Why Lean Startups are Hard Part 1 – Our Genes Aren’t Lean

This is the first of a two-part essay I’m writing on why Lean Startups are so hard.  In part 2 I explain why I embrace skepticism.

I just completed a pilot customer site visit with a startup I’m helping through my EIR work. The startup has a lot going for it: talent, funding and support of large influential companies.

After a day it was clear that many of key our assumptions were wrong. Wrong as in, “They don’t have X problem” and “Y solution creates more problems than it solves.”

The kind of wrong that crushes your confidence as an entrepreneur.

Amidst powerpoint slides, laptops and stacks of coffee cups, we found ourselves in uncomfortable moments of silent frustration.

I decided to break the silence by stating the obvious:

Lean Startups are really, really hard.

Discovery – A Simple Concept

The concepts of Lean Startup and Customer Development are shockingly simple: Since startups are in the business of discovering a new business model, we need radically new frameworks, tools and tactics for optimizing the discovery process.

Simple, right?

I’ve observed that—despite the popularity of the movement and their claims to the contrary—shockingly few entrepreneurs are able to implement even basic lean principles. 1

Why are Lean Startups so hard?

There is an enormous shortage of experienced mentors and case studies relative to the number of startups. Without hands-on mentorship or the support network of other Lean Startups, entrepreneurs find it difficult to invest the months and years into testing and discovery and usually revert to habit. 2

And as Eric has pointed out, discovery and learning is tedious, boring, frustrating work with failures that vastly outnumber successes. Most of us would rather sell the world on our great, unproven idea and enjoy the attention and resources of TechCrunch articles and quick venture funding. 3

But in due time Lean Startups will get easier as better support systems and smarter money help overcome these challenges.

Unfortunately, I’ve concluded the real source of Lean Startup frustration will be much harder to overcome: We’re not wired to think lean.

Our Genes aren’t Lean

As Michael Shermer explains in his new book, The Believing Brain: From Ghosts and Gods to Politics and Conspiracies – How We Construct Beliefs and Reinforce them as Truths, we have evolved biological thinking that is decidedly un-lean:

We form beliefs for a variety of subjective, personal, emotional and psychological reasons in the context of environments created by family, friends, colleagues, culture and society at large; after forming our beliefs we then defend, justify and rationalize them with a host of intellectual explanations…Beliefs come first, explanations for beliefs follow. I call this process belief-dependent realism, where our perceptions about reality are dependent on the beliefs that we hold about it.

First we believe. Then we look for justification.

That’s how our minds work—the very opposite of what we need for efficient discovery.

Believing First is the Easy Path

It is no surprise that discovery interviews with prospective customers about a new product or service often produce misleading results. We desperately want to believe that we’ve discovered a novel business idea and filter data accordingly.

We ask questions designed to give us the answer we want and place greater strength on responses that supports our beliefs.

Nor is it surprising that we rationalize a poor consumer response to a new product as “people are on vacation now” rather than confront the more likely possibility that our product launch didn’t resonate with our audience.

This is the easy path for our minds, and resisting the pull of belief-dependent realism is hard, hard work.

Thinking Differently: The Hardest Pivot

Fighting these inclinations is particularly hard for us because the stakes are so high.

Having invested months (or longer) getting ourselves, prospective customers, family, friends, advisers and investors to believe in us and our ideas—is it any wonder we’re scared to confront the reality that we were wrong?

Of course not.

We desperately want our assumptions to be right because the alternative is just too painful to consider, a pain that gets stronger as we invest more time and money into our beliefs. 4

Unfortunately belief-dependent realism is the single greatest source of waste in entrepreneurship because it impedes the discovery process.

You can’t discover an answer if you think you already have it.

Lean Startup Schizophrenia

What makes lean thinking even harder is that we have to balance this analytical, evidence-driven discovery process with the practical reality that we have convinced most of the world we already know the problem and have the solution.

90% of the world is sold by genuine passion and emotion—not evidence.

Asking a prospective customer, “I’m not sure of your problem or the solution but can I get you to test some ideas?” translates to “can I waste your time?” (If you find a customer that embraces your discovery process, you’ve found an earlyvangelist.)

Spending your day as both a salesman and a scientist is a tough balance, but one that we’re forced to make.

So Why be Lean?

Being a Lean Startup entrepreneur requires me to enjoy the process of failure.

Patrick Smith

So lean startups are tedious, frustrating, boring and lonely work that have a 90% failure rate. Put that way, who in the world would want to do this?

It has taken a few years and it’s been a painful path, but I’ve come to embrace and enjoy the discovery process. This is my career, and something I’ll endeavor to master in the coming decades.

I now expect my ideas to be 90% wrong and search for the 10% that is right.

I try to surround myself with people like Patrick Smith and Scott Day, who know my limitations and can tell me when I’m lying to myself. We have scheduled Pivot-or-Persist meetings where we make fast decisions on what projects to continue and what to kill.

My instinct for quickly identifying the biggest risk areas for a new product is getting better, and I’m now able to cycle through ideas in weeks—a process that used to take months.

But most of all I’m getting better at accepting and embracing the limitations of my mind. This is a skill that can be learned but you’ll have to ignore 99.99% of what you read on TechCrunch to do it. 5

In part two of this essay I have some advice for how you can learn to think differently.

  1.  I can usually tell in five seconds whether an entrepreneur is practicing lean startup principles. If they speak in terms of discovery, quickly vetting the highest risk assumptions, etc., I know they are on the right track.
  2. If you think you have the experience and aptitude to mentor startups on lean principles, please reach out to me. I’m working with Steve Blank to launch the NSF’s I-Corps program at Stanford this Fall and we’re looking for qualified mentors.
  3.  Silicon Valley just might be the worst place in the in world for a lean startup. Of course this is hyperbole, but at the moment you can get funding for an idea without any evidence for whether or not it can lead to a scalable model. Few entrepreneurs are able to resist the ‘glamor’ of TechCrunch coverage and available venture funding for an unproven concept. Taking the easy money for an idea is a rational choice.
  4.  Shermer and other researchers explain that we are more attached to our beliefs the longer we’ve held them. This is another reason to test the highest-risk parts of your business FIRST. Delaying a painful answer only magnifies the suffering.
  5. I’m not picking on TechCrunch, just using them as a metaphor for the startup entertainment industry. They just happen to be the best at it.

22 Comments

  1. Giff August 6, 2011 at 6:23 am #

    Love this post! It is so hard, and I can’t tell you how many tell me they love lean and think they are being lean but really are not, but they are too close to it to see.

    • kevindewalt August 6, 2011 at 7:24 am #

      Totally agree, Giff. In some cases I really wonder if it is possible for people to learn to think differently. Not everyone is able to maintain healthy skepticism about their own ideas.

  2. Alexei Zheglov August 6, 2011 at 8:27 am #

    Kevin,

    My thing is Kanban in software development, so I have a short answer to “why lean startups are hard”: because build-measure-learn can be an awfully long and complex value stream.

    Most of today’s agile/lean/Kanban implementations deal only with the “build” part. The value stream could be ready-analyze-design-code-test-deploy-done. For those who really get agile, optimizing it is difficult enough. And the majority of those who say they do agile don’t actually get it.

    In 2002-06, I was one of the few engineers at an Internet ad startup that was a departure from dot-coms and also made a profit. After building a feature, we had a non-trivial “measure” phase, when we released to gradually increasing percentages of our userbase, ran various experiments and did statistical hypothesis testing. I wish I knew what I know now about lean and Kanban; I’d map out a “measure” value stream and draw 5 or 6 columns on a kanban board to visualize and manage it.

    Now, if we join the build, measure, and learn kanbans together, that’s one long kanban! Ideas and hypotheses are the input and validated learning is the output.

    What lean thinking means to me is seeing this whole thing and optimizing the whole. You can optimize it for the “response time” or for the throughput of validated learning (and to some extent, for both). Local optimization doesn’t help (we once built something quickly, but really got stuck in the “measure” part). Load the system such that you get a steady flow (of validated learning units to the downstream end). Use a pull system with work-in-progress limits to create kaizen events and apply the theory of constraints to take advantage of them.

    I believe – sorry – my hypothesis is, the stuff of the previous paragraph is not what 99% of people think when they hear the words “lean startup.” They hear the word “startup.” “Lean” is an afterthought, an antonym of fat, out of Aeron chairs and back to the proverbial garage. Therefore, the emphasis on “lean” in “lean startup” is very important. What do you think?

    • kevindewalt August 6, 2011 at 8:38 am #

      Definitely true that it is hard breaking out of a local optimization – especially when the map itself is dynamic and covered in fog.

      But you definitely can’t do it if your convinced that you’re already optimized.

  3. Alexei Zheglov August 6, 2011 at 9:48 am #

    Lean is about visualizing, activating senses, and dispersing the fog. Lean improvement is a never-ending quest: once you’ve found and exploited/elevated a bottleneck, you’ve got better flow and a bottleneck in a different place; repeat.

  4. Robert DiLoreto August 7, 2011 at 9:48 am #

    One of the areas of B2B Lean Start-up confusion for me has been the impression that: “Wait…now that we built it leveraging Lean Start-up principles…THEY WILL COME?”

    I understand the “Customer Development” component of Lean Start-up…but am still missing ideal strategies to generate new MVP customers and users, especially for B2B startups providing a “disruptive technology/solution”.

    It sounds like all you now need to do next is implement a sales/marketing 2.0 tool, add a “PRICING AND PLANS” section on your website and hire some internal telemarketers?

    Can this represent a single point of potential failure, relying only on this strategy?…Should these start-up’s also target big company “C-Suites” og bigger companies/partners to communicate their value prop towards “C-Suite” sponsored initiatives? This is where the action is…Also, having a coach who can validate and lead (initially) a strategy to first understand C-Suite-sponsored initiatives, followed by a proactive effort to connect with and communicate a compelling MVP value proposition is key.

    Should a “top down” sales approach be ignored? “Bottoms up” / viral approach only?

    • kevindewalt August 7, 2011 at 9:56 am #

      Robert,

      This is more complex than I can answer in a blog comment, but my main point is that TACTICS are not the issue. How we THINK is the issue. People are coming up with strategies to mitigate the biggest risk in situations like you describe.

  5. Adam Rifkin August 7, 2011 at 3:52 pm #

    It’s not just lean startups that are hard.

    Starting a company, in general, is hard.

    http://ifindkarma.posterous.com/11-reasons-why-starting-a-company-is-hard

    • kevindewalt August 7, 2011 at 7:11 pm #

      Yep, no argument here. But that’s what I love about it.

  6. Ben August 8, 2011 at 9:26 am #

    Excellent piece. You have nailed the essence of the gap between the enthusiasm for lean principles and the realities of how its being practiced.

    Because entrepreneurship (its origins, costs, success rate) is poorly understood by most business folks and society at large, a mythology has arisen to handle these unknowns. That mythology emphasizes a great leap of faith and bravery (starting your company, leaving your job, convincing others to give you money, etc) followed by heroic struggles and hopefully a victorious emergence at the end. And of course, its very hard to question the faith – and so being lean is an incredibly hard psychological road to walk.

    I work with a regular group of fellow lean entrepreneurs and as much as we work to adhere to Lean principles, I can’t think of one of us (me included) who isn’t holding onto some precious untested faith part of our market models. Its actually kind of hillarious :)

    Superb post,

    Ben

    • kevindewalt August 9, 2011 at 4:57 pm #

      “I can’t think of one of us (me included) who isn’t holding onto some precious untested faith part of our market”

      I guess that is what ultimately gives me some piece of mind: we cannot avoid this anymore than we can stop breathing, but just by being aware of it we can create the structures to minimize the impact.

  7. Sue Kim August 8, 2011 at 5:23 pm #

    Thank you for pointing out our reptilian “believing” tendencies. It’s liberating to act in awareness of these instincts rather than be subject to them. It’s tricky because the believing, passionate, emotional part of us is what motivates us to continue working under extreme conditions — and you end up thinking you’re killing your dream. I’ve found it helpful to divorce belief in the overall vision from belief in smaller problem hypotheses.

    • kevindewalt August 9, 2011 at 4:58 pm #

      “I’ve found it helpful to divorce belief in the overall vision from belief in smaller problem hypotheses.”

      No kidding. What makes it even harder is that I get more external rewards when I run on pure passion and belief. Unfortunately it is ephemeral.

  8. Casey Corcoran August 9, 2011 at 9:55 pm #

    Great article, Kevin. Perhaps you have read about related research in neuromarketing which examines how buy decisions are made. Basically, if you can get to the appropriate emotional reaction, the buying decision has already been made. At that point, it is only a matter of having enough supporting information on the website to allow the buyer to justify the decision which was already made. Patrick Renvoise & Christophe Morin wrote “Neuromarketing: Understanding the Buy Buttons in Your Customer’s Brain”
    http://www.amazon.com/Neuromarketing-Understanding-Buttons-Customers-Brain/dp/078522680X. It is a good read, especially for anyone considering a startup involving eCommerce.

  9. Berislav Lopac September 19, 2011 at 1:47 am #

    My favorite quote on this topic is (I’m not sure who made it originally): You should always eat your own dog food, but you should never drink your own kool-aid. :)

  10. Sebastian Sastre November 12, 2013 at 2:47 pm #

    First time I see your blog (came here via reference from Justin Wilcox).
    You’re doing a great job.
    You convinced me to go out and schedule some out of the building activities for next week :D
    Looking forward for more
    Subscribed!

    • kevindewalt November 12, 2013 at 6:00 pm #

      Thanks Sebastian! Yeah, Justin’s work is great. One of the best statup mentors I’ve had the pleasure of working with.

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