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Preaching to the converted
on September 17, 2011
In the tech boom of the '90s, so-called "startups" would burn through millions of dollars of investor cash before seeing any revenue. They'd hire PR firms and launch national ad campaigns; they'd bring on big-name C-level executives; and they'd train an army of support staff--all before they had any customers. Webvan, Pets.com, eToys, and countless others whose names are now forgotten went down this path, only to find that the massive demand they'd anticipated for their services never materialized.
Investors have wised up since. Validation is the name of the game: Your concept may look good on paper, your demo may look great, but you're never going to raise more than six figures without traction--enthusiastic beta testers, active users, or best of all, revenue. Today, the word "startup" suggests a handful of people working on a small product, collecting feedback, and iterating on that feedback. Rather than launching when everything is perfect, they launch when they have a "minimal viable product" (MVP). It's an approach that's been advocated for years by startup accelerator programs like Y Combinator and TechStars. And now Eric Ries has a name for it: "The Lean Startup." He's built a whole brand around the name--including a video series, a conference, and now this book--and attracted press coverage that's described it as a "radical new theory" (Wired).
So is it new? That depends on who you are. If you're already in the startup world, most of this book will sound familiar. That's not to say that Ries' writings are useless--the book contains some solid anecdotes (though not as many as I would've liked), and many entrepreneurs are aware that they're not iterating on feedback as quickly as they could be--but it does make the repetition of the theme tedious. Small feature set, gauge customer interest, repeat as fast as possible; got it.
To avoid limiting his audience, Ries has broadened his definition of "startup" to encompass virtually any human endeavor. So if you work at a large corporation, a government agency, or a non-profit: Good news! You, too, can apply lean startup principles! Unfortunately, the book offers few tangible lessons in that arena. Yes, all else being equal, having customer validation is a good thing. But what to make of Ries' aside that the iPod rested on assumptions validated by the success of the Walkman? By that same reckoning, Apple should have looked at the web-capable smartphone market in 2005--a small niche comprised of geeky professionals--and concluded that few people would want an iPhone. Or they might have looked at tablet computers in 2007--an even smaller niche--and reckoned that no one wanted an iPad. Apple is the antithesis of the lean startup. They have the resources to make big bets and shrug when they don't pay off. Startups can't.
It's a dichotomy Ries never really gets at: When should you be lean, constantly listening to feedback and reevaluating your direction, and when should you just keep moving toward your vision? That's the fundamental question of entrepreneurship. There's no one-size-fits-all answer.