Getting to "yes" in a world of "no"…


Eric Ries’ 2011 book “The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses” has garnered lots of attention, and indeed plenty of favourable reviews. He’s a thoughtful guy, who has been gradually building up interest in his “Lean Startup” ideas over the last few years: if you haven’t really heard of it, it’s basically an abstract conceptual toolkit aimed at very young companies that offers plenty of sensible-sounding advice, with very little to obviously disagree with.

But even so, I think that Lean Startups still suck. And here are ten big reasons why:-

(1) The “Lean Startup” approach is not a science. In fact, even though much of it is couched in terms such as “empirical” and “hypothesis”, it’s not even properly scientific. What it offers is a load of consulting-style models mixed in with contemporary truisms about business presented as hypotheses, which Ries hopes you will then go out and test for yourself. Why? Because despite all his evangelism, so few businesses have actually tried being lean startups that he hasn’t yet got enough data points to construct convincing arguments for his book. Which is why he so wants you to go test his ideas for him with your money and your business on your customers. If his ideas were scientific, they would have been tested already: but because they’re not, they’re merely hypothetical, which is a different thing altogether.

(2) “Lean Startup” is not a Scientific Management theory. I’ve seen Eric Ries talk, and he likes to claim Scientific Management as a (retrospectively adopted?) parent of Lean Startups, but in practice that’s simply not so. True, he likes metrics (and Frederick Taylor’s ghost would surely approve of that): but metrics and dashboards have been in high management theory vogue for well over a decade, so they are merely things that Ries has appropriated rather than devised in any useful way.

(3) “Lean Startup” is not a Quality System for R&D. The core of Ries’s claims is that his Lean Startup ideas provide a more productive way of getting to “product/market fit”. However, in its current state it is not even remotely close to an ISO-9001 approach for systematizing R&D: as a general rule, I’d say quality systems are a poor fit for R&D companies. Rather, the key test Ries applies to everything is relentlessly Darwinian: is your product a good market fit yet? (If not, iterate and try again). But as far as I know, there is as yet no substantive academic research on whether relying so utterly on customer feedback is in fact a good way to design new things: it could be argued just as strongly that it’s merely an effective way of making incremental design changes.

(4) Lean Startups are unfundable by angels. I estimate that 95%+ of current business angels (oh, and 99%+ of VCs, too) would not currently invest in any lean startup. This is because the Lean Startup toolkit has a single operating model: a Zen state of sustained-yet-aggressive ignorance while you intuitively develop some kind of tentative product-market fit by repeatedly bouncing things off enthusiastic early customers. Even though this may be in some ways inevitable if you’re trying to build a startup using your own savings, it is anathema to almost everyone looking to back a startup. I’ve talked with 130+ business angels, and almost without exception I would say that they want to put money into small, highly productive teams who have the self-belief that they already know what they are doing, so that those people can get on with executing their plans and making them work. Angels don’t want to fund your industrial education, they want to fund your market-focused business.

(5) Lean Startups are not lean. That is, as far as I can tell the ‘lean’ part of the title was merely appropriated from “Lean Manufacturing”, which – I would argue – bears almost no relationship to Eric Ries’s customer development ideas (which were instead built to a very large degree on Steve Blank’s Customer Development ideas). In fact, Ries’s idea’s correct title should probably be “The Learn Startup” because it is 100x more to do with learning than with reducing process waste and quality management: it’s certainly not to do with doing things cheaply or even fast, because educating yourself into a constantly changing market via progressive iteration can take an entire lifetime, and can happily absorb every penny you care to throw at it.

(6) Lean Startups makes little sense outside Web 2.0 startups. If you are considering setting out as a “lean startup” manufacturer, I’d urge you to think again. Iterate with your customers all you like, but you still need to pony up heavy-duty capital when setting up a manufacturing process, and the Lean Startup consulting toolkit is of little use when funding or developing this kind of thing. Regardless, you’d probably be better off reading up on mechatronics development, because this covers an awful lot of the same area (did I mention that it’s not new?) without telling you that you need to iterate in order to build worthwhile things.

(7) “Lean Startup” ideas have not yet been tested. Look, anyone – and I do mean anyone – can assemble a set of contemporary-sounding statements about how best to run a business, and then claim that the multiple similarities between those statements and carefully-selected details of the runaway success of { Google | Facebook | whatever } form cast-iron proof that your overall theory works universally. Eric Ries knows (and indeed points out) that this does not amount to any kind of real wisdom: however, because he has as yet amassed no real data, I think this is exactly what his ‘Methodology’ reduces to.

(8) Lean lacks cojones. Or “bravery”, if you wish. By delegating design decisions purely to the result of customer iterations, it encourages startups to produce incremental me-too wannabe products that appeal only superficially to customers, and to make design decisions based more on incrementalism than disruption. As such, it is a way of developing things that is intrinsically anti-engineering. Yet I would argue that to build company value and have lasting societal impact, startups need to be (quite literally) revolting.

(9) Lean is not a movement. It is not even a popular revolution. It’s one guy touring the world telling developers telling them how smart they are, and selling them an unsustainable dream – that it is in their power to build their own company cheaply and effectively by iteratively running prototype product versions past early adopter customers. It’s a tempting notion – after all, it’s the same basic dream that fills hot desk seats in Old Street and all the other tech hotspots worldwide. But ‘ought’ doesn’t make it ‘true’, no matter how many times you say it to audiences who would like it to be true.

(10) It would be nice if Lean was truly as good as Ries claims. But it’s not. In some idealized parallel universe, it might well possibly be true. But in this particular universe, it is at best no more than a technical hack for trying to avoid really big customer-facing design mistakes. So, unless you (and your optimistic co-founders) can entirely self-fund your killer startup through a (probably very prolonged) lean development phase, I would strongly advise taking your Lean Startup noodle soup with a large pinch of salt.

Update: you might also consider what a disaster it would be if you applied Lean Startup principles to your Real Life

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Comments on: "Lean Startups suck. Here are 10 reasons why…" (61)

  1. Fighting talk Nick! An honest review and great food for thought. I have certainly fallen into the Lean Trap and have found my wheels spinning… doing neither my startup nor my consultancy particularly well. Time to get off the Eric Ries bandwagon :-)

  2. Phillip: thanks for commenting! For me, startups face three big challenges: technology, customers, and politics (which includes funding). Eric would like it to be true that you can get by with only the first two, but this ain’t so, certainly in the UK.

    Perhaps this points to the real underlying story here, that the Lean Startup thing is no more than a hopeful byproduct of the US startup finance bubble – i.e. that Eric can’t conceive that getting funding on reasonable terms might be a non-trivial exercise, which is why he tries to reduce everything to a Bach-like technology/customer development fugue. Just a thought!

  3. Thanks Nick for this review. Given that most new businesses fail within five years it is important to thoroughly assess new methods to building businesses, particularly when they are somehow hyped up. Here are some thoughts on the first three points raised based on my postgrad research in entrepreneurial planning and my own experiences as a nascent entrepreneur:

    I’m no too familiar with how Ries explains and sells his concept but to me it’s the combination of prototyping and customer development. Steve Blank’s customer development process, which in academic literature is referred to as “discovery-driven planning”, is what really gets me. Whereas I don’t think the details of the concepts are too important, I think checking continously whether what you are planning on building adds value is one of the most crucial steps in exploiting untested market opportunities.

    (1) The “Lean Startup” approach is not a science: “If his ideas were scientific, they would have been tested already”

    Ries should use the word scientific carefully in my opinion to avoid confusion.

    He promotes the continuos testing of hypotheses/assumptions. This is what I believe he means by scientific approach to building a company. Because that’s what positivist scientists do, they take a dependent and independent variable, make an assumption as to how a change in the independent variable influences the dependent variable and then verify or falsify this hypothesis. This is the method/concept.

    Whether this method works or not has not been proven scientifically. But then again, no other method to building a new venture has been proven to work scientifically. For instance, the business planning-performance relationship has been extensively and comprehensively tested since the 1980s and even quantitative researchers in 2010 acknowledge that the results are completely inconclusive. “Discover-driven planning” is a relatively new concept from the 1990s (whereas the business planning framework can be traced back to strategic management literature in the 1957) and yet is to be tested in a positivist and quantitative manner.

    (2) “Lean Startup” is not a Scientific Management theory:

    Good point, if I were Ries I would not link entrepreneurial concepts (opportunity-seeking) with managerial concepts (advantage-seeking). They are fundamentally different.

    (3) “Lean Startup” is not a Quality System for R&D:

    I must admit I didn’t fully understand this part of your interesting article, so please correct me if I’m wrong.

    “not even remotely close to an ISO-9001 approach for systematizing R&D”

    Like productes, ventures go through life cycles. One attribute of these cycles are formal systems, which at the beginning are 0. In other words, ISO-9001 is typically not a concern of a nascent entrepreneur.

    “there is as yet no substantive academic research on whether relying so utterly on customer feedback is in fact a good way to design new things: it could be argued just as strongly that it’s merely an effective way of making incremental design changes”:

    My understanding was that the concept has it that you should test your innovation, radical or incremental. So you develop the ideas first then you test. Ries doesn’t advocate going to people first and ask them for incremental innovations.

    Looking forward to hearing your opinion on this.

    • Michael: thanks for your detailed response. As far as quality systems go, Ries seems to me to be advocating a development process (repeatedly test successive iterations on customers) while making quality-style claims (‘lean’) for its efficacy. By stressing his proposed process’s alleged scientific credentials, he seems to be presenting it as if it is a quality-assured scientific management process. But R&D simply doesn’t work like that.

      My point in that section was really that proper innovation is about making game-changing leaps, whereas Ries’ view of innovation seems to be heavily constrained, almost as if he only considers Web 2.0 social media hacks as the limits of that-which-can-be-invented-now. In my experience, customers rarely propose big changes to anything you show them, which helps to reinforce a “micro-pivoting” incrementalist mindset. Hope this is a help!

      • Totally agree!! If Ford were to ask his customers on what they want for transportation, they would probably say, “a faster horse”. You can’t depend on consumers to give you a disruptive technology concept, because you are supposed to know more things than they do in that particular field. Consumer feedbacks can be useful, I guess that concludes the Ries lean startup, which is also plainfully obvious.

        I also totally agree with you that Ries’ approach is only reverent for web 2.0 social, and it doesn’t get you any further than doing insignificant changes to your GUI or UX. Anything more significant than that, you ought to start worrying. Alos, UX is simple, just keep it simple and elegant, so that you could capture the average Joe majority market.

      • Kristjan Siimson said:

        Ries would very much agree that customers rarely tell you what they want, in fact he already states that in the introduction on page 5: “focus on what customers want (without asking them)”. The central theme of the book is avoidance of naïve decisions by validating your assumptions.

      • Kristjan: …and yet in lectures he said what came across as the complete opposite. Maybe that was a kind of A/B testing. :-)

  4. I am with you on pseudo-science (you cannot help but be amused by guru-ness) but I think you are completely off on point #4.

    Lean or similar concepts (we used to say Prove/Build/Scale, whatever, they’re all just useful elements in a toolbox) are being used by experienced entrepreneurs. They posit hypotheses (that’s a codename for their very strong vision on what the business model should be) but they test against the reality of their market early.

    Evidence (Startup Genome) suggests companies mostly fail because they are not answering customer needs properly (this applies even to disruptive innovation).

    As for Angels not funding lean-style startups, that’s just bullshit. Angellist is littered with hundreds of lean startups who got funding from great angels. Why, it’s even the opposite. The “do more with less” mentality is what makes angel investment the fundamental bedrock of seed stage innovation that it is today.

    I don’t know who these 130+ business angels are, but they don’t sound like to 30 odd I work with on a regular basis.

    • * Eric is a clever guy, but he presents his ideas with an unsupportable universalism. Positivist scientists claim to test their (implicitly separatable) hypotheses one by one, but only rarely do startups (or indeed real scientists) have sufficient runway or sufficiently separable hypotheses to do this. Getting to the start of the J-curve in a properly scientific way would require a level of resource of a Toyota or Canon: in practice, entrepreneurs have to get used to being resourceful in every other sense of the word. :-)

      * The Startup Genome project suffers intensely from sampling bias (do they even know that self-selection yields unusable statistics?) and in my opinion falls well short of being real evidence. Was it set in motion to help entrepreneurs improve or to upsell inappropriate consultancy to companies that can least afford it? Looks like the latter, I’m sad to say…

      * As far as AngelList goes, I think it is actually “littered” with angels funding speculative projects run by second-time or third-time entrepreneurs whom they know and trust with their money (say, ‘trust punts’), quite independently of whether or not they happen to call themselves ‘lean’. I expect nearly all such projects are funded despite lean, not because of it.

      * “Do more with less” is what good startups have always done, I’m sure you know the whole Robert X. Cringely “commando” thing well. For me, it’s how I’ve always run high-productivity dev teams and companies, but that doesn’t retrospectively make me part of Ries’ movement. I tell mentee entrepreneurs that startups have only two things – money and brains – and guess which one usually runs out first?

      * Finally, I’ll take a wild guess that your 30 regular angels aren’t based in the UK’s Home Counties! ;-) Cheers, Nick.

  5. I tend to agree with your summation. It is not such ‘lean’ but ‘expensive’. However, I will stand up for it as being a damn fine place to start. Fill in the gaps, think about what you are producing and for whom.

    Much past that point, if you don’t know who your customers are and what you are going to build, you probably shouldn’t be in the startup industry.

    By all means build ‘lean’ but build one. Correctly the first time. Spend the extra month thinking and planning.

  6. 1. The ideas are being tested at Lean Startup Machine, and it’s very empiric. If you’d like to come feel free to email me trevor [at] theleanstartupmachine.com

    2. Weak point, what are you saying? Or maybe, who cares?

    3. Again you’re missing the point.

    4. Simply not true. Examples of Lean Startup include: DropBox, Etsy, Kickstarter, eHarmony, etc. these are all VC backed

    5. Wrong, Lean Startup avoid waste by focusing on large changes to their business model before PM/FIT rather than optimization.

    6. Eric gives several examples in the book outside of Web 2.0, how did you miss these?

    7. I have data :-)

    Got tired of reading the other responses. Please come to Lean Startup Machine or email me, I feel like you’re just on the wrong wave-length here.

    • Trevor: perhaps I’ve woken up feeling grouchy, but I have always reserved a special corner of Hell for those who sell consulting toolkits and conferences to entrepreneurs starting up – and I can’t see any reason not to place The Lean Startup Machine’s £175 UK conference in that same dismal corner. As far as your bullet points go, suffice to say that real knowledge knows its own limits, rather than being touted as a panacea: by that measure, Lean Startup is not yet even close to being real knowledge.

      • Wow! Ad hominem attack much? I have to agree with Trevor that your ten complaints about the “Lean Startup” concept seem to be missing the point. You yourself are making a lot of assumptions – such as that the lean startup approach can only lead to incremental design changes (there are lots of counterexamples).

        And some of your arguments are pure straw – of course it’s not a “quality system for R&D” – and that’s not what it’s aiming to be at all. It’s a system for validating a product idea – whether its Web 2.0 or hardware or whatever – before over-investing in the product idea. And of course it’s not a “scientific theory” – but it does use a “scientific approach” – have a hypothesis, figure out how to test it, test it, see if your hypothesis was right, and if not, change your hypothesis – where many business methodologies use an “I wish it were so” approach, or even worse, and this goes directly to your point #8, a “this is cool technology so I’m going to make a product with it, because everyone will want it” approach – the canonical and very very common “engineering-driven” method to starting a company that will fail.

      • Nils: please feel free to give some counterexamples. A “quality system” (in the sense of 9001 etc) is a set of consistent process steps that you take in order to get to an end result. You know: build, experiment, measure, persevere or pivot, etc. And so in all the important senses, I’d say that The Lean Startup is a prescriptive, normative process system for reducing self-funded entrepreneurs to poverty by introducing a vast cultural divide between them and the people who would like to fund them (but now can’t).

        Anyone who thinks science (or indeed a scientific approach) alone can make startups successful needs to go on a crash course in sales. Sorry, but 90% of entrepreneurship is sales, and that’s the end of it. :-(

        Finally, there are plenty of engineering-driven companies who made it big: but most did so by being confidently backed and having the money to pivot. Is that Lean?

  7. Hi Nick,
    You make some good points here – I find myself agreeing with some and disagreeing with others, but I’m wondering why we have different conclusions.

    I’ve always been interested in how much mileage people get out of these attempts and crystalizing entrepreneurship methods – not just Lean Startup, but also things like Rework, E-Myth and so on. I’d really like to know your story, what Lean Startup approaches you’ve tried and what didn’t work.

    You’re right that, in the bigger picture, Lean Startup is largely untried-and-untested. Sure, there are loads of examples of successes, including BufferApp.com, based here in the UK, but all of these examples don’t make a scientifically-sound management theory. The problem with this argument is, is it a realistic benchmark? What scientifically-sound management theory exists? Is there a more useful way to spend our time than debate this? I’m very interested in specific stories and examples, good or bad – so we can learn from them and adapt. The more theoretical debates are interesting to me, but I don’t put much time into them. I am interested in your story though, since what we can learn from that is actionable.

    He’s said openly that people that use Lean Startup methods are consenting guinea pigs, so you’re absolutely right about that. Eric Ries is actually really clear that this stuff need to be used and tested more, and that’s his intention. I don’t see it as a criticism in and of itself though – everything new and good needs to go through this phase. Of all the management leaders out there, he’s one of the more honest about this. Accepting this, I’m interested in improving upon Lean Startup, which is why I’m interested in what specifically doesn’t work for you and others.

    I’m not sure if you’ve been to any of the Lean Startup meetups or Leancamp events in London or Scotland. There’s a really supportive community there where you’ll find others, including me, who are trying this out, trading notes and supporting each other. Please come! I’d also love it if you got in touch with me directly so I could better understand where you’re coming from, and see if I can help out if possible.

    I know that you have people’s interest at heart when you write a post warning people off of something you don’t believe in or find harmful. That’s commendable – community-minded and charitable. To me, that puts you in the same category as Trevor.

    I just need to clarify something though. I helped Trevor, Kelley and all the other volunteers with bringing the LSM event to London because I thought it would be helpful for people to experience. And the majority of the participants found it eye-opening and educational. Trevor works hard to help entrepreneurs, and the cash from the LSM London tickets went to pay hard costs – everyone involved is volunteering and trying to help entrepreneurs, just like you.

    So, please take this as it’s intended- as a respectful suggestion from someone who also wants to help – I think you’re out of line in chastising Trevor in this case, and even for chastising Eric Ries, who has also spent years volunteering, trying to help entrepreneurs by debunking incumbent Management Think. For where I stand, looks like these guys might be on the same side as you.

    If you’ve had problems with applying Lean Startup yourself, I truly want to either help you overcome the issues you’ve faced, or for us as a community to learn from your specific experience.

    While a critical questions are very useful, this type of negative, personal attack doesn’t really fly in the community so you won’t get as much out of it if that’s your approach. In terms of UK investors specifically interested in the Lean Startup approach, I know of quite a few. If they’re reading your attacks on others in the Lean Startup community, I don’t think this helps the chances they reach out to you, so I invite you to get involved and share your experience with us. (Try it as an unscientific experiment! :) ) Up for it?

    Cheers,
    Sal

    • Sal: what an unexpected pleasure to have you drop by my small corner of the web, nice to meet you! :-)

      My startup story? Having worked for various security camera companies (twice as CTO), I saw a gap for a new type of CCTV camera designed for reliability, invented it, and decided to try to build a startup around it, giving it my best shot (and all my savings). Having first priced up the likely cost of getting it to market with IP in hand (~£1m), I’ve spent the years since finding suppliers (which Lean actually makes 10x harder) & customers, and demoing a series of prototypes to mentors, industry insiders, investors and (of course) eager customers, all the while solving countless social, cultural, technological and political problems. Basically, the game of “Honey, I Shrunk the Risk” angels like you to play using your own money rather than theirs. :-)

      You might think what I did would be a perfect Lean case study, insofar as it has been on a shoestring, involving a bit of bootstrapping (building cameras for other security companies), and making progress used brainwork + customer-facing iteration rather than a mountain of equity-funded cash. However, (a) it has taken a ridiculously long amount of time, (b) that time has come at great personal cost to both myself and the people close to me [don't even ask], (c) many (if not actually most) of the investors I have pitched to and talked with simply don’t want their money going into anything remotely like lean startups, while (d) even though the company has now (finally!) pretty much got to product/market fit, the journey ain’t over yet. :-(

      I suspect my blog is pretty much a kind of self-help therapy programme to help me deal with the unbelievably high tension between Lean Startup ideas and Startup Finance ideas. Perhaps because I have a background both in running high-productivity low seat-count dev teams and in mechatronics, nothing in Lean came as a surprise to me: once you’ve seen Steve Blank’s diagrams, it’s all pretty straightforward, and I guess this is just as true for plenty of other broadly similar dev guys. Yet as I said to Trevor, the issue with Lean Startups lies mainly in knowing when it becomes a hindrance rather than a help to your startup, i.e. knowing the limits of its applicability. In the lifecycle of my company, I think I hit that point about 18 months ago, which was pretty much when I started blogging.

      So right now, I don’t see anyone asking proper Lean questions to establish the limits of its applicability to UK startup funding, such as:-
      * How can you price a lean startup, if the EIS won’t let you use convertible notes to dodge the issue?
      * How can you negotiate with an angel over valuation, if you don’t really know what your product or market is?
      * What kind of contractual expectations can a Lean Startup negotiate with an angel, given that he/she is in a self-declared position of ignorance?
      …and so forth. I’ve discussed this kind of thing with Eric, but the impression I get is that he doesn’t see it as anything like the issue I do, and that he thinks time will heal this as his ideas slowly percolate through to angels. Or perhaps his view is so tightly channelled by the ongoing US startup finance bubble that what I see here in Europe is just not meaningful to him.

      But what I think he’s missing is that even when angels do understand Lean, they don’t necessarily like it – it’s a bad fit for how almost all of them work. The biggest misconception of all is that Lean has some kind of monopoly on high capital efficiency (that’s what startups have always had, that’s what they need to get by), when actually what Lean does is to replace focused reflection and engineering with time and customer-mediated interactivity. My experience is that that’s usually a good trade early on in a startup’s lifecycle, but as time goes by it becomes less and less tenable.

      As far as the LSM goes, I simply can’t square a £175-per-ticket conference with the bruising, difficult experience I – and countless others like me – have in starting up their small company. For me, £1 of pre-funding money is worth close to £50 of equity cash, which pegs the typical equivalent equity cost of attendance at £8750. I’m not saying your / Trevor’s ideals and intentions in volunteering to help with it weren’t good, rather that it’s a format which I simply can’t personally endorse. Meetups in rooms above pubs are good, though.

      I’d happily give a talk on “When Lean Works And When Lean Sucks”: just because I listed 10 downsides doesn’t mean I can’t see the upsides too. But those people who spend all their time proselytizing solely on Lean’s upsides (and I’m sad to say that I’d tend to include Eric Ries in that category, for all his undoubted generosity of spirit) really don’t help the overall cause – they’re the ones who make it, in Fred Destin’s words, like a “Lean religion…”, to be taken “with a pinch of salt”.

      Finally, if those Lean-friendly investors you know are actually experienced investors, then I’m pretty sure than none of this will be remotely surprising to them. Lean is a sensible (if often rather slow) way to self-fund a company while you gradually build it to the point that it’s investment-ready: but it also offers a thoroughly lousy interface between entrepreneurs and investors, something that Eric will doubtless have to pivot many times around in years to come. Ask them about this, see if they agree or disagree.

      • Hi Nick,

        I value your opion and everyone who has made a comment!! Your right LEAN is OVER SOLD BULLSHIT By People who can read books………and travel the world to share the learning.
        I’m a guy who left school went through college joined the ARMY and worked in a factory…..
        BOOOOO Me, no!!!!
        I work hard for companies all over the world! NO , not selling Bullshit!!!! Supporting them to stay a float in this GFC Situation not with stats not with Lets do A Value stream!!!!!
        Get off your Arse and Manage Your company be HONEST. The fat cats always want to get FAT.
        Deal with it!!!! How can you keep a Business running and make Profit and Help your Employees.
        Its Simple if you know How……. No-one Knows , You can all but try……. I’m on a Salary working for a LEAN consultancy firm! 4 years now!!!! i’m in Australia and have continued to support my clients implementing Lean across a wide range of organisations Its not easy….. i DONT use sigma i use COMMON SENSE!! GRAFT and a sense of Belief. CHANGE is upto you….If you dont want to change you wont. IF you have poor Man Management Skills it will Reflect on your Staff.What im trying to stay is, if a company is not doing as well as it can………ASK why! Listen to your Staff and HELP THEM…. It’s SIMPLE …LEAN = COMMON SENSE.
        Unfortunitly we all don’t have it.

        Lee without a Degree

        Take this with a pinch of salt.

      • Degree-free Lee: in your work, do you advise manufacturing companies about Lean Manufacturing, or do you advise skinny-arsed latte-drinking social software startup guys about Lean Startup Philosophy? If the former, then more power to you, your company and your clients, because that’s proper stuff: the latter is just a bit sucky by comparison. ;-)

  8. [...] approach the participants described (customer-focused, iterative, uncertainty-based, etc) was to the whole Lean Startup thing. And the more I’ve thought about it since, the less I can see any obvious [...]

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  14. Dear Nick, thank you for this review,it really pushes people to think further. I have to admit I have been quite enthousiast about Lean Startup approach because I have applied it myself and it worked very well but without knowing this “methodology” (if we can call it like) actually existed.

    My analysis, partially based on your review, is that Lean Startup is just the first phase of the startup and should integrated in more global view. By getting some prototype ready quickly to test the market, it provides more information to build a clear business plan on the side that would be easier to sell to Angels or VC.

    The main danger with every methodology is how you apply because it is a matter of interpretation. Eric Ries didn’t say that customer feedback is the holy bible, from the start he says that you should not always do everything that your customer tells you to do. But customer feedback is always valuable information.

    Where I strongly disagree is that Lean Startup makes little sense outside Web 2.0. In my case I always applied some Lean Startup principle without knowing it and getting brilliant results in banking or even in industry if you make the assumption that Lean Startup is just a phase. In my point of view, many projects fail because we keep changing our minds and adding new things to our products which tends to overspend budget. The Minimum Viable Product principle will certainly help in making sure you deliver something that meets minimum requirement in short period of time. The whole challenge is in how you define that minimum viable product.

    Finally, I think Lean Startup is more of a set of project management best pratices than a real methodology for creating a start up.

    • Alexandre: sure, it can be useful to think of Lean Startup as a phase. But just remember that the person funding that phase is probably you. And if you haven’t got tens of thousands of Web 2.0 passing eyeballs to alienate on failed experiments, you’ll almost certainly have to devise more compact – and less wasteful – ways of testing your business hypotheses. Which isn’t to say that it’s impossible, but rather that it’s extremely hard. Good science is difficult! :-)

  15. [...] then, does bootstrapping actually achieve? And how can you square this curve with the entire Lean Startup thing? And is “pivoting” anything but upgrading your startup’s ambition to a level so [...]

  16. [...] one common reaction to my popular post Lean Startups suck. Here are 10 reasons why… is that I must be some kind of Lean Hater. In fact, the single biggest thing I hate is seeing [...]

  17. [...] http://nanodome.wordpress.com/2011/10/05/lean-startups-suck-here-are-10-reasons-why/ Share this:EmailTwitterFacebookLinkedInLike this:LikeBe the first to like this. This entry was posted in Uncategorized and tagged a/b testing, lean startup, marketing, product management. Bookmark the permalink. Marketing is Bullshit → [...]

  18. dassvenster said:

    Great post! I sometimes feel like I’m pointing out the Emperor’s New Clothes when I mention that not all might be perfect with a Lean Startup approach. If interested, I’ve written something here about a specific issue, that it can just lead to a “Blind Watchmaker” approach to product management/marketing (i.e. “I’m not going to think about what I’m doing, I’m just going to take a wholly empirical approach and see what happens”), which has been an issue for us:

    http://focusproductmarketing.com/2012/09/12/ab-testing-lean-marketing-and-experience/

    Anyway, great post and thanks.

  19. Lean is not about “fast and cheap”. The focus should be on learning and effectiveness – not efficiency.

    If the point of the book was to have no ideas and go talk to customers… I guess I missed that… I thought it was about the concept (not new, but in a different frame) that instead of wasting money on building an idea to a complete product and then talking to customers, you get feedback from the earliest point you can. It is really just that simple. Every product (web or otherwise) has points that feedback could have saved money… but you have to ask AND then decide if that feedback makes sense. Are you even talking to the right customers. No one, as far as I know, is recommending taking blind feedback and running your company on it… are they?

    Why would you NOT want customer feedback before investing or investing more? If that is the case… I guess you still have 5% of angels out there… :)

    • Jake: unlike most Riesian commentators, I’ve read Eric’s book three times, and have had the opportunity to bounce some questions off him after one of his talks in London. On further reflection, I have to say my criticisms of The Lean Startup in this posts don’t go nearly far enough. For instance, it’s not a self-consistent system: even though it espouses strategy (which is what all your experiments are supposed to test, p.56) I don’t think there’s a single place in the book that deals with where that strategy actually comes from. So, faced with a Lean manifesto that is silent on initial strategy yet spends the majority of its pages promoting incrementalism, metrics, tests, and pivots, I think – in a Mintzbergian way – it is all the latter that comprises Eric’s particular “School of Strategy”.

      Eric’s definition of a “Lean Strategy” therefore seems to be no more than the tiniest of seeds and an open mind: very admirable, but (for example) utterly impractical when dealing with business angels. Oh, and please feel free to cite actual counterexamples to my arguments, the world is always richer for them. :-)

  20. Yes, I’ve recently had some limited contact with a well established group of lean start up evangelists down here in Australia, and have come away with the impression that these guys are very ideologically driven, almost in the political sense. As if, you have to follow the lean start up methodology or you are not even in the race. However, its clear that their own business model is very much based on regular, highly profitable seminars, teaching the system, and panning for specks of gold in the process. – But it seems to me that the methodology by its very nature, excludes a serious and committed approach to commercialization that might develop highly original works, in favour of the more predicable ‘variations on a (common) theme’ type.

    • Simon: I suspect the reason so many service-based blowflies buzz around startups is that they find the smell – of money, innocence and premature demise – simply irresistable. Lean blowflies? Par for the course, I’m afraid. :-(

      As for commercialization, the harsh reality is that these days you have to calculate right through to the end based on the assumption that external funding won’t happen until you’re already making money. To my eyes, Lean seems to place itself outside the kind of zones where such realpolitik trafficking takes place… in fact, I’d go so far as to say that Lean is hence hopelessly idealistic and naive, a vain attempt to generalize an engineering hack to the entirety of startup business reality. But real life is not that simple, not by a mile.

  21. Hi Nick, I just discovered your post. Would you write the same thing one year later ? I’m trying to figure out if becoming a Lean Startup coach is actually making sense or if it’s something entrepreneurs don’t need.

    • Sébastien: one year on, and I’d write it even more strongly. But please don’t take my word for it, go out and meet entrepreneurs trying to self-fund, and as you track their progress, watch in slow-motion horror as they drain their meagre savings, lose faith, go bust, and crawl back slowly into ‘real’ jobs. How much of a drain is that on every country’s economy? How does encouraging people to follow that route (as Lean Startup coaches almost inevitably do) contribute anything positive?

      Look: you’re a bright, thoughtful guy who can write well (I liked your “L’entrepreneur et l’artisan” post, by the way), but for me the key problematique with Lean is whether it genuinely makes sense for anything apart from large companies, i.e. ones which can afford to launch a small boat on a learning adventure in unknown seas. If (as I now strongly suspect) it does not, then there is no such thing as a Lean Startup, only a “Lean Spinout”. Hence, I think there is plenty of room for Lean coaches, but only working as consultants for large companies, not for entrepreneurial startups. Make of that what you will!

      • Hi Nick, interesting post – it must be if it’s still generating comments a year after you published it!

        My own background is having done product management in mobile services for about 13 years. I have to say that the key tenet – to avoid building things that people don’t want to use – is sound, and resonated with me.

        To me the value of the methodology is basically to spend a relatively short amount of time and money prototyping and testing a concept before going big. Some products and services are surely not amenable to this approach, but many are.

        It seems to me that your big concerns are 1) some of Eric Ries’ choices in terminology, 2) the inability of lean startups to get angel funding and 3) from your reply above – “watch in slow-motion horror as they drain their meagre savings, lose faith, go bust, and crawl back slowly into ‘real’ jobs.” which I interpret to mean that the Lean Startup INDUSTRY is giving people unrealistic expectations of their chance for success (and encouraging them to leave ‘real’ jobs that, objectively, they shouldn’t). Am I being fair to your arguments?

        With all that said, if someone is going to try to create a new product or service (whether on their own, or within their company), do you not think that it will INCREASE their chances (not guarantee success, mind you) to spend a relatively small amount on conducting what amounts to a better form of market research than throwing money at focus groups (or leaving the core business concept untested)?

        Anyway, I enjoyed both the article and the discussion above.

      • Hey Nick,

        Thanks for your thoughtful comments, which are indeed entirely fair.

        I think your key question comes down to whether or not, all the other caveats aside, ‘going Lean’ will increase Startup X’s chances of success. I’m all for testing, customer discovery, outreach, iterating: but the key issue for me is that these should all be techniques you make appropriate use of along the way, not a central guiding philosophy of your business methodology. Lean tries hard to be inscrutably Zen-like, insofar as it espouses product design without designing products, and product development without developing products – a very anti-engineering kind of engineering. Moreover, Eric’s claim seems to be that you should only know things through experimentation from first principles seems to be anti-theoretic, anti-conceptual, even anti-science (in the sense of Science as a thing that accumulates wisdom and principles that are applicable more generally, rather than just to a particular situation).

        I just don’t get how a smart guy like Eric found himself actively encouraging engineers to build giant products through tiny customer-directed iterations. To do that effectively in practice, you’d actually need a large team moving fast behind the scenes to provide your Chief Scientific Officer with sufficient means to properly experiment with: in the hands of a typical cash-poor startup, this translates into an excessively-lengthened overall development cycle, because in almost all such cases you simply can’t build worthwhile experiments at speed (beyond mere A/B testing).

        All of which comes back to my more nuanced as-of-late-2012 position, which is that Lean Startup is great (a) if you have a Sugar Daddy keeping the faith with you over a devastatingly loooooong period of time, or (b) if you are spinning out from a large resource-rich corporation with a commando team into a market tangentially connected to the parent company’s main industry (i.e. the Lean Spinout). For everyone else, I think Lean promotes a relationship with the funding world (and this, after all, is a blog primarily about Funding Startups) that just doesn’t make much sense, and running out of cash is probably gonna kill your enterprise before anything else. :-(

        HTIAH, ….Nick….

    • If you buy into the lean startup method your profits will reflect that….lean.

  22. [...] my eyes, the whole Lean Startup thing seems to be little more than a nicely crafted piece of contemporary rhetoric, that sings an [...]

  23. I’m sorry, but I think Eric Ries is a joke. He hasn’t really done anything of real value or anything ground breaking. IMVU?…Please, give me a break. He might as well be one of those late night real estate “coaches” who sell seminars, it is actually what he does.

    There is is nothing in the lean startup “method” that isn’t already common sense, but it’s not all practical either.

    The author of this article hit the nail on the head with every single point especially numbers 8&9. It’s just too bad that some startup founders like to throw around the lingo that they’ve picked up on all the big blogs (mashable, TC, etc), in the end it’s all they end up doing.

    The lean startup method is just a product that someone is selling them…too many miss that and it’s the main event…if you know what I mean.

  24. [...] more discussion on why The Lean Startup is not always correct visit The Startup Handbook [...]

  25. I am running a start-up and have decided to apply the customer development process which is the core of the Lean Startup. In my opinion it is a good method for nascent entrepreneurs. Firstly, I used the typical resource-based approach, I looked at my capabilities and created a product which was turned down by first clients that I approach with the idea (fortunately I have not invested much money into it). So I have pivoted and am creating a product which the clients want to have. It is lean because lean does not mean cheap, low costs, it means to produce what customers wants; pursue a pull strategy not push. I have been to the Porsche plant close to Leipzig and saw a very sophisticated lean factory. They just produce on order and have like 16 hours delivery of parts only in quantities needed for production of what customer wants. So lean, yes it concerns waste minimization but the core of the strategy is to produce on demand with no stocks, no predictions no wishful thinking.

    It is true that the Erics and Steve Blank’s strategy is nothing new. It is a managerial innovation not invention. They have not invented Lean Startups just put together the available tools in one method.
    Actually this method, although called differently, starts to be scientifically proved. I have just come across a research (Whalen P.S., Holloway S. S.„Effectual marketing planning for new ventures”, Academy of Marketing Science (2012), 2 pp. 34-43) which results show that the best for entrepreneurs is to plunge into the market with the idea and see if it works. The business should not be based on a rational analysis of best options but trial and error method (so yes, Learn Startup). Only those who can afford it can invest in inventions provided by extensive R&D. Perhaps if one day I become a 9 digit businessman I will fund 10 year research on a new space ship. Now, with only my brain and love money, I can deliver what customer wants not what I want him to have.

    • Rafal: actually, I’m told there is plenty of other (slightly older) research that demonstrates that incrementalism and customer-driven design are lousy tools to build companies. But The Lean Startup is all the rage these days, so therefore it must invalidate all that stuff. Good luck with your company, but better luck with your spaceship! ;-)

  26. John Hookway said:

    I think this constructive argument with lean startups is well overdue and if anything is rather mild and self evident criticism. Theres at least another 20 points that could be made against this bizarre and irrational lean startup movement. At a personal level it leaves no room for the individual creative process, and rushing something out to market so that it can be bounced about between users for improvement is obviously to the detriment of the technical merit of a project. Somethings simply take time and depth that the lean startup model does not provide for.

  27. Thanks for a useful, contrarian article. We applied Lean Startup and failed, Here’s the article Fat Startup:Learn the lessons of my failed Lean Startup http://bit.ly/Zx7CNF

  28. [...] been reading ‘Lean Startups suck. Here are 10 reasons why…’ a blog post by Nick [...]

  29. As a non-business person, I find these posts rather scary. Why are all the ‘Lean’ people so emotive? It’s just a business theory – can’t pros and cons be discussed without having to gush over the person, then whap them, then try to get more money out of them… then ‘struggle them’ as Chinese did dissenters in the 60s. It really reminds me of the attitudes of weird cults like Scientology and self-invented DIY pseudo-Christianity ‘me-churches’, done as only America can. brrrrh!

  30. Just wanted to take a moment and say thank you Nick.

    I’m a developer at a relatively large company and I literally can’t stand one more minute of people touting this book as a cure for everything that ails us.

    At best, the Lean Startup could be seen as a good way to help move companies that are motivated purely at the whim of executive dictatorship to a model that is more driven by customer feedback. At worst its a way to build a faster horse that eats less while leaving true innovation to companies that are willing to risk more on ideas that are unpopular at the time but wise in retrospect (or maybe we all want physical keyboards on our phones again?)

    To be clear I’m used to a certain amount of this kind of pain. I’ve come to expect it. The MBA cronies that run this and every other code mine that I’ve toiled at come out of the ivy leagues thinking that they are the only ones who know how to read. They then use this unique skill along with whatever common sense concept is being touted as revolutionary in the latest management book and make believe that they (unlike their last 5 identical predecessors and their books) will be a smashing success. Navigating that sort of naive executive enthusiasm comes with the territory and I’m pretty good at it after 15 years in this business.

    Used as a way to develop products though – The methodology that the Lean Startup proposes has ruined my job, destroyed my team, and made me question my career. Hows that for a real world result?

    Its a long story and one that does not fit readily in the comments of a blog article, and yes – it takes people not just books to herald this kind of disaster. That being said – I lay much of the blame on the book because it and its author claim to be a pathway to success – not just common knowledge along the path.

    Some food for thought for the believers:
    *Building products based on knowing your customer and getting feedback is so commonplace and so simple minded an idea that there was an episode of the Simpsons about it in 1991 (season 2 episode 15 – Oh Brother, Where Art Thou?)

    * Having garbage in A and garbage in B during A->B testing will lead you to successfully choosing garbage and thinking you’ve made things better.

    * Concluding from surveys that say a customer wants X is different than actually selling X and supporting X and dealing with X.

    * Regardless of its success creating the latest socially networked, foodie related, calendaring application – any methodology that sidelines disruptive technology may not be the best choice for those looking towards having a future on the internet.

    * When your competition is an army of unemployed, highly intelligent college age programmers with nothing to loose from seeing their complete vision all the way to the end – your crowd sourced camel by committee might seem a little…. uninspired.

    * If you do happen to work in a large company and have the resources to A->B test your product to a state nearing the aforementioned competitions (driven by unemployment) product – you may want to wait to congratulate yourself till you compare R&D costs.

    * Lastly, for those who’ve studied the failures of Marxism – I’d suggest that Improvement is not a end in of itself in the same way societal equality is not an end in of itself. This does not equate them – but it means they share a similar weakness and likely a common end.

    I may not know Eric Ries…. I haven’t heard him speak and I could barely stand reading through what I’m sure to him was a great accomplishment. I wish I did though so I could introduce him to all the people who have quit or quit caring due to his work here. I wish I could force him to look at the face of every developer who has undoubtedly known the shortcomings of their application for years only to be told that their life of attending to executive whim has been replaced by the wondrous new life of attending to customer whim.

    So thank you Nick. Thank you for being a voice of dissent in an otherwise kool-aid soaked crowd. Diane (Commenter from above) was right. Its a debatable business theory – not penicillin and I wish more people would be more cautious before putting the livelihood of those around them at risk by implementing the latest managerial fad.

  31. […] really, don’t get me started on how ridiculous cargo cults such as The Lean Startup waste startups’, angels’, and VCs’ time by encouraging entrepreneurs to design […]

  32. […] nanodome.wordpress.com […]

  33. […] it is critical to the success of any startup and that it is even the DNA of any modern startup. Others claim that it’s unproven, unscientific and gets your product to market in a haphazard way that is […]

  34. […] is critical to the success of any startup and that it is even the DNA of any modern startup. Others claim that it’s unproven, unscientific and gets your product to market in a haphazard way that is ungrounded in […]

  35. […] is critical to the success of any startup and that it is even the DNA of any modern startup. Others claim that it’s unproven, unscientific and gets your product to market in a haphazard way that is ungrounded in […]

  36. […] is critical to the success of any startup and that it is even the DNA of any modern startup. Others claim that it’s unproven, unscientific and gets your product to market in a haphazard way that is ungrounded in […]

  37. […] is critical to the success of any startup and that it is even the DNA of any modern startup. Others claim that it’s unproven, unscientific and gets your product to market in a haphazard way that is ungrounded in […]

  38. […] Great ideas and definitely innovative. But from time to time, I can’t stop thinking about lean becoming just a fad. An empty word lost its meaning. Remember SCRUM? TQM? So please, think about what lean means before using it. The discussion here is a great start: http://nanodome.wordpress.com/2011/10/05/lean-startups-suck-here-are-10-reasons-why/ […]

  39. >> skinny-arsed latte-drinking social software startup guys

    I think you’ve hit the nail on the head here.

    Lean startup is part unprovable statements and part platitudes that anyone with common sense has known since well before Ries was born.

    It seems to me that it is designed to perfectly appeal to young guys with lots of hopes, energy, way too much optimism, not a lot of knowledge or experience and a generous amount of gullibility.

    Some claimed to apply it (often questionable to what degree, really) and have success. I don’t doubt it, but I propose that they would have probably had it regardless, and perhaps they would have had more success without LS.

    Anyone who’s been around the block enough knows that LS was patently designed to sell books and workshops. And at that, it hasn’t failed.

  40. […] Lean Startups suck. Here are 10 reasons why… | Funding Startups (& other impossibilities) […]

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