Staying Lean?

Trim the Fat, But Keep the Flavor: The Problem With the Lean Startup Model

 Trim the Fat, But Keep the Flavor: The Problem With the Lean Startup Model

Mr. Grebski.

This is a guest post by Jacek Grebski, COO of Badger, and a board member at the Bowery Arts & Sciences. You can find more of his musings at http://jacekgrebski.com.

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.

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Comments

  1. Okay, in general I agree with this article but still the idea of “saving yourself $15.63″ by sitting in at  business school classes is like recommending that people save themselves bus fare by buying a Mercedes. LOL … what?

  2. Phil says:

    I agree with you in parts and I also have some reservations about the book, but I think you missed the point.

    “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”

    I do think that the book overemphasizes A/B testing, but your statement doesn’t really contradict anything in the book. Conceptually new ideas can be tested rapidly. The book’s examples of a “concierge MVP” are one way to do that as are “wizard of oz” tests. Of course, it will take time for your initial vision to congeal into a mature product, but validating assumptions throughout that process is a good way to speed up your progress towards maturity.

    “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.”

    I admit my ignorance here as I haven’t finished the book. Your statement is obviously correct. But I haven’t read anything yet in the book that advocates putting up a suggestion box nor have I seen that approach recommended in the blogs and meetups about Lean Startups. I’m happy to be corrected if I’m wrong.

    1. Phil, the suggestion box was used as a metaphor. – Best

  3. Trevor Owens says:

    It’s always depressing to see people try and refute LS while displaying only a superficial understanding of it. There are drawbacks to LS but you’re not even close to any of them.

    1. Trevor, you’re a proponent of LS because it provides you bread w/ LSM,  whereas I’m an opponent because I think it’s predominantly self righteous bollocks with a splash of whole lotta obvious. 

      In all honestly an 800 word article isn’t going to wholly dissect a 330+ page book, nor should it, but it should serve to point out a few potential problems that young inexperienced entrepreneurs will run into with the LS model, which I think it by and large does.

      And I would love to hear some of the drawbacks you personally find with LS. – Best
      + Hey, what’s up Schlaf? 

      1. Trevor Owens says:

        Implying that I’m a proponent of LS in order to make money couldn’t be more of an idiotic statement.

        Refuting this post would be a waste of time — like copying & pasting one of many posts on Eric’s blog that addresses these points.

        If you’re interested in drawbacks of LS – check out my Roundtable on The Future of Lean Startup – http://www.atroundtable.com/leanstartup

    2. Anonymous says:

      This calls for a counter blog post.