From cycling to startups: the power of incremental improvements

2024 has been a landmark year for the sports world, with events like the Euros, the Paris Olympics, Wimbledon and the Tour de France capturing global attention. As I type, I’ve currently got half an eye on the 100m relay, in awe at the physical and mental fortitude it takes to be an elite athlete.

Behind the scenes, competitors and their teams are relentlessly pursuing every possible edge to outperform the competition. This concept of finding minor improvements is best exemplified through cycling coach Dave Brailsford's "theory of marginal gains," which he employed to great effect with the British Cycling Team. The essence of this approach – improving everything by just 1% – subsequently saw British riders rise from ‘also rans’ to multiple gold medal winners and Tour De France champions. But this doctrine of cumulative gains can be a powerful tool in business as well.

Google, for example, runs 12,000 data-driven experiments annually – tweaking the shades of links, in one case – in order to discover small weaknesses and, thus, small improvements. In healthcare, a hospital in Seattle, USA – highlighted in Matthew Syed’s novel Black Box Thinking – started a system of small systematic improvements which led to a 74% reduction in liability insurance premiums.

At JustFix, we've integrated the theory of marginal gains into our core operational philosophy. The idea is simple: small, consistent improvements across various facets of the business can compound over time, leading to significant overall gains. This approach is akin to the Japanese philosophy of "kaizen," which emphasises continuous improvement in all aspects of life, including business.

In October 2022, early in JustFix's journey, we implemented a "marginal gains board" on Trello, an online production management solution. This board was a space where our tech team and other departments could log small changes they believed could enhance our platform. From tweaking the user onboarding process to optimising our website's conversion rate, every suggestion was a potential 1% gain. These seemingly minor adjustments often required minimal resources but could significantly impact our overall performance.

For example, early on, we noticed a high bounce rate on our homepage, which was critical as it was the first touchpoint for potential customers. By making a series of small, data-driven changes – such as adjusting the layout, simplifying the navigation and improving the call-to-action – we managed to reduce the bounce rate significantly. This not only improved user experience but also led to a measurable increase in customer acquisition, demonstrating the power of marginal gains in real-world scenarios.

The concept of marginal gains also applies to our financial metrics, such as the crucial LTV (lifetime value) to CAC (customer acquisition cost) ratio. Initially, our cost to acquire a customer was high – around £900 for a customer spending £150 on our platform. This was obviously unsustainable, so we focused on optimising our marketing strategies and improving our product offering to increase customer retention and upsell opportunities. By making incremental improvements in these areas, we've been able to significantly reduce our acquisition costs and enhance the lifetime value of our customers, thereby achieving a healthier LTV to CAC ratio.

This relentless focus on marginal gains extends beyond product and marketing. It permeates our company culture, influencing how we conduct meetings, design workflows and even how we think about customer service. It's about fostering a mindset that constantly seeks improvement, no matter how small the change may seem. 

This approach not only helps in optimising processes but also in fostering innovation. By encouraging our team to question the status quo and experiment with new ideas, we create an environment where continuous improvement is not just a goal but a way of life. As this McKinsey report suggests: “High-performing companies continually scour their organisation for outdated, inefficient ways of operating.”

One of the challenges of adopting a marginal gains approach is balancing attention to detail with a broader strategic vision. As a founder and CEO, it's my responsibility to move between micro and macro perspectives. While it's crucial to understand the intricacies of our product and operations, it's equally important to ensure that all these small improvements align with our long-term strategic goals. This dual focus helps in maintaining momentum and avoiding the pitfalls of getting lost in the minutiae.

For other business leaders looking to implement a system that embraces marginal gains, my advice is to start small. Begin by identifying areas where minor adjustments can yield significant results. Create a culture that values data-driven decision-making and is open to experimentation.

Remember, not every idea will work, but the process of testing and learning is invaluable. It's also crucial to maintain a balance – don't let the pursuit of perfection hinder progress. Sometimes, it's better to launch a product or feature that is "good enough" and refine it based on user feedback rather than delaying its release in pursuit of an unattainable ideal. As Sheryl Sandberg famously said in her book Lean In: Women, Work, and the Will to Lead: “Done is better than perfect.”

The theory of marginal gains, then, is a powerful framework that can transform not just athletic performance but also business outcomes. At JustFix, this philosophy has been instrumental in driving our growth and success. By focusing on continuous improvement across all aspects of our business, we are not only optimising our performance but also creating a culture that values innovation and excellence. As we continue to refine and expand our services, this commitment to marginal gains will remain at the heart of our strategy, guiding us toward greater heights.