At DeveloperTown, we partner with entrepreneurs to be the “Technical Co-founder” of startups. Part of this responsibility is making business decisions, and the Lean movement has made an impression on us. This post and others will dive into our thoughts behind Lean.
A year and a half ago, I was making $2 of profit a week selling fruit on Indiana University’s campus. Three years ago I was spending $20k building a college social network based on culture. Neither venture made it. But one of these sticks out in my mind as a success: selling fruit.
Why was Fruitocracy, my fruit venture, a success? Long before I knew what lean meant, I had started Fruitocracy “going lean.” And in retrospect, this helped me make the critical decision to shut the doors after only 4 months of operation.
I’ve argued that lean is a dangerous word to use, because few people are on the same page about what it means to “go lean.” After reflecting on my past experiences, I came to understand the following:
Lean is a mindset. It is not any one set of practices, but a state of thinking about your startup. You cannot “go lean” by implementing any number of processes or tools. The only required process is the thought process of how to answer the big questions about your business sooner rather than later.
And that is why lean techniques are difficult to learn. Learning requires gaining an intuition, which is not had by reading any one book or blog post. Instead, lean is a determination to make smart decisions about 1) when to mitigate risks, and 2) how to mitigate those risks.
The best way to teach lean, then, is to look at examples and counter-examples, so that an intuition can be built over time.
A Tale of Two Startups
I started two ventures my sophomore and senior years in college, CultureU and Fruitocracy. The first was a large undertaking, with $25k in financing and as many as 30 people working on the project at one time. The idea behind CultureU was to provide a platform for college students to expose their talent. The second, Fruitocracy, was a fruit-delivery service for students living in the dorms. It started with one person, me, and maybe $20.
At CultureU, my mindset was, “awesome idea, let’s hire a team of programmers and DO IT!” Nothing was to get in my way of getting a first release out. Our measurement of success was how quickly we were able to build the product we wanted.
The problem was that I wasn’t focused on prioritizing risks. I understood the risks of building a product that no one wanted, but I didn’t make an effort to prioritize work around answering the big questions. And there were several risks that were ignored until many months into the CultureU’s life:
- There’s a considerable supply of student talent.
- Students want to expose their work to other students and professionals
- Employers (our potential customer) are facing a poor supply of talented students in the job market.
The result? It took 8 months for my team to learn that we had a lousy product that lacked a compelling business model. Lesson learned? “Tackle the biggest questions first.”
Fruitocracy: A different flavor of startup
When I set out to start Fruitocracy, I wanted to be smart about building the business. The pitfalls of moving too fast and failing to ask the big questions were clear in my head.
My vision was to engender healthy eating on IU’s campus. The initial idea was to sell local fruits and vegetables at a produce stand on Indiana University’s campus. I had seen a produce stand flourish on another college campus. The big question in my mind wasn’t, will people buy fruits and vegetables? Instead, I had two big questions:
- Will the campus permit me to run a produce stand?
- Can I sell fruit for a profit?
I set out to answer those two questions, and within a month had the answers: I could buy local produce wholesale to turn a profit, but the campus wouldn’t dare see a produce stand!
A pivot was in order. I decided to try delivering fruit to freshmen. I knew this group was crippled by their lack of access to grocery stores and healthy eating on campus. I also knew I could run this operation independently of the university.
The big questions then became:
- Will freshmen buy fruit?
- How can I get freshman to order on a regular basis?
- Will freshmen order food besides fruit?
- Can I turn a profit?
I answered the first question by going to a couple of my friends’ dorms and selling directly to students. After a few hours, I signed up 15 students to start a trial with It was clear I had something cool going.
With some initial traction, I set out to find how to get freshmen to order regularly. I thought that students might prefer ordering via text messaging. I had lots of ideas on how to build an automated ordering system, but that was not necessary to test whether students would use text messaging to order. Instead, I manually texted out my menu twice a week and responded to each text message. Sometimes, this took an hour of time during early morning class. No need to scale!
The third question was relatively straightforward to answer. I postulated that students might enjoy locally-produced goods like bagels from the Bloomington Bagel Company. I met with the owner, and sparked some interest in a partnership. But there was no need to do anything significant at this point: nope, I just added bagels to my menu and bought them from the bagel shop when needed. Turned out only a few students were interested in the extras on the menu.
All this time, I was learning more about the wholesale business, legal issues, farmers markets, and people’s demand for food. Despite having a tiny operation, I found myself stumbling upon interesting paths that my business could take to expand. That is the upside of doing instead of researching.
The final, and most pressing, question was answered within two months. I experimented with different prices and different product offerings, and I modelled my financials based on the results of my trial. That’s when it became clear that the stars weren’t aligning for my business. Furthermore, I discovered that the different growth paths I had previously brainstormed were leading me straight into the middle of some serious competition. Sadly, I closed shop, despite having accumulated a loyal group of customers.
Not every startup is bound for success. By keeping a “lean mindset” (despite having no idea what “lean” meant), I was able to answer big questions about my business in a mere 4 month period.
The problem with my experience from Fruitocracy is that I wasn’t quite sure what to take away. In the startup I pursued after Fruitocracy, I made many of the same mistakes that I had made before Fruitocracy.
And, I think, that’s where the lean movement can succeed. It’s helped solidify principles that many people understand but that are difficult to express. It’s taking the “black magic” out of entrepreneurship and giving people’s intuition a head start.
But no book, blog post, or speech will drive your success more than learning from experiences. So, go out and get ‘em!
I’m interested in learning how lean has impacted your thoughts on entrepreneurship, if it has had any impact at all. Have you found yourself better able to understand past failures and successes? How do you set out to answer the BIG questions?