The Lean Startup Conference hosted an amazing webinar today called Beyond Silicon Valley: Applying Lean Startup Around the Globe. Justin Wilcox, Takashi Tsutsumi (aka “The Steve Blank of Japan”), and I shared our experiences helping entrepreneurs worldwide apply Lean Startup principles.
I’d like to share with you the key points I took from the discussion.
My International Experience
I’m an American entrepreneur & investor living in Beijing, China. I’m working with startups across Asia at great institutions like JFDI (Singapore), Chinacellerator (China), Kickstart (Philippines). I also spend a few hours each week giving free help to entrepreneurs across the world. I’ve talked to entrepreneurs from SOMA, San Francisco to Iran to Tajikistan and just about everywhere between. It turns out that what works in Silicon Valley doesn’t work everywhere.
Most of what is written about, by, and for Lean Startup is done by middle-aged white Americans from California or the Northeastern US. It isn’t surprising that all of the lessons don’t directly translate.
Issue 1 – Customers Reluctant to Talk about Problems
I remember well the first time I advised a team to get in front of potential customers and ask about their problems.
Problems? Us? We don’t have any problems here!
In Silicon Valley people recognize that failure is a part of business and consider it a corporate duty to identify problems and solve them. In many cultures this simply isn’t done – someone may worry that their boss or a competitor sent you to check on them.
Solution 1 – Talk About Industry Issues and Give Them Something Valuable
Instead of hitting them up with direct questions, talk about the industry and the issues. Share what you’re learning, what you’ve read, what you’ve learned from other conversations. This makes Customer Development less weird and more natural and gives them an opportunity to open up with their own ideas.
Remember your customers are mostly stuck inside their boring office going to boring meetings talking to boring people all day. They are not experts in the problems and by sharing your experiences you bring real value.
Issue 2 – Lack of Support from Investors, Co-Founders, and Mentors
I know, I know – you feel like the only guy in the room who cares about this stuff. Your investors think pivot = failure. Your co-founders just want to keep building, hoping-against-hope the next feature will cause traffic to suddenly spike.
You just wish you were in Silicon Valley where everyone is practicing Lean!
Solution 2 – Talk About Tactics, Not Ideas
First, let me dispel a myth – Lean Startup is not widely practiced anywhere, not even in Silicon Valley. Sure, teams will use the terms but if you look at their actions you’ll see they are mostly executing on an idea and not discovering.
My advice is to talk about tactics rather than trying to get them to buy into a process based on ideas. Instead of talking about the need to pivot, go out to the market and get the evidence. Talk to customers, run experiments. Then suggest changes based on what you learned. The differences are subtle, but you’re more likely to bring people along if you talk about facts and data.
The worst thing you can do is to give them a copy of The Lean Startup and tell them to read it.
Issue 3 – Relationships Trump Solutions
In many cultures “who” is a lot more important than “what” or “how”. Unfortunately this is true everywhere – people look for relationships as credibility. To use an extreme example, some Chinese startups find they can’t get traction since nobody on their team has the Guan Xi (关系）- relationships – to have a prayer of getting started.
Solution 3 – Turn this Challenge into an Asset
Unfortunately I don’t have an easy answer for this one except to say that with enough time you can turn this into an asset – foreigners or other startups are going to need these relationships to enter the market. It will be hard, for sure, but once you get them you can use your relationships as a competitive barrier.
Issue 4 – My Market is Too Small; How Do I Get to a Bigger One?
Alas, you and your investors have done the math and you’ve realized you can’t create enough value in your market. So you’re wondering, “Should I start with the US”?
Solution 4 – When Possible, Start Locally First
I almost always advise teams to start at home. However hard it is, it will be 10x harder starting in the US unless you have a game-changing asset (these are really, really rare). Even emailing Americans will be very hard – unless you are a native-born American English speaker your emails will probably read like spam or scams. We’re inundated with them all day long.
And while the US is the biggest market, even in America teams usually start in a local market. Matias Hernandez has written a great post about the issues he encountered doing Customer Development on the American market from Spain.
If are pursuing the US market, first get advice from someone experienced in America business – here are some people who have made themselves freely available to help you.
Issue 5 – Local Resources are Undervalued and Underutilized
Almost every region has an experienced entrepreneur, investor, or educator who understands Lean Startup as well as anyone. And yet when I meet these people they often report to me that they don’t get a lot of respect locally.
Teams don’t ask them for advice or dismiss it when given.
Solution 5 – Develop Your Regional Startup Community
Understand that Lean Startup concepts are incredibly simple – doing them is incredibly tough. Rather than rely on case studies from the US, contact your regional leaders and ask for their advice. Attend meetups or start one yourself. Blog about your experiences.
I guarantee you Kahlil Corazo can give you better advice about doing Customer Development in the Philippines than I can.
Always Remember – the “Big Idea” is Still Most Important
When you get bogged down in specific tactics, remember the most important concept in Lean Startup: Your job is to search for a scalable new business model.
That’s it. You’re in a process of DISCOVERY, coming up with ideas and first testing them – not executing on them. So don’t get bogged down in the detailed tactics.