
Marc Andreessen: Not every startup should be a Lean Startup or embrace the pivot - DanielRibeiro
http://gigaom.com/2012/12/03/marc-andreessen-not-every-startup-should-be-a-lean-startup-or-embrace-the-pivot/?utm_source=social&utm_medium=twitter&utm_campaign=gigaom
======
gruseom
Proponents of the Lean Startup Theory like to cite startups of the past as
successes of their theory. That strikes me as dubious. For the theory to be
sound it must have predictive value. Where are the great companies that have
been built by people consciously taking the theory and applying it? It seems
that there aren't any. If there were, advocates wouldn't need this practice of
retroactive baptism.

It doesn't follow that the theory is wrong, but there is a large gap between
results attributable to it and the grandiose claims being made. Wouldn't the
true scientific attitude be to hold off claiming to have a science of startups
until significant results have first been produced, then reproduced?

A lot of people badly want this theory to be true. It's easy to see why; it
says it is a method to success — not only that, but a quasi-scientific method
that has tremendous appeal to the technically minded. But the fact that the
desire to believe the theory is so strong is not evidence in its favor; it's
reason for doubt.

I'm skeptical of the theory for two reasons. The first is that I keep feeling
like I've seen it before, in another risk-ridden field where people badly want
a reliable way to get results: the field of corporate software projects.
Failure and unpredictability are so common there that people are eager to buy
the idea of a repeatable process. Lean Startup Theory seems very much like
software process transplanted to startups – so much so, in fact, that a more
accurate name for it might be Startup Process. I could be wrong about this,
but the sense of deja vu is striking.

If that's a correct analysis, it's possible to describe what it would look
like. One would expect to see social clubs of believers who share techniques
and inspiring stories about how their process is working. One would expect not
to see any decisive outcomes, though people will expend great energy
interpreting all outcomes as evidence for their process. One would expect to
see gurus and consultants selling the answers that people are so eager for,
whether they work or not. (In some cases it's better when they don't work,
since one can then sell them repeatedly.) One would expect the gurus and
consultants not to have any significant track record of success in the areas
that they're teaching, since that's not actually what they're good at. And one
would expect many people's desire to believe the theory to be strong enough
for them to overlook that anomaly.

The other reason I'm skeptical is that, if the theory is true, it would amount
to a science of history. There's nothing intrinsically different between
startups and historical undertakings; that's all the word "enterprise" means,
after all. Most don't lead anywhere, while a few lead somewhere important. An
empirical technique to create the important ones would amount to an empirical
technique to create history. That seems unlikely.

~~~
jt2190

      > For the [Lean Startup] theory to be sound it must 
      > have predictive value
    

When did the Lean Startup method become the Guaranteed Startup Success method?
My understanding is that Lean methods encourage startups to build short
feedback loops to the things they're trying to accomplish: Capturing market,
building the product, etc. The short feedback loops let the company know
_quickly_ whether their efforts are showing signs of success, and whether they
should keep at it, or change their strategy. This is one of the points that
Andressen is critical of, as well: Know when you're attacking a difficult
problem and you won't get quick feedback.

~~~
gruseom
I'd rather hear an answer to the main point: if the theory is so good, where
are the great companies that have been created by people consciously applying
it? (Of course, if it's just about listening to feedback, that's something
that anybody competent would do, and hardly a new approach to building
startups.)

------
antoncohen
Lean Startup is not about building trivial things and not hiring sales people.
It's about testing business assumptions. And it can work for any type of
business, even non-technical businesses and companies with ambitious goals.

The "Lean" in Lean Startup does not mean "Don't Spend Money". It's a reference
to Lean Manufacturing, and it's about not wasting resources. Waste in
manufacturing come from things like excess inventory, needless movement of
people and parts, and excessive defects. In software it's things like
developing features users don't want, or onerous release processes.

A lot of people think Lean Startup is all about the Minimum Viable Product,
and if the project is too ambitious for a little MVP you can't use Lean
Startup. But that's not true. The MVP is about testing business assumptions;
your leaps of faith.

Here is an example of an ambitious project, the kind that will take years to
develop:

Lets say you want to build something like Google Spanner/F1. A globally
consistent database with rich query capabilities and reasonably low latency.
Do you release minimal versions to test if people want it? No, you can't.
Minimal versions exist. We have globally inconsistent, or rich query, or low
latency databases already.

You have to do the market research and decide that if you build it there will
be a market. Your testing of business assumptions comes later, after you
develop it.

For example, do you sell it as a hardware appliance? I say that's probably a
bad idea, the companies using that sort of database aren't big on proprietary
hardware. What about packaging it as proprietary software? Maybe, plenty of
companies buy proprietary databases. But banks aren't early adopters (except
Deutsche Bank), and you'll miss "the next Facebook" during their early
development/growth phase. What about releasing it as open source and making
money off support and services? I think you'll get the startups using it, and
once they grow a little I think enough will pay to make the business
profitable.

But those are all _my business assumptions_. Those are the things that need
testing. Maybe hardware appliances are what the market really wants. But if
they aren't (and you assumed they were) you would be wasting money developing
hardware. Maybe it's not tech companies that want this, but actually banks
that would love a hardware appliance. Or scientific research institutions with
big budgets that are happy to use proprietary software.

You can use Lean Startup methodologies in any company and in any part of the
development phase.

~~~
erichocean
You picked an interesting hypothetical!

I recently finished a full, end-to-end business plan on a product/service
that, at its core, relies on my own company's in-house Google Spanner-like
technology, so your example hit pretty close to home. I will say that
globally-consistent distributed transactions is a game changer, IMO.

We have, indeed, spent many years on the technology, and as I said, we did it
because we had an in-house need, not with an intent to sell. But now we're
extracting it (and other, complementary tech, which separately took years) and
making the bundle available as an integrated product/service to third parties
in 2013.

We didn't end up with any of the business plans you mentioned, but I think the
one we did devise is novel enough that I can imagine it being used as a case
study in business school in the future (hopefully on the "success" side).

I've developed literally hundreds of business plans over the years, virtually
all in the $100 million+ startup category, and this one was by far the most
fun I've had designing one, and I also think has the best chance of
succeeding.

(I'm not at liberty to discuss the actual approach we're taking until we
launch the product/service.)

------
erichocean
Whether or not you should adopt a lean startup/pivot approach is based on your
view of the world, and how you fit in it.

Peter Thiel wrote a great article[1] about this.

In a nutshell, for the purpose of this topic, you can divide the world into
two axis: optimistic/pessimistic & determinate/indeterminate.

If you are optimistic and indeterminate, then the Lean Startup method is for
you. You think there _is_ an answer (somewhere), but you don't think you can
know it ahead of time. Your company won't create products like the iPhone, but
it will discover niches like AirBNB did through trial and error.

My own company, Fohr, is firmly in the optimistic/deterministic camp, as am I.
Trying to "find" a market, pivoting endlessly, etc. are not for us. We already
know what we want to build, and the only "customer" we have to please,
ultimately, is me, and I've known the essence of our company/product since the
late 90s, when I first came up with the idea at Siggraph. The only "pivoting"
we've done is to accomplish that vision in technical terms (aka, R&D), _not_
to determine if "people want it" or if there's a market.

Maybe I'm just too stubborn to pivot, but I'd like to think it's because I'm
optimistic and believe the world is knowable and the best way to predict the
future is to invent it, so that's what I'm doing. I suspect Elon Musk feels
the same way.

[1] [http://blakemasters.tumblr.com/post/23435743973/peter-
thiels...](http://blakemasters.tumblr.com/post/23435743973/peter-thiels-
cs183-startup-class-13-notes-essay)

~~~
pbiggar
> not to determine if "people want it" or if there's a market.

According to my world view, this is suicidal. Can you explain it to me from
your world view?

~~~
erichocean
What I was trying to say is that I don't try and answer those two questions by
"pivoting", in the Lean Startup sense.

I do answer those questions, but I do it in an optimistic, deterministic way,
which is to create a narrative for our company, its product, sales, service,
pricing, etc. and then step back and evaluate the narrative. I run the
narrative by people I know (not strangers), and see how they respond. This
allows me to identify problems with the vision (aka narrative), and adjust.

I iterate like crazy, and I'm constantly tweaking things (as anyone who knows
me will tell you). But I do it from the worldview, if you will, that I can
risk many years and capital and release a product or service into the world,
iPhone-like, and get the result I anticipated in my narrative.

I'm confident that's true because I'm constantly developing narratives on a
smaller scale, and testing them. I'm not always right, but I'm right about
enough things, enough of the time, that I feel confident basing my company's
vision on that.

~~~
pbiggar
> This allows me to identify problems with the vision (aka narrative), and
> adjust.

This iteration (or small "pivot" if you will) seem identical to the "lean"
idea.

~~~
erichocean
I thought so too when I first heard about Eric Reis' Lean Startup, and even
went and implemented a bunch of his stuff.

I ended up eliminating his practices, because they didn't fit. I think the
resemblance is superficial, but it could just be me who did it wrong. I do
know that when I dropped his approach, my process improved a lot.

If I had to guess, I'd say that his approach is too reliant on past-looking
data (e.g, the results of an A/B test), and not reliant enough on the ability
to project an outcome into the future and actually _hit_ the outcome with any
kind of confidence.

I work far better, and have far better success, when I bring the outcome I
want into reality, vs. testing a bunch of hypothesis and trying to divine
which worked, without any understanding of why, other than the A/B test
indicated people liked this shade of blue.

Also, orienting my company so that it could "pivot" based on the analysis
essentially crippled productivity, because so much energy is spent on being
_able_ to pivot (e.g. huge unit test suites, continuous deployment, etc.) that
very little business value is being created for the end user. The whole thing
was actually a huge waste, the opposite of what "lean" is supposed to be
about, ironically.

Since we use everything we create in house, it's very obvious when actual
value isn't being created, and pivoting, A/B tests, and the like gave
essentially useless results, or at best, trivial results, and produced no
value.

That's why we dropped it.

I didn't understand _why_ it didn't work for us until I read Thiel's axis of
startups, and discovered that Reis' approach isn't targeted at companies or
people like me.

I think his _goals_ are fine (really, does anyone disagree with them?), but
his practices only apply to specific kinds of people/companies, in my
experience. You can keep the goals, change the practices, and it'll remain
relevant for people like me and the companies we run.

~~~
pbiggar
How can you project without past data?

Things like continuous deployment allow you to move quickly, whether you're
pivoting or not.

I also can't see how A/B tests fit into this. They seem like they're
orthogonal at best to everything else.

~~~
erichocean
_How can you project without past data?_

Me personally? Or anyone?

Because it's pretty clear that people can and do project without any data. For
example, Apple hadn't sold a single phone, and Steve Jobs went up on stage and
said that Apple expected to sell 10 million iPhones.

Apple did ZERO market research. It was basic Jobs saying, "yeah, this'll sell"
based on his own estimation. And it did.

I'm not Steve Jobs, but I also don't need historical data to project sales
into the future, and be reasonably accurate when doing so.

What I do, and what I suspect Jobs did, is (a) see if the product/service
resonates with me personally, and (b) most importantly, see if there is a
narrative for the product/service that can be communicated to, and accepted
by, large numbers of people. If I can't develop a narrative, I don't believe
the product/service will succeed and I work on something else.

The ability to determine a narrative that'll work ahead of time is what makes
the forward-looking approach work. If you can't do that with any kind of
consistency, you should do Ries' approach, IMO.

I'm a writer/filmmaker at heart, and have spent many years getting good at
story/narrative. So that's a really comfortable way to do things for myself
and my company.

------
aviswanathan
Another thing unsaid about the Lean Startup approach is that it seems to
heavily favor software startups, almost to the point that it is more of a
manual for a software/web startup than any other type of company. In creating
a vertically-integrated retail brand, for example, there's very little margin
for error and iteration bandwidth in the initial stages. You really need to do
your homework, understand the market, and design a great product to truly make
an impact. Scraping the surface with shabby clothes at high prices just to get
a feel for the market, for example, doesn't work. In many industries, true
product-market fit can only be proven at scale. Man-power tests don't always
work in the early stages.

~~~
weisser
I do lots of work with musicians and I think the LS approach is incredibly
applicable to them.

So many bands go into the studio and spend tons of money recording a very
polished full length album and getting CDs pressed before they even break
1,000 likes on Facebook.

It makes no sense to spend so much time and money before they know if they are
a band that people will like or if they will even stay together long enough
for the album to remain relevant.

------
grinich
_The pivot. It used to be called, ‘the fuck-up.’_

That's so refreshing to hear these days.

------
redguava
"Not every startup should"... complete that sentence with almost anything and
it will be true.

Rather than a bunch of articles on different topics, I hope we can just agree
that there isn't one rule fits all or we would all follow that rule and be
successful.

It's exactly why you can't just copy how someone else does things and hope to
get the same result.

~~~
marcosdumay
I dunno. Testing their ideas by the cheapest possible procedure seems like
something that every startup should. Maybe there are exceptions, but that's
not obvious at all.

It's ok that sometimes the cheapest possible option is still quite expensive.
That isn't reason to use anything more expensive.

It is also true that not all startups that do it will succeed, and that not
all startups that don't do it will fail. But it looks like the kind of thing
that will increase the chances of any startup, not just a subset of them.

------
jamespitts
Andreessen's counter-argument to lean really needs to be put out there. As in
all trends, people take a popular concept like lean too far and adopt it by
default (instead of by its fundamental merits).

Of course lean has worked well. Especially when it was the hungry rat or roach
to the 90s dinosaur. But people are getting complacent in this success, and
increasingly chicken-shit to do something really difficult and time-consuming.

And there are a lot of skittish roaches and rats running around the tech scene
now. The startups types just out of college saw Social Network and they think
its easy, ha ha. Time for a new kind of beast to rise, a bigger one that does
not suffer from startup-ADD and requires a lot more intellectual and financial
resources to grow.

I've been working on some hellish shit, pushing myself to the very limit of
what I can do after 15 years of programming. A lot of people won't touch
difficult now. But difficult or not-on-trend or unseen advantage is what good
investing is all about.

It seemed risky to people with self-programmed assumptions to do lean in the
early-to-mid-naughts. It seems risky to do a big beast now. But investing is
finding some edge, that is one great way to increase your chances to win.

------
noelwelsh
The core of the lean startup is the application of the scientific method to
systematically and consistently gain knowledge about product/market fit. The
scientific method is the only reliable way for gaining knowledge about the
natural world that has been discovered in all of history. Only a kook would
argue against it. Luckily that's not what Marc Andreessen argues.

Marc seems to believe that the Lean Startup approach is not applicable to
"audacious" ideas, citing the Macintosh. This is, of course, not the case. The
scale of a project might make experimentation more costly, or more difficult,
but it still occurs. For example, the Macintosh was preceded by the Lisa.
Apple learned from the Lisa (too complex, too slow) and hence the Mac was
simpler. Sometimes experimentation occurs not at a company level but at an
industry level. To use Apple again, the early experiments leading up the
iPhone were performed by Apple (Newton, iTunes Phone), Palm, and RIM. It's not
like the iPhone sprung fully formed into an empty market, much as Apple would
like you to believe this.

~~~
rimantas
Markets (and decisions in general) are hugely influenced by emotions. We are
far far away from having anything scientific of much practical importance in
these areas. Anyone deluding oneself with an idea of a rational market is
well, delusional.

~~~
noelwelsh
The Lean Startup has nothing to do with rational markets. It is about using
the scientific method to acquire and interpret information from the market.
This does not presuppose the market is rational in the way (some) economics
does.

------
sorich87
_We see Lean Startup methodologiy being used innapropriately as an excuse to
not take sales and marketing seriously,” he said. “Founders tell us that all
that matters is product, and sales and market will happen automatically. The
‘if they build it it will come,’” mantra, which he noted is not always an
acceptable approach for those looking to grow._

I thought the Lean Startup was based on customer development... These
"founders" are doing it wrong.

------
adrianhoward
This bit in the lede is actually the TL;DR of the article

 _Marc Andreessen notes that sometimes founders misappropriate the ideas or
don’t apply them correctly_

... but much less attention grabbing than the headline ;-)

Anybody, for example, who is ignoring sales and marketing is almost by
definition not taking a Lean Startup approach.

------
ChuckMcM
I think the point about being to willing to call something a failure is a good
one. It is important to be "Ok" with failing but it is also important to be
honest with yourself in terms of whether or not you gave it everything you had
to give.

------
vrajesh5
Most likely the audacious ideas like rocket to Mars come from Elon Musk and,
Elon has the track record to not have to go lean.. If Rajesh proposed a rocket
to mars, security will be called. But Elon must have also broken down spaceX
to a process of validating some definition of MVP (power sub systems,
insulation, inertial navigation and other fancy terms) that adds to the final
product.. Overall I feel Erics lean startup approach is much more reliable
that the deterministic approach used by investors to pick the winner based on
how young the team is, since when they coded, where they dropped out off and
how much in the fringe the idea is..

------
sgold1
99% of ppl attened to learn about the lean startup. Big tunechi never rides
with the crowd!

