Lean Failure and the Risk of No-Man’s Land

by Giff on June 30, 2010

mirage

Isn’t Lean startup” supposed to prevent failure?” That was the question posed by Andrew Warner to Sean Ellis in a recent Mixergy interview. There is only one answer, “of course not.”

Sean responds that not everyone is built to be an entrepreneur: even the best tools in the wrong hands go awry. True, and there are many other reasons startups fail: team chemistry, money woes, technical risk, and so on. You can pivot badly or run out of pivot ideas. A successful startup is a mix of great execution, luck and timing.

No-Man’s Land

Lean startup methodologies help you speed up and bullshit check yourself and your ideas, but many companies will still end up in a lean startup version of “no-man’s land”. Their ideas and iterations will be good enough to pass validation tests along the way but not quite good enough to create the breakout hit entrepreneurs need in our noisy online world, or at least not in the time the entrepreneurs can allot to chasing that dream. Good but not great.

Fear of no-man’s land is familiar to most entrepreneurs. Reality is messy, and can deliver a lot of false negatives and false positives.

Bradford Cross recently wroteIf you can’t falsify your hypothesis, it might be correct – but if you try to validate your hypothesis, you can easily delude yourself into perceiving it as correct.” I like the statement because it forces an entrepreneur to face fears and overcome the stubborn optimism that flows in our slightly-crazy veins. My only caution is that it is really easy to kill a good new idea, and most stuff doesn’t turn into gold without a hard fight. You could spend your life testing and killing ideas and never actually *do* anything. But I like the spirit of Bradford’s argument.

In the case of Aprizi, I know someone, somewhere, some-when is going to crack the code on shopping personalization/discovery and be hugely successful, and I fiercely want it to be us. Lean startup methods increase our odds of getting it right, but they do not guarantee it. Our job is to bust our asses to stack the deck in our favor and make our own luck.

Net-net, lean startup ideas and lower infrastructure costs combine to de-risk new software startups tremendously, but if you think they de-risk anything entirely, you would be deluding yourself.

Fight on my brothers and sisters!

Mirage photo at top by Michael Gwyther-Jones, Flickr, Creative Commons

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  • http://startupcfo.ca startupcfo

    If your startup idea is worthwhile, that means there is a certain amount of innovation that cannot be completely validated. You'll just need to go for it. Lean methods reduce risk, but never eliminate it. And methods of any kind are only as good as the people implementing them. Team execution is still where the rubber hits the road and where you have the most risk.

  • http://giffconstable.com giffc

    Thanks for commenting Mark. When I heard Andrew ask the question in the interview, I sat up thinking, “surely no one things this totally de-risks a startup?” Couldn't help but jot this down on the train this morning.

    I do expect that a wave a “lean startup” failures will cause some to try to discredit the ideas, but I see them as very disconnected.

  • http://throughput.us/ consultski

    Interesting observation. I get the sense that “lean” used here simply means “on a reduced diet” rather than the thorough Lean Methodology based on the Toyota Production System (TPS). In that sense, this post makes sense. However, from the more formal Lean (TPS) approach, there is a lot more to the story. And it starts with an appreciation of mutual trust, not costs savings. Also, as “startupcfo” properly suggests, execution is key metric that gets overlooked too often as well. I too am a big fan of “making my own luck” but as Deming said, “Success is 94% the result of the system.” Better systems produce better results in most cases.

    So yes, fight on, but upgrade your skill set on each iteration.

  • http://giffconstable.com giffc

    No, I am indeed talking about “lean startup” as in Eric Ries' ideas, not cost at all. Not sure where I lost you but perhaps I wrote it too fast.

    Lean startup is tremendously valuable on the hunt to “product-market fit then growth”, but it doesn't guarantee getting there. It helps you kill bad ideas and focus on the good ideas, but you are still pushing forward with a combination of instincts and customer validation. It makes you faster and sharper. It reduces risk, but only to a point. It increases the odds but doesn't make things perfectly predictable. And there are many many more factors at play in a startup.

    (and yes, constant improvement is a must — I don't know who would argue with that!)

  • http://throughput.us/ consultski

    Thanks for the reply. Let me look at Eric Ries' posts before I comment, other than to say I noticed a reference in a thread somewhere on “lean startups” to the book, “Lean Thinking” by Womack and Jones, which is a great book, but it does not really touch on the mutual respect aspect of TPS. Too often in the “Americas” we get “close enough for rock & roll” with regard to these mythologies (especially in the days of TQM), and miss the finer points. But again, thanks for redirecting my thoughts. More later…

  • http://giffconstable.com giffc

    Ah now I get it — sorry, “lean startup” is a phrase Eric Ries coined after being influenced by both Steve Blank's ideas and lean manufacturing principles. My background is software startup land, so I'm not deep enough in TPS to comment more than that, but I think mutual trust is essential in startups both between co-founders and between company and customer.

  • http://monicoperez.wordpress.com/category/marc-accetta/ Marc Accetta

    There are risks involve when getting into “lean” but that’s how many people get what their want and be successful. It’s ok to fail because you will learn from it afterall.

  • http://monicoperez.wordpress.com/category/marc-accetta/ Marc Accetta

    There are risks involve when getting into “lean” but that's how many people get what their want and be successful. It's ok to fail because you will learn from it afterall.