The lean start-up model: A better way to start a business or a methodology flawed from start to finish?

“Everybody has a plan until they get punched in the mouth.”

– Mike Tyson

Science Vs. Intuition

As of 2017, the lean startup methodology is one of the most popular methods of building a new business.

I know, it’s been 6 years since Eric Ries released his best-selling book “The Lean Startup” but it seems that the lean movement he helped popularize is not going away anytime soon.

And for many, that’s a good thing!

After all, as the lean startup supporters would say, it’s a scientific(ish) process that has been proven to work…

… not necessarily turning a (business) idea into a success but at least helping people find out – fast – whether it has market acceptance or not.

So what’s so special about it?

According to Steve Blank, also one of the lean startup pioneers, it’s special because “it favors experimentation over elaborate planning, customer feedback over intuition, and iterative design over traditional “big design up front” development.”

Which as you might agree, at least in theory, appears to be a more appropriate formula for startups.

But at this point you might wonder, if it’s an undisputed theory that does the job (for everyone) why even bringing this topic in the first place?

Well, because it simply is not undisputed!

In fact, the last couple of years more and more people came out of the woods and said: That thing doesn’t work; time to throw it under the bus!

And on today’s post will do our usual digging and find out how much of that is true and how much is BS talk!

Let’s get started…

The Case for Lean Startups

Before going into the lean critics, I think it is worth taking a moment and to see into a bit more detail on why the lean methodology got so much traction the last few years.

Early decisions are validated by data and not market guesstimates

A couple years ago the conventional practice of starting a new business was to a) create a static business plan (which as you know described not only the area of opportunity, but also how you’ll make things happen), b) build the product on stealth mode and c) almost religiously follow the prescribed action plan.

Nonetheless, at least for startups, that approach it would seem to be gone (as in forever).

Why?

Simply because many new founders got to agree with Steve Blank that a startup is not a smaller version of a large company [but] a temporary organization designed to search for a repeatable and scalable business model”…

… hence embracing the big corporates playbook not only is unhelpful but in fact can sabotage, big time, the chances of ever making it.

So what was the lean alternative?

Common, you already know the answer!

Rather than assuming you have the magical ability to foresee the future, you simply accept that you have a series of untested hypotheses and your job is to go out and test them the lean way.

Which, in a nutshell, can be broken down into 2 phases:

Problem space: Go out of the building – before building anything – and learn as much as possible about your target audience needs, goals and most importantly pain points (yes by talking in person with real human beings)

Solution space: Put together a minimum viable product and rapidly test your key business hypotheses before going to actually build the final product (by observing actual behaviours from end-users using your MVP)

And with the lean method briefly explained let’s jump on the other camp and see what the lean critics have to say!

The Dangerous Reality of Lean Thinking

Yes my friends, it’s not just Peter Thiel that dismisses the lean methodology, but in fact, there’s a whole community of entrepreneurs that fervently stand against the “go lean” mantra.

Because I know you’ll ask, here are the three fundamental criticisms of the lean approach.

Criticism #1: Code for unplanned

This one comes from Peter Thiel…

According to Mr. Thiel, would-be lean entrepreneurs have been trained to believe that: “nothing can be known in advance…[so] you should not know what your business will do; planning is arrogant and inflexible. Instead, you should try things out, iterate, and treat entrepreneurship as agnostic experimentation.

The consequence of that behaviour?

Encouraging new entrepreneurs to jump in a market recklessly – quite often without even a basic understanding of a) the market they are in, b) the competitive landscape and c) how they could create something with an edge.

Why?

Because of the misconception that since you don’t learn until you launch, the only sane thing to do is to launch something out there – super fast – and then based on customers’ feedback you will somehow manage to iterate until to get it right.

The reality?

That rarely happens!

Criticism #2: It gives entrepreneurs an excuse to create sh*tty products

Why do I say that?

Because of the MVP disease…

… which is the tendency of ‘lean entrepreneurs’ to think that they have to get something out the door as fast as they can, even if it’s half-finished, present it to early evangelists/adopters and let them “play with it” and then together iterate it until it is fully functional.

Why would they help you do that?

Well, according to the noted Steve Blank, a pioneer of this way of thinking, it’s because “they’re visionary customers. They fall in love with the idea of your product… [and] will stick with you through good and bad because they share your vision.”

The truth?

According to the lean critiques, the early evangelists simply don’t exist!

Yep, as they say, just hoping that some kind strangers will help you to iterate a buggy half-baked product until it is fully functional not only is delusional but will probably be the #1 contributor to your inevitable startup car-crush.

Criticism #3: It makes entrepreneurs quit, before even giving a good fight

Ben Silbermann, Pinterest’s founder, in an older interview said that he recently read Eric Ries’s, The Lean Startup, and was grateful he didn’t read it at the time because it might have convinced him to quit at that point.

Why?

Because the lean startup model gives people an easy way out.

According to Sramana Mitra: “the weakest point of the methodology, in my opinion, is the excessive emphasis on quick validation and pivot… But often, especially if you have strong vision and internal conviction about market, a product, a direction in which you want to take your industry, you won’t be able to score a quick validation. You would need to give yourself and the market some runway. The Lean Startup principle that Eric Ries espouses ignores this whole line of thought.”

Don’t blame the tool, blame the user

To answer today’s question I am of the belief that even though I acknowledge that ‘going lean’ doesn’t come without some glitches I do think, on the whole, it does more good than harm.

And I say this because hype-aside (and truth to be told when it comes to lean there is a tremendous amount of BS talk from the so-called “lean practitioners”) many of the weaknesses associated with going lean don’t necessarily derive from the system itself but rather from the fuc*ed up interpretation of (some) end users.

Yep, as they say don’t blame the tool, blame the user

Moral of the story?

Yes giving ourselves and the market some runway is often a sensible thing to do but we should always keep in mind that there is a fine line between having strong conviction and BSing ourselves.

***

Ok guys, that’s all from me for today.

If you enjoyed today’s post, check out my brand new book, The Aspiring Entrepreneur Entry Strategy: A practical step-by-step guide for finding a validated, winning business idea that stays true to who you are, that is currently available at Amazon.

I hope to see you soon.

Best,

Andreas

“Customers aren’t good at having theoretical discussions about value propositions and customer benefits. What they are good at is reacting to the solution space.”

– Hannah Alvarez

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