A few weeks ago I had a guest post on Beta Beat, and figured that I might as well repost it here if you haven’t had a chance to read it. The original article and associated comments can be found here.
The Lean Startup model seems to be present everywhere you turn these days–any methodology that seeks to improve the success rate of young companies is welcome, and this is especially true when new enterprise is needed more than ever to add kindling to the economic fire. However, there is an undeniable problem with this proposed methodology: Eric Ries is largely selling 336 pages of obvious, while simultaneously making assumptions that would be effective in only a handful of startups, and surely not in an across-the-board situation as advertised.
As with any management ideology, there is of course both the good and the bad, so how’s about we take a quick looksee.
The good. Maybe it’s because I’m a New Yorker, maybe not, but I couldn’t agree more that defining a revenue model early on should be the priority of any startup. Some believe that the mantra of acquiring millions of users and then devising a model is preferred but I would dispute that, you don’t need to, nor should you burn cash for years. Instead young companies should focus on seeing revenue appear on the P&L form starting day one.
However, we all speak from our own experiences, and so does Mr. Ries. A lot of his assumptions are based on his experience with IMVU, a product that at time of launch entered (as far as tech is concerned) a mature market: online chat.
But what if your startup is debuting in a relatively young market, like Foursquare, or attempting to create an entirely new market, like Skillshare or Airbnb? Conceptually new ideas need time to test markets and mature. New product acceptance is not something that happens overnight, it’s often a lengthy process that involves careful strategic oversight, which the lean startup model lacks. Small sample sizes, constant iterations and new features are detractors. In fact, I would go so far as to say that the lean startup approach will do more in terms of hindrance than good to the company’s overall vision.
Using a feedback loop to provide an optimal solution for a saturated market can be a good strategy. However, when the startup is doing something absolutely novel and new, this approach is equivalent to asking everyone in Union Square to name their favorite band. Imagine if the gents behind Twitter were to have listened to their community in 2006? I think we can all attest to the fact that by and large people assumed that 140 characters were not enough, that the service did not make sense, and it was for lack of a better term, just plain dumb. (Who wants to read about what people are having for lunch? etc.) But, by staying the course, Jack Dorsey & co. proved the naysayers wrong.
People can only tell you what they want based on the products they’re already using. But if you as an entrepreneur can make something completely novel, something you yourself want to use, now you’re innovating. That doesn’t happen by putting up a suggestions box.
(Another thing: can we please stop with the pivots already? Turntable.fm did not pivot from Stickybits, Turntable.fm was a completely new product developed by the same people from Stickybits. Bar code scanning, and music-enhanced chat rooms are not similar products. Sheesh.)
And what about the obvious? Yes, agile development is absolutely pivotal (get it) when it comes to product, and it’s something that every young company should be employing. It’s an absolute necessity, and looking at the nature of today’s market where test products can be delivered in a matter of days it just makes sense. Anyone who isn’t working in an agile methodology is simply stuck in the 90s. But the call to continuously improve in lean startups borders on the absurd, seriously. All products need to be improved upon and updated, without them we’d still be driving Model-T Fords and watching black and white TVs.
At times, it seems like Mr. Ries read Friedman’s “The World is Flat” and thought to himself, I can do this too, which is fine–by all means we should embrace efforts to foster entrepreneurship and growth. It’s just that we should look objectively at these methods that claim to be the holy grail solution to an industry that is far more complex than Lean Startup gives credit to, and one that is sadly often marred by the cult of personalities that Mr. Ries has become.
At the end of the day, nothing beats foresight, a skilled and complementary team, and market knowledge. But if you really want to take away some of this book’s teachings you’d in all honestly be better off sitting in on a few operations classes at any half way decent MBA and saving yourself the $15.63 plus shipping and handling.