Iteration Cycles: A tech business idea that can result in big changes for your wine business.
One of élevage Consulting’s operating principles is that the most significant potential gains in knowledge and performance result from adopting insights from other industries into our wine businesses.
There was recently a video on social media of ChatGPT founder Sam Altman discussing the value of decreasing the time for “iteration cycles.”
The idea is that many companies focus on the magnitude of product improvement with each new version, the iteration cycle. They want to make the next version of their product 25-50% better, and improvement on that scale takes time.
Mr. Altman suggests focusing on the speed of the iteration cycle instead of the magnitude of improvement. Reducing your iteration cycle from four weeks to four hours and making your product only 2% better with each iteration will, due to the effect of compounding, result in a far better product over time. He suggests that companies should aim to become the “fastest iterating company.”
How can we apply this idea of shortening iteration cycles to our wineries? We think of a winery’s “product” as the wine. Except for negociant type operations, the iteration cycle of wine is more or less fixed and very long. Even if we work on making Pinot Noir ready for bottling in 6 months instead of 10, we only have one harvest yearly. We can do very little in our winemaking to shorten our iteration cycle to less than one year.
“Reducing iteration cycles can become a powerful tool in our businesses if we reframe our ideas of what our products are.”
In many cases, such as methode champenoise sparkling wines, iteration cycles can stretch to many years. Regarding winemaking, it is best to focus on the magnitude of improvement with each iteration. Learn from your mistakes and make as many improvements as possible with the next vintage.
Reducing iteration cycles can become a powerful tool in our businesses if we reframe our ideas of what our products are. Our tasting room experience is a product. How we participate in an event, or the events we produce are products. Our email and social media campaigns are products. By expanding what we consider our product to be, we find many opportunities to reduce our iteration cycles.
Another place to apply this idea is our processes. How often do we find a way to do something and then just do it that way for years on end? How much material, time, and potential waste could we reduce if we thought about our processes as products we constantly strive to improve?
For example, what if we viewed our tasting room experience as a product with an iteration cycle of 1 day? Each time we turn the closed sign to open, we see a new opportunity, a new iteration of our product. There are thousands of elements to a great tasting room experience, most of which are tiny details. What if we did just one little thing better each day? In a month, you will see massive improvements to our product.
How about email campaigns? Are you looking at metrics? Are you A/B testing? Are you actively looking for something to improve with the next campaign? Even if you only sent one email a month, by actively improving each email by only 1%, you would be 12% better after a year.
Again, minor improvements compounded over time. What if we applied this discipline to 10 or 20 different aspects of the business? How much more profitable would our wine businesses be?
There is another reason to focus on the speed of improvement over magnitude. Asking ourselves or our employees to improve something by 20% or even 10% can seem overwhelming. Focusing on magnitude meets resistance, frustration, and, ultimately, failure. Ask someone to improve something by 1%, and they will do so quickly and stress-free. Then, simply ask them to do it again.
Incorporating the idea of reduced iteration cycles in our wine business’ culture demands we expand the concept of our products and commit to constantly improving our processes. It is a sustainable way to grow our businesses and our people. Most importantly, over the long term, it will produce exponentially better results than focusing on making large-scale improvements that take time and energy.
Where can you reduce the iteration cycle and implement small changes quickly and repeatedly in your business?