: they will insulate R&D from abuse or angry customers, but it does not mean there is no stress or “cost”. Both sides should show gratitude regularly for each other’s mutual sacrifice (R&D staying up late to fix an urgent issue, S&S for taking the hit from the customer & being the deliverer of bad news).
- Communicate in detail and regularly (in higher frequency for high-urgency situations) and close the loop upon resolution by letting the customer know as soon as practicable (not only does this build customer confidence & trust) it strengthens R&D and S&S collaboration (each side has each other’s back and reinforces this cooperation). Be sure to include everyone affected in the communication: not just R&D and S&S, but Design, DevOps, and even G&A at times must be in the loop.
- Scaling the Product pyramid is a matter of learning the right process, staying true to solving for ‘jobs to be done’ and building effective communication and teamwork that is focused on customer success.
THINK by Thomas Watson
“By THINK I mean consider everything. I refuse to make the sign more specific. If a man just sees THINK, he’ll find out what I mean. We’re not interested in a logic course.”
The highest level of progression and success for an individual within a product R&D organisation is the ability to think critically and build a high-level understanding of the Pyramid.
An effective anti-fragile R&D organisation is one where all members independently think in a decentralised fashion without repetitive micromanagement and where individuals can be relied upon without second thought to carry out their duties.
In carrying out their duties, whenever possible individuals should rely on a checklist process.
Imagine a garden in a dream that maintains itself, automatically kills the weeds, prunes the vines, waters the orchids and regulates the temperature and sunlight to perfection. Everyone does their part and it works together like magic.
The opposite is each individual only executes without thinking. In this situation, the system falters rapidly because there are no secondary checks, or management to counterbalance and plan, and one careless error through transmission can bring down the system. “I was doing my job” is not a good excuse if you didn’t also close the loop with all the other jobs.
At Faria, we understand that our success comes from your success. The peak moments for our team come from getting customer feedback like this:
“You just made my day! I like this product.”
“You just took 40 hours of my work and did it for me in two clicks.”
We recognise that these moments of customer joy can only happen when the entire team is encouraged and enabled to deliver their best work. Everyone understands that our job is to do this work with maximum focus and minimum waste motion. This means:
- R&D can choose the best tools for their day-to-day work on an individual team or even a user-by-user basis. We don’t care what text editor or IDE you use as long as it makes you productive.
- Senior technical staff coordinates inter-project tool selection so that we run best-of-breed mail services, hosting platforms, support tools, and so on. We learn from each other and make smart choices that maximise productivity while minimizing our internal support load.
- Design works closely with teams across the company to deliver user interfaces that delight customers with both functionality and style. The design builds iteratively on past success and does not just “throw it over the wall” for others to implement without feedback.
- Customer service and QA are empowered to prioritise critical customer-facing issues for fast action and resolution.
- The senior management team understands that their core job is to remove blockers and afford growth opportunities so that every part of the company is composed of peak performers.
Within this framework, we move through our key tasks with the complementary tools of DRI and cross-check. Every action has a Directly Responsible Individual: At all times we know who to talk to for a particular feature, a particular to-do item, or a particular configuration change. But nothing is ever done only by the DRI: we have a system of cross-checks that gets multiple eyeballs on all changes. This allows us to deliver superior software without needless rework and rethinking.
To manage is to communicate. Our managers simplify and decide, serving our customers by serving the company rather than just ordering people around. We believe in providing resources and relentless follow-up to ensure our best work goes out the door without excuses.
We operate by the “No surprises!” principle: if you are just “doing your job” and you do not coordinate with all the other pieces of the company, then you are not doing your job. Communicate your work, make sure others have the lead time that they need for their work to coordinate with yours, always keeping the ultimate customer deliverables at the base of the pyramid.
Work, Life & Stress Management
Like Inception, we fight projections on a day-to-day basis, these projections come in the form of distractions, urgent problems that need resolution, someone else being a flake and killing FLOW, etc.
Having a bad day, in a bad mood, super depressed, feeling overwhelmed, really angry, or got sick. The best thing you can do for yourself and everyone else is taken care of yourself first and get back into the right FLOW.
If you do not take care of yourself, then this will build up into burnout and result in a crash.
Without FLOW, we cannot work and without FLOW stress and burn-out risk builds, when we work with FLOW we have no stress, and no problems – work is smooth!
These are some strategies to bounce back if somebody broke your FLOW: disconnect from the Internet, turn off Slack, take a walk in the park, go to the mountains, go swimming, read a book or two, watch a good movie, laugh or cry, get 10-12 hours of sleep, go to the gym.
Good YouTube videos to get back to FLOW and pumped up:
Music to listen to:
On problem-solving and resourcefulness:
“The cucumber is bitter, then throw it out. There are brambles in the path? Then go around. That’s all you need to know.”
– Marcus Aurelius
“We will either find a way or make one.”
– Hannibal Barca
We cannot solve problems optimally when we lack proper backup support (failed reliance on others) or when we do not have FLOW, therefore building and maintaining FLOW is the most important thing.
“When jarred, unavoidably, by circumstance revert at once to yourself and don’t lose the rhythm more than you can help. You’ll have a better grasp of harmony if you keep going back to it.”
– Marcus Aurelius
“In the meantime, cling tooth and nail to the following rule: not to give in to adversity, not to trust prosperity, and always take full note of fortune’s habit of behaving just as she pleases.”
“Offer a guarantee and disaster threatens.”
– Ancient Inscription at the Oracle of Delphi
Remember we only set a sequence of priority – rarely do we have guaranteed deadlines – don’t get stressed out if you think a deadline is at risk.
Just communicate it early when you have an inkling of doubt – the collective resources, experiences, creativity and mind-power of the team can only be applied if communicated.