Lean start-ups are like playing a special type of Plinko.

For those of you who aren't familiar with Plinko - see Plinko

In Lean Start-up, the process of building a sustainable business involves two primary types of movement, the test - involving a hypothesis and a testable, actionable metric (Really, the test isn't movement. Instead the action taken as a result of the test is the actual movement. See my post The Anorexic Start-up), and the pivot - a change to a core philosophy about how the product works, who it serves, etc.

Generally, a start-up takes an informed idea - something pre-validated with some level of interest by potential customers and builds an MVP (minimum viable product) to prove that product will build a sustainable business.

The business proves, validates, by testing their MVP against a set of base hypotheses with a set of desired actionable metrics. These base hypotheses are called the leap of faith hypotheses, the ones without which, the product as it is envisioned is doomed to failure.

Should some of those hypotheses prove false, it may be time for an immediate pivot, but that's not the subject of this post.

Once the initial concept is proved viable and their is evidence of some traction, the team begins iterating. During this phase, the team works to improve the product by bringing it more in line with the desired metrics. This is accomplished by creating experiments consisting of a central hypothesis against a set of actionable metrics. E.g. Changing the messaging on page x will result in higher percentage of behavior y. These tests are carefully constructed to ensure the results are verifiable and repeatable - generally by a/b testing.

Eventually these tests start producing diminishing returns. When it becomes clear the ultimate business goal will not be reachable with the given product, it is time for a pivot.

The price is right.

Instead of a ball or round disc, your product is a slinky. It's sitting at the very top of a special Plinko board. That board is design so that instead of pegs, their are platforms just big enough for your slinky to rest on that each pivot around the peg as an axis. When you start iterating, you drop your slinky onto the top platform. It draws out quickly from the start, generating big results. But, as the rear of the slinky starts to compress, so too does your progress towards your goal - a particular metric set at some stage down the Plinko board. Now, for most businesses, you're still not where you want to be and you make the decision to pivot. At this point, the platform rotates, launching your product or decision process in a new direction, allowing you to add value in different ways.

The crux is that YOU are in control of when your platform rotates. If you rotate too soon, you risk losing potential gains, throwing your slinky into a wild swing (banging into other platforms, etc) with no clear path. If you rotate too late, you've let your product stagnate and lose momentum. Just right, and your product moves like, well, a slinky down stairs.

Eventually, you reach your goal.

Or do you?

Most businesses don't end up quite where they imagined they would. On the great Plinko board, there are a lot of different platforms to land on, each a different business model with a different level of success. Remember, your goal is a sustainable business - it just might not be the one you thought.

Recently, entrepreneurial consultant Eric Reis published his book, The Lean Start-up as the culmination of his lean start-up experiences and a summary of the tenets of the lean start-up movement.

Here at Fabric, we've been following our own lean philosophy for years. We advocate Minimum Viable Products (MVP) - I'm still baffled that this is now a “buzz word.” We encourage iterative testable development in small batches. We encourage our clients to change direction when they or their product have hit a wall; in lean, this is called a “pivot.” I like to call repeated pivots “walking”

We're big believers in lean thinking and the lean development framework. Each of its central tenets are both common sense business practices and productive guidelines for building a successful business.

There are dangers lurking in lean.

There is a certain evangelical thread that permeates Eric's book and the Lean community. When I'm faced with evangelism for any system, I immediately grow skeptical. Generally this behavior tends to blind one to the faults in a given system or behavior. This danger lurks in lean development.

Learning for Learning's Sake.

Central to the Lean Start-up belief is that learning is, in and of itself, the goal of building your product. “Our goal in building products is to be able to run experiments that will help us learn how to build a sustainable business” (p201, Reis, The Lean Startup).

Is it really our goal in business to simply learn how to build a business? This message pervades the book; that learning is the ultimate goal. While I appreciate this high minded approach, it is a fundamentally flawed message. Learning is an integral and inseparable component, but a step on the path nonetheless. The goal of your product is to build a sustainable business, not simply to learn how to do so.

I'll venture to guess Reis wants you to build a sustainable business, and that learning is what gets you there. However, that's not how the message is framed. Instead, it seems he's battling bad start-up behavior so strongly, that his message is a little right (or left) of center in an attempt to bring people back to the fold of good business practice. Ironically, this behavior is something he addresses specifically in his book in regards to individual developers and teams.

The book contains one other example of a mis-framed idea - that the experiment is 'movement.' In this context, movement is defined as progress towards your goal. If you assume learning is your goal, then indeed, any experiment that results in learning is progress and hence movement. But, since learning by itself isn't our goal, that it is movement doesn't necessarily follow. Remember, our goal is to build a sustainable business, not to learn. Instead, think of your informed, validated decisions that result from the experiment as movement.

Perhaps I'm splitting hairs. This is, after all, potentially just an issue of semantics. But, there is a simple way to validate: test it. Go up to your potential clients - in our case start-ups and businesses with new products - and ask them if they are in business to learn or to build a successful business. I've done this. Unless your respondent is already a lean evangelist, their answer is universally to build a successful business. Now, follow up by telling that same client they're wrong, that they are in the business of learning. When the client gives you that look - you know, the “you're crazy, did I really hire you” look, you'll have your answer. Of course, don't do this with clients you want to keep… mis-framing scares your clients for no reason.

While it's true that every decision made about a product should be a validated one, the central goal of our business is not to learn. That goal is reserved for academia. Instead, our goal is to build a sustainable business. What we learn along the way is crucial to informing our path to that goal. But we must be careful not to frame learning as the goal itself. Else you risk alienating potential clients who aren't initiated, or falling into the trap of learning for learning's sake.

Remember, we want a lean business, not an anorexic one.