It's a shortcut that can take you to a dead end. October 5, 2018 7 min read Opinions expressed by Entrepreneur contributors are their own.
It’s a shortcut that can take you to a dead end.
7 min read
Opinions expressed by Entrepreneur contributors are their own.
Lean is good. Fat is bad. Right? Maybe not. Ask the polar bear if he doesn’t store fat, how would he survive the winter? This furry analogy may not only be wildlife wisdom. It finds some pertinence in the world of business as well.
When the lean startup movement started in 2009, I was on Wall Street and working on my master’s at NYU, seeing the energy of New York shifting from a financial frenzy to an interest in tech and media startups. Everyone wanted to go lean — build, measure, learn. MVPs, validate and pivot became the buzzwords whose echo is still resounding in the entrepreneurial hallways worldwide. If the lean startup method was as effective as it was touted to be, I would have seen many of my classmates’ startups — and my own — thriving today. But sadly, that is not the case.
While one cannot deny the merits of the lean process, the bigger lesson is that the lean startup methodology is not the holy grail of startup success. What sounds great in theory is extremely hard to practice. A dig into few startups shows that following the lean method can lead to both false positives — a lean approved idea may not turn viable — and false negatives — a lean rejected idea may become successful.
1. Building with a deep-rooted interest versus chasing success.
Fundamentally, the lean approach promotes a culture of chasing success, measured by traffic and funding instead of how passionate you are about the idea.
I was talking to Prasanna Sankar, cofounder of Like a Little and Rippling, for my upcoming book No Shortcuts. Sankar followed lean principles to start Like a Little, his first venture. The anonymous flirting app went on to get 20M page views in the first 6 weeks and attracted $7M of funding from Andreessen Horowitz, Ron Conway, Mark Pincus and Paul Graham, just to name a few. Then the engagement went down, founders tried to pivot unsuccessfully, and it ended up folding after four years.
Switching ideas until a small group of users showed interest was what Sankar took away from the lean approach. While it did help him get users and funding, the idea was not fundamentally exciting to the founders. And, they did not know how to keep it growing. So, when lean startup says an idea is validated, what does it mean? Eventually, the business has to be built and scaled. The lean approach takes no responsibility for it.
In hindsight, Sankar expresses concern about their lean approach:
“I would never do the lean startup thing again. I don’t think ideas are brainstormed. You need to have deep commitment and domain knowledge to whatever you are doing. It comes when you care for something for long regardless of its commercial benefits. I have met hundreds of founders by now and consistently, we see that the guys who did not switch ideas too frivolously may not be the VC level hit stories, but they are the ones who are doing really well for themselves.”
Such a stance gains strength from many startups that were born out of commitment and succeeded after a long time — the antithesis of lean startup — such as Amazon and HackerRank, which brings me to my next point.
2. Long lasting success only comes from surviving the dips, not running away from them.
My main grudge with the lean startup technique is the concept of pivoting when your original idea is not working. In Like a Little, we see the story of a false positive. What is even more likely to happen with a lean startup approach is a false negative — basically rejecting a good idea because the approach does not make it very clear whether pivoting is the right way forward for a startup. Whatever benchmark you are using to measure the success of your product is only as good as your estimation of what matters.
Every product will face hurdles in its journey. How do you know whether its a problem worth solving if you pivot away every time you stumble? Most of the long-term successes are the ones who found a way to survive the down period. Would Apple be here following the lean method?
Ben Silbermann has said that he was grateful he didn’t read The Lean Startup when he was starting Pinterest because it might have convinced him to give up the idea in early days. “The hard part about that idea of ‘minimum viable product,’ for me, is you don’t know what ‘minimum’ is, and you don’t know what ‘viable’ is.” Sibermann said.
3. Getting customer feedback on the unfinished product is not always possible.
The flaws of the lean startup philosophy particularly get exposed when we apply it to the hardware segment and the ideas which are set out to change the world. Products like Tesla and iPod would have never come out of a lean thinking because they needed to create a new market for themselves and couldn’t be validated in the traditional sense.
Plus, think about it. How can Elon Musk quickly build one small tunnel prototype beneath Los Angeles and validate before boring more tunnels? The effort required in creating a physical product (leave apart full manufacturing) makes it unviable for a build-measure-learn approach.
Lean startup’s emphasis on constant validation, testing your hypothesis and refining your idea can easily lead to fatigue and burnout. While A/B testing has become a popular buzzword among the founders, it doesn’t produce significant results unless your traffic is meaningful. Many lean enthusiasts get blinded by testing finer details and lose the bigger picture in the process.
5. Lack of focus on technology and architecture.
Quick prototyping as advocated in the lean startup itself comes at a cost of sound product architecture decisions.
Slideshare was gaining good traction in its early days and growing fast. To keep testing new features in a lean fashion, it prioritized short-term decisions over long-term scalability practices and accumulated technology debt as the product evolved on the back of user feedback. While Slideshare survived the phase when it had to go deeper and redesign its architecture, it is a fatal transition for other poorly designed apps.
The strongest evidence that it may be time to think of a new startup paradigm has come from its founding father himself. Steve Blank wrote a post that specifies the constraints for which lean philosophy was originally designed — namely capital starvation. He further goes on to show that some of those constraints may no longer exist and hence, lean may not be the best way forward for everyone.
Even on the matter of capital availability and corresponding applicability of the lean approach, I find better sense in this original post from Ben Horowitz. As he wisely summed it up:
There are only two priorities for a start-up: Winning the market and not running out of cash. Running lean is not an end. For that matter, neither is running fat. Both are tactics that you use to win the market and not run out of cash before you do so. By making ‘running lean’ an end, you may lose your opportunity to win the market, either because you fail to fund the R&D necessary to find product/market fit or you let a competitor out-execute you in taking the market.
Lean startups can fail and so can a fat startup — perfect example being Theranos. Let us not get so fixated over what approach we are pursuing that we forget the very motivation behind building a startup.