Lean is a much feted startup methodology, but working with the Entrepreneur First (EF) cohort we find that there are some common misinterpretations of how to put it into practice. In particular, as we fund individuals pre-idea I have seen many of the mistakes would-be founders can make. Here are some of the most common mistakes I’ve seen from the 150 individuals who have been through EF to date.
You can’t crowdsource an idea
One of the key principles of lean is listening to customers. As Steve Blank puts it, ‘get out of the building’ and speak to the people who would be using your product, rather than sitting in a room and trying to guess.
Sometimes this can be misinterpreted as ‘get the customer to tell you what they want’. We see early stage founders diligently lining up hundreds of customer interviews and then trying to synthesise this mass of data into a product. This is impossible.
The oft-quoted Henry Ford is useful here: “If I had asked people what they wanted, they would have said faster horses.” Lean is not about asking customers what they want, but about bringing clear and well structured hypotheses to the table that you can test with them. The hypothesis Ford was trying to solve was do customers want to get from A to B faster? The answer was yes, but the solution was still in development.
At EF, we had one team who after two months of the programme still didn’t know what product they were building. They had spoken to more potential customers than anyone else and they were confused. It wasn’t until they stepped back and drew some simple sketches of the product that they started making progress. This gave customers something to react to and allowed the founders to test specific hypotheses.
You have to ship if you want any data
A key part of lean is making data driven decisions. To do this you need to release your product to groups of users and see how they use it. Sounds simple, but in reality this seems to be where founders (particularly technical founders) have the biggest mental block.
Many first time founders attach great significance to shipping their product for the first time. For some they see this as the moment to validate whether they should be investing more time in this product or packing it in. For some they see it as the moment when the world will laugh at them if they get it wrong, and for others they worry that if it’s not perfect they will turn off potential customers forever.
All of these excuses lead to more time spent on product development and less time talking to customers. First, the initial release will never give you a clear idea about whether you should be investing more time into the product or calling it a day - there is no such thing as an overnight success or failure. Second, when you’re a founder obsessing about a product, it’s hard to realise that as an almost pre-existence startup, no-one cares about what you’re doing, and they definitely won’t be interested enough to ridicule you. And third, if your customer pool is so small you could release the product to a hundred or so who would be permanently turned off, it’s probably not a big enough market.
Only gather data from your customers
Lean focuses on data driven decisions, but one of the confusing things is that at the early stage of a startup, you will have very small amounts of data that may not give clear messages. Particularly for the engineers we work with at EF, having to use tiny data sets to make important decisions seems ludicrous.
Founders need to be able to synthesise small data sets and intuit meaning from them, using the data alongside hypotheses you have about the customer. This means it’s important you only gather data from your customers as even one or two non-customer data points can skew the meaning you take away from it.
For example, I remember one team who was developing a saas platform. They were being pulled in different directions by the customer feedback they had and were struggling to make a choice about which direction to take. With closer inspection of the feedback it turned out it included some investors’ perspectives, which was completely different to the customer feedback. Once they only focused on customer feedback they were able to see a clearer pattern.
With B2C products, one of the common problems is that founders spend time speaking to friends and family who, keen to help, have given tonnes of feedback even though they may not be the target customer. This leads founders astray as they follow the feedback of those who are trying to help, not those who are actually their customer.
Lean is an important framework for early stage startups, but it’s not a crutch. Founders that try to do startup-by-numbers following lean step by step will never succeed. Lean is about founders who have bold hypotheses that they are constantly testing and updating. Or as we like to call it bold hypotheses, weakly held.