The word entrepreneur is thrown around frequently these days. Many (particularly those that watch the The Apprentice and Dragons Den, I fear) believe that entrepreneurship is synonymous with risk-taking, playing hard and forever yearning to achieve that holy grail of labels: The Big Cheese. Unfortunately this places an unnecessary emphasis on the ‘gut-feeling’ or the ‘maverick’ factor. In reality though, whilst the undercurrent of any successful startup will always be that of the entrepreneur’s passionate vision, the steps taken to help make these companies successful will need to be made of something a little more grounded… dare I even say… structured? “Pah, ‘structured’… I’m an entrepreneur, I do things my own way”.
When I formed my first startup, I thought just like that. To me, it was all about being brash, highly creative and visionary. If an idea wasn’t grandiose it probably wasn’t worth doing. The trap you fall into when you start thinking like this, is that you believe that the product or service that you deliver has to be mature and complete with a myriad of bells and whistles. In one such startup, I recall spending 2 years building a product that hadn’t once been challenged by potential customers. We were basically building blind, crossing our fingers that the end result would be of interest to our expected market.
When we scrub away the passion, the ingenuity and the steely determination to succeed, (because we’ll assume we have that in abundance anyway) we then need to be damn sure that what we’re left with is a solid set of tools and structures. Enter the ‘Lean Startup’ : a movement that aims to create a science out of entrepreneurship.
So what does it mean to be a Lean Startup? To answer that question we first need to ask what it means to simply be a ‘startup’. Unlike mature businesses, a startup is in the unique situation where both the problem and the solution are unknown. Unless you have had your problems validated by customers, then all you’ve actually got are a bunch of unknown hypotheses – and this can prove to be a risky position to be in. Take, for example, your typical entrepreneur. He has devised what he believes to be a winning idea and is passionately determined (if not slightly hell-bent) on his product or service being the next big thing. Now whilst this might end up being the case, it is an awfully big risk and assumption to be making. Instead we need to be testing and validating our hypotheses against customers, as early as possible. After all, why take the risk of launching something that might have zero demand?
The basic idea behind the Lean Startup movement emanates from the days of lean manufacturing. At its core, is the idea that to be lean is to be both capital efficient and to enter into a never ending process of eliminating waste. And the biggest waste of all? Well, that’s producing something that might not be useful in the short term or even wanted by the customer in the first place.
Eric Ries recently said of global entrepreneurship that, “there are too many companies out there that are fundamentally building things that people don’t want”. This isn’t just the waste of a lone programmers time spent building features that will never get used; but arguably the waste of an entire economy.
In a Lean Startup it is all about failing faster, or to put it another way, to test fast and fail early. The quicker you can do this (commonly referred to as pivoting in Lean Startup circles) the quicker you can end up with a product that is in demand and the greater your chances of still having money left in the bank. The distinction being made here, is that ‘concept’ failure is a very different thing to company failure – in fact, it is the very notion of being comfortable with your ideas failing, that can prevent ‘company’ failure from rearing its ugly head.
So this all sounds great, but how does it work in practice? Typically, a Lean Startup will channel much of its focus into two main teams – that of the Agile Development and the Customer Development teams. Traditionally, Agile Development has worked well where the solution is unknown – but the problem is known (a luxury we don’t have in a startup). This meant that a development manager would simply work through a number of linear steps in order to satisfy the product manager’s objectives, after which the problem might be solved and a new set of features or products could be released.
In a startup, we don’t have known problems, we just have unknown hypotheses. Therefore, we need to introduce Customer Development right at the start to ensure that every single feature produced is carefully aligned with feedback garnered by the Customer Development team. The continual flow of information between this and the Agile Development team forms the backbone of a successful Lean Startup. This helps encourage a culture of learning within the company, from the bottom up, and ensures that developers think in terms of “the customer”. A hugely beneficial asset for any company to acquire.
Inevitably, as with any methodology, the Lean Startup delivers its fair share of buzz words and acronyms. Refreshingly though, they all seem to make absolute sense and tend to resonate at an incredibly practical level. This all helps ensure that both you and I can start applying its principles in a meaningful and effective way right now. In fact, there really is no excuse not to!
If you find yourself intrigued in what Lean Startup methodologies have to offer, then there are a number of resources out there. Steve Blank and Eric Ries are without doubt the two people you should be following in order to keep up to date and learn latest developments.
For those based in London, Benjamin runs a Lean Startup networking group; that serves to provide a place for like minded individuals, to get together and talk about the Lean Startup philosophy. More information can be found here