Dave Concannon

Icon

In Pure Water, No Fish

Site Launch – leanstartupfeed.com

Taking a liberal amount of inspiration from Grace Smith’s excellent thefreelancefeed.com, I’ve just launched http://leanstartupfeed.com – A one-stop-shop for all the best thinkers, writers, and innovators working on Lean Startups and Customer Development.

I’m hoping it’ll give a good overview of what’s happening in the world of Customer Development, and get more people involved. Check it out, and let me know who I’m missing – Who else should be included on the feed?

Leave your Ego at the Door

Jiujitsu clubs have a motto – “Leave your ego at the door”. When you walk onto the mat, you’re going to meet people of different sizes, speeds, and skill levels who in one way or another are going to kick your ass. You approach each fight differently, and with a large amount of humility or else you’re going to end up frustrated at best, and just plain broken at worst. The goal is to learn what works in each different situation and ignore what doesn’t. In Jiujitsu, if you hold on to an idea too long you get choked out, or get your arm snapped.

Business and Ego

In a company, people have ego attachment to different areas of the business. You might love the grand vision, the content team might love the type of data they’re creating, marketing might be really proud of their positioning strategy, and the development team is smitten with the fantastic technical solution they’ve created. None of this matters if there’s no customer who also loves it and is willing to pay for it. On the road to developing a successful business, every part of the business can do what they’re told and the system as a whole will still be a complete failure.

Lean Philosophy

The Lean Startup philosophy is designed to minimize this ego involvement. You validate with the customer that you understand their problem. You validate that they think your solution is the answer. You measure that they’re actually using it the way they said they would. You constantly test and tweak, and abandon that which doesn’t work even if you’ve poured your heart into it.  Gradually from the shattered remains of your ego, you have something that people love. You just have to learn to let go.

Why Ben Horowitz’s Article has nothing to do with ‘Lean Startups’

Ben Horowitz has a great contrarian article about ‘Fat’ startups which has caused immediate reaction around twitter and the Lean Startup community. Unfortunately, his article has very little to do with the Lean Startup concept and a lot to do with reactionary CEOs flipping out about the infamous Sequoia presentation. It also has a little to do with how choosing a name is important. For the record Ben Horowitz is right, but let’s backtrack a little bit.

What is the ‘Lean’ in ‘Lean Startups’

The ‘Lean’ in ‘Lean Startups’ comes from ‘Lean Thinking‘ as used in the streamlined production process pioneered by Toyota. This process is designed to banish waste in a production process. In the specific context of the Lean Startup process, it is to ensure that if you’re going to add a feature to your product there had better be a customer there to love it.

What the ‘Lean’ in ‘Lean Startups’ is Not

‘Lean’ in this context has nothing to do with spending less money. It is about effectiveness. It is about preventing your developers writing code that will never be used. It is about making sure that when you only have only one hundred hours to spend writing code, that as many of those hundred hours as possible are spent creating features that customers actually want. Fundamentally, it is about increasing the amount of validated learning you can get out of your process. To do this might involve increasing the amount of money you spend. It may require spending more money on people who are continually testing that your hypotheses are correct on actual users.

What’s the difference?

In Ben’s article we see CEOs reacting to the Sequoia memo, which makes a lot of sense. Around the startup community it was like a meteor had hit. Guy Kawasaki said that if you weren’t paying attention to this memo then you were clueless. Any available investment money dried up overnight. What Horowitz sees in these investment pitches is CEOs trying to display their cluefulness to potential investors by preaching the ‘Low Cost’ mantra. But he’s claiming that sometimes you need to spend big. Is there a disconnect?

Where the ‘Lean Startup’ becomes a ‘Fat Startup’

The critical mission of a Lean Startup (from Eric Ries’s concept) is to get to Product-Market fit.  Horowitz’s VC partner Marc Andreessen describes it as the only thing that matters. This is where the two stories link up. It’s the next stage in the same process – when you have product-market fit and there is a scalable and repeatable sales model you crank up the volume! All that validated learning turns into a method where a smaller amount of sales effort turns into a much larger amount of money. You spend to get there, and then you spend a whole lot more.

Facebook

Pumping too much money into a small start-up is unhealthy for both the company and the investor. On the other hand, Facebook has raised several hundred million dollars and is on track to produce fantastic returns for all of its investors. So what’s a start-up to do?

The difference here is one of timing. Facebook had phenomenal growth – users on college campuses all across the country were signing up at an amazing rate. That’s a pretty good indicator of product-market fit, and a different ballgame entirely. At this point the organization needs to scale to meet the demands of the market, and to do that you need money. A lot of it.

Hypergrowth Markets

Both Opsware and Facebook had product-market fit and were racing to gain a dominant position in a market where no clear leader had emerged. The decision to shoot for break-even revenue vs land-grab for market share is a strategic play at this stage. They both chose the process that Geoffrey Moore describes for capitalizing on hyper-growth markets in “Inside the Tornado“, which is a place that most startups can only dream of getting to.

Final Lesson?

Sorry Eric, “Lean Startups” is a terrible name for this movement. There’s been too much confusion with people translating “Lean” into “Spend zero money”.

Book Review: “Rework” by 37Signals

Add to Cart

I’ve been eagerly awaiting the arrival of “Rework” since I preordered it back in January. I’m a big fan of 37signal’s work, their blog, and loved David Heinemeier Hansson’s talk at FOWA Dublin in ‘09. I’m not a huge fan of “Rework”.

Testimonials

Before getting to the actual content of the book, the reader will be confronted by some of the most overly-enthusiastic praise from recognized industry figures that I can ever recall seeing in a publication. This almost stopped me from buying the book in the first place. Mark Cuban is someone I’d gladly sacrifice a major appendage to work for, but check out this effusive gibberish:

If given a choice between investing in someone who has read Rework or has an MBA, I’m investing in Rework every time… a must-read.

Or this mental breakdown from Tom Peters:

The clarity, even genius, of this book actually brought me to near tears on several occasions. Just bloody brilliant, that’s what.

Content

37signals typically write in a blunt, straight-shooting style, and they pull no punches in “Rework”. Don’t get me wrong – there are a few gems, but also several essays which really don’t make any logical sense. One or two of the essays remind me of “The Sphinx” from the movie “Mystery Men” – amusing upon first read, but logically empty. In particular, the introduction sets up some weak straw-man arguments about what ‘conventional critics’ say is not possible that comes across sounding like teenage rebellion.

Getting Real” was a breath of fresh air in an industry that seemed to have learned little from the Dot Com crash. It was absolutely original and controversial when released, and inspired people around the world. At least part of the reason for the success of “Getting Real” was it’s contrarian stance on what was then normal industry practice – their advice to do less, avoid feature bloat, have passion for what you do, and their simple functional design theories were revolutionary.

The problems with success

It may be that they’ve actually been too successful at promoting their philosophy because for the most part “rework” doesn’t feel like it’s saying anything very unconventional. Here’s an (admittedly out of context) quote from the book that I found ironic:

When you’re a success, the pressure to maintain predictability and consistency builds. You get more conservative. It’s harder to take risks. That’s when things start to fossilize and change becomes difficult.

If you’ve been following resources like Andrew Warner’s interviews with entrepreneurs, or the surge of interest in concepts like the Lean Startups philosophy, a lot of the advice in this book just feels like common sense. Maybe I’m just not in the target demographic? It is to 37signals’ credit that they have inspired so many with their work and there is a lot of good advice for those who are not familiar with what they’ve already done, but some of “Rework” just doesn’t hold up to the light. It’s Seth Godin’s easy conversational writing style but missing some essential nugget of truth.

To make sure I’m not just whinging in this post I’ll clarify that there are the occasional diamonds in the rough. I particularly enjoyed:

  • Meetings are toxic – Good advice on how to run a meeting if it’s really necessary
  • Let your customer outgrow you - Don’t pander to every change request
  • Scratch your own itch – Solve one of your own problems and you’ll find a market
  • The myth of the overnight sensation – The only path to success is hard work
  • Marketing is not a department - Everyone is responsible for the public face of your company

Buy it?

My critical process for reading any article, blog post, or book is to ignore who the author is and concentrate on the actual content. In this instance I wasn’t overly impressed.  Let’s be honest though – this book is going to be a resounding success whether I praise it or slate it. 37signals have a very large audience among whom they’ve reached a certain level of rockstar infamy. If I can riff on this tenuous rockstar analogy – “Getting Real” is to the Red Hot Chili Peppers’ “Blood Sugar Sex Magik” as “Rework” is to whatever that last album was called.

With all the points above in mind, there is still enough good advice in this book that I would recommend getting a copy if you haven’t already read “Getting Real”, and don’t subscribe to their blog.  There are four of the better essays from the book on Tim Ferriss’s blog if you want a sampler to make up your mind.

Add to Cart

Customer Development Guide

Support the Startup Visa

Startup Visa Logo
Scrabble Word Finder Crossword Solver