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The Lean Startup, or how the best entrepreneurs don’t listen to customers

 

"We really did have customers in those early days— true visionary early adopters— and we often talked to them and asked for their feedback. But we emphatically did not do what they said." This startling admission appears in the first page of The Lean Startup: How Constant Innovation Creates Radically Successful Businesses, by Eric Ries (2011). Should we congratulate him on his fresh approach, or laugh at him for missing the only true guidance that product development can trust, that is, the customer? The truth is somewhere between the two. Ries has written a book that some have labelled a key management text of the 21st century, while to a more jaundiced eye it reads like so many business books that come from America, combining evangelical fervour with rather dubious and questionable statements that have not been tested.

First, the achievement. The Lean Startup celebrates a culture of constant innovation. It recommends, or adopts, several ideas common to current thinking about software development, together with some innovative ideas from a wider business context:

  • Minimum viable product
  • To “pivot”, that is, to decide that a business process is flawed and abandoning it. Pivoting is not just tolerated, it is celebrated, just as I am told that in the USA the most revered entrepreneurs are those who have failed at least once and preferably several times.
  • “Build – measure – learn”, describing the process of innovation, then testing the result before trying again in a repeated cycle or “feedback loop” (not quite the same thing, but let it pass as an analogy).
  • “validated learning”, which is knowledge backed up by empirical data collected from real customers, rather than simply talking to customers before you launch. 

Most importantly, he recognises the distinction between “can this product be built?” and “should this product be built?”. The latter question is the most important. The experiment is the first product, that is, launch your product as fast as you can so you can gain feedback from the market. Ries recognizes as few others do that Agile methodology is not in itself guaranteed to produce a better product. He describes one character in a case study as “He was a devotee of Agile, and yet had built a product that our customers refused to use. “ At worst, the book repeats the platitudes of so many management books. Describing the prerequisites for the innovative culture, Ries names them as:

  • Proper team structure
  • Good personnel
  • Strong vision for the future

But he doesn’t describe them any further. Of course we agree these are prerequisites, but how do we achieve them? By themselves, these terms are meaningless. Then he adds a fourth criterion that changes the tone abruptly: “an appetite for risk taking”. At a stroke we are removed from the majority of corporations on both sides of the Atlantic, who are risk-averse with a vengeance. Other weaknesses include an uncritical adulation of “scientific management” – that is, analytical management, as exemplified by the Toyota Corporation: “the most advanced learning organization in history”. That’s quite a claim, and I would be interested to know how the author validated that conclusion. From this book can be extracted some useful principles for innovation and new product or service development, even if the terminology is often just a new term for an existing idea, for example the “value hypothesis” – does it deliver value to the customer? Ries is very accurate when he describes “vanity metrics”, the use of statistics to show some progress but to mask fundamental growth – in other words, statistics designed to comfort the senior executives who dreamed up the new product. The author even attempts to describe an unlikely scenario by which an established corporation could have both operational and innovative thinking happening in parallel, something he calls “portfolio thinking”.

 

So in conclusion, a fascinating and maddening book. Just as you extract the ground rules for a lean startup, Ries ducks away from responsibility by stating “Ultimately, The Lean Startup is a framework, not a blueprint of steps to follow”. Well, it seems like a blueprint when you read it. And I much prefer to read a Lean Startup blueprint than to accept the author’s woolly idea that such a methodology will eliminate the “wasteful” nature of modern work. That is only possible if, like Ries, you are interested in the art of entrepreneurship, rather than, like the rest of us, interested in creating a good product that meets a customer need in an effective way.