The only real measure of success for a startup is not to stay a startup. And yet, the gurus of innovation and entrepreneurship admonish us to “innovate continuously, like entrepreneurs do,” “fail forward,” and “fail fast.”
These slogans come from an ideology born out of The Lean Startup, which advocates for launching continuous lightweight experiments around product guesses. Once your first “minimum viable product” (MVP) is “validated” in the “market,” the theory goes, you can begin working toward your final vision, testing solutions at each step with minimally viable fixes. Simply launching a product with minimal resources automatically becomes innovation, entrepreneurship, and organization building, and the goals of accruing users and achieving constant small failures become process.
This is how aspiring innovators end up expressing their worldly ambitions on the back of a barely viable product that requires millions of users to become sustainable. Doing that unwittingly seals their fate: until they have those millions of users, there is no other trajectory but to raise huge sums of money just to stay afloat.
Whether investing capital, time, talent, or company resources, the promise of innovating with little and the tale of startup “nimbleness” and “heroism” are so evocative that they are difficult to let go.
The problem is that, with a focus on an imaginary product’s viability, it gets easier to discard everything else. Then it’s all downhill. Every next “validation” just strengthens the emotional attachment to the “idea.” It’s all fatally powered by the seductive appeal of availability and confirmation biases. And what starts as an ambition to build a world-changing innovation with nothing but a minimum viable product ends up with an easily forgettable flop.
You don’t need to look far to see the results of this thinking. Take Grove Labs, birthed in 2014 by two MIT grad students eager to solve world hunger. That same year, it was a MassChallenge incubator finalist and its “bookshelf-size” home aquaponic gardens (really just a purpose-built closet to grow a daily salad indoors) were celebrated in Forbes magazine. But in five years, the idea crept from an aspiration to feed the world to an in-home garden for well-fed, high-income families to the “Grove Experience” consulting service.
Similarly, Juicero, with its Nespresso-like business model, raised $120 million to sell juice packets for its $400 juicer that couldn’t outperform the pressing power of a human hand. Doppler Labs likewise did not succeed with its in-ear computing technology—leading its founder to go on a rant about how only software startups are really possible (“We fucking started a hardware business!,” he told Wired. “There’s nothing else to talk about. We shouldn’t have done that”).
Since 1994, the U.S. economy has seen a whopping 15.6 million new businesses created, but only 1 in 10 has survived. That makes “die” the one attribute that best captures what startups do (not innovate).
In reality, the companies we tend to view as exemplars of innovation all succeeded by graduating from being startups, not continuing to behave like startups. Obviously, their founders—Jobs, Wozniak, Musk, Gates, Bezos, Hastings, Ford, Edison—all had a “start,” but they went on to achieve the true goal of entrepreneurship: creating a sustainable organization.
Alnylam, Tesla, SpaceX, and Square—all companies started in this century—were once wetware and hardware startups, but their paths appear to be missing stops at demo days or other beauty pageants. Yet, they’re still around, making serious inroads into changing our world for the better.
As counterintuitive as it may be, making a minimum viable product takes no less effort than making a good one. It just requires trading ambition for messaging; after all, the more minimal the thinking, the less ambitious the actions. Grove Labs and Doppler Labs had their dreams shattered the moment they traded their world-changing ambitions for making a minimum viable product.
By contrast, Ford’s affordable car, IBM’s mainframe, BASIC on the Altair, or selling books online were all ideas that stubbornly failed to fail after everyone deemed them not viable.
Overcoming the biases embedded in the vocabulary of the Lean Startup ideology requires developing strong criteria. The first is that any given idea as pitched is probably bad. If it’s an app, it is probably worse. It’s truly nuts if it depends on accruing users by the millions. That said, innovation is about turning ideas that look like they’ll never be viable into viable ones—which means accepting that if something’s already minimally viable, there’s no innovation to be found or built. Further, if it can be done with $120,000, there’s a way to demonstrate it first with pocket change. Whether building or funding, companions that don’t care about solving the same problem or just want to “do a startup” make for bad journeys (they should be interested in building an organization). Lastly, none of these are science: a recipe to hack your way through a bad idea, putting “whatever” in the market, hoping for the best, or pivoting.
Of course, every multibillion-dollar business started out smaller, with a product that fell short of later successes. But again, 90% of what starts out minimal and small actually dies. The very idea of Lean Startup is itself barely viable. Funding should be to scale up an organization, not validate an idea.
The Lean Startup ideology has sown a lot of confusion in cohort after cohort of my MIT students for a decade. The recipes have all the right sounding words and slogans. They seem to make so much sense, so how could they not work?
But if Lean Startup works at all, it’s only in hindsight, when the complexity of the story makes it easier to forget what went into success. In addition to a fail-fast mentality, Airbnb had a fundraising operation that attracted $4.4 billion in 14 rounds over 10 years and an internal hedge fund that yielded a 30% return on the side. It makes for a beautiful lean startup story only if you ignore all that.
Time and talent—not a product idea—are the most valuable assets of an entrepreneur and innovator. Ten years’ experience with Lean Startup and its variants has taught only that it’s an expensive recipe for remaining an entrepreneur longer, not really for innovating.
Correction: An earlier version of this article stated that the founder of Doppler Labs had written a rant about the difficulties of starting a hardware business. His comments appeared in a magazine article.
Luis Perez-Breva is the author of Innovating: A Doer’s Manifesto for Starting from a Hunch, Prototyping Problems, Scaling Up, and Learning to Be Productively Wrong.