What does Occupy and the Tea Party have in common with the Lean Startup movement? Each has been misunderstood, by both their followers and observers.
I’ve been involved with 5 startups in the past. There’s no doubt that the Lean movement has answered many questions I’ve had about bringing new products to market. It started to take the black magic out of startup-land.
Then why is “lean” quickly becoming a dangerous-to-use word? The reason is that “lean” is almost cliche: it is overhyped and misconstrued by both those who claim to practice and those who criticize it. It’s failing to get its basic message across: use capital more efficiently. Entrepreneurs are still talking the same game: invests lots of money, hire lots of people, build big sites, and see what happens.
The “why” should be obvious–this is how movements come and go. But the “what” is more interesting to me: what are the different ways people see Lean? In this post I’ll breeze through the 5 positive connotations of Lean that I’ve grasped through experience and conversation.
1. Experimentation: Staying Objective
At a recent Verge event, I asked Brian Deyo of LastBite what came to his mind first when talking about Lean. His answer was experimentation.
Lean asks us, as entrepreneurs, to consider our startups a big scientific experiment, not just a bunch of activities that somehow turn into success overnight. Experimentation has a very special meaning in science: it is an objective way to measure the “correctness” of some statement. And by thinking about a venture as grand experiment, we immediately understand that an experiment can either conclude with accepting or rejecting our original statement.
In business, we make guesses all the time. These guesses form the “art” of entrepreneurship. The scientific part of entrepreneurship comes when we put some of the most critical guesses to test, whether this be a qualitative test (such as user testing) or a quantitative test (like a/b testing).
It’s always good to compare things to their alternatives: instead of experimenting, entrepreneurs could launch new products and features without ever realizing what it is about their business that customers really care about.
Ultimately, entrepreneurs LEARN from testing, just as science progresses through experimentation. This forces us to be more objective about our business, and to realize sooner rather than later whether we’re working on a solid idea.
2. Better Iterations
The concept of iterating has been around as long as humans have had the capacity to think…which is, like, forever. But the Lean movement asks us, how can we make each iteration count for more while spending less?
According to the popular Lean Startup by Eric Ries, an iteration starts with an idea (e.g. feature), continues to building the idea, and concludes with learning whether the idea improved the business. He emphasizes improving the quality of an iteration by focusing on a few things:
1) Minimizing the time & money spent on an iteration
2) Maximizing the amount of learning that comes out of the iteration
Notice that these are tradeoffs. If you take a feature and do a quick and sloppy job of building it, you may never learn whether the feature was a good or bad idea, since the sloppy job undermines the feature’s value.
So, better iterations: have clear objectives for what you want to learn from people when you plan a new product or feature, and make learning, not total revenue, the early measure of success.
3. Risk Mitigation
Startups can be thought purely in terms of risk assessment and mitigation. How can I ensure that I’m solving a real problem? How can I ensure that my idea will have traction before spending lots of dough?
Lean asks us to consider our biggest risks first. If we’re unable to tackle big risks early, then how can we ever hope to see the day when we worry about details?
What are the BIG risks, and which are insignificant early in a venture? Ash Maurya, author of Running Lean and founder of Lean Canvas, recently wrote about why he created the Lean Canvas, which is a simple summary of a startup’s most important parts. He writes, “My approach to making the canvas actionable was capturing that which was most uncertain, or more accurately, that which was most risky.”
The Lean Canvas proposes four major risks to tackle first (and in about this order, too): I’m solving a real problem (Problem), I know who my potential customers are (Customer Segments), I am different from others (Unique Value Prop), and I have a solution (Solution).
Sure, other risks abound. Will this idea make enough money? Will my idea scale? How will I market to find customers? But, in the end, mitigating these risks before others won’t be fruitful.
4. Avoid premature optimization
While similar to mitigating the highest risks first, I feel that “avoiding premature optimization” deserves a special mention. Seriously: Lean asks us to sit down and think what the is SMALLEST thing you can do to TEST something.
If you’re starting a new business, what’s the minimal amount of resources you need to get your product built? If you’re building a product, then what’s the minimal set of features required to get a version in front of customers? And if you’re building a new feature, what’s the minimal amount of code and design required to learn whether customers like the feature?
In other words, avoid optimizing your work as if you have a million customers, when in reality you have very few.
5. Reality over perception
This last view of Lean is more of a mindset than anything else. It’s not new that oftentimes entrepreneurs need to quell their egos for a minute to grasp reality. But Lean provides a compelling reason to grip reality sooner rather than later: we can be wasting our precious time and money on things that just don’t matter.
Entrepreneurs are great at seeing what others don’t see. It’s the entrepreneur’s perception of the world that makes them great at pushing vision forward. But let reality tell you whether you’re succeeding at reaching your vision. In the world of Lean, reality comes in the form of systematic experimentation, using both qualitative (user feedback) and quantitative testing (metrics).
What’s the point of all of this? It’s not clear what anyone means when they talk about “going lean.” Maybe this is natural for a movement that has many followers but only a few true practitioners. Hopefully the different connotations I’ve put forth have helped broaden your view of the word “lean.”
But, I’m most interested in what YOU think lean means. Please, share your reaction, or the “correct” way to view Lean, or what you’ve seen as the most-used definition of Lean.