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Lean methodology vs Zero to One


In the startup world there are two schools of entrepreneurship advice. Eric Reed created a breakthrough in the management world in 2011 with his best seller Lean Startup. In 2014, Peter Thiel, Silicon Valey’s prolific investor shares his own insights about the startup world with his own book Zero to One. There is advice in between such as Reid Hoffman blizzscaling practices and Paul Graham Essays for startups. Nevertheless the Lean methodology and 0 to 1 are often put side by side due to the antithesis in the perspective.

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1. The importance of the Idea

*Lean: A idea is not that important as you will learn and pivot along the way. * Start with a trivial product and make incremental advances. You can’t predict what feature would be attractive and therefore you have to experiment.

0 to 1: Bet on a contrarian truth as it is better to risk boldness than triviality. A trivial idea would have being picked by a thousand entrepreneurs. People with more resources, better industry relationships and more startup experience. On contrary, some ideas are just crazy and could be infeasible to pull out. You should strive for somewhere in the middle. An idea that the number of people that are building it could be counted on one hand. Your goal will be to prove the idea and to outrun the few competitors that you have.

2. To plan or not to plan

*Lean: Planning is futile as market brings surprises. *The planning phase increases complexity and therefore introduces friction and delay to the process of perfecting your product.

*0 to 1: A bad plan is better than no plan. *At the end the self evaluating feedback you would receive, would be the most valuable part of the procedure. You will learn from feedback in regards to your plan and not to your product. The plan should be align with the vision you have regarding your idea. Your product may be wrong but your plan shouldn’t.

Photo by Daria Nepriakhina

3. The winning team

*Lean: You need great engineers. *The lean methodology consists of 3 parts. Building, measuring and learning. Therefore you need great product engineers to build and great data scientist to measure so you as a startup learn. There is no place for sales or marketing people.

*0 to 1: You need a mixture of talents.

  • A hacker. A hipster. A hustler. All three are equally important in bringing the new experience your product provides. The hacker would implement the nifty details of the product. The hipster would visualize the experience so it is closer to the user. The hustler would make the sales explode though different channels and keep the process accelerating.

4. Development and sales trade-off

*Lean: Focus on the product, sales will come. *You don’t need to upsell a great product. A great product sells itself. On top of this the resources are limited. So focus on your product.

*0 to 1: Sales matter just as much as product. *A customer has limited attention and in a world where the attention spans shrinks day by day you need to sell to your customer. Selling will be a valuable experience and will tell you tons about your customer. Moreover that communication channels will be a great deal for latter part of your business development.

5. Market research and competition

*Lean: Watch competition closely and outperform their product. *Learn what new features they introduce, how popular are they among users and what competitive advantage the have over you. This data is as important as your own data. Moreover, since product is king in the Lean methodology you should iterate faster and beat competitors products.

*0 to 1: You should strive to avoid competition.

  • Competitive markets destroy profits and profits are what a startup builds its momentum on. The idea should beat competition on its own. You need a bold idea that very few people are trying so the competitors resources are not your greatest fail point. From that point on when you reach product market fit you will have the first movers advantage with your infrastructure in place that competitors would have to outpace.
Photo by Annie Spratt

Long story short

All the above can be summarized in two decisions that an entrepreneur should make for their company. The first is “Time on development vs time on sales” that requires the appropriate team for each direction followed. The second is “Crazy idea with almost no competition vs quick advances on trivial idea to outpace competition” that sets the starting point of the startup. That would be either a hard one where market validation should be done and scaling is outperforming a few competitors or an easy one on a proven or easy to prove market where scaling is harder and many more competitors would run along for the finish line.

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