Why FastCompany Gets "The Lean Startup" Almost Completely Wrong

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Why FastCompany Gets "The Lean Startup" Almost Completely Wrong

 

Normally, I don't like to criticize someone else's content — particularly when it's from a source like FastCompany, which I respect and enjoy reading. But, today, I came across this article that talks about the values of the “Not-So-Lean” Startup. It caused a visceral reaction in me as I was reading it. Not that it didn't make a few good points (like the importance of sales and marketing and the value of inbound marketing and content creation), but it seemed that the author was attacking the lean startup method, popularized by Eric Ries in his best-selling book “The Lean Startup” without actually understanding it all that well.  Also, I'm a self-proclaimed Lean Startup fanboy.   [Note: The link to the book is an Amazon affiliate link. I donate all money I make from Amazon to non-profits — I figure the non-profits need the money more than Amazon does].describe the image

The following are some direct quotes from the article about the lean startup method and my reactions.

1. “In life and in business, failure can mean certain death, without a chance for another loop.”

Sure, failure can mean certain death — but one of the ideas behind the lean startup is to not only make loops short and fast, but try to maximize the odds that you can iterate enough times to get to product-market-fit.

2. “…another Riesian commandment that equates to plowing through "build-measure-learn" feedback loops until one discovers that special (and monetizable) moment when a product and its market interest collide.”

If you met Eric Ries or read what he's written, you'd know that he doesn't deliver commandments. He's scientific and thoughtful. He delivers ideas. He has a theories, and he argues for his theories — pretty well, I might add. To refer to a “Riesian commandment” misleads readers into thinking he's some arrogant know-it-all — which is simply not true.

3. “Indeed, too many startups have died (or are doomed to) by applying this method to their businesses, especially as their investors watch in horror.”

Really? How about some examples? Most startups die. How does the number of startups that have died (or are doomed) by applying the lean startup method compare to the number of startups that die because they didn't apply the method? By the way, as an angel investor myself (30+ startups), I will say that I am more “horrified” when I see startups not follow the lean startup model.

4. “you only get one shot to make a real splash with a product launch and truly impress the world, right?”

Actually, wrong. If your strategy is to bet it all on a single product launch and the hopes to get the magical ingredients “just right” to make that big splash and impress the world, odds are, you've already lost. In any case, it's at least sub-optimal. Why put so much emphasis on this “big bang” lauch model? Why not try and learn from early users, iterate and maximize the odds of market enthusiasm when you do think you're ready?

5. “Yes, the lean startup movement is correct in saying you shouldn’t throw wild parties and give Teslas to all your new employees--but isn’t that just common sense?”

Yes, that is indeed, common sense — but it has little to do with the lean startup. Once again, I will repeat, with emphasis, being lean is not about being cheap, it's about being fast. Every time I see someone make this msitake, I wonder if they're ever heard Eric speak or read the book.

6. “You can’t be a startup forever. And you shouldn’t want to. The lean startup model only offers tools to get you so far.”

Right. That may be why it's called the Lean Startup Model. The idea wasn't to come up with the grand unifying vision for all that is good and true in the universe. The reason the lean startup exists is to reduce the rate of startup failure and the related loss of human time and talent. I think it does that really well, and frankly, that's plenty of value right there.

Disclosure: I didn't realize until reading the early part of the article that the author of the article was Phil Fernandez (hi Phil!), someone I know and respect and who is the CEO of Marketo, a company in the marketing software industry. (My company, HubSpot is also in the same industry).  Once I figured out it was Phil, I think I reduced my level of snarkiness.  :)

So, what do you think?  Did I over-react?  Are my points misguided?

 

 

Posted by Dharmesh Shah on Mon, Feb 20, 2012

COMMENTS

Thanks for the insight Dharmesh. I think at the end of the day, there is no "right or perfect way" to build a business.  
 
Eric has good tips in his book, but so do a lot of other people with their own methods.  
 
Key? Not getting locked into a box as a start-up entrepreneur believing there is only one way to get to the promised land.  
 
Yes, use a framework for guidance, but be open to alternative ideas. Make sense?  
 
Thanks again Dharmesh... :-)

posted on Monday, February 20, 2012 at 2:35 PM by Eric T. Wagner


Let's not generalise. 
 
Are we sure that the "lean start-up" approach can be applied to all companies, sectors or countries? 
 
Perhaps not.

posted on Monday, February 20, 2012 at 2:50 PM by Petko Karamotchev (Merar.com)


Hey Dharmesh, 
 
I think you are exactly right. No over-reaction and your points are bang on. 
 
For most startups (not all but I would guess more than 90%) following the ideas behind the lean startup model will be life saving... or at the very least, massively risk reducing. 
 
The associated misunderstanding that drives me nuts is the Minimum Viable Product. I continually meet people that decry the idea. "You can't release a product that sucks", "You can't blow you launch" etc.  
 
There are three words in that phrase and viable is one of them. Within the customer centric focus of Lean Startups, "Viable" is clearly a customer-informed value. If your customer thinks the MVP you shipped sucks, guess what, IT WASN'T VIABLE. 
 
Such an elegantly simple concept, like the lean model itself, and so frequently misunderstood.  
 
I think it benefits us all to expose and discuss these kinds of misunderstandings... 
 
-Nick  

posted on Monday, February 20, 2012 at 2:51 PM by Nicholas Napp


Agree with most of this, but I have to say, when reasonable people consistently misunderstand your core themes, there's probably an underlying issue. 
 
Maybe it's the brand "lean startup" that's at issue - human brains want to categorize and "know" things, and skimming lean startup literature and images tends to reinforce the "do it on the cheap" or "just in time" notions that the phrase "lean startup" conjures. 
 
Of course, if Eric had called his book "Innovation Accounting", it might not be a bestseller. But that in my opinion is the most significant idea, and the core message of the book and his work, i.e. measuring what matters versus vanity metrics, being accountable for those metrics, and adapting quickly when things aren't working as you theorized. 
 
Ironically, Phil uncovers some of those nuances (actually spelled out in writings of Eric and Steve Blank) in his arguments against, so I see it more as violent agreement, than as an actual refutation.

posted on Monday, February 20, 2012 at 2:54 PM by Dave Churchville


Bottom line: I've been helped more than hindered by Reis. I can't ask more than that of a book.

posted on Monday, February 20, 2012 at 3:34 PM by Andrew Ellis


No, you did not over-react. A few things to add on to the discussion. 
 
 
 
As you noted, Lean does not equal cheap. This can be easily explained to state that Lean is about the process, bootstrapping is about the funding. Bootstrapping can be big bang or it can be lean. Having said that, Big Bang Bootstrapping is a recipe for failure. 
 
 
 
Lean Startup is not just for startups, just as Entrepreneurship is not just for starting companies. It is a philosophy. It can be applied in big businesses and currently is. It is a way, a method, to overcome the Innovators Dilemma.  
 
 
 
As noted in one of the comments, there is a branding problem. It should be called something like "Kick Ass Way to Win in Innovation." 
 
 
 
Good article!

posted on Monday, February 20, 2012 at 3:35 PM by Alex


It's INNOVATE or DIE - either you learn quickly on the impact of your actions, or you are doomed to go out of business (even though some funding may help you to live a bit longer). 
 
In summer 2008 I did a presentation with Team Academy, an entrepreneurial university from Finland near Berlin on the above topic. It is all about applying the Dr. Deming method P-D-C-A, only that some call it XY method other LeanStartup, in the end it is only to be burned down to: 
 
only deliver what is feasible, and do it quick, elegant, and more important learn from it even faster. So over short or long you become a systems thinker (also called lean thinker). Application can be in any field from education, household, shopfloor, programming company, hospital, .... even in the office of a political party.

posted on Monday, February 20, 2012 at 4:03 PM by RalfLippold


I was happy to read this fast company point of view which clearly raises some very questionable aspects of the book and the caveats this has lead to: gangs of engineers setting startups, focussing 99% on product (the good old 1960's way) and 1% on designing serious value proposition and gotomarket. 
Large product centric companies have certainly found there a good excuse to have their product-centric engineering staff running the show and the gambling (trial and error...) and thousands of startups have found there a great cookbook to just follow diligently, fail and start another try... 
That book for me is partly a leap in the past, glad some serious magazine has raised some doubts on its several flaws and my guess is these are grounded and the result of a serious read and understanding. 
This post and instant reaction is actually a good illustration of the weaknesses of some aspects of the book: advocating acting without much upfront thinking, trial, test and error

posted on Monday, February 20, 2012 at 4:24 PM by Alexlot


Wow, the author of that FC piece pretty much completely misunderstands the ideas behind the Lean Startup approach. That article is riddled with so many invalid assertions and misunderstandings as to be effectively useless. It adds nothing to the discussion about how to build a startup and simply makes the author look uninformed. 
 
Anyone who's seriously interested in Lean Startup and Customer Development would be better served to read "The Four Steps to the Epiphany" by Steve Blank, then Eric's book "The Lean Startup" before making any judgment on their merits.

posted on Monday, February 20, 2012 at 4:31 PM by Phillip Rhodes


I completely agree. Most startups aren't blessed with the capital and/or connections to live...fat. If you aren't a lean startup, then you are wasting resources, and someone is bound to do it better at some point in the future.

posted on Monday, February 20, 2012 at 5:29 PM by J.P.


Good counter article Dharmesh but why reduce your snarkiness just because you know the author. Either the criticism is valid or it's not. I'm sure Phil can take it. By the way this is may favorite mantra from this article "being lean is not about being cheap, it's about being fast".

posted on Monday, February 20, 2012 at 6:03 PM by Karl Treier


 
Hi Darmesh - This FC article was just odd. Couple germane points that preceded 'Lean Startup' -- 
 
'The Purpose of a Business is to Create a Customer.' - Peter Drucker  
 
'A Startup is Not a Smaller Version of a Large Company.' - Steve Blank  
 
Fernandez is probably not a Lean Startup apostate. Rather, Phil has taken enormous poetic license. 
 
First, there is this dismissal, '...tremendous drawbacks and limits to the Lean Startup cycle...' (There are NEVER drawbacks to listening to customers!)  
 
Then this Lean Startup mandate, 'Instead of beta testing a product, we beta tested an idea...' (Of course, Phil, startups are ideas, not products, c'mon, you know better, we ALL know better.)  
 
This contradiction is playing fast and loose with the Lean Startup ethos. It is as if Lean Startup went through the ‘spin’ cycle by political operatives at national headquarters…  
 
My biggest issue is conflating ‘Company Building’ with all the preceding activities of Lean Startup. Of course, scaling is a step in Lean Startup – the LAST step, the end. Again, Lean Startup is for STARTUPS and they are positively not, ‘small versions of a larger company.’  
 
Remember, once you pivot a few times, or many times, and have created customers, you are no longer a Lean Startup. It is important to know when to STOP being a Lean Startup.  
 
Honestly, this is what I think Phil was trying to say with, “In Defense Of The Not-So-Lean Startup,” i.e., “Trade the lean for the green.” so he gets a pass from me.  
 
This key principle could have been said much more simply. Lean Startup is like flirting and dating. It's to discover if there is a possibility of creating something productive. Outside of Hollywood, no one can flirt and date forever.  
 
Thanks. Would never has read this rather odd morsel unless you raised it. Besides, isn’t it fun to be slightly snarky sometimes as long as it is constructive? Thanks again. 
 
-j 

posted on Monday, February 20, 2012 at 6:55 PM by John Maloney


Dharmesh, 
 
You're absolutely right and I can't help but feel Phil didn't really get the key points of the book (or Ries' points, for that matter).  
 
I just want to add a little piece; when you said: "being lean is not about being cheap, it's about being fast", I think it's not just being fast. While important, "being fast" is a relative by-product of a more important point which is to remove waste from the build-measure-learn loop. Anything that does not add to the validated learning process, is a waste and eats up unnecessary time.  
 
Cheers

posted on Monday, February 20, 2012 at 7:55 PM by Pandu Truhandito


Hi Dharmesh, 
 
 
 
I never seen/read you snarky. This was, though diluted as you put it, once you realised - and- "hi, Phil"! 
 
 
 
I guess Phil went in another direction, a point of view, points of view never make the picture complete. 
 
 
 
I agree and if there is a commandment in the book (I confess i still have to complete it), it is to generate and test ideas with minimum chance of the startup dying, which it surely will if it went the big bang (back in the 90s burn rates) way. Every page i read gives me a few iterations on the idea i am working on and its simply awesome. 
 
 
 
And yes, John Maloney, says it well: "Besides, isn’t it fun to be slightly snarky sometimes as long as it is constructive?" 
 
 
 
Thanks again. 
 

posted on Tuesday, February 21, 2012 at 12:47 AM by Raj Mohan


Having lived through the early years of a big bang startup that chewed through about $16M in 2 years and hired and then laid off about a 100 people any methodology is better than that in the startup phase. I don't agree with everything in Eric's book but fast iteration to minimum viable product is how we built the first SaaS versions of ProspectStream and it's working.

posted on Tuesday, February 21, 2012 at 5:04 AM by Karl Treier


It is surely impossible to fault the stepped logic of Messrs Blank, Ries and Osterwalder. 
 
Rapid Customer Development cycles turning hypothesis into actionable metrics > iteration and avoidance of false metrics...I would not like to be associated with any startup that rejected these core principles.  
 
Unless you are 'out of the building' listening and moving fast then it is a slow cycle of wasted resource, both time and money, the two elements that 99% of all startups find in limited supply... 
 

posted on Tuesday, February 21, 2012 at 6:23 AM by Dom


Great post. I liked the book so much I asked Eric Reis to be on my radio show on Feb 27.

posted on Tuesday, February 21, 2012 at 6:44 AM by Kip Marlow


Lean. Learn. Change. Optimize.  
Learn. Change. Optimize. 
Learn Change. Optimize. 
 
This should be the mantra of every business, whether start-up or otherwise. Squander (of knowledge, money, timing) is a 4 letter word. 
 
Somehow what has gotten lost in today's super speed business world is that business fundamentals haven't changed -- they just need to be applied as such.  
 
Judicious use of resources, flexibility, the ability to adapt, well-considered adoption of risk...these are all as they've always been. 
 
Somehow the words "start up" makes people, even some of the most experienced ones, forget that in some critical ways, it is business as usual. 
 
Whether resources (tangible and intangible) amount to dollars or millions of them, the ability to utilize them wisely, with great foresight, and with the ability to pivot at the drop of a dime creates the best opportunity for success. 
 
Easy? no. Rewarding? If you don't think so, a start up may not be where you should spend your time.  
 
Because even if you've packed your parachute yourself, if it doesn't open, you must be ready with plan B,C D...isn't this what good business (any business but most critically start up business) is about? 
 
Enjoyed this (and all) your posts. 
 

posted on Tuesday, February 21, 2012 at 8:16 AM by Janine Darling


gr8 way to bring footfall to the author of the other article  
in the end it was just a waste of time without any knowledge 
you are better than this dharmesh

posted on Tuesday, February 21, 2012 at 11:47 AM by suraj


Glad you took the time to write this as I was amazed that author of the FastCompany article - a valuable source of intelligent information - seemed to not have read all of the book before putting fingers to keyboard.  
 
We're putting the principles of the Lean Startup approach into practice daily for our customers at GetViable, and the proof is in the execution. It's a sound approach and delivers the results - customer validation that you have a product someone uses and is willing to pay for.

posted on Thursday, February 23, 2012 at 11:38 PM by Leslie Barry


Totally agree. I saw Eric Ries present at ProductTank and he certainly came across as thoughtful and not at all arrogant. Although quite a lot of what he proposes seems (to me, anyway) to be pretty much common sense, he also brings a rigour to a process that should have all startups questioning their assumptions and adjusting their outlook as they go along. I suspect FastCo of trying to stir up a little controversy to provoke discussion (and it worked!)

posted on Friday, March 02, 2012 at 9:59 AM by Liz Rice


Very fantastic info can be found on this blog.

posted on Saturday, March 17, 2012 at 6:50 AM by Amith


Awesome post , very informative too.

posted on Saturday, March 17, 2012 at 6:55 AM by Amith


Ries takes own failures as examples in his book. This usually does not come from the bragging ones.  
 
It is a great book, everyone willing to start a business should read it. Even though at times I thought it was repetitive, certain truths are never said too many times.  
 
Thanks for the great work you're doing here.

posted on Thursday, April 05, 2012 at 1:06 PM by John


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