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6/21/2012
10:59 AM
Patrick Houston
Patrick Houston
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Lean Startup Concept No Silver Bullet

The latest business management craze is called "The Lean Startup." Don't swallow this lite philosophy without asking some critical questions first.

In a career spanning decades, I've encountered dozens of business management panaceas. Some of you remember. MBO? TQM? Reengineering? All promised revitalization, growth, and great, good fortune--only to come, and then go. So when I encounter any such silver bullet these days it only makes me want to reach for one-as in the kind that comes in a shiny aluminum can with a golden libation inside.

We continue to be assaulted by business nostrums. For heaven's sake, it seems like we've been hearing ad infinitum about "consumerizing" or becoming the "social enterprise" or "mobilizing the enterprise." This week, I'm pointing a loaded one at my head (in the vicinity of my mouth) over the latest of these crazes: A philosophy spawned by a 33-year-old Silicon Valley guru named Eric Ries and prescribed in his best-selling book, "The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses."

I don't know how it's playing in Peoria--you tell me--but everywhere I go in Silicon Valley I hear entrepreneurs reciting the "lean" lingo, like "minimum viable product," "persevere or pivot," and the "build-measure-learn feedback loop." In a recently published profile about Ries, Wired magazine noted the "lean" way of life is making its way into old school Fortune 500s like General Electric, and the Harvard Business School is offering a course based on it. Just last week, even Informationweek.com sported an exegesis about lessons from "lean" for IT.

Before I get too cynical, know I've read the book. I've recommended some its practices. I've embraced some too as my own startup conceives, develops, and consults to technology-fueled media startups. I concur with the precept at the heart of the lean approach: Even the most brilliant and experienced people don't know enough to outwit emerging, rapidly changing, and increasingly complex markets, especially when it comes to products and business models without precedent.

According to the "lean" way of life, the only prudent way to determine what the market wants is to deploy the scientific method, the very same one we learned in grade school: State an hypothesis and then do an experiment to prove or disprove it.

This inherently more humble approach to business represents a refreshing contrast to the entrepreneurial hubris that struts its stuff down the streets of Palo Alto where people live by the self-assured motto, "Go big or go home." If only for that reason, I'm attracted to its tenets.

But that doesn't mean I'm willing to swallow it whole. The main reason: The "lean" philosophy is just that. It's not just a tactic or strategy. To listen to its champions, it's an ideology. I started wincing on Page 14 of the book when Ries called the Lean Startup idea "a global movement." A movement? Really? Like civil rights? Environmentalism? The Arab Spring?

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To me, when someone touts a practice as a movement that's the telltale sign of fad, one that over-promises like so many predecessor methodologies that came and went because we failed to subject them stringently enough to critical thinking.

While they're rare, there are others who refuse to guzzle the Ries zero-calorie Kool-Aid. The Wired profile pointed out one certainly worth noting: Respected Silicon Valley venture capitalist Ben Horowitz who's said in his own blog post that, to hell with skinny, startups need to be fat--monied and rapaciously profligate enough to dominate a market before someone else does.

One of the most outspoken and quotable curmudgeons I found lives far afield from the precincts of Silicon Valley. Maybe distance makes the head grow stronger, because 47-year-old Nick Pelling, a serial entrepreneur from Surrey, south of London, pulls no punches. Consider his screed on the 10 reasons why "lean startups suck."

For all its reliance on the scientific method, Pelling declares that "lean" isn't science at all; it's only validation is anecdotal. And its reliance on metrics hardly makes it any newer than the "scientific management" methods pioneered by a turn-of-the-20th-century efficiency expert named Frederick Taylor.

But Pelling's main rap is that the "lean startup" is naive. "A lean startup is only really self-fundable," he says. And the reason is that, in the real world, how many people are willing to give their money to someone who wants to go off and conduct "experiments" with it. Instead, someone funding a business, whether an entrepreneurial or an intrapreneurial one, wants confidence, comfort, and proof you know what you're doing.

"What kind of a 'contract' can you have with a business angel by taking this approach?" Pelling asks. He talked to dozens. And so far he hasn't found a one--not for his latest security camera venture. "It's a key disconnect with the way people actually behave," he says. The sources of capital "don't want to fund your industrial education," he says, concluding that Ries doctrines "are much more about learning than about leaning."

As I told Pelling during our Skype discussion, I'm not as strident. There are "lean" methods and tactics you might well find applicable and fruitful. Nevertheless, I won't, and you shouldn't, take the approach for what it's not--and it's not a silver bullet. There's only one of those that delivers on its promise, and I'm about to pop the top on it right now.

Patrick Houston is the co-founder of MediaArchiTechs. He is a former SVP for a new media startup, a GM at Yahoo, and editor-in-chief at CNET.com. He can be reached at patrick.houston@mediaarchitechs.com.

At this year's InformationWeek 500 Conference C-level execs will gather to discuss how they're rewriting the old IT rulebook and accelerating business execution. At the St. Regis Monarch Beach, Dana Point, Calif., Sept. 9-11.

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pcalento011
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pcalento011,
User Rank: Apprentice
6/28/2012 | 11:47:07 AM
re: Lean Startup Concept No Silver Bullet
Perspectives or management philosophies are like diets. While you can debate the merits of each, ultimately following through on one ultimately yields better results than doing nothing. Why? You're thinking about the process. To me, that's a silver bullet ... and that silver bullet "could" be the lean approach. --Paul Calento http://bit.ly/paul_calento
MyW0r1d
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MyW0r1d,
User Rank: Strategist
6/25/2012 | 1:33:24 PM
re: Lean Startup Concept No Silver Bullet
Well I personally tend to follow the Sun Tzu, Bossidy and Charan philosophy that without execution they are all only also rans. I believe though that rather than coming and going, they represent an evolution. I was in the Tactical Air Command for instance when Gen Creech made TQM a household phrase throughout the command and MOB was fashionable. I see some of both in Six Sigma.

I haven't read the book, but your description sounds like so much of a rehash of many basic "lean" methodologies championed during the past 24 months perhaps focused to startups in order to sell a book. Innovative? At least 5 years old, but as long as rehashing someone else's ideas still sells... Some quick calculations, 33 minus 18-24 months to write the article and another 18-24 for research may put the author a couple of good years out of college. A sound experience base to identify the silver bullet of the moment? I used the word fashion earlier because I see these models comparable to the fashion industry, fads that come and go only to be rehashed and labeled innovative years later. Give me Sun Tzu, W.Edwards Deming, and these any day for companies with long term vision.
PatrickH
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PatrickH,
User Rank: Apprentice
6/23/2012 | 4:44:47 PM
re: Lean Startup Concept No Silver Bullet
Oh my. I've been around long enough to remember that I forgot about them. Quality circles may have been the very first cure-all I personally encountered. Thanks for the jog.
rlewine194
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rlewine194,
User Rank: Apprentice
6/22/2012 | 11:20:12 PM
re: Lean Startup Concept No Silver Bullet
How about Jugaad? Another silver bullet? "A Hindi slang word, jugaad (pronounced "joo-gaardh") translates to an improvisational style of innovation that's driven by scarce resources and attention to a customer's immediate needs, not their lifestyle wants.G«• Still waiting for the globalization on this one. And, don't forget Quality Circles, Patrick.

Richard Lewine
EricLundquist
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EricLundquist,
User Rank: Apprentice
6/22/2012 | 7:53:18 PM
re: Lean Startup Concept No Silver Bullet
fat or lean? Sounds like a choice at a deli. Remember the Enron "asset-light" strategy? Don't hear much about that one anymore.
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