1: Imagine. We are starting a new company. What are the key ingredients to ensure success? Thorough market research? A good plan? A solid strategy?
“In earlier eras, these things were indicators of likely success,” writes Eric Ries in The Lean Startup. “The overwhelming temptation is to apply them to startups too, but this doesn’t work, because startups operate with too much uncertainty.”
Startups live in a VUCA world: Volatility, Uncertainty, Complexity, and Ambiguity.
“Startups do not yet know who their customer is or what their product should be,” Eric writes. “The old management methods are not up to the task. Planning and forecasting are only accurate when based on a long, stable, operating history and a relatively static environment.”
Startups have neither.
Many entrepreneurs fear instituting traditional management practices out of fear they will suffocate creativity or create bureaucracy. Instead, they adopt a “just do it” attitude, avoiding all forms of management, process, and discipline. Unfortunately, this approach typically leads to chaos rather than success.
2: There is a third option: Entrepreneurship as a type of management. “No, you didn’t read that wrong,” Eric writes. “It may seem counter-intuitive to think that something as disruptive, innovative, and chaotic as a startup can be managed or, to be accurate, must be managed.”
Eric’s Lean Startup methodology is based on the lean manufacturing process developed at Toyota. “I found that by applying ideas from lean manufacturing to my own entrepreneurial challenges—with a few tweaks and changes—I had the beginnings of a framework for making sense of them,” writes Eric.
3: Early in his career, he viewed entrepreneurial setbacks as “technical problems that required technical solutions: better architecture, a better engineering process, better discipline, focus, or product vision.”
But these “supposed fixes led to still more failure.”
So, the Lean Startup framework emphasizes the “business and marketing functions of a startup should be considered as important as engineering and product development,” he notes, “and therefore deserve an equally rigorous methodology to guide them.”
The bottom line? This holistic approach maximizes our chance of success. Because it provides entrepreneurs with a method to test predictions, measure progress and decide when to invest in infrastructure and scale the business.
Reflection: Reflect on when I took a successful model from one area and applied it successfully in another area. Is there a current challenge I face that would benefit from this approach?
Action: Discuss with a colleague.