Brant's Rant | Economy | Lean Startup

Don't Think Big. There, I Said It.

mt-mckinleyThose who run in #LeanStartup circles know too well the problems encountered with language.  Eric Ries, Steve Blank and others are criticized for choosing terms and phrases — lean, customer development, MVP, fail fast, etc. — which unintentionally lure would be startup entrepreneurs into thinking about things Wrong and then doing them Wrong.  Lean means don’t take money, “don’t you really mean market development, not customer development,” minimum viable product should be minimum desirable product, one doesn’t really want to fail fast, that causes entrepreneurs to screw their investors or not persevere.
While the critics make cogent arguments, there’s an implicit assumption that different words would not be subject to similar critique from a different angle. It’s generally not helpful to remove phrases from their context and critique them standing on their own.  Doesn’t “viable” contain “desirable?”
I tell you all this, however, because I’m about to do the same thing.

Don’t Think Big

“Thinking Big” is used as panacea to the menace of “feature” startups, who are merely “copycat” companies that often embrace the leanstartup “formula” that forces them to have “small ideas” and seek to “flip,” thereby leaving their investors in the lurch.  Thing is, markets determine the size potential of the business and many startup entrepreneurs mistakenly believe “think big” means go for a big market.  Tragically, a small idea attracts a small market no matter how big the market is you go after.  Thinking big doesn’t change a small idea into a big market.
Do you see what I did right there?
Truthfully, people who exclaim “Think Big” mean go for big ideas.  But do you know why the “startup curve” leads with the TechCrunch bump?  Because the founders were “thinking big” regardless of the size of their idea.  Do you know why a few startups survive the bump? The sage Fred Wilson says:

It turns out, like most success stories, the answer [for success] was simplifying the service. Taking features out. Reducing the value proposition to a clear and simple use case. This was not done in a vacuum. This was done by releasing a less than perfect product to the market, finding a few customers who wanted a less than perfect product, and then listening carefully to those customers to get to the ideal product.

That’s right, they succeed by thinking small. Product-market fit happens first in sub-segments. Understanding the core value proposition for hyper-sub-segmented markets is where you’ll find strong market signals.  You can’t go big without winning small first.  It’s impossible.  The top of the funnel is not filled in as quickly as the bottom no matter how fast you pour the water.
Sean Ellis writes: “[S]tart by focusing the majority of your energy trying to create at least one must have use case.”
To understand a “use case” you must properly and even obsessively segment your market.

Think Disruptive

What critics of me-too startups (criticism that I think is unwarranted, btw) really mean is: Think Disruptive.  Don’t be sustaining innovation.  Change the world.  I’m all for that, though all startups have their place in the ecosystem.  (If we grow the bottom of the startup pyramid, we’ll get more disruption at the top.) When you have thousands of new startups, the fact that most founders focus on problems they experience shouldn’t be surprising. What would be surprising is if it were true that if they simply thought a little harder, they’d be able to come up with ideas that are truly disruptive.
Most truly disruptive innovations come out of scientific or engineering disciplines and though they’re not very visible to the startup community, tens of thousands of people are working on them.  If Universities had better lab to market programs (e.g., where they’re taught doing rather than merely writing business plans, or licensing technology to dinosaurs), we would see more disruptive activity.  Investors focusing on hugely promising technology is a good thing, too.
Disruption is often stumbled upon.  Experimentation is a good way to lead to lucrative stumbles.
Like other startup people who hear a lot of pitches, I do tire of hearing similar pitches and the mobile app equivalent of a bridge to nowhere. But hey, if any of them happen to succeed, it will likely be because they nailed the value prop for a market segment that eventually proved big enough.