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Marc Andreessen – Challenges Lean Start-up Model: Business Planning

Lean start-up model gives ‘permission to give up very fast’, US investor claims

By Michelle Hammond
Wednesday, 05 December 2012

Famed US venture capitalist Marc Andreessen has taken aim at the ‘lean’ start-up model, claiming that it overlooks the importance of sales and marketing and gives entrepreneurs “permission to give up very fast”.

 

Andreessen, co-founder of venture capital firm Andreessen Horowitz, challenged the lean start-up model when he spoke to Eric Ries at a conference in San Francisco earlier this week.

 

Ries is the author of The Lean Startup, which aims to change the way companies are built by encouraging quick iteration and inexpensive prototyping of ideas.

 

Andreessen said while the lean start-up model is hugely popular, there are several ways entrepreneurs can misinterpret it.

 

However, Mick Liubinskas, founder of Sydney-based tech seed fund Pollenizer, which prides itself on its lean start-up principles, has offered rebuttals to each of Andreessen’s points.

 

Here’s what the two tech start-up heavy hitters have to say about going lean:

 

Not all start-ups can be lean start-ups

 

Andreessen: “I would serve this as a challenge for the lean start-up community, especially the ones with the really audacious goals,” he says.

 

“Sometimes they start audacious because otherwise the product will never get to market. The Macintosh – that product had to exist in its entirety for people to wrap their heads around it.

 

“I don’t think the lean start-up idea, as brilliant as it is, and as widely applicable as it is, should halt us from investing in these big ideas right out of the gate.”

 

Liubinskas: “It’s always lean to different degrees. [With regard to the Macintosh,] Apple does quite a good job in that they take the biggest risks, but they also have the biggest failures,” he says.

 

“Also, there are more tools around now. One part of starting up lean is the marketing available. Previously for me, if I wanted to test the market I had to build [something] and get it out there.

 

“I understand what he’s saying… But I think every start-up should aim to be as lean as they possibly can. The leaner you are, the faster your speed of learning.”

 

Don’t use the lean start-up model as an excuse to skimp on sales and marketing

 

Andreessen: “We see lean start-up methodology being used inappropriately as an excuse to not take sales and marketing seriously,” he says.

 

“Founders tell us that all that matters is product, and sales and marketing will happen automatically.”

 

Liubinskas: “I think that’s the complete opposite of what I see. The whole point of lean, for us, is to get in front of customers as soon as you can,” he says.

 

“You should be able to get in front of a customer within an hour – call up a customer and try to sell it to them or put it on a landing page and try to sell it to them.

 

“From our perspective, it has to reach the customer.”

 

Don’t develop a “fetish for failure”

 

Andreessen: “Taking the stigma out of failure is very exciting. But we see founders who give up too quickly. It’s permission to give up very fast,” he says.

 

“We joke around the office that the worst is the fetish for failure.

 

“You want to preserve the good of the idea when it comes to pivoting, but you don’t want people to be intentionally encouraged to fail.

 

“Maybe it’s time to add a bit more stigma. The entrepreneurs I admire, I admire the ones who pivot but I really admire the ones who have persisted.”

 

Liubinskas: “Bringing it here, some people are now using this [acceptance of failure] as an excuse to fail,” he says.

 

“Failure is okay as long as you keep going, do it fast and get somewhere. If you fail 50 times and don’t produce anything, you’ve learnt some big lessons.

 

“In Australia, we’re just getting comfortable with failure.”

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having been part of a lean startup i would this is more by design than choice. Most startups simply cannot find an investor so early, especially if they have not had previous success, so the lean startup is more the norm with the aim of getting traction and then proving to an investor the market size and appetite.

From my pretty long history of startups starting lean often means you miss out on the market as often it is sales and marketing that are key and this is more down to muscle that product and you can get through a lot of money in that game. if you have a great product but lack of people telling the world how great something is that can be very frustrating. Also you need often need to get the service or produt to the tipping point where the product/service mix outweights the concerns of the client who is willing to purchase.

Often you need to develop heavily at the start just to get to that point so speed is important and therefore having many programmers and team from early on is valuable.

To often a lean startup will develop a product too slowly and be outmaneauvred in marketing to a lesser product or service. however i am sure many people can point to successful lean startups and failed heavily backed services. it is easy to pick holes but if you are a startup and have the choice to get investment or not i suspect i know where most will lean, or possibly regret not taking the money to enjoy the ride!
simon roberts , December 06, 2012
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