Missing Paradigms

by Christophe Mandy

The first half hour of every LTV class follows a similar pattern. We invariably spend some time discussing whether the company under scrutiny truly is lean startup and evaluating where on the LEAN-NOT LEAN scale we should place it, and right around that time we implicitly (and in one case explicitly) assume that although the lean framework is elegant and concise, it should be taken with a grain of salt, and the success or failure of a company does not depend on its dogmatic application, nor do all companies apply each principle consistently. Invariably, somebody compares the company under scrutiny to a highly successful enterprise that was manifestly not a lean startup (traditionally Google, Zynga or Facebook).That DropBox ignores some of the customer feedback it gets, or that IMVU waits until it gets no traction or income before actually paying attention to customer feedback makes neither more or less of a lean startup than the other. So this simple evaluation begs the question: is the lean framework a valid one dimensional tool? Are there more paradigms than “lean” and “not lean” (Fat? Opulent? Ostentatious?).

I couldn’t possibly come up with a taxonomy of every possible kind of framework a successful startup can fit in, and isolate the conditions under which a startup should apply each one. And I don’t really know the history of that many startups. But I could try to do a full factorial test of each lean principle to see if they’re necessary. We basically defined lean startups as doing the following:

A.  Getting to market as fast as possible
B.  Testing hypotheses about the product and monetization to validate them based on explicit metrics, then pivoting until product-market fit is reached
C.  Scaling only when product-market fit is reached
Testing the principles looks like this:

A: Get to market fast
notA: hide from customers

C: scale post-PMF
notC: scale pre-PMF
C: scale post-PMF
notC: scale pre-PMF
B: Test hypotheses and get to PMF
Movie studios

notB: No tests

Sony Walkman
Market-share-now = money-later philosophy (Samsung?)
Apple iPad
Honda entering the US

It’s doubtless arguable whether or not I’ve put the right companies in the right boxes and if each is really an example of a success story, but that’s not quite the point of this exercise. I’m sure you can also tell that filling every box didn’t come that naturally. And it’s not necessarily surprising that there can be success stories in each category. But looking for simple patterns suggests that:

·     notA companies are based on monetization that heavily benefits from making a big splash when a new product is launched (not conducive to viral spreading for instance),
·     notB companies seem to not live in markets that might tip whereas B companies face the threat of winner-take-all situations,
·     notC companies are in industries where there is extremely intense competition and the possibility of low margins
So is lean only good for companies that could spread virally in markets that don’t tip with not-too-intense competition?