No, “Lean Start-Up” doesn’t mean that the bank account is empty, but that is the truth for many start-ups.
Steve Blank, a consulting associate professor at Stanford University and a lecturer and National Science Foundation principal investigator at the University of California at Berkeley and Columbia University, offered “Why the Lean Start-Up Changes Everything” in the May 2013 issue of Harvard Business Review (HBR). If you have an HBR online access subscription, you can read the article here.
Traditional Planning Considered Harmful (for start-ups)
Blank reminds us that traditional business plan development for a start-up is heavily front-loaded with analysis about the business, the product, projections for future revenues and expenses, and similar forward-looking elements. In other words, a traditional business plan evolves much like a Waterfall software development project, with analysis and design completed before anyone writes a line of code, executes a test, or a single user experiences the concept. It means lots of writing and rewriting, backed by lots of guessing.
The IT industry has known for decades that the Waterfall style of software development rarely produces good results when applied to new software product development. Back in 2006, I wrote “Waterfall, Still Crazy After All These Years” on this very topic. If you are interested, perhaps you can get a copy from Gartner, or you could ask me.
What goes wrong in Waterfall for new products and services?
In any type of Waterfall development approach, generating and capturing specifications takes precedence over learning through experiments. The time-lapse between specification and realization is simply too great, and the assumptions initially held when creating specifications may no longer be valid by the time the specifications become reality. Whether it is new software or some other new product or service, Waterfall is risk-enhancing, not risk-reducing.
When is Waterfall the Right Approach?
Waterfall works fine for incremental changes to a well established product or services when the scope of change is small, the existing technology or process is well understood, the requirements are agreed upon by all stakeholders, and neither the requirements or stakeholders change during the delivery cycle. Lots of constraints there! It can be very difficult to get stakeholders to agree on requirements. You can read about one approach to solving this problem, here.
OK, Lean Start-Up Means It’s Time to be Agile
Steve Blank makes the Agile reference directly in his article, offering three “lean” suggestions. Along with sketching out your hypothesis and listening to your customer, he states his last key lesson:
“Third, lean start-ups practice something called agile development, which originated in the software industry. Agile development works hand-in-hand with customer development. Unlike typical yearlong product development cycles that presuppose knowledge of customers’ problems and product needs, agile development eliminates wasted time and resources by developing the product iteratively and incrementally. It’s the process by which start-ups create the minimum viable products they test.”
Yes, this is exactly what agile software development proponents have been preaching and practicing for years. Produce running software as early in the development cycle as possible, and put it in the hands of the users. The feedback gained from this approach is priceless! Finally, after years of listening to pundits claim that IT should run more like a business, business has a chance to learn something from IT.
The Bottom Line
When we develop your content, we honor the agile approach. We sketch out a hypothetical blog stream, white paper, case study, or custom research assignment, and we listen to you, our customer, to understand what you want and need.
Then, we build in review cycles, early and often. We learn from your feedback, incorporate the insights you and your team offer, and deliver the content you expect, instead of a surprise that might shock you. No worries, there is no Waterfall here at Principal Consulting.
By now you must be ready to start sketching, so Contact Us and let’s get started!