Lean startup methodology is brilliant but confusing

I just read two articles which beautifully illustrate the brilliance and challenges with the Lean Startup methodology.

First up was the story of Blue River Technology an agriculture robotics company whose first product is called LettuceBot. They were part of Steve Blanks Launchpad class at Stanford and followed lean principles to great effect. Their first idea was an autonomous lawn mower. In conversations with customers they discovered that was a bad idea, but also learned that farmers have a problem with weeding fields of carrots. Through more customer development they found that thinning lettuces is a bigger problem, and LettuceBot was born. They then sold their first LettuceBots off Powerpoint and had huge validation before they started building product. Brilliant.

Second up was Dan Kaplan’s critique of Peter Thiel’s critique of lean. I’m with Kaplan in thinking that Thiel is wrong in his critique of lean, but the interesting thing is that the problem stems from Thiel’s understanding, not from any fundamental issues with lean:

  • Misunderstanding 1: Lean is only good for making small changes to things that already exist
  • Misunderstanding 2: Customer development is nothing more than listening to what customers say they want
  • Misunderstanding 3: Identifying and testing hypotheses isn’t a planned process
  • Misunderstanding 4: MVPs are half baked products

Those are Thiel’s confusions as described by Kaplan. Then as a bonus Kaplan also points out that most people misunderstand the word pivot, mistakenly defining a pivot as when a company switches from one product or business idea to another (e.g. when Stuart Buttefield switched from the failed flash game Glitch to Slack) whereas Steve Blank defines a pivot as a smaller iteration of a business model or idea (e.g. a change of channel or customer segment).

To be fair Thiel’s critique of lean is bound up in a wider critique of incrementalism and a desire to see more step change thinking, but these points illustrate that lean methodologies are hard to understand and implement. It’s interesting to note that Steve Blank was in the classroom with Blue River Technology to help them with any misunderstandings and to stay disciplined. Most entrepreneurs don’t have direct access to Blank, and maybe that’s why they struggle. At one point Kaplan says:

if more entrepreneurs understood it [Lean] and applied it rigorously then fewer startups would fail

I agree with this. The high failure rate for startups is an unnecessary source of misery and loss. The opportunity now is to do something about it by helping entrepreneurs understand and apply lean. That means making it simpler and more practical.

You will see more on this subject from Forward Partners over the coming weeks.