Why Lean Startup Methodology Doesn’t Go Far Enough

This following was cribbed from a recent post on MosaicHub:

Lean Startup Methodology Graphic

If you’re starting your own business these days, you’ve no doubt heard about the “Lean Startup Methodology” as espoused by Eric Reis. For those less familiar here’s a breakdown of the concept, including core principles and methodology.

Basically the lean startup concept is this: push a minimum viable product to market (or to a beta/consumer base) as quickly and cheaply as possible. Focus on the core functionality of your product and get as much feedback as possible from your beta/consumer core. Depending on the response and feedback, improve/update your product to meet consumer demands and repeat the process until you have a finalized product ready to pitch to investors or sell to the general public (this is called iterating).

While there are a lot of good practices in the Lean Startup Methodology, there can also be a lot of drawbacks, including poor beta response, failure to capture an adequate consumer sample size, lack of exit strategy, lack of end-to-end planning, and poor customer service (not everyone likes being a beta tester).

Would be curious as to your thoughts about LSM and whether or not it is a reflection of the tough funding and economic times (in the US and globally) or if this is a methodology that is here to stay in the startup world.

In my view there’s no question that LSM is the best way to create new ventures in the modern business/technology climate. The big thing that’s changed is the cost and speed of doing what LSM proscribes: you could do it in the 80s, but you didn’t have a social graph to work with, or hundreds of cheap or free tools and APIs to accelerate the process for a fraction of the cost. Not to take advantage of all that just seems silly. The idea that the environment will change back to what it was is equally so. LSM provides a paradigm for coping with the rapid innovation that is the hallmark of the rest of our lives, as the singularity approaches.

Kyle mentions a few “drawbacks.” Here’s the hard lesson of LSM, and one that leads to many of the drawbacks peopel talk about: sometimes the lesson of LSM is that you should quit. If you have a “poor beta response” or a “failure to capture market,” you probably don’t have the product/market fit. The correct response is to improve your beta or work on your positioning and try again – but if you still can’t do it, you should probably give up. Quickly, while it’s still cheap to do so.

As far as “lack of exit strategy/end-to-end planning” go – that’s actually the whole point: you can’t be too committed to any one strategy or plan, because in all likelihood it will need to change. The key is to be able to change your plan (or make it up) as you go along, while still meeting customer needs. If you fall apart because you achieved market fit but can’t figure out what to do next, you’re doing it wrong. If your product leaves people feeling that they are beta testers (which implies obvious bugs and errors and shortcomings) you haven’t achieved the definition of MVP yet. (The V stands for viable, after all.)

The problem with LSM is it doesn’t go far enough. As the drawbacks Kyle mentions indicate, many people thinking about LSM are still thinking about ventures in the old-fashioned way (i.e. 1. make a plan, 2. build a product, 3. get customers), and are just hoping LSM will get them from 2-3 on the cheap. The truth is that we need to start thinking about this process in reverse: 1. get customers (by telling them what you’re going to do and making sure they’ll buy it), 2. build a product (one that actual customers want and use), and only THEN 3. make a plan.

Most entrepreneurs are egotists (they have to be – no sane person would take the risk of starting something without believing they personally have what it takes to overcome the odds of failure), but ego also means you fall in love with your idea. After all, no one knows it better than you and or has spent more time thinking about every possible permutation or consequence. But the more thinking and planning you’ve done, the greater your emotional investment becomes and the harder it is to hear the market signal over the noise of your own narrative. Better to under-think and under-plan, but make up the difference quickly when you get actual market contact. And better to let it go than chase after an idea that (in many cases by no fault of your own) isn’t going to work.

In the end, proper LSM is very zen: you must take your SELF out of the idea – and make it about the product and the customer – before you can achieve success.

Michael Sattler

With a career spent in founding and technical leadership roles with new and enterprise-level organizations, Michael Sattler is a veteran in technology strategy, operations, and product management. He’s spent decades in B2B and B2C SaaS product development, software and application design, engineering operations, new venture creation, and innovation practices.

He has scaled and managed technical teams from 2-50+ across three continents, led large-scale cross-functional program management, and founded or co-founded six companies.