Lean Startup : Let’s clear a few things up

I must have heard the phrase, “We’re a Lean Startup” at least 3 times in the past week. The founder is usually alluding to the fact that their set up and running costs are very low. That’s great. But that’s not what makes them Lean.

Lean Startup. It’s not about saving money and cutting corners. Let’s just clear that up and move on. Lean, means carrying no extra fat.

Sure, being able to quickly spin up a few Linode servers for a handful of dollars a month, is a smarter way to spend your money than purchasing hardware. It’s certainly an option that wasn’t available to startups a few years ago and YES that means that many of the barriers to getting started have been removed. But, again, it’s not the low cost or ease of access that is the point here. They are merely bonuses.

The core of Lean is experimentation and testing. Hypothesise, test, evaluate, decide, move on. Being able to do that cost-effectively is great for business, but it’s not what makes you Lean. You may have to burn through a lot of capital depending on how you test your hypothesis and reach your customers.

Being Lean, means avoiding blind alleys building product or features that nobody will pay for by setting clear criteria that your experiments have to meet before proceeding to the next stage. By testing your ideas early you’ll find your product/market fit and a business model that will work a lot quicker than just rushing headlong towards the end goal of your business plan. And that’s where the savings are.

The low cost to getting up and running just means you can do more Lean experiments and hopefully not run out of money as quickly.

So why does it matter? Isn’t it just a matter of semantics?

It matters, because as long as people mistake seeking out business efficiencies as being Lean, then they are missing out on the true advantages of incorporating Lean practices into their business. And for many companies that’s the biggest waste of all.

So good luck, but remember, Lean != Cheap.

5 comments

  1. Yeah, lean means getting a minimum viable product out in a short time, then asking people feedback about the product so you can figure out what customers actually want, and then iterate the product using the feedback you received.

    This post doesn’t mention it, but the book “The Lean Startup” by Eric Ries explains this in great detail and I highly recommend anyone to read it 🙂 Good post, Gilbert, it’s important to know there’s a difference between cheap and lean.

  2. I agree that in the moment, being lean doesn’t mean cheap. I agree, it takes time and money. But in the end, when you sum, you should obtain a benefits. Indeed, the purpose of experiment is to reduce risk and increase gain, IMO. That means, in the end, it should be cheaper than the average toss of coin. I say in average, because a faster path followed by chance is still possible. But, among the possibilities, the probability that you follow this path is nearly zero. I wouldn’t bet on it, even with a lot of faith.

    From my point of view, being lean is just adopting a scientific approach for the development of business. You can take action according actual and current facts, not beliefs. It helps you to evolve faster.

    As conclusion, I agree with you, we don’t have to mix up the method and its benefits. It is important because it is hype and popular. People could miss the benefits because they follow a goal rather than an approach, that can hurt their business.

  3. You’re right to emphasis the distinction in both way : if build cheaply something that no one want, you’re just slowing the road to death. On the other side, some business need a lot of cash, even if you’re testing your hypothesis right. 

    My only quirk with this is that the distinction between “lean” and “customer development” begin to be very blurry to me. I would say that the key word of Lean is “Testing”, while in Customer Development its more “Get our of the building”, but in most situation, doing one means actually doing the other. 

    You even sort of acknoweldge it by tagging this post “customer development” !

  4. Thanks for the comments so far. I’ve been receving feedback via Twitter and email and I’ll incorporate some of that thinking in an update later on.

  5. Nice post Gilbert about lean startups. In the end, it doesn’t matter if you’re a lean startup or not.. What matters is that you build a successful business, and more importantly, that you understand why it is successful. For that to happen, you need to understand who your customers are, why they value your offering, how you can reach them and at what cost, etc etc… Customer development and lean startup (both are very related IMHO) offer insights on what questions to ask and how to get to answers in a systematic way. Both argue that rushing ahead, building a product and then shipping it is not the best way to get the answers.

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