Lean Startups and Early Markets

posted Aug 14, 2010 3:35 PM by Amin Ariana   [ updated Jul 11, 2011 11:15 AM by Amin Ariana ]
I'm quoting a golden paragraph from the "High-Tech Marketing Enlightenment" chapter of Geoffrey A. Moore's amazing book, Crossing the Chasm:

"... the basis for reform is the principle that winning at marketing more often than not means being the biggest fish in the pond. If we are very small, then we must search out a very small pond indeed. To qualify as a 'real pond', ... its members must be aware of themselves as a group, that is, it must constitute a self-referencing market segment, so that when we establish a leadership position with some of its members, they will get the word out - quickly and economically - to the rest."

Every successful startup that makes it on its own dime knows these three success principles:
  • Keep cost low
  • Hit revenue quickly and maintain positive cash-flow
  • Keep a close distance with the customer to know what to do next
    (For this last one, see Taylor's theorem for approximating differentiable functions in calculus(!) )
Eric Ries summarizes the above principles for software engineers by evangelizing the concept of Lean Startup -an organization that practices the following three operating principles (also known as why startups go faster) :
  • Commodity technology stack, highly leveraged (free / open-source, user generated content, search engine marketing)
  • Customer development - find out what the customer wants BEFORE you build it
  • Agile (lean) product development - but tuned to the startup condition

Eric Ries "evangelizing for the Lean Startup" in Stanford.
Summary: Achieve failure, then pivot. Again, see Taylor's theorem.