The Myth of "Pick Any 2: Fast, Cheap, Quality"

If you’re starting a hardware company, you’ve likely heard “Hardware is hard” from your entrepreneurial software brethren. You need more time to launch, have longer development cycles, need more capital to get off the ground, have lower margins, and all that VCs are more wary of what you’re doing, limiting the capital you get and compounding all the difficulties above.

You’re fighting a war on all fronts, and your main enemy is time.

You’ve got your POC, EVT, DVT, PVT, supplier lead times, and a long working capital cycle working against you.

So in the old world mantra of “Pick any 2: Fast, Cheap, or High Quality”, it might seem that you’re fighting a war that can’t be won. You don’t want to sacrifice on quality, and you certainly don’t want a crappy product, so does that mean you have to burn all your capital while you try to make it to market?

What if I told you that you could have them all? That increasing speed actually improves the cost and quality of the product?

Tim Cook is the operational titan who built Apple into the world’s first trillion dollar company. He wasn’t the product visionary that Steve Jobs or Tony Ive were, but he was the one who helped get them to unheard of gross margins of nearly 50% and built them into a hardware juggernaut.

How did he do it? By making time his #1 enemy.

And Apple’s products never suffered for it, their quality is spectacular, their products aren’t cheap, but he was able to turn on production lines, speed up logistics, and get the whole business running like a well oiled machine based on the philosophy of competing against time.

“Competing Against Time” by George Stalk is the one book he recommended for all his executives, and it lays out the philosophy that allowed for Apple’s continuous hitting of the targets in a way that other companies couldn’t dream of.

Let’s take a look at how making speed your number one goal allows for polished products and great returns.

Staying behind on tech trends can be a career killer.

But let’s face it, no one has hours to spare every week trying to stay updated.

That’s why over 100,000 engineers at companies like Google, Meta, and Apple read The Code twice a week.

Here’s why it works:

Join 100,000+ engineers who read The Code to stay ahead of the curve.

Quality is a function of iterations, not time.

When Tesla released their first cars, early sales associates knew to only open the doors by the interior door handle because the fancy pop out handles were too unreliable to use. For such a sexy looking car, their quality was well below the standard automakers. Early reports of panel gaps and leaks and creaks, not to mention motor and battery failures peppered the forums. 

But Tesla operated differently than the other automakers. Despite their 100+ year head start in building cars, Tesla was able to surpass them in consistency and quality within a decade thanks to their full-speed-ahead way of operating. 

With 20+ changes hitting the line every week, compared to their competitors doing their standard once a year updates, Tesla was able to surpass their competitors after a decade of producing cars.

Moving faster may seem reckless, but with a system of rapid iteration, the rewards compound far faster than a slow deliberate product improvement process.

But isn’t that expensive? Having to redesign everything all the time, dealing with the complexity of managing a BOM to that level of changes? Having to have manage any dead stock from rapidly changing parts?

Not with an organization built around time management.

Tesla is well known among suppliers as being demanding, of even having contract stipulations that to win a contract, the supplier must set up shop within a short drive of the production factories.

When an engineer can drive to a suppliers factory on their lunch break for a quick design review, they’re able to drive changes faster.

When they have suppliers nearby, they don’t require 2 months of supply sitting on a boat and they’re able to implement changes quicker while also reducing the cash needed to buy parts.

And now the pieces start to fit together well.

Suppliers close by → faster design changes and lower cash output → a better product for cheaper.

The “Pick 2” myth busted directly. When minimizing time is the number one focus, the product improves faster, and the cash required to scale goes down, giving you all 3 on your Fast-Cheap-Quality triangle.

There are 100 places to implement this in your business.

Speeding up sales reduces the amount of finished goods inventory you need to store, improving your cash on hand and reducing warehousing needs.

Improving payment terms helps with cash on hand, moving your suppliers nearby effectively reduces it further while also minimizing the amount of cash you need to store on hand and improving product development.

The added benefit of this is that speed is contagious and compounds. It helps prevent bureaucracy from popping up while the rest of the business moves faster to keep up. Meetings stay shorter and more time goes directly to work. 

Customers are happier as your service team gets out quicker responses and their products keep up with the latest improvements, as they get their product shipped faster. Employees learn faster and become veterans earlier in their career.

It’s why Amazon patenting their “One Click Purchase” was a 28-year cheat code as customers could buy faster, and their 2 day shipping took them to be the 2nd trillion dollar company.

So you may scoff every time one of Elon’s rockets blows up, but he doesn’t care because they’re building so fast and learning so much, and why Facebook’s early mantra of “Fail Fast, Fail Often” took them so far.

So next time your engineers are pushing for more time, try pushing the other way and seeing what can get done this week, or even today. As Elon says, “if the timeline is tight, it’s right. If it’s long it’s wrong”.

If this resonates with you and you’d like more ways to build time directly into your company’s operating system, check out Competing Against Time and see how your company can improve their velocity.