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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 [email protected]

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