Can a Startup be too Lean?

Posted by on Dec 11, 2012 in Continuous Improvement, Insight and Inspiration, Lean, Small Biz + Startups | 1 comment

Can a Startup be too Lean?

After attending the Lean Startup Day at MaRS startup incubator in Toronto last week, I felt tremendously vindicated that my Lean skills are very applicable and useful to the process a startup venture goes through.

It helps that I have my own startup Engineer Your Life; tools and support for engineers to find the next best steps in work and life.  *Shameless plug alert!*  So I have been through my own process of defining who my customers are, how I can serve them in a way that is sustainable, practical and benefits them and me.

So I’ll begin with full disclosure:  I’m a rookie in the world of startups, and a seasoned vet in the land of Lean.

As I heard the questions flying around the conference, I had to chuckle.   The crowd assembled at MaRS Discovery District (a member of a chain of startup incubators) was looking to poke holes in the Lean Startup formula:  “Is this stuff all just labels and bullcrap?”  “Does it apply to me?”  “Can a company be too Lean?”

It reminded me of my early days as a Black Belt when I encountered massive skeptism to Six Sigma.  New methods always make people who know a lot a little tetchy.   Call it healthy skeptism, call it resistance to change, call it flavour-of-the-month burnout.  It’s normal.  The best way forward that I know is to treat any new methodology as a hypothesis to be tested.

So is Lean just labels?  Yes and no.  It’s a set of ideas and processes that, when used skillfully, will lead to greater probability of success.  In some cases, paradoxically, success means detecting failure – so you can bounce back, or pivot, quickly enough that it doesn’t tank your entire venture.  Truly Lean companies (like Toyota) work on exposing waste so they can eliminate it as soon as possible.

Good tools become good company culture

There are lot of good ways to do that; Lean is just one of them that happens to have been proven out in numerous industries.  It’s no silver bullet; it’s a good set of tools and over time it becomes a habit; just the way you do things!  Over time, Lean changes culture for the better.

For example, the habit of Gemba (which means ‘the real place’) in Lean methodology becomes ‘get out of the building’ in the Lean Startup.  Either way, it means not relying on assumptions without testing them out with realtime data, whether that be a trip to the shop floor or an iteration of testing with future customers.

Shared language saves time (and relationships?)

It’s also a shared language – a shorthand that your team can use to get on the same page and stay there.  Judging from the talk about the woes of technical and business co-founder relationship, it seems a common language would be a blessing; a bridge between the two skill sets, personalities, and approaches.  It could save arguments, save precious time and keep startups from failing due to co-founder fall-outs.  But I digress…

The question of whether a Startup can be too Lean is an interesting one.  I’d say there are a few ways that a company could, through over-zealous and incorrect use of the Lean Startup methods, end up in a ditch:

Over-mapping & over-measuring.  If you’re trying to measure everything, test everything, gather data on everything, you’re going to spend all your time playing with numbers and not actually moving forward to deliver value to your customer.  Unnecessary testing is non-value-added activity, which is a form of waste.  Adding waste to a process is the opposite of the definition of Lean.  Therefore, doing lots and lots of loops of testing just for the sake of doing them, or measuring every measurable you can think of, is NOT Lean.  Anyone who thinks it is should have their mouth washed out with soap.  There, I said it.

Eric Ries defines the entrepreneurial condition as operating ‘under extreme uncertainty’.  Put another way you can’t test and pivot your way to absolute certainty.   Successful entrepreneurs know when it’s time to pull the trigger and go.

Giving up too quickly (or with insufficient data).  A variation of this error could be pivoting too quickly, before you have collected enough data to understand what is really causing the effect you’re seeing in testing.  Starting all over again is costly (if your idea was good and you just abandoned it too quickly).  Going ahead could be disastrous (if your idea was bad but you didn’t know it because you didn’t collect enough data).  In Six Sigma methodology, you are required to determine the correct sample size for your studies in order to ensure that you are measuring a true signal, not just picking up on random variation, in order to avoid both these type of errors.

Lose sight of the big picture.  Silicon Valley veteran enterpreneur turned venture capitalist Marc Andreessen outlines a few other exceptions to the Lean Startup formula.  I especially like ‘fetish for failure’, which involves becoming so enthusiastic about embracing the process of testing and defeating your prototypes that you lose sight of the real endgame – to deliver value to your customers and make a profit.  How about that?

I applaud Eric Ries for making the wisdom of Deming and Drucker accessible to a wide and ravenous-for-wisdom audience across the startup universe.  Here’s a video of him chatting at Toronto’s Rotman School of Business.

If you’re a member of the Startup community I would love to hear what you think of The Lean Startup.  Has it worked in your business projects?

If you’re a member of the Lean community please drop a comment.  What do you think of Lean methods showing up all across the product development and Startup world?   Do you spend a long time defending Lean to non-Lean folks?

Now I’ll throw it to you!




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One Comment

  1. Hey Erica,

    Great post! I feel it was wayyy to easy to get lost in the nitty gritty of things. The balance between high level and details is the hardest to manage in those exercises as well as day to day business.

    Hope you got value from the lean startup day!

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