Is the lean startup dead?


The “lean startup” could be turning into a passing fad, according to one Montreal startup founder.

Last week we reported on Hopper, which was also recently named one of Apple’s best apps of 2015. The startup, led by CEO Frédéric Lalonde, took about six years before it released its travel app, which seems to be the talk of the town lately.

It took a lot of time, effort and money. In fact, Lalonde told us they spent close to $12 million preparing what would be their Apple-best, mobile-only platform for travellers to find the best prices for travel. It certainly helps to have sufficient funding, but Lalonde didn’t buy too much into the lean startup when the team started building Hopper in 2008.

“Back then everything was all about the lean startup, and a little bit of that has died down. The novelty of it has gone away and people realize that building a startup takes a decade now,” Lalonde told MTLinTech.

In Dispatches from the Future, Dan Kaplan talks about how the lean startup methodology was formed by Silicon Valley serial-entrepreneur and academician Steve Blank. It roughly goes as follows:

  • Come up with concept for a product
  • List out all of their core assumptions about the market for it
  • Go into the market to test those assumptions by talking to potential customers, suppliers, vendors, and technologists.
  • Take what they learn and pivot their concept until it resembles something the market wants, keeping lines of communication with customers going at all times.
  • Build a minimum viable product
  • Get the MVP into customers’ hands as quickly as possible.

Build a product fast and fail fast. Repeat.

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But well-known Silicon Valley venture capitalist and future-thinker Peter Thiel wrote in his book Zero to One that lean is “code for unplanned.” He equates the Lean methodology to “making small changes to things that already exist.”

To that, Kaplan argued that, in fact,  Lean methodology is brilliant. If more entrepreneurs understood it and applied it rigorously, fewer startups would fail. He even interviewed Blank, who had this to say about Thiel’s assertions:

“The goal of a Lean Startup is to minimize resources, time, and dollars, and maximize impact. I don’t know how you could disagree with that, but the best I can fathom is that Thiel has a visceral dislike of the word Lean.”

Could lean methodology simply be a recipe for certain types of limited-impact startups? One well-known Montreal startup founder said that lean methodology has always been great for developing “feature” startups, which, at first, do one thing only, followed by A/B testing towards other features.

“This method is hard to adopt if you are developing a startup that necessitates a large initial investment to get going, like hardware startups, certain big data projects and enterprise software startups,” said the founder.

Indeed, entrepreneur Michael Sharkey forcefully argued in VentureBeat that Lean methodology encourages “features” rather than whole products.

Another Canadian founder argued that Lean methodology is so prevalent that there’s increasing pressure on the part of the Silicon Valley venture capitalist culture, “Even if it’s not the best way for your business.” In this way lean is often taken out of context: businesses can’t simply be placed into a cookie cutter and expect to be successful.

“It’s almost like people lose their common sense and just follow the heard of startup life. Founders need to take the info, process it, and do what’s best for their specific business at the stage that they’re at,” said the founder, who noted there are obvious strengths to take away from lean methodology. Still, “people need to plan. And think further down the line then the next immediate milestone.”

Vincenzo Pallotta, a Professor of ICT, Project Management and Entrepreneurship at the UBIS University in Geneva, Switzerland, argued that Lean methodology actually “negates the importance of a business plan,” among other myths he attempts to dispel.

Whether lean methodology is ultimately an effective startup ethos or a fad blindly followed by the herd is too hard to know for certain: any simply google search will reveal countless arguments for and against it, to the depths of the Internet’s deep reaches.

Our question to Montreal founders is simple: how do you feel about Lean methodology? Tell us how it helped or hindered your company in the comments section below.

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