Crystal Lang

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Most proposals for a tech project share a problem: they consist of a few introductory sections dropping credentials, a list of scope gathered from conversations with the customer, a table with budget, a timeline with deliveries. The problem is that they focus on the wrong thing, and create conditions for a mismatch in expectations:

Businesses evaluate potential providers, not in terms of how well they can do the work, but on how capable they are of putting together an attractive proposal.

If we aim for better outcomes and better relationships, this needs to change. We hope this article will start that conversation.

In this article, we will walk you through what was probably the most innovative and forward thinking proposal-writing experience of our 2020: a startup came up with an experiment where two contractors compete head to head, to find the best suited one for their project.

By the end of this article, it will be clear that there is an alternative approach to thinking about tech proposals, one that works because it underscores what actually matters to a customer looking for a contractor, and because it focuses on the provider’s actual capacity to deliver what’s needed.

Origin story

At the end of 2019, we came in contact with Mimic, a startup on the look for a tech partner who would help them bring a new idea to market. Their core business was flourishing, they had recently finished a great round of funding, and they were determined to spend that money wisely.

Mimic specializes in producing food at scale and selling through online channels. Being a very competitive market, they meant to install a completely new way to conceive a customer’s interaction with the food they want to eat. Blow people’s minds and blow up the market, all in one stroke. We will explore how five key changes in the framing of an innovation project had a big impact on the results.

To make it easier and more pleasurable for you to read, we’re going to break it down into sections, each focusing on one key element of why their approach was so radical: transparency, expectations, communication, prototyping, remuneration.

Transparency

The first element of this experiment, and a cornerstone of this entire approach, is transparency.

Perhaps inherited from four and a half decades of Cold War, up until not too long ago, secrecy was widely considered to go hand in hand with innovation. Sayings like “secret sauce” and “secret ingredient” crystallized this vision: keep your cards close to your chest. Slowly but steadily, however, transparency has been gaining ground. And perhaps a lesson learned from those four and a half decades of Cold War, is that keeping secrets is simply too costly –and not necessarily advantageous.

We know that transparency enables trust, which is necessary when you want to get the most out of a collaboration. A provider that doesn’t trust you holds back on what they can do: no one wants to throw their best ideas on the table for free, so that the competition can then execute on them for less money.

But what if the competition was also sitting at the table? That changes things, doesn’t it? Well, it did. The client came forward with a conundrum: we’ve got two suitors and both have merit and experience, would you be willing to participate in an experiment to help us decide?

While it was definitely a rare event, the fact that the client was so transparent about having more than one simultaneous proponent had a trust-generating effect. It was a bit strange, but it raised the stakes and everyone knew what was going on. They were trusting us, and inviting us to trust them.

Expectations

The second relevant component in this experiment, and one that is often the seed of future displeasure, concerns expectations. Entering the competition, all participants knew what we were dealing with.

The client set up an all-hands kickoff meeting and explained, in detail, what their expectations were: they went over their business goals, market, customer base, challenges, lessons learned, trends noticed, and their vision about the future. Then, they presented the results of their market research, how they intended to act on it, and the role they envisioned technology could play in those plans.

They shared the slide deck with everyone, so we had their expectations and evaluation criteria in writing. At this point, the possibility of having doubts about what they were looking for was tiny. They knew what our expectations were, so they were very clear about theirs.

Communication

Just to be extra sure they weren’t taking any chances, the client decided to tackle one of the structural weaknesses of the traditional contracting scheme: communication

Usually, communication during the proposal elaboration takes the form of Q&A, rather than a collaboration and iteration on the actual work being done. For this project, interaction was built into the process from the beginning, by design.

Within the four-week span of the competition, we had a weekly meeting scheduled, to show progress, bring up doubts, give and get feedback. They were spearheading collaboration, and inviting us to partner on the making of the proposal.

Prototyping

Almost every company looking for a provider, in almost every field, conducts their search by looking at the wrong thing. They ask for proposals, portfolios and marketing materials, instead of actual work.

This is a hard problem to spot, because it is a common feature of the human experience. This is how we evaluate consumer product brands, potential employees, presidential candidates, you name it. The fact that it is a widespread practice doesn’t make it a good one, though. We all fall into this trap one time or another, but there is something we can do. We can –and should– ask better questions.

Someone’s ability to deliver good products is best measured by their ability to deliver good products. It sounds tautological, but it is the best approach you can take. What should be under evaluation is actual work done, representative of the same kind of service you expect to get from your provider, should you hire them.

If you are on the path of innovation, the single best course of action you can take is to allocate a small percentage of your total budget for that project to see if your idea holds water. Spend a little time and money to understand if it makes sense, and you will have saved a lot of time and money.

If you are evaluating a partnership with a provider for a project, isn’t it also the single best course of action to allocate a small percentage of your total budget to see what they can achieve with it? Nothing will give you a better sense of the value they can create, as giving them a chance to create value.

For this project, the client’s end goal was to tackle an USD 8 billion industry, starting with a very focused niche market, that could rapidly grow into a business serving over 20 million customers.

For such an ambitious projection, wouldn’t you want some kind of proof that your tech partner can deliver on their promises?

Remuneration

Last but not least, the element that ties everything together and makes this crazy experient work is remuneration. Paying people for the work they do always makes sense, but especially when you are asking them to bet on you.

Think about it: providers don’t know for sure that the proposal will get them hired. For them, it’s a gamble. Sure, an open and transparent competition scenario raises the stakes. But there is a point along the curve where investing becomes overinvesting. And that point isn’t always easy to determine If providers are competing for free. The quality of the proposal will be a compromise between how much they care to get your business –their expectation of how much they stand to win if they do a good job–, and how much time and effort they can afford to spend on something that might not pay off.

It’s analog to how quickly you will be serviced when walking into a restaurant: if the place is crowded, you won’t be the priority; and if there aren’t that many people there, the wait will be shorter. But who wants to eat at the empty restaurant, after all?

The quality of the proposals you get is in direct proportion to the amount of time and effort your providers can dedicate to them.

As a client, you can influence that. You can acknowledge the work that goes into designing a proposal and pay for it. It is like any freemium model: whatever you get for free, is marketing for the company behind it; the features that will really make a difference for you and your business are likely behind a paywall.

Funding a proposal guarantees that your provider is going to be fully invested into it. And it sends a clear message that you value their time and their work.

This startup decided to take this path. They were letting us know that they valued our time, and that let us know that they value their own.

Takeaways

Innovation is usually thought of as the outcome of a process, but it can –and perhaps should– also be applied to the process itself.

Understanding that there was a lot of uncertainty to be dealt with, this startup opted for maximizing their chances of creating a truly innovative product by investing in a truly innovative proposal design process.

Understanding that collaboration yields better results than speculation, this startup opted for minimizing their risk by creating a transparent, open and hands-on experiment, where providers developed a proposal with them, and not just for them.

Understanding that communication is pivotal in reducing the chances of building the wrong thing, they built fluid interaction channels, not as an addition to the experiment, but as part of its underlying infrastructure.

Understanding that the work speaks louder than any deck ever could, they created an opportunity to show up and do the work.

And understanding that a good proposal is a sound investment, they invested in creating an opportunity for their providers to invest the time and effort that go into creating great proposals.

As David Grandes, Mimic’s CTO puts it:

“I think the biggest issue for other firms adopting this approach is not that they don't know how to do it. It's that they don't think paying for more proposals in parallel actually makes sense in the bottom line. In other words, they disregard the value of information. What made it super clear to me that in the end this was a solid investment, was seeing the difference in the proposals. It made me realize that the gap was so large that paying 2X for proposals was worth it.”

Innovation is about understanding, and taking action on that understanding. In this case, it was about understanding that the conditions in which great proposals are created are not a random and natural occurrence, but something that can be designed. And then acting upon that understanding. That is how you know a company is serious about innovation.

So, in order to get the best proposal for your tech innovation project, it’s fundamental to change the questions you’re asking about the process. Otherwise, you will get a very neat set of right answers that are of no use.

Don’t focus on the content: instead, create a context that enables and drives the rise of interesting questions and tiny, discrete experiments to test those questions. Not only will this give you a better tool for measuring your providers’ competencies; you will also learn valuable information in the process. It’s a win-win.