First off, a great big thank you! to all the people who came along to my entrepreneur guest lecture at UCL last week. Apparently one attendee was spotted IMing something along the lines of “came here expecting to be cynical, but this guy’s more than cynical enough already“. Well… bruised: yes, cynical: not really. And a special thank you to Johnathan Agnes, who managed to round off the evening with some hugely supportive comments from the back. Well worth the pint I bought him afterwards (though I’d have bought him it anyway). 🙂
The thing I recommended at the end – but failed to put in the slides – was my (definitely non-cynical) Startup Handbook, so here’s a link to it in case you haven’t already found it. What’s relevant here is that since I posted it, I’ve been thinking a bit more deeply about what it’s actually all about: really, what exactly am I proposing with the Minimum Buyable Product concept? Am I saying we should all emulate Alan Sugar and sell reconditioned car aerials in Romford Market?
The answer is: sort of, but not really. For once, economics has a diffuse term which usefully touches on this issue – the “economic agent“. Roughly speaking, this is an abstraction of embodied human behaviour embedded within an overall economic system: you model a system of people as a set of economic agents, each doing his/her thing. However, whereas many economics papers (particularly in behavioural economics) obsess about the countless ways how economic agents differ from real people, what I’ve been thinking about is the degree to which many entrepreneurs apparently try to avoid displaying economic agency.
What I’m saying is that if you invest all your efforts on specifically non-economic behaviours (e.g. planning, modelling, forecasting, graphing, pitching, presenting, meeting), that you’re largely avoiding the burden of economic agency has to be a valid criticism. I’d say this is largely a byproduct of MBA careerist thinking, where you try to promote yourself beyond the niggly twistiness of actual transactions and actual data to the point that you need only think about optimizing an entire process that’s already working. Really, an entrepreneur wearing an MBA hat circa 2011 could easily look quite foolish.
Similarly, I would say that Eric Ries’ whole Lean Startup model (proper book review to come soon) is built upon a model of pure microeconomic agency, in that unless your business is able to do continual B2C microeconomic experiments, I don’t think it can properly be run as the kind of lean startup he envisages.
Hence with the Lean Startup people espousing pure economic agency, and the MBA people espousing zero economic agency, it seems that the two groups have us surrounded, though not in an entirely useful way. I think what startups need to develop is limited economic agency, somewhere in the vast practical gulf yawning between the two extrema: which is where my concept of Minimum Buyable Product comes in, to be used as a developmental focus for something that gives your startup a moderate amount of self-determination within an external market. Selling stuff, however small that stuff happens to be.
This division may well highlight the biggest difference between the UK and US angel funding ecosystems: a complete lack of economic agency seem to be no handicap when it comes to getting funding in the US, whereas in the UK it seems as though only startups with full economic agency get even a sniff of interest from angels. Something to think about, eh?