Lean Startups fail for these 3 reasons, but they didn’t tell you in the book
medium.com
medium.com
Tl;dr 1. the founder(s) quits too early due to lack of conviction ; 2. the founder(s) don't understand how to fundraise or company-build; 3. The venture capital market is in a period of risk aversion. And some stuff about how amazing Sean Parker is.
His controversial line is "Startups do not fail because they build products that nobody wants". And he is using his own taste as a barometer of "want". Sorry , it doesn't work that way.
That's the best way to put it. It would make a great "Startup GQ" or "Startup Vanity Fair" article.
If you're not currently trying to raise a multi-million dollar round: skip this article and keep building good things. It's written for a very narrow group of people going through a very specific point in the startup lifecycle—don't waste your precious waking time reading about or comparing yourself to things not relevant. (The voice of the post makes me feel inadequate for not playing The Game (startup edition) because other people are hustling/cheating/ruining themselves to be hip to the scene and I'm still not an acquihire failed-product millionaire.)
I wanted to like the post, but it comes off as a personal "rich man has to deal with kids, thinks most people aren't being dangerous enough, wants people to risk more of their lives instead of playing it safe." It's about 6500 words of slightly incoherent rambling of personal bro anecdotes after the first three points.
A classic example is "don't squat too deep, it's bad for your knees". It has staying power because squatting deep is hard. If you squat deep, you can't slap as many plates on the bar. The original source is a 1970s study that hasn't really been followed up. But it doesn't square with what's known now about biomechanics (eg shearing is highest at the "safe height"; shallow squatting leads to uneven wear because that's not how the knee is arranged to work etc), or on the statistics on injury and pathology in sports using lots of squats.
Sometimes broscience comes from observations by bodybuilders and sometimes it gets validated. But a lot of the time it's worthy of mockery because it's just folklore with a particularly postural nature.
I am vaguely bothered that such a term was necessary.
Even though Francis Pedraza's intuition says that people should want something, it's not certain that they actually do (and will pay for it). For example, my intuition tells me it'll be really difficult to build a business around his Everest app but if there's something to learn from Lean it's that intuition rarely is sufficient. (And I'm sure the Everest team proves my intuition wrong with good growth and feedback).
Though, in general, I love visionary startups and founders but I don't think that a grand vision should be an excuse for not validating the value and growth hypothesis.
And of course he has a good point in that startups often need many iterations to find the exact product that their customers want and since these iterations can be painful it's very helpful, if not necessary, for founders to be vision driven.
Medium is already becoming riddled with linkbait.
Not every Start-Up i've worked with has had the same issue, but these are my general observations.
1. Founder doesn't release product early enough due to an inherent fear of vulnerability 2. Too much focus on getting investment instead of gaining traction. 3. Too busy building systems instead of solving customer problems 4. Dysfunctional Team or poor working culture.
Here are a few more mistakes founders make:
1. Resistant to talk to target market
2. Focused on adding more/better features
3. Involved in pleasing one or two early customers
4. Taking nay sayers seriously
5. Losing steam at later stages when growth does not happen as planned
That's not even really right. It's more of a folksy and over-generalized statement about the Lean Startup approach. You can fail in any number of other ways: developing a product that people do want, but not knowing how to reach the customers to let them know it exists; developing a product that people want but not at a price point that people are willing to pay; developing a product that people do want, but that isn't sufficiently differentiated from the competition (including its substitutes, or the status-quo); etc. If you read The Four Steps To The Epiphany - one of the seminal works that the Lean Startup approach is rooted in - you'll see that there are steps in there for dealing with all of these "other" issues: pricing, distribution, marketing, etc... This definitely goes beyond a simplistic "you built something nobody wanted" scenario.
My assumption is that the author is not a hardcore engineer by trade, but it's apparent that he's got a decent understanding on the inner-workings of an industry we're all a part of (or trying to be a part of).
Engineers need to pair with thinkers like Francis. To me, he seems like an amazing compliment to a conservative engineer.
Lengthy read? yes. A bit incoherent? Maybe. "A Broscience article targeted at Startups instead of bodybuilders"? No. That's plain "'ignant".
"author is not a hardcore engineer by trade" - you don't have to be an engineer to value objective reasoning.
The lean system is simply the application of basic scientific principles to business.
The principles are:
1. Formulate Hypothesis
2. Test Hypothesis
3. Pivot
In the book adapt - why success begins from failure, you would get why the word "lean" was chosen.
It's because of survival. If you bet the whole farm and your bet is wrong. It's game over. That's why the lean system admonishes that start-ups try small experiments.
I also spoke as someone who helped lead a startup past Series B prior to an epic crater. Product/market fit was mistake #1. I could argue Francis' reason #2 played a role in not keeping the corpse animated - we had serious company-building problems, for example.
I don't know Francis and don't mean to be cruel, but I had to tell it like it is: I had a flashback to my days reading long screeds on bodybuilding.com. The article was well-intended and had some glimmers of good writing. It just felt like a let down for such a provocative headline, length (time commitment), and that someone with clearly good observational skills seems to miss key gaps in his world view.
As Orwell would say, "To see what is in front of one's nose is a constant struggle." We all have that struggle, But not all of us write for online magazines :-)
On the other hand, some companies are the opposite. They are some companies that are completely driven by A+B testing. They 'pivot' to a completely new idea every other week. These companies all end up doing some kind of project with the word 'analytics' somewhere in it. These projects are almost always crap, and their success is mainly tied to how aggressive their sales/marketing people were.
Being 'lean driven' is a bad idea, but abandoning all lean ideals is worse.
While it's possible to become popular without being right, that's not sustainable. So, for all intents and purposes, I'm equating "right" with "popular" in this case.
Of course, there's a whole lot that goes into making a "right" idea a popular idea, and that's nontrivial. Did not mean to gloss over that. But my broader point was about how coming up with a right-fitting solution is much harder than identifying a need in the first place.
i've always felt that taking other people's money, i.e. venture capital, before you have a viable (i.e. running and profitable) business is almost certainly a bad idea and its indicative of desperation. its a massive and risky shortcut in many cases.
nobody i know who was successful in business even entertained the idea, let alone did it. they saved money, scraped it or just poured their spare time in to succeed. starting out e.g. £100k in debt but with £100k in the bank just sounds dangerous... in my experience people are terrible with money, especially if its not their own in any way...
if you start properly without taking other people's money in the form of loans, credit or venture capital then failing is exceptionally difficult regardless as to anything else...
(1) The product can't make money. (Corollary: at first, the product only needs to convince investors it can make money, and then it can be sold to large web firms for great profit.)
(2) The firm can't complete the product.
I have seen all combinations of the two above.
I think the tendency on a lot of self-help websites is to try to give advice for accomplishing a product according to what has worked for other people.
However, any startup is a business, and the principles of the two rules above still apply: find something that you can sell, and then find a way to accomplish at least a 1.0 version of it.
Startups fail for three very different reasons:
- The founder is not playing a big enough game, does not have enough conviction, is not confident enough in how BIG his idea is, and is not aggressive enough in execution, ends up quitting too early because he doesn’t have enough money to pay rent and groceries. Needs a Sean Parker.
- The founder does not understand how to do company building and fundraising. Needs a Matt Cohler.
- There is a capital markets problem (opportunity!) and there is not enough risk capital available.
About other comments, don't worry too much about them. Everybody that doesn't run their own company is an expert in startups these days.
My bet is that the author of that article has either not read the book "lean startup" or he flipped quickly through the book like i did his article.
I am wary of methodology driven startups vs a great team tackling a general idea/market.
We can always speculate why one business fail and another win, i think it depend only on the founder and their decisions (right time, right place).
Those aren't mutually exclusive. How about a great team, employing a great methodology, pursuing a general idea?
Lean is big on experiments and sounds great in theory but as a complete system it is very lacking.
I think part of the problem is that the "lean startup" approach inherits a lot of (or all of) Steve Blank's "Customer Development Methodology", and CD is not a quick and easy thing to learn. I mean, the basic gist of it can be taught in 5 minutes, but the actual methodology is very elaborate and detailed. But if all you read is the "Lean Startup" book, or a few blogs on the topic, and don't actually sit down and read The Four Steps To The Epiphany (or The Startup Owner's Manual) directly - and probably a few times - you probably don't know enough about the topic to really use it, or comment on it.
For perspective, I'll offer this: I first read TFSTTE about 2 years ago, and have been incorporating the approach into what we do at Fogbeam Labs ever since. I've also read the Eric Ries book, and several other titles on the topic, and a ton of blog posts on the topic. I've also attended Lean Startup Circle meetings and follow the LSC mailing list. And I'll still quickly admit that I have a lot to learn. I think I could teach the basics to somebody else right now, based on what I know, but I'm not even close to being a real expert on this. And I've been at ground-level, actually implementing this (albeit not full-time) for two years or so..
It's a bit like Agile Development in a way... "Lean Startup" and "Agile Development" have both become trending buzzwords that are often flaunted by people who don't really understand all the depth and nuance of the topic, which results in an inevitable backlash (also by people who don't really understand the topic in any depth).