Theory of constraints for startups

Sometime back I came across a video by Eliyahu M. Goldratt, the originator of Theory of constraints.

In any production process there would be constraints and they serve as a bottleneck for the overall output.

The theory suggests to,

  • 🕵️‍♂️ Keenly look for constraints
  • 👨‍🔧 See what can be done with available resource
  • 🎛 Bring other dependent activities down to the level of constraint to avoid pile up and over production
  • 🛠 Fix the constraint
  • ♻ Repeat the process and avoid inertia

It is so universal and has been applied for decades in manufacturing industries but somehow it is not that common for startups to do this.

Startups usually struggle where they have a product but no or not enough revenue. While there could be lot of reasons, one aspect which is not looked keenly is the constraints.

Some might sound familiar,

  • $ Leads not getting converted, still get more and more lead
  • 🙅‍♀️ Customers are not interested, continue marketing and pumping in more features
  • 👩‍💻 Employees do not have right skill / attitude, continue same hiring process

I guess not having a physical product and physical process like manufacturing, the cost associated with constraints goes unnoticed.

But smart entrepreneurs figure this out.