Getting to "yes" in a world of "no"…

Archive for November, 2012

The Unwritten Lean Gospel…

To my eyes, the whole Lean Startup thing seems to be little more than a nicely crafted piece of contemporary rhetoric, that sings an alluringly timely song engineers desperately want to believe is true… that through the magic of fast iteration, their crappy little startup can prosper despite knowing nothing about positioning, sales, marketing, buyer psychology, or indeed human nature.

Essentially, Ries sells a kind of techno-pipedream that Yes You Too can build a purist company that doesn’t need to sully its hands with all the grungy, old-fashioned business kruft (that every other business book ever insists you need to have as some kind of grounding), because by experimenting fast on eager early customers, you (supposedly) get to find out what works.

Put it all like that, it should be clear that this fetishizes incrementalism (i.e. ‘if made rapidly enough, many small steps can carry you far‘), and is in fact the opposite of (software and hardware) engineering as a discipline, sales as a discipline, marketing as a discipline, pretty much anything as a discipline… it’s anti-every-other-kind-of-knowledge. Put “The Lean Startup” on your bookshelf, and you should surely be able to throw all your other books away. Beguiling, isn’t it?

However, there are many other foolishly impractical messages I suspect The Lean Startup implicitly preaches, but which may not be immediately obvious:-

1. Hope big, dream small.

2. Fail fast, learn little.

3. Self-fund till you die. (For who on earth has a Sugar Daddy rich enough to fund such open-ended stuff?)

4. Alienate lots of early customers by testing lots of rubbishy iterations on them.

5. Don’t trust anybody’s goddarn theory, just iterate instead.

6. If you can’t A-B test if something works, don’t do it.

7. Customers are test subjects for your experiments, not people you have business relationships with.

8. Keep on iterating while the market changes around you (invalidating all your earlier tests).

9. It’s not a product business or a service business, it’s an iterating business.

10. Oh, and don’t forget to A-B test people on your team, that’d be a great way of [mis]managing people, right?

Have I missed any?

“These boots are made for walking”…

The longer I work in the world of startups, the more I realise that most revolutionary inventions have to be delivered to their markets wrapped up in equally radical business models for them to succeed at scale. And the reasons for this are many and varied:-

  • If your new widget is half the price of existing widgets, by putting it on the same shelves as them you run the risk of its being seen as a me-too cheap Chinese clone quality-killer (by end-users) or a make-less-per-sale-on-that margin-killer (by retailers). Yet by finding a different route to market to your competitors that your new widget’s dramatically lower price-point enables (say, corner shops, service stations, mobile phone shops, etc), you can get to walk all over your competition.
  • If your new widget has 2x or 3x the working life of existing widgets, by putting it on the same shelves as them you run the risk of its being seen as a mystifying product variant (by end-users) or a sale-complexifying variant (by retailers). Yet if you instead give your new widgets away and live handsomely off the super-long support contracts, you can get to walk all over your competition.
  • If your new widget is 2x or 3x as powerful as existing widgets, by putting it on the same shelves as them you run the risk of being seen as a “Rolls Royce” (by end-users who are looking for Mondeos) or as an overfancy version of what’s already on sale (by retailers). Yet if you find a real-world application that that extra power suddenly makes possible and can get it to people’s attentions by other retail channels, you can get to walk all over your competition.
  • If your new widget is far, far more configurable than existing widgets, by putting it on the same shelves as them you run the risk of being seen as a confusing product variant (by customers) or an unnecessary support headache (by retailers). Yet if you build an online scripting forum and active user community around it, you can build a direct connection with your market and so walk around the the need for retailers at all.

Hence if you are running an innovative startup, remember that on its own your invention is no more than a pair of shoes. But if you find a route to market & a business model that actively reflects the key difference they have over the competition, then they become a pair of boots that can walk all over your competition. Hence any time you need some direction, let Nancy Sinatra (or Jessica Simpson, if you really insist, *sigh*) show you the right way forward for your young business:

“These boots are made for walking, and that’s just what they’ll do
One of these days these boots are gonna walk all over you.”

Building a startup is like building a boat…

out of flotsam, while swimming alone in the middle of a vast ocean. By the way, it’s cold out there, really cold.

So, how are you going to do it? Well… government grants are leaky lifebelts that help keep you afloat (but only for a short while). Oh, I should mention that to get them, you have to swim 50 miles and back, leaving your part-constructed boat behind you to sink ignominiously beneath the waves. EU grants are the same, except that you need to swim 1000 miles while also collaborating with people building their own sinking boats in different countries. then you’ll probably be turned down anyway.

You’re not swimming completely alone out there, though. Business angels enjoy motoring past in their speedboats to see how your funny little tech construction project is going. Even so, they rarely bring along anything of use with them: most are content to have a chat with you over a cup of (salt watery) tea, and to share their reminiscences about how difficult they found it to build their own first boat way back when (at a time when, curiously enough, banks were happy to lend to boat-builders). Then off they motor, leaving you freezing in the water, scavenging nails to fix passing planks together.

Occasionally a VC cruise liner will sashay past you, sending bloggy ripples that confuse and annoy. Their captains wave, but never actually stop: though you can see all the waste food being chucked over the side, seagulls get it all before you can reach it. And although it’s sometimes nice to dream about building your boat in a shipyard (the way that VCs claim to do), sadly that’s not an option for you either.

Coaches tell you how to dive deeper to find the nails you need: while mentors tell you which planks they’d choose to build with. But even with all their “help”, your best case startup scenario will almost always be a leaking,hacked-together contraption that is barely sound enough to keep itself afloat, never mind keep you afloat as well.

Errr…. do you still want to be an entrepreneur?

* * * * * * * * * *

OK, I completely accept that all human endeavour is, to a very large degree, no more than an attempt to create small bubbles of order in a vast ocean of entropy and doubt: and that in those terms, starting up a company is no different to any other exercise. But all the same, what is the sense of having such a complicated network of non-funding funders, inept financial gatekeepers and pointless service providers when so few young tech companies ever manage to start up both successfully and scalably?

Has nobody actually noticed how unbelievably cold it is out there? Even if you are an experienced ice diver, you may not arrive in port…