While “lean” is thrown around a lot as modifier for contemporary businesses, Ries said that with his book he hopes to clear up one of the big misconceptions in defining the term; for starters, “lean” does not mean being cheap or frugal, it’s about being efficient and taking a smarter approach to the development of your product.
Act 1, he said, is all about who the guys are and how they come up with their great idea, whereas Act 3 finds them on the cover of magazines, having hit the big time.
Act 2, which is often short — and takes the form of a quick photo montage on screen — is the most important and often most overlooked part of a business’ development, in which the startup attracts their first customers. Here startups often suffer from the same repeat mistakes, unsure of when and how to pivot and which customers to listen to. By becoming more scientific in their approach to “Act 2″, startups can increase their chances of being successful. (And obviously by buying Ries’ book.)
Cook said that time and time again his team was spending Herculean efforts on delivering products that ended up fizzling out without much fanfare or success.
As an example, Cook cited QuickBooks‘ desktop product. Formerly, he said, “we had huge teams” working on QuickBooks, but the company has recently done away with large format development, breaking product development down into teams “no bigger than four”, focusing on rapid development of a prototype and quick testing of the market.
Intuit is now focusing on launching prototypes that customers can test and tinker with over a matter of months, rather than taking what might be years to fine tune a particular product. In the old days, he said, this would happen over a much longer time span. “We’re now focused on how many weeks after hatching the idea it takes to get the product into the hands of the customers, to test and see how it works”.
Using Intuit as an example, he said that teams that are most often successful are so because senior management allows them to operate on “an island of freedom”, in which they can report progress only when they actually have something to report — they remain free to iterate, test, and are not beholden to a series of strict deadlines and check points.
The key in pivoting, he said, is not to throw away a product or idea completely but to use what’s already there to better fit customers.
When to make the decision to pivot is, of course, not so clear. “I’m not sure it’s ever clear when founders should begin working on something new — that decisions isn’t clear, and it’s never really a particular point, it’s a gradient”, he said. If founders don’t see a kind of addictive behavior among early users, having users ask why the site is down (should that happen), then you know you’re onto something good.
Good words on pivoting as gradient and lean startup as a three acts show. I would define lean as always touching on market from beginning to middle to the reiteration. Also pivoting is both gradient and a point: it is the gradient that leads to a breakaway point.