Balancing entrepreneurial drive and instinct with lean and other methodologies

On Tuesday night Michael Breidenbruecker, founder of Last.fm, RJDJ and all round nice guy gave a talk for around 50 of our friends and portfolio company staff (thanks again Michael). One of the interesting things about the Last.fm story is that success took a while to come. There were, I think, 2-3 years of little growth before market changes pushed music streaming into the mainstream, user numbers rocketed and the company was acquired by CBS for $280m.

In his new startup Michael is rigorously applying lean principles. These principles weren’t around when he founded Last.fm in 2002, so they built what they thought the industry needed and people would want. They quickly found a small group of passionate users which he says is what kept them going until the market turned, but looking back Michael thinks that if they applied lean principles they might have made some different decisions.

That observation prompted an interesting discussion about how to strike the right balance between entrepreneurial drive and instinct on the one hand and modern startup methodologies like ‘lean’ on the other. Someone from the audience made the good point that you sometimes see entrepreneurs over-focusing on doing everything by the ‘lean book’ and missing the big picture requirement of doing something meaningful.

I have three observations:

  • startups still need a great idea at their core – without that no amount of lean discipline will bring success, but once the great idea is there disciplined application of lean and other methodologies reduces the requirement for further moments of inspiration and/or luck down the line
  • it is easy to picture entrepreneurial drive and instinct as polar opposites to startup methodologies but that misses the point – they are in fact compliments – the methodologies help with the execution of the entrepreneurial ideas, in particular they make it quicker and cheaper to find out what works
  • for big and long-ranging decisions on issues like strategy, product quality, brand and market evolution it is often best to rely on instinct, but for shorter term and smaller impact matters like choosing between competing site designs and predicting customer behaviour methodologies and data are often more useful (see here for a good discussion of this point in the context of design)

As regular readers of this blog will know I’m a big fan of methodologies like lean, design thinking, and customer development. That’s because they increase the speed of learning, reduce the cost of failure and will ultimately increase the success rate of startups. My point here is that they are not a substitute for good old-fashioned entrepreneurial flair.