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Lean Startup is Crap!

Stressed OutYou’ve just got an idea for an app. Following the “lean” methodologies (Eric Ries, Ash Maurya, Rob Walling, et.al.), you put up a landing page and then see if you get signups. If you get a lot of signups, that means the idea is viable and you can count on 3% of those converting to real customers. Sounds like a good plan.

So you buy your domain, put up your landing page and waited. While waiting for a result, you repeat the same exercise nine more times, each with their own domain, landing page, and e-mail list. So you’ve just spent about $150 and 20 weeks of “after-hours” work to generate ideas, filter out the really sucky ones, write marketing copy, and put up landing pages for each surviving idea.

After a tiring five months, none of your 10 ideas generate any traction. Traffic is low and only your friends that you’ve pestered signed up. Then depression starts weighing in. You then think to yourself: you’re probably not an entrepreneur and probably be better continuing your day job instead.  At least the day job provides sustenance and you don’t need to generate ideas which fails anyway.

Or is it? Lean startup may be a viable methodology but you shouldn’t just blindly trust on it. It’s one way to “skin a cat”, but definitely not a religion (even then you shouldn’t blindly trust religious texts, but let’s save that for another discussion – let’s talk business for now, after all this is a biz-tech blog). Yes, your ideas are probably crappy – but to be fair, the whole Lean Startup craze may also be crappy.

Here’s the fallacy of the above “landing-page-then-see-what-happens” lean methodology:

  • How your target customers can find the landing page?
  • How can you get early adopters to trust you with their e-mail address?
  • Have you done some validation before even putting up the landing page in the first place?
  • Are you talking to your target customers using their language?

Keeping all of the above factors in mind, a landing page is a necessary but not sufficient component to launch your app. You really need to do some groundwork before putting up the landing page and deliver tangible value to your potential customers long before you ask them for money. Paying it forward, so to speak.

If you have something real to show – for software this is likely a beta version of the application – you will get:

  • Early users who can provide feedback.
  • Word-of-mouth marketing from those early users.
  • Social proof saying that you’re not just there to harvest e-mail addresses and sell them to spammers.
  • More opportunities to talk about your product – often gives SEO benefits (for example, release notes on placed on the website).

Scuttlebutt Example

When I started Scuttlebutt – our Yammer app – signup rates were very low. There wasn’t much text on the app’s landing page that Google can index.  The site was asking for an e-mail address with nothing in return and very few people were willing to give out their e-mail address fearing spam. Yes, I did saw several e-mail addresses tagged with Scuttlebutt’s website using Gmail’s disposable e-mail address trick – signifying that those people didn’t really trust me. 

But I got signups. Why? I did some validations before I bought the domain. There were a number of complaints on Yammer’s support forum about the need of a Mac app (complaints that Microsoft took down not long after the acquisition). In addition there were some questions on Quora showing there were at least some demand for it. Furthermore signups really took off after I’ve been pushing out releases – these were alpha & beta versions of the software. It’s not fully functional nor stable but it’s proof that I’m “for real” and not just trying to harvest people’s e-mail addresses.

Just look at the graph below. This came from MailChimp‘s “list growth” report showing the accumulative number of people who signed up for Scuttlebutt‘s launch list and stayed on that list until now. I’ve annotated it to show milestones as the software progresses and matures.

Scuttlebutt list growth

The official “start” of the project was in June 2012, the time that Microsoft announced that it’s buying Yammer. But really it starts way, way before it. I’ve experienced the need for a native Mac client myself and done some “market research” (e.g. googling, binging, and quoring around) to see if there is a demand.

I’ve also personally tried to contact some of the people who wanted such an app but received no reply whatsoever. Perhaps because I didn’t have anything tangible and I have no social proof nor any credibility that I can leverage at the time. Yet some of those very same people signed up to the beta list once I have a working application.

Then I sent out an offer, asking if people are daring enough to try alpha releases. The signup form was essentially a “notify me when we launch” list with a checkbox to opt-in for beta releases as well. There were 34 people who were offered for alpha releases and 11 opted in – so that’s a 30% conversion rate. Pretty neat huh?

It turned out that releasing crappy alpha versions were very useful. There were a number of important design decisions that were made in this phase that’s would be too hard to change if the app was already matured. Some who wanted the alpha releases even submitted UI mockups that I ended up incorporating in the application. (That’s “crowdsourcing” your UI Design ^_^).

So this is a screenshot from an early alpha version of Scuttlebutt

Scuttlebutt early alpha

After using the above alpha app, an early adopter came up with the following mockup…

Scuttlebutt User Mockup

Pretty neat, isn’t it?

Back to alpha releases and list growth. The inverse is also true – when I was lagging behind in releases, exponential growth stopped. Just look at the period from January to February. In that graph, you can see that growth was slightly lagging. Keep in mind that until 16 February only 11 people get to use the application – those in the alpha tester list. But word-of-mouth effects from those releases and SEO benefits from posting the release notes helped grow the list.

Then when I started sending out beta releases to a larger group of people, real growth starts. You can see for yourself in the graph. Subscriber count grows exponentially from February onwards. I was providing real value in terms of a working application that they can use on a daily basis, save for a few bugs here and there. It’s not just “a promise and a form” but it was something real and tangible.

What should you do?

If you have an app idea and you’re planning to bootstrap it yourself – or perhaps with just one or at most two other co-founders – with zero outside investments, here’s what I think you should do. 

  • First put up a landing page and sign up form anyway. It’s not much useful by itself, but it’s your anchor on the web. Don’t waste too much time on the site or buy custom design, or even too much money on web hosting — it’ going to be a one-page site. Just state your value proposition and put a mailing list form for that. MailChimp has free and pay-as-you-go plans thus you don’t need to spend any money on this until you’ve gotten some traction.
  • Start finding people that has the problem that you’re going to solve and contact them. Some entrepreneurs say that you should cold-call them but that’s going to be expensive if your target market is half a world away. You can start the relationship by email/Twitter/LinkedIn and then move on to Skype if it gets somewhere. But don’t count on getting replies from them.
  • If you get people on your list, contact them personally using your business e-mail address. That is use yourname@yourcompany.com or yourname@yourproduct.com and not an anonymous email address like support@yourcompany.com (also don’t publish your own email address on the web or otherwise people won’t feel exclusive being contacted by you). Don’t use any mass-mailing software (not even MailChimp) for this.
  • Make your app and release it as soon as you can. Despite of all those who say that you need to sell your product first. Pre-selling doesn’t work for software products – even Amy Hoy agrees on this. No, it doesn’t need to be perfect and you don’t need to stage a huge launch for your crappy initial release. Just cobble something up (you’re a competent coder, aren’t you?) that people can play with and work your way from there into a viable commercial product.

In short, stop worshipping that “lean startup” mantra — especially if you’re an un-funded solopreneur that is nowhere near the VC-infested Silicon Valley ecosystem. Put your head down, spirit up, fire up your favorite coding tool, and get down to work. You’ll need to get it out fast to people who need it and ask them whether it’s solving their problems.

If you want to have a barbershop, you don’t just rent an A4-sized plaque somewhere asking people whether they want a hair cut and write down their phone numbers, would you? No. You set up a spot under a nice shady tree then put up your shingle saying “Haircut $10” and start cutting hairs. Then ask people how the experience was, give them a huge discount for being an early customer and leverage their word-of-mouth marketing.

Take care and good luck!

 



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Discussion

12 Responses to “Lean Startup is Crap!”

  1. Using the term [“landing-page-then-see-what-happens” lean methodology] makes me think that there has been a misunderstanding of what the lean startup methodology is about.

    It may be a by-product of the methodology, but that’s from a lack of creativity towards your MVP. You want to be looking for feedback in terms of alignment of your value proposition to your end users. That doesn’t have to be a landing page and if it is, you should be establishing an answer of why or why not this is aligning with your users.

    In your case the MVP was your alpha release. The landing page wasn’t enough. The process you laid out actually seems to fit the Lean Startup pretty well.

    Posted by paulstonier | April 24, 2013, 21:31
    • Absolutely , it’s total nonsense ! I was quite excited about reading some serious arguments against the lean methodology but I am just very disapointed now…

      Posted by Laurent Vergnaud | April 25, 2013, 00:29
      • Yep. Me too.

        If we were to get onto that topic, I think there really needs to be a balance between testing hypothesis and using your gut. There are just certain cases where you can save resources by deciding on something versus over-testing. That type of flexibility requires a certain judgement and accountability, but that’s what shapes a manager. The end result will be a more agile business.

        Posted by paulstonier | April 25, 2013, 01:35
    • If you look from a micropreneur’s perspective, once you write code (or take longer than a month’s “off-hours” work to do anything) it’s no longer “lean” – should the code/product/demo is solving a non-problem then there’s a lot of waste already done.

      So the remaining question is on pre-validating your product idea in a very limited amount of time – while still juggling a dayjob or consulting work. We’re talking about about 5 weekdays * 3 hours/day + 2 weekends * 12 hours/day part-time working hours to validate whether an idea is worth working on or not.

      Posted by Sasmito Adibowo | April 28, 2013, 11:16
  2. Man, a lot of venting, someone needs a big hug. i dont think you realise that the early validation part of your argument ‘validates’ lean startup principles. Landing pages are only one way to test your hypotosys and sitting waiting for hits s just bumb. The point of early customer engagement is critical to ensure you are not choosing the wrong domain name for example to eliminate wasted time and money.

    Posted by Paul R Daniel | April 25, 2013, 17:43
    • That is if you’re lucky enough to engage a potential customer without delivering value up-front.

      Posted by Sasmito Adibowo | April 25, 2013, 19:20
      • But the point is to deliver value up-front, but just the minimum value. The methodology is used for unknown terrain, so not a barbershop. We know people are in need of a hair cut and they already know about the concept of a barbershop, but even in that case, you can put up posters on empty store windows with a link to a website. A different URL for every poster in every neighborhood would tell you which locations generates the most traffic to your site and eventually where you should rent your place. Then you start with a chair, a pair of scissors and a mirror and talk to your customers about what else they would be willing to part with their money for: shave, washing hair, painting hair etc.

        But then again, not an innovative concept. The lean methodology starts with assumptions and innovative concepts have a lot of them, so you start by validating the most important ones.

        Posted by vanderlinden | April 28, 2013, 02:53
        • But when you already deliver value it’s no longer “lean”, isn’t it? It’s somewhat chubby already :p That is from an un-funded micropreneur’s perspective. Please refer to my reply to @paulstonier:disqus about this.

          Posted by Sasmito Adibowo | April 28, 2013, 11:22
          • The term “lean” doesn’t refer to size (i.e. big, small) nor money (i.e. cheap, expensive) but to waste avoidance. “Waste” understood as activities that don’t deliver consumer value.

            Posted by Jaime | WiseHunch.com | May 29, 2013, 21:52
          • But there’s no way to see whether activity “x” have delivered customer value until you’ve done enough implementation (which includes “x” and many other activities) beyond some tipping point. At that time there is already a significant risk that the implementation doesn’t provide any value and in retrospect “x” and it’s related activities to implement the product proved to be a waste.

            Posted by Sasmito Adibowo | May 31, 2013, 05:22
          • Exactly. That’s why lean startup proposes to build a product incrementally, while getting feedback from prospects/customers as early and frequently as possible.

            Posted by Jaime | WiseHunch.com | June 2, 2013, 18:06
          • Then if “x” is below the tipping point (which is impossible to see until it’s exceeded), there’s a good risk of having false negative and infant mortality due to lack of responses from potential customers/users. After a few rounds of these, it sums up to thrashing of efforts which in hindsight can be used to put a product to market.

            Posted by Sasmito Adibowo | June 9, 2013, 12:10

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