Distribution is the New Agile
Will Software Learn The Lessons of a New Way of Working, or Just Grasp at The Shadows?
The movie business is a high stakes, high rewards business with 7 out of 10 movies resulting in financial losses; yet, despite a 70% failure rate, the movie business continues to be big and profitable, raking in an estimated $42.5B in 2019.
The studio system has had over a hundred years of time tested strategies to manage complex risks and huge upfront investments. Twenty years ago, the advent of new digital technologies challenged the established system. The Blair Witch Project was shot on an estimated $25K budget with the newly affordable Hi8 digital camera. It currently holds the record as the most profitable film in history, with box office in excess of $230M, It is the rags to riches disruptor that make the studios sit up and take notice.
Instead of large upfront planning, budgets, and risks; could smaller, more agile films replicate The Blair Witch’s model and success? A new generation of low budget films were spawned; but 20 years later, still one third of 2019’s total box office came from the top ten blockbusters. The highest ranking agile movie came in at 51st. Escape Room, with its scrappy $9M budget, banked $155M box office for a 17x return on investment. However, $155M in movie terms is a longtail play (0.03% of the box office) and Blockbusters come in with orders of magnitude larger returns.
During the time of Blair Witch, software was facing a similar sea change. Up until the 90s, computer time was the main limiting factor in development costs and schedules. 8 of of the top 10 software companies of the decade were exclusively enterprise software.
The advent of cheap computers meant that small teams could afford to build software and near ubiquitous access to the new World Wide Web created a global distribution platform that circumvented the software studio channels. In addition, the web was new and the requirements for consumer web sites were simple enough that small teams could quickly bootstrap and launch viable sites in weeks.
Investors, eager for the next gold rush, poured in cash as they speculated and on the next big trend. On America’s West Coast, you couldn’t find a garage or repurposed warehouse that wasn’t infested with one of the new agile startups. Quickly names like Yahoo, Pets.com, Ebay, and Google became household names; and like Blair Witch, the traditional players wanted to know the secret.
This is where the movie and software industried diverged. Both are industries that are driven by big egos, mythologize their own origin stories, require constant innovation, and are gambling that they can build today what will be gold tomorrow.
The movie industry has been around in some form or another since the beginning of the 20th century. It was not built by Stanford MBA models, Gardner Quadrants, or 7 Habits of Highly Effective People. The studios that survived a century of changing tastes, social and technical disruptions, and multiple economic collapses did so on the backs of good project and risk management, maximizing the leverage of their investments, and always adapting in a constantly changing world. When new digital technologies allowed new directors to cheaply make and distribute movies, studios didn’t try to replicate the situation; they sought to adopt and adapt the lessons.
A lot of customers only come out for blockbusters. If studios limited themselves to smaller, more agile movies, they would lose most of their market. Instead they adapted the technologies to streamline making blockbusters; reducing production costs, shrinking schedules, and reducing risks. New agile production also created oppertunities for new products such as the cheaply iterated horror franchise movies like Saw and Paranormal Activities. The digital revolution was less a disruption than an iteration on the themes of better risk and project management and the next generation of cheap long tail money makers.
The software industry, on the other hand, didn’t learn lessons. Instead it tried to replicate the conditions of the early agile teams. Never mind the fact that 8 developers in a garage cannot create the next Excel, nor can you test and iterate an MVP to the next Halo or BioShock.
The successful startup teams of the agile revolution had typically worked together in previous jobs and already had gelled deep and trusting relationships. They had shared values, culture, common ways of working, and styles of communication. They quit their day jobs to dedicate themselves to clear missions with a strong belief in who their customer was and why they needed their products.
Limited budgets combined with small teams of very talented founders who all understood the business, had high degrees of trust in each other, good group dynamics, able to wear many hats as needed, able to be flexible and firefight but also align to the longer mission — this is what made agile work. Agile is the result of good teams, not the cause of it.
Unlike more secretive movie studios, the software industry cannot stop talking about how they are disrupting. Blogs, books, conferences; we are awash in methods, best practices, and five easy steps to be the next agile unicorn. Companies create “innovation labs” with small groups of “rock stars.” Like cargo cults of polynesian islands, software is building bamboo radio towers and making landing lights out of fire pots; because that makes the planes bring cargo.
Quickly the books came out, The Lean Startup, From Good to Great, and Drive. Consultants started billing themselves as agile masters and delivery coaches. Matrix organizations got rebranded as tribes and squads and we are encouraged to “Measure What Matters” and align our KPIs with our OKRs.
We have been busy for the last 20 years selling the idea that replicating the artifacts of agile will invoke the trust, communication, talent, and focus of the original teams that created the agile movement.
Anyone paying attention is seeing a similar sea change across industries right now. Like agile, there will be teams that figure it out and thrive. There will be companies that hold on to old patterns and fade from relevance. But if this is anything like when agile swept the industry, most companies will try to replicate the conditions of the successful teams and not learn the lessons — and end up doing more harm than good.
In 2005 Basecamp launched its lightweight team coordination software. A year later Google Docs enabled collaborative documents. In 2011 Skype released free video conferencing across devices. Google followed 2 years later with Hangouts. For over a decade, people have been advocating the benefits of distributed team and remote working. The hurdle to traditional business (not to mention justifying all those long term office leases) has made adoption slow and sporadic.
Covid-19 changed it all overnight. Suddenly every software team is remote and distributed. When the offices re-open, companies will have to choose to return to traditional work, hybrid, or fully remote. Of course, this is assuming that we can or even want to return to the office in the first place. The health and sanitary conditions of the open office plan have long been the dirty little secret of the software industry — at the very least, maybe it is time to finally kill that management fad. [1][2]
By this time next year, the next cargo cults will by flying high; and the natives will be hiring distributed-work coaches, breathlessly blogging about video coffee time, talking about cross timezone task handoffs, and how to manage cost of living adjustments across markets.
Either way, there will be real challenges, opportunities, and lessons to be learned. There will be winners, losers, and way too many imitators.
