Maple Syrup Wisdom

After staring into a pot of boiling sap for eight hours, I finally poured off a pint of rich amber maple syrup. The flavor is incredibly intense but slightly different from other maple syrup I’ve had – probably because I used red maple trees instead of the traditional sugar maples. Anyway the yield was pretty good (6 gallons of sap to 1 pint of syrup) and the color is fantastic. It does take a good deal of effort though, and gives me a new appreciation for the more-than-reasonable cost of pure syrup.

Part of the challenge of this endeavor lies with the fact that there are a couple things that are really beyond your control. The first is that the trees only produce a certain amount of sap and at a certain rate. No matter what, some trees will give a half gallon of sap in a day while others a quart in a week – you can’t change this. The other thing that really limits the process and consumes your Sunday is that no matter how hard you boil, the rate of evaporation is fixed. For my 5 gallon pot, I could boil off about 3 quarts in an hour. The limit is surface area, which is why you see sugar shacks with these 8 foot long flat pans.

This situation is similar to what many growth businesses face on a daily basis – there are lots of places to put more effort and gain more customers, but there are also some areas where your increased efforts will have little effect. Knowing which is which is critical to the wise use of your resources. Here are a few examples where you need to be cautious.

• Grow the market – I’ve seen many proposals and plans for increased revenue based on markets rapidly getting much larger. If you are the main driver of the segment (think Apple) then you have a good chance of ramping up the market by yourself. Since you are more likely in a highly competitive market with lots of players vying for a piece of the pie, the growth can still occur, but it will be at a moderated rate. You can’t just put more taps in the tree and get more sap. You need bigger trees, which may take a decade or two.

• Increase prices – An obvious route to more revenue is simply to raise prices. However, the price/volume elasticity is often overlooked (or unknown), and the results are not satisfactory. The value that the customer perceives is often governed by the importance of the problem that you are attempting to address. So it is often the customer’s situation that dictates the value, not your margin or product features or service quality.

• Develop new products – Most companies have well-defined processes for creating new product offerings. Some have keen insights on the customers’ needs while others build it, ship it, fix it and iterate until they get it right. Regardless of the approach to this, the rate of making new products is somewhat limited. You can’t develop and launch a new hardware/software system for molecular analysis in 4 months – there is a fixed rate at which these things progress. My rule of thumb is 12-18 months minimum, regardless of how many resources you throw at it. Companies get into trouble when they think they can truncate this process by more effort – water evaporation is about 1 gallon per square foot of surface, regardless of the amount of heat applied.

So before you apply resources to your recalcitrant problems and try to accelerate them, be sure that the limitations are soft or moveable. Pushing against barriers that are fixed will waste resources and create frustration. That said, I’m already thinking about next season and how I can get a bigger pot…