Thursday, June 21, 2012

Are you ready for Lean Startup?


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.

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