Wednesday, February 29, 2012

Who Deserves Credit for Lean Startup?

With all the excitement about Lean Startup (Eric Ries has made comments with concern about over-hype), it's easy to miss other important works. In particular, I have just finished reading The Innovator's Dilemma by Clayton Christensen, which was first published in 1997. While reading, I was awestruck by the concepts Christensen brings to light. But more on the thesis and general topics of the book at a later date.

What I want to point out is that every entrepreneur should read this book. A lot of important concepts Steve Blank elaborates on in The Four Steps to the Epiphany (2004) and Eric Ries simplified and popularized in The Lean Startup were already captured in The Innovator's Dilemma. In fact, Blank and Ries frequently recommend reading The Innovator's Dilemma. What Blank and Ries did was to help us understand the concepts, identify how they relate to our success as entrepreneurs, and give us a road map with tips and tools to use them.

A few excerpts from The Innovator's Dilemma will illustrate concepts very familiar to fans and practitioners of Lean Startup:

  • Research has shown, in fact, that the vast majority of successful new business ventures abandoned their original business strategies when they began implementing their initial plans and learned what would and would not work in the market... Guessing the right strategy at the outset isn't nearly as important to success as conserving enough resources... so that new business initiatives get a second or third stab at getting it right. Christensen cites supporting research that goes as far back as 1992.
  • But in disruptive situations, action must be taken before careful plans are made. Because much less can be known about what markets need or how large they can become, plans must serve a very different purpose. They must be plans for learning rather than plans for implementation... Discovery-driven planning, which requires managers to identify the assumptions upon which their business plans or aspirations are based, works well in addressing disruptive technologies. Here he references work from 1995.
  • Moore suggests that products are initially used by innovators and early adopters in an industry - customers who base their choice solely on the product's functionality... Moore observes that markets then expand dramatically after the demand for functionality in the mainstream market has been met... A third wave of growth occurs... pulling in the late majority customers. Note that Crossing the Chasm was published all the way back in 1991.
  • Although we don't have a clue about where the market is, the one thing we know for certain is that it isn't an established... market segment.
  • But, although we may target this market first, there's a high probability that our initial concept will prove wrong. So we've got to get the first models done fast and on a shoestring - leaving ample budget to get it right once feedback from the market starts coming in.

So aside from giving credit where it's due, what additional value comes from reading The Innovator's Dilemma? a general outcome is to understand what disruptive innovation is and its contrast to sustaining innovation. Readers will learn why entrepreneurs that develop disruptive offerings can compete and win against entrenched, well-funded competitors. People often talk about how startups have an advantage by being nimble and this book helps develop a definition of what it really means to be nimble and implicates how to strategize around that, turning it into a competitive advantage (against established players).

With the recent attention being given to the methods of Lean Startup, I want to recognize Christensen for identifying the concepts 15 years ago and at the same time thank Blank and Ries for developing them and spreading the practice. All are critical pieces that work together as part of the same puzzle. So if you haven't already done so, make a little space next to Blank and Ries on your Lean Startup shrine for Christensen.

Who else deserves recognition for identifying and publishing these concepts prior to Christensen? If there are requests, I'd be willing to go back and copy the references mentioned with the quoted text.

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