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Startups are NOT smaller versions of large companies (and so need a new approach)

An excerpt from a post on London Open Coffee:

“I’m really bored of hearing of lean, and business model canvas, and kanban and some other cool word. Old methods work, and for some reason (possibly lack of money) we startups are moving farther (further …who knows) away from techniques which really work, and have been tried and tested by companies for decades….. Lets bring back cold calling, and the hard art of selling, as opposed to pitch decks, bring back the importance of marketing as opposed to just focusing on a great product.”

Hmmm. So in summary then let’s have…

  • More cold calling
  • More products that no-one wants
  • More wasted marketing spend
  • More 30 page business plans that no-one reads and are simply guesswork?

Not my idea of fun. 

Sales & marketing are clearly necessary but it’s a hell of a lot easier with a great product that people actually want. Best to save your marketing spend for when you’re looking to scale and have some solid traction. Or even better create a remarkable product that gets people talking (based on a great brand, clear value proposition, seamless user experience, etc). Positive PR = free marketing. Even better I’d say.

The premise of lean is reducing waste (whether budget, time, resource). Interested to understand why anyone could see this as a bad thing?

Traditional techniques work. Really?

I guess it depends on the definition of a startup. If you’re talking about setting up a new flower shop, then more traditional techniques may still be valid (although I’d still argue that a lot can be streamlined to accelerate learning). But if you’re looking to disrupt an industry and create a truly innovative product then these just don’t cut it.

I’d much rather focus on

  • Less selling and more listening
  • Less guessing and more learning
  • Less documenting and more doing

The fact that the majority of startups fail means that things ARE broken. Rather than live in a blind bubble of hope, why not find out the bad news earlier and learn from it before wasting your cash/time/energy?

Also I believe that Steve Blank is an ‘old fashioned guy’ but he has learnt after 40 years working in Silicon Valley that startups are NOT smaller versions of large companies, hence the need for a different approach. The key difference being that startups are searching for a viable business model, not looking to execute one – hence the need for close customer involvement throughout those key early stages.

It all depends on your priorities I guess. Clearly no process is a silver bullet and you need to choose the right tools for the job depending on the context. Having worked with tons of startups over the last 10 years I realise that each has its own priorities. But I’ve yet to meet one that doesn’t want to reduce risk in some way.

Rant over.

STARTUPS ARE HARD
If you need help turning your startup idea into a successful web product, visit www.spookstudio.com or contact me via Twitter @welovelean. I offer a free 20 minute sanity check for startup founders to share and discuss their ideas in confidence via Skype.

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2 Responses to “Startups are NOT smaller versions of large companies (and so need a new approach)”

  1. Salim Virani

    Hey Lawrence,I get caught up in these rants sometimes too, and sometimes it’s hard to remember that they might be trying to be helpful! (In my case, I ask myself, how would I respond if they said this at Leancamp?)With some interpretation, I can see where they’re coming from. It’s easy to geek out on all the newfangled Lean techniques, but they can distract rather than help focus on what’s important. Especially if you’re prone to geeking out on new shiny things, and especially if you don’t invest in learning the tools sufficiently. I’m sure you’ve met a few people who rattle on about Lean Startup but don’t actually apply it themselves.Cold-calling seems to be an example they chose of a useful startup skill, and I agree with that. Not all cold-calling is boiler-room scamming; it has a professional side in corporate sales which is super-valuable for any startup dealing with enterprises, or for opening doors for Customer Development. (I use techniques from Buyer-Approved Selling in all my custdev calls.)And in many cases, a remarkable product doesn’t overcome the need for a repeatable sales or marketing model. Just because your users love you doesn’t mean you’ll make money. (How many products do you love that have been shut down or put on ice?) Finding that out sooner than later can eliminate a lot of wasted effort.In this case, when it comes to "traditional methods" it’s good to remember that a lot of Lean Startup techniques aren’t actually new, they’re traditional direct marketing and industrial design techniques, remixed and reapplied with a new measure of eliminating waste in getting something new to market.

    Reply
  2. Anonymous

    Hi Sal, thanks for stopping by to share your thoughts.I’m not one for blindly following everything lean and dismissing anything that has come before, far from it. As a designer I recognise many of the techniques as nothing particularly new and think it’s wise to have a healthy scepticism.My main issue is when startups try to sell/advertise/market (and throw vast amounts of cash at it) when they should be listening or just working on the thing they’re selling first. I see this as wasteful. Using cold calling techniques for cust dev is a different matter. It’s all about the purpose I guess.I also don’t think a great product and killer sales team are mutually exclusive. I for one don’t want to work on supposedly great products that sink without trace. It’s about balancing ??? + $. Hence the need to test the commercial viability of any solution early on, whatever the approach.I personally see the sales techniques you’re referring to having most effect when you’re looking to scale, rather than being used too early in the process. I’ve seen startups trying to scale too soon which, while attractive for the bottom line, has a considerable risk attached to it, particularly if you’re on the product side.

    Reply

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