One would expect that Lean methods would be more rigorously followed by now. I come across founders everyday who don't, and moreover even refuse to consider them. I see accelerators that pay lip service to them and "graduate" ventures with half-baked ideas by the dozen. The worst is when they leave founders without a clear go-no-go decision criterion, leading them to believe that there is hope for their "idea", when frankly there is none. Investors usually have specific decision criteria, and apart from (in)validating their hypotheses, founders should focus on seeing if they can clearly demonstrate the value to investors along these decision axes. (This assumes that they are looking for funding of course.) Ultimately, the goal of the hypothesis approach is to make the venture successful, and using these investment decision criteria as proxy goal posts may not be such a bad thing. I think the first thing that accelerators need to do is to educate founders about building a business, even before they explore users and product and market.
I have experienced first-hand how difficult it is to keep one's objectivity regarding one's product, idea, and business, and there are always other factors that affect decisions, some of which are beyond one's control. Willingness to keep an open mind and accept the outcomes of experiments are paramount. If you refuse to let decision making be guided by experiments, it's all moot anyway.
Thanks for reading and commenting. A few thoughts:
Lean Startup (and other frameworks like JTBD and Design Thinking) may be a bit over-exposed, and so founders are resisting some basic fundamentals that can help them.
I think Hero worship in a hot market also impacts things. "Well Elon Musk doesn't test hypotheses, he just does whatever he wants." Sigh.
As for accelerators - they're a mixed bag like everything else. Some are good, some aren't. Some are earlier stage, others later stage. So it really depends.
And finally on VC investment criteria -- I think it's dangerous to use these as goalposts for moving forward, b/c they're not always super concrete. You might get, "You need more traction" from a VC -- but what does that really mean? The VC might be just saying "no" and trying to do so politely. So it can be hard to truly interpret what VCs are saying and if you use their "targets" as benchmarks, you may achieve them and STILL not be able to raise capital from those VCs.
I definitely agree with the challenge of staying objective when building your own company. It's so easy to fall in love... :)
William Goldman said of Hollywood: “Nobody knows anything...... Not one person in the entire motion picture field knows for a certainty what's going to work. Every time out it's a guess and, if you're lucky, an educated one.”
For me, that’s the exciting thing about working in early stage tech. It’s not about what you know, it’s about how quickly you can learn. Which is exactly what your post is explaining. However one issue I have encountered is ego. “This isn’t an assumption, I KNOW this!” Succeeding in this area requires a level of humility that in some respects runs counter to the absolute, consensus-breaking confidence required to start a tech business (“everyone else is wrong about this one thing”). It’s tricky balance to maintain emotionally & intellectually.
My approach is to fall in love with stuff quickly, "This is a genius idea!" And then fall out of love equally as fast, "Nope, I was wrong."
I don't mind people having conviction on something and fighting for what they believe in, as long as they're open-minded enough to be proven wrong and move on.
Hi Ben,
One would expect that Lean methods would be more rigorously followed by now. I come across founders everyday who don't, and moreover even refuse to consider them. I see accelerators that pay lip service to them and "graduate" ventures with half-baked ideas by the dozen. The worst is when they leave founders without a clear go-no-go decision criterion, leading them to believe that there is hope for their "idea", when frankly there is none. Investors usually have specific decision criteria, and apart from (in)validating their hypotheses, founders should focus on seeing if they can clearly demonstrate the value to investors along these decision axes. (This assumes that they are looking for funding of course.) Ultimately, the goal of the hypothesis approach is to make the venture successful, and using these investment decision criteria as proxy goal posts may not be such a bad thing. I think the first thing that accelerators need to do is to educate founders about building a business, even before they explore users and product and market.
I have experienced first-hand how difficult it is to keep one's objectivity regarding one's product, idea, and business, and there are always other factors that affect decisions, some of which are beyond one's control. Willingness to keep an open mind and accept the outcomes of experiments are paramount. If you refuse to let decision making be guided by experiments, it's all moot anyway.
Thanks for reading and commenting. A few thoughts:
Lean Startup (and other frameworks like JTBD and Design Thinking) may be a bit over-exposed, and so founders are resisting some basic fundamentals that can help them.
I think Hero worship in a hot market also impacts things. "Well Elon Musk doesn't test hypotheses, he just does whatever he wants." Sigh.
As for accelerators - they're a mixed bag like everything else. Some are good, some aren't. Some are earlier stage, others later stage. So it really depends.
And finally on VC investment criteria -- I think it's dangerous to use these as goalposts for moving forward, b/c they're not always super concrete. You might get, "You need more traction" from a VC -- but what does that really mean? The VC might be just saying "no" and trying to do so politely. So it can be hard to truly interpret what VCs are saying and if you use their "targets" as benchmarks, you may achieve them and STILL not be able to raise capital from those VCs.
I definitely agree with the challenge of staying objective when building your own company. It's so easy to fall in love... :)
Great stuff. I wrote something much higher level that touches on the same issues: https://tempo.substack.com/p/dont-tell-me-your-strategy-budgeting (esp. your comment about fictional excel)
Thanks for reading and commenting Matt. I'll definitely check out your post.
Excel Wizardry is a real skill--just gets abused in a lot of cases to make the business case and math look amazing. But it's mostly fantasy land... :)
William Goldman said of Hollywood: “Nobody knows anything...... Not one person in the entire motion picture field knows for a certainty what's going to work. Every time out it's a guess and, if you're lucky, an educated one.”
For me, that’s the exciting thing about working in early stage tech. It’s not about what you know, it’s about how quickly you can learn. Which is exactly what your post is explaining. However one issue I have encountered is ego. “This isn’t an assumption, I KNOW this!” Succeeding in this area requires a level of humility that in some respects runs counter to the absolute, consensus-breaking confidence required to start a tech business (“everyone else is wrong about this one thing”). It’s tricky balance to maintain emotionally & intellectually.
Completely agree on the ego side.
My approach is to fall in love with stuff quickly, "This is a genius idea!" And then fall out of love equally as fast, "Nope, I was wrong."
I don't mind people having conviction on something and fighting for what they believe in, as long as they're open-minded enough to be proven wrong and move on.