Plumbing

How do you avoid bottlenecks in your business? Don’t design it as a bottle.

All the fastest growing businesses aren’t designed as bottles. They’re designed as plumbing systems. Take Grab (formerly GrabTaxi) as an example - Malaysia’s four-year-old ride-sharing startup just raised another $750 million this week, at a valuation of over $2 billion.

The company began after Tan Hooi Ling and her co-founder, Anthony Tan, were runners up of Harvard Business School’s Business Plan Contest in 2011 with the idea of launching GrabTaxi in Malaysia.

Hooi Ling says “Right after graduation, I flew back and went straight to a storeroom in Segambut (In Kuala Lumpur, Malaysia). It’s in the middle of nowhere. There was a storeroom that we could use for free.”

That’s where GrabTaxi started, before growing rapidly into Malaysia’s first Unicorn, relocating its Head Office to Singapore, and raising over $1 billion from China’s Didi and Japan’s Softbank.

Today, Grab is in Malaysia, Singapore, Thailand, Vietnam, Indonesia, the Philippines and is on track to reach over 3 million rides a day within the year.

Hooi Ling took on the role of COO and says “I like to fix plumbing. I think a couple of things I spend most of my time on these days is, firstly, on product. Secondly, is our people and, thirdly, is customer experience or customer support… I call them plumbing because once you get them working really well, it’s amazing what kind of output comes from them.”

So what’s the difference between designing a business as a bottle where you’re the bottleneck, compared to designing a business as a plumbing system, where you’re the plumber?

Business in a Bottle:

When you design your business as a bottle, it has a heirarchy structure where everything from decision making to marketing to sales to production have bottlenecks. The focus for daily improvement is on the management and product. Scaling x10 or x100 rapidly is impossible as breaks in flow lead to exponential growth in management, service and resource problems. Most often you become the bottleneck.

Business as a Plumbing System:

When you design your business as a bottle, it has a network structure where everything is decentralized, automated, self-correcting and self-improving. The focus for daily improvement is on the user experience and platform. Scaling x10 or x100 rapidly can happen by matching growing demand with growing supply. Flow grows exponentially provided you focus at being the plumber.

All today’s exponential businesses, from Uber to AirBnB (which just raised $850m this week at a $30 billion valuation) to Grab, have grown into billion dollar businesses in a matter of years by being designed like this.

What can you do to turn your business from a bottle to a plumbing system?

How can you switch from product to platform?

How can you create a self-improving user experience?

How can you decentralize and automate everything?

And if you don’t make any changes, don’t be surprised if you keep on finding yourself as the bottleneck in your bottle.

“In most organizations, the bottleneck is at the top of the bottle.” ~ Peter Drucker