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Lean Startup is appealing as it promises to bootstrap your business fast. However, it might prove to be a very tough method that might find strong resistance in its adoption. Lean Startup needs you are ready to get out of your COMFORT ZONE.
These are, in my opinion, the main reasons why Lean Startup finds resistance among startups and entrepreneurs:
1. You are afraid of throwing away what has been done so far. You already have a plan and you want to stick on it. This might happen when you try to embrace Lean Startup at a later stage in your project. You have already committed resources to certain activities and you don't want to backtrack. More correctly, you don't want to take the risk of realizting that you are going to the wrong direction and you will have to backtrack. But you do want to take the risk to fail later because you have created something that nobody wants. (Would you call it "procrastination"?).
2. You have a strong ego as a founders (or CEO) and you don't want that someone challenges your assumptions. It's very hard to get out of your own reality distortion field. To put this bluntly, the problem is that you refuse to measure the progress towards business objectives. Lean Startup requires that you are ready to setup Actionable Metrics and honestly evaluate your progress towards Product-Market-Fit. In this case, measure of progress is a mean, not an end. It is a proof that you are going in the right direction, namely you are buidling a product that sells.
3. You fear of facing the reality of the market. World is much nicer if seen on a piece of paper. The market is made of people and as Steve Blank says: "no business plan survives first contact with customers".
4. You believe that getting to market too early would entail loss of reputation in case of failure. You don't see failure as part of the process of searching a viable business model and achieving the product-market fit. What you don't understand is that failing with early adopters is not a problem. They are aware of the imperfections of innovative products and they are very forgiving. Besides, the type of failure that you might face at this stage is that NO ONE will buy your products. Therefore, nobody will notice you and your reputation is not at stake.
5. You see business from the top down. You have a business degree and you think you know how to do business. You are not ready to build your business from the bottom up. Executives know how to run a business, not how to create it. Startup is a search process aimed at finding the Product-Market-Fit. Once you found it, you can build your company, scale your business and execute a business plan.
6. You believe that your business is not "lean-compatible". You may have been already been funded on the basis of your Business Plan. In that lucky situation, I can only wish you best luck in not finding yourself in the 90% of startups that will fail.
Lean Start could be a threat to focus-oriented people. I mean that, those who believe that once the plan is written, the only way to succeed is to stick on it. As I already said, planning in uncertain situations is nonsense. So, do you want to stick on nonsense? Be my guest! But don't tell me I did not warn you. :-)
Vincenzo Pallotta, Strategic Adviser at LeanStart, Geneva, Switzerland.
While it is pretty clear that a Minimal Viable Product (MVP) enables validated learning through its adoption by early adopters, it is not clear enough what it actually is.
Even Eric Ries seems to be very vague on what actually constitues an MVP. He says that essentially a MVP is a learning tool that we can use to learn about the targeted customers needs from early adopters providing them with the minimal set of features that they accept to find in your product.
But now the question is how to figure out the minimal set of features? In order words, how do I know the needs adn wants of early adopters?
This might seem an chicken-and-egg problem, but there might be a way out.
First of all, WHERE do I find early adopters. Well, of course it depends on the type of product, but high chances are that you find in place where the people talk about simiar products (e.g. discussion forums).
Second, HOW I select the features for building my MVP? Here is my 2 cents about the topic. You can follow these simple steps:
One suggestion, to improve the process is the following: for each feature you want to remove, ask yourself what is the value of this feature to the user/customer and try to understand what is its contirbution to the overall perceived value. You might even rank them beforehand and start removing them from the lowest valued features up.
Notice that this is about "features" of your product and it does not tell you if you have to implement them into a real functional prototype. This process leads to the design of a product that is the "cheapest" to build because only contains the features that define the "substance" of the product.
Building it or not is another story. Namely, it fundamentally depends on what resources you have. If you can afford to build a real instance of your MVP, that's great because you can directly sell it to your early adopters. But sometimes (often?) this is not possible. In this case, you can tell your early adopters about the "design" of your MVP and ask them for feedback or, even better, to support its development. In times of economical recession, maybe this is the way to go and there are a lot of successful cases of crowdfunding out there such as KickStarter.
My personal suggestions are:
Don't be afraid to eliminate "vanity" features from your MVP as long as it represent your vision. There will be time to reintroduce them later.
Dont' be afraid to ask your early adopters to pre-order your product. Sales are the only reliable indicator that people really want what you offer to them. If your MVP requires an effort that you cannot afford, ask your potential customer to help building it. After all, this is a win-win situation because they will eventually have what they were looking for.
Don't ask investors to help you in building your MVP. Investors are not customers and basically they are interested in their return on investment and company ownership. Always be aware that with an MVP you are running an experiment that allows you to learn what the market really wants. Inverstors are not interested in experiments that have a high chance to fail.
Make several versions of the same MVP and split test. There is a high chance that you made a mistake in selecting the relevant features.
Listen your potential customers and ask them to help you in designing the MVP: they know better than you what they want.
Vincenzo Pallotta, Strategic Adviser at LeanStart Geneva.
Reading this post on the reasons why Path and Flipboard are no longer adopting the Lean Startup model, my intuition tells me that the true reason is because they are no longer startups.
It probably does not make sense to stay lean when you need to scale. Scaling is a big effort that require a heck of resources. When a company decides to scale, it can no longer afford to make pivots. Yes, because there is a committment on the infrastructure which renders even small changes extremely expensive.
This means that when you decide to scale, you must do it right. And to do it right you need to have learned everything about your business.
So, I believe that Lean Startup has its own scope and it is a mistake to try to apply where it is not appropriate.
...maybe yes!
According to Google, Knowledge Graph is the new frontier of Web Search. From the video below, it seems that Google was able to build a huge semantic network that will be exploited to retrieve semantically related content to a query.
However, it is not yet capable to fully understand natural language queries such as those showcased by PowerSet a few years ago:
The above queries differ only on the prepositions: "on" vs "for". Standard search engines get rid of these words in the indexing phases (they are "stopwords". Unless the content is indexed differently there is a minimal chance that the right results will be selected for the different queries. In other words, for Google the two queries are identical.
If you think that you may overcome this problem by putting the query into brackets: "books on children", Google will only return results that contains the string "books on children", which is not exactly what we are looking for.
Being a book ON children means that the book should tell stories about children. This is a PROPERTY of the BOOK object. More precisely is the value of the attribute TOPIC for the concept BOOK (if you speak RDF, it would be the triple topic(book, children)).
I don't know what exactly are the plans at Google, but if they really want to make progress towards the Semantic Web, they should turn their "classical" indexes into an RDF version of them where the text of the pages is semantically parsed and the semantic roles extracted. This is a very computationally expensive task (well, IBM Watson did it).
But it is not enough. Google should also process the query differently, i.e. without removing stopwords like prepositions as they carry essential semantic meaning as in the above queries. The technology for doing this already exists and it is also quite effective. I am sure Google is onto it.
From this video, Mr. Ben Horowitz has pointed out three alleged flaws of the Lean Startup Model:
1. It presumes when you have achieved product-market fit. The supporting example was about measuring success of products over time. iPods did not sell as fast as iPhones, and on that basis Apple should not have introduced other iPod models after iPhone.
This argument is flawed because, first Apple is not a startup. Second, and most importantly, Lean Startup never said that one should use metrics from another products to assess the product-market fit of a product. In the example, exactly because of the risk of cannibalizing iPods, Apple decided to introduce new models (i.e. to do a pivot, as Lean Startup suggests).
2. Lean Startup presumes that once you have product-market fit you can't loose it. The supporting example, is Netscape that once had the product-market fit, but lose it when Microsoft included Internet Explorer in the OS.
Again, the fallacy resides on the fact that Netscape was not a startup. But more importantly, this was not a problem with customers needs, but rather than an external factor that forced the users to accept Microsoft policies/strategies. Horowitz points out that they "did not have the luxury to address the issue in the Lean Startup way". That's not a "luxury", is a rational way to adopt if a company cannot afford to splash milions for crashing new product development. Actually, it is the Fat way a luxury that startups cannot afford. In such a case, Lean provide a way to achieve decent results with a fraction of "Fat" resources.
3. Lean startup implies or assume that there is no competition. What if prior achieving product-market fit, even if the market is large, a scary competition appears. The supporting example is taken from VMWare who take care to invest money in order to be ahead of open-source competitors like Xen and big scary competitors such as Microsoft.
The argument is obviously fallacious because, first not even VMWare was a startup, but secondly because if crashing massive resources to gain competitive advantage works well, this does not necessarily mean that Lean doesn't. When it is not possible to deploy brute force to deal with competitors, Lean offers smart tools (like David and Goliath). One idea is to elicit niches where competitors are weak or not considering so that the startup can avoid direct competition and possibly erode the main market. Lean Startup is in that sense compatible with the work of Christensen's work on disruptive technology and emergent markets.
The problem with Horowitz is not business skills; it's LOGIC. He provided three fallacious arguments against Lean Startup. I also believe that Lean is not universal and there are many contexts where it does not apply well (e.g. large established companies for mainstream products). Also, Lean Startup advocates that once the business scales, the conditions change and probably the methodology is no longer applicable.
Besides, a Fat startup model has several problems, among which "premature scaling". Horowitz was unable to explain how the Fat model could be beneficial for startups as he showed only Big Companies examples.
On the other hand, the Willson's argument was much clearer and plausible:
"Wilson’s argument focused more on how to maximize the probability that entrepreneurs will get favorable exits. He boils down the formula to: (Founder’s Stake) x (Probability of an exit) x (Size of the exit). Wilson says to focus on the first two variables. Accepting more funding will dilute the founder’s stake, but it isn’t going to proportionally increase the probability of an exit (which is based on far more factors). In other words, it hurts the likelihood of a favorable outcome (at least from the entrepreneur’s perspective). Likewise, he says investors are looking to mitigate risk, which is why investing small amounts when a company is young is in their interest."
However, he only focused on one of the many benefits of the Lean Startup model: the reduced need of initial resources. Lean Startup is a comprehensive methodology that make sense for startups (possibly with a few exceptions), and it has several facets.
My personal opinion is that Lean Startup can help startups in finding the right direction towards a sustainable, profitable business model by incorporating failure in the product and market development process. Failure becomes a learning event, which allow the startup to "rule out" the failing paths (or pruning, to use a Computer Science terminology, the "dead branches" of the business opportunity search tree) very early in the process.
Dear Readers,
I would like to resume my blog today with an Easter egg.
I stumbled upon this talk given by Tina Seelig about Divergent Thinking and related subjects.
Divergent thinking, when combined with convergent thinking results into Design Thinking.
Design Thinking is what is needed to create new things and change the world. Sometimes people only see the "convergent" side of this process, because they can only see the result of it. Instead, ideas generation is the most challenging part and often hidden. Even Steve Jobs, before getting it right, have explored plenty of designs he did not hesitate to throw away if they did not meet his standards.
Nobody get it right from the beginning. But everybody is able to explore the search space of ideas. But also people are afraid to explore this, possibly large, space because they can get lost. Moreover, many assume that sharing one idea means believing that the idea is the best or the right one from the perspective of who generated it. This a wrong assumption. Generated ideas are not right or good. They are just ideas... that need to be validated. Ideas are assumptions, and assumptions need to be validated. Only after this process, one can say if they are good or bad. If you don't do that, you are simply biased.
This is where convergent thinking unfortunately kick off prematurely. Once an idea is generated, instead of taking position in favor or against it, one should think about how to validate it with a neutral standpoint. Validating, means setup experiments and put the idea at work. Sometimes is very straightforward and brainstorming might be sufficient. Some other times, it can be very challenging and it would require a complex experiment.
In no case, an idea should be classified immediately as a non-sense. Moreover, ideas can be tweaked and made feasible and valuable just by changing the some assumptions that don't work. That is "morphing". As I said before, nobody get it right from the beginning, but there is a high chance that they get it "almost" right.
Another situation is when some assumptions are believed to be validated and in fact they are not. When implemented, these ideas fail just because some of their assumptions were believed true and in reality they were not (e.g. customers like it because I like it). In these situations, one has to have the courage to throw away work done and start from the beginning. This is called "pivoting".
In my opinion, if pivoting is required often later in the process of developing an idea, it means that too little has been done in the "divergent" phase of design. In other words, ideas were not explored adequatelly.
In the divergeng phase, one can use the "re-framing" technique. This is when, one tries to see things from different perspectives. The idea can be the same, but you look at it in a different way. You do this when you say "let's see this as it was that". In other words, you can use different metaphors.
As pointed out by Tina Seelig, metaphors are a very powerful tool to change perspective. Metaphors are orthogonal to ideas. Of course, adding an additional dimension makes the process more complex and difficult to manage. However, the chances to find the best idea are higher.
Dealing with metaphors requires to see things differently. If you see ideas differently, the assumptions might change and turn out to be validated. This is something we do for instance when we change market segments or consider a different use of a product. Well, in reality we don't do this, our users do. Yes, because they are not biased like us by "convergent" thinking: they are naturally "divergent".
That is why, "validated learning" is very helpful. Validated learning is a technique promoted by the Lean Startup Model proposed by Eric Ries. The idea is that assumptions are validated through the building of a Minimal Viable Product (MVP)t that users can test and provide feedback to. Then you learn by measuring the feedback and then iterate the process by integrating what is learned in the next version of the MVP.
To conclude this post, I would like to stress that being a Design Thinker might be challenging if you work with "convergent" thinkers. They tend to see in black and white whereas you see colors. They see one dimension where you see two (like in Flatland). They blame you to bring distraction where they need focus. They see threats where you see opportunities. And most of all, they fear "pivoting" because they have focused so much energy in developing one single idea that throwing it away would represent a big failure for them.
Design thinkers know that faillure is the only way to success and they are just fine with it. For 100 bad ideas there might be a good one. They know that the only way to seize it is to rule out the other 99.
So don't be disappointed if you don't find what you expected in the Easter egg.
Happy Easter to everybody!
Vincenzo
As it is common for many people living in several locations, I have several iTunes accounts. It happened I purchased (well, it was free, but technically it's the same) an App from the Swiss App store which has now been removed. However, the app is available in another country's App store for which I have an account.
Now, when I am connected to this App store my iPod detects an update of the application (from a different country's App store from which it has originally purchased). When I try to update it, it asks me again the original country's App store account password, which I provide. But the result is that it bounces back to the other App store and tells me that the app is no longer available.
Currently, I don't see any workaround for this problem.
Of course, it is in general very annoying having to switch from one account to another for updating the apps (including selecting the different iTunes stores and wait that everything loads).
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