Tuesday, January 18, 2005

Hansen’s Laws

There are natural laws that govern how business acts and responds to the world. The more we understand these laws, the more we can work within them and be successful. The less we understand about these laws, the more likely we are to bang ourselves and our businesses up against them, and it hurts when we do. Over the next few postings, I’m going to share some of the natural laws I’ve observed.

#1 Pick Any Two

Downstairs, in my recording studio, there’s a sign on the wall. It’s very simply designed, printed off of my computer, tacked onto my bulletin board. But it’s the first of my laws of business.

It reads: “Good. Fast. Cheap. Pick any two”

At first glance, it’s often confusing to people. It’s not immediately clear what it means. But it demonstrates the ongoing tradeoffs and compromises that we face in business, and in life. It presents three qualities that are desirable in any circumstance. Then it points out that you can’t have all three.

Let’s consider all of the situations this simple law addresses:

First, “If you want it good and fast, it won’t be cheap.” Have you ever needed something done really fast? It’s got to be done by this Friday! So you call someone to do it, and they quote you the price.


Why so high? Well, because they’re going to have to really scramble, and really put out some time and effort to do a good job on such short notice. They might have to put off some other clients. So, they’re gonna charge you for it.

Another situation. Maybe you want something, say, a website. You want it done well, so it’s going to take some real effort to do, and you want it done soon. What that means is that you’re going to have to sink some real overtime into getting it done by your goal. It might not cost you extra money, but it won’t be cheap in terms of work, time, and effort.

Second, “If you want it good, and cheap, it won’t be fast.” So, maybe it’s important that something be done very well, and it be implemented effectively, and maybe cost is a big factor, and you want it cheap, or you don’t want to put in a lot of immediate effort. Then you have to be willing to accept that it will take some time to happen. No overnight successes here.

Often the providers are very busy, and they’ll be willing to work your project in. They’ll do a good job, but since you’re not paying top dollar, it won’t be a priority. As a result it’s good, and it’s cheap, but it’s not fast.

Third, “If you want it cheap and fast, it won’t be good.” If you’re not willing to pay the price, either in financial costs or in human effort, and you need it now, the results will be less than satisfactory. This, sadly, is one of the more common ways that this fundamental law is misunderstood. All too often, people jump into a venture because they think that with very little effort, and in only a few weeks, their business will be successful and bringing in the bucks.

But let’s look at that: With low effort (cheap), and little time (fast), it won’t be effective (good).

So, where do you sit? What can you do? Where do you fall into these equations?

Well, let’s say you’ve got a lot of time in the day, but you want to get it rolling soon. Well, then you’re in the “Good and Fast” category. You can put in the effort (making it not cheap). But let’s say that you’re working this part-time. You’ve got a regular job and a family to be with. In that case you want it “Good and Cheap”. It may take you a while to get it done, but with relatively lower effort per day invested, you get the job done. It’s a great website and good, solid business plan, but it just takes a little longer to implement it. But hey, that plan worked for the tortoise when he beat the hare!

The plan you definitely don’t want to buy is the “fast and cheap” package. Because of the three, that’s the one that brings results that are not good. And no matter what else happens, if it’s not effective, nothing works.


Pick any two!

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