Wednesday, September 10, 2014

Busting the Lean-Startup Myth

Posted By: George Deeb - 9/10/2014


& Comment

The below is a really great guest post by Howard Tullman (@tullman), CEO at 1871 (the largest shared space for startups in Chicago), Partner at G2T3V (an early-stage venture capital firm) and good colleagues of Red Rocket.  I couldn't have said the below any better, myself .  Thanks, Howard, for sharing your wisdom.  You can also check out the original post on Howard's blog at


One of the greatest TV commercials of all time featured a crotchety old Chicago woman (Clara Peller) whose plaintive 3-word inquiry ("Where’s the beef?") became not just a huge advertising home run for Wendy's but a national catch phrase. Every comedian, late-night television host, news commentator, and politician seized on the expression and couldn't use it enough.
"Where's the beef?" is a question that's still worth asking today, specifically at those many startups that have jumped aboard the latest and greatest craze--"lean" everything. That's because, when it comes to "lean," the same question applies: Where, exactly, is the beef?

Is There "V" in Your "MVP"?

I find myself thinking fondly of Clara's pronouncement whenever I have to sit through another bogus business review session where someone with the bare bones of an idea is trying to convince a group of otherwise intelligent investors that there's a real business opportunity buried beneath all the B.S., and that (a) all the shortcomings of the story being spun and (b) all the gaps in the gospel aren't actually problems at all. They're not bugs, oversights, or misses; they're the intentional result of trying to be "lean" and trying to launch "something" (not to say, "anything") to get the ball rolling.
I'm not sure when it got to be OK to try to do the least work possible in developing  something that you are seriously trying to do well, but maybe I missed a memo or two. But when people tell me that it's the minimum viable product (MVP), not the meat of the matter, that actually counts I remember that Clara knew better. This entire lean startup movement not only misleads and misdirects people into building mediocre products and potential services, it's also much more of a curse than a cure.
We're encouraging an entire generation of young entrepreneurs to rush things out to prospective customers--to throw a bunch of stuff against the wall and see what sticks. In the old days, people thought this was a good way to test to see if the spaghetti was al dente, but it actually wasn't. Pasta that sticks to the wall is most likely overcooked and too gummy to taste good.
Like so many other things in life, there's no simple shortcut or quick way to do these things right.  It takes time and craft and patience to build things that will matter and last. "Quick and dirty and out the door" sucks as a strategy for successful startups. Maybe you can never be too thin or too rich, but a startup can clearly be too lean. The ultimate goal isn't to build skinny start-ups, it's to build smart ones.
I understand that it would be na├»ve to delay your launch until you thought you had every single detail exactly right. We know that even the experts can completely overlook glaring interface flaws or other obvious omissions that the simplest novice user will see right off the bat. And it's equally arrogant to assume that you can't learn a single thing from the marketplace or your users. But that's a different issue. 
As I see it, there's a basic flaw in the common understanding of the "lean startup" concept, and then there are three main problems with the way most young entrepreneurs are trying to adopt and implement it.

The Basic Flaw

Even the best MVP won’t succeed without an MVA. An MVA is a Minimum Viable Audience (that's my simple shorthand for a bunch of potential buyers). Long before you start creating your product, crafting your code, and designing your UI you need to find out if anyone gives a damn about your idea and your proposed solution. This isn't easy work. You have to actually get off your butt and get out into the field and find and talk to actual people--not your co-founders or your folks--about what you're hoping to do.
You have to find actual problems that are generating real pain for a large number of people. You have to determine whether those people recognize the problem, appreciate the pain, are willing to admit that they have the problem, and are willing to pay for a solution. Then you might have a fighting chance to define and build a viable solution
You have to also recognize that: (a) there's an infinite demand for the unavailable (anyone can say they'll buy something that you don't have for sale); and (b) the easiest way for a buyer to get you to leave them alone is to say "Yes" and "Come see me when your product is ready," and then show you the door.

Problem 1: They Won't Care

If you haven't done your homework and identified the right pain points and the right target customers, you might as well take a hike because no one wants the cure for no known disease; no one is going to invest in solutions in search of problems; and you'll end up building and wasting a lot of time on the greatest software never sold. The way you start the process determines where you end up, and these businesses are hard enough even for the people who do all the proper research, preparation, and planning.  A goal without a plan is just a daydream on someone else’s dime.

Problem 2: They Won't Suffer

The idea that you can dump some partially-baked solution on your first prospects and they will then help you figure things out is another pipe dream. Trying to make your first users into your last beta testers is a waste of everyone's time because smart users want simple solutions that work right out of the box, not more problems. And it doesn't really matter what the problems are (implementation, training, support, stability, or security) because they're all just more noise and aggravation that busy people don't need. We are quick to try and even to adopt things that work for us, but we're much quicker to dump stuff that doesn't. And while there is an obvious trade-off between the degree of the customer's pain and the customer’s otherwise heightened expectations, in the end no solution that simply swaps one set of problems for another is going to get out of the gate.  

Problem 3: They Won't Wait

As the Heads & Shoulders people say, you don't get a second chance today to make a first impression. Customers won't (and don't) wait for you to figure things out; if your first attempt falls flat you can bet that they won't let you come back. It's ridiculously easy to burn your bridges and impossibly hard to rebuild them when there are fast followers and copycats galore standing by, watching your mistakes. Customers don't want stories or excuses; they want workable solutions.

The Right Way

There is a right way to do this and it's pretty simple. Do your homework and find an important unmet market need. Recruit the right early users who are invested (by virtue of their own desires) in your success. Build your MVP to their specifications and with their input and buy-in.  And then prepare to enter the perpetual iteration loop.
Launch, Measure, Modify, Re-Launch and Repeat the Process ad nauseam.
Successful solutions today are all the same: moments of mad creativity followed by months of maddening maintenance. Continually raising the bar and improving your offerings is the only way to stay in the game. 

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