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On Saturday, I had the pleasure of attending and serving as a panelist at the North American Chinese Entrepreneurs Association conference on the Lean Startup Method. Together with investors John Ason and Ed Goodman and entrepreneurs Vineet Sinha and Danny Wen, we fielded a number of great questions about the Lean Startup Method. The panel was moderated by serial entrepreneur Joe Chin, who led us through a number of thought-provoking discussion topics, and the audience had great questions throughout the day.
Is the Lean Startup Method formulaic?
There are definitely mixed views on this question amongst Lean Startup proponents. Obviously, at a granular level, formulas are impossible. Say we’ve got two potential web business ideas: a deals website and a video-sharing web idea. The minimum viable product you might build for the former will differ from a minimum viable product for the latter. And, the exact questions you’d ask in interviewing potential customers for each of these sites would also differ.
But, I think there IS a high level formula. With both web ideas, would I recommend talking to customers? Yes. Are there even questions that you’d ask for both ideas — about daily behavior, analogous products used, pricing, etc? Yes. Would I recommend running landing page tests in both cases? Yes. Would I suggest building out a prototype in each case? Yes. So, even though these business ideas are completely different, I’d recommend the same approach using the same tools and methodology — that’s a formula.
When fundraising, is it advantageous (or disadvantageous) to be a company that embraces the Lean Startup Model?
While I can’t speak to how investors think, I do know that investors want as much business risk removed as possible. To that end, for most consumer internet companies, the largest risk is in being able to acquire customers profitably. So while investors may or may not use or know the Lean Startup nomenclature, do they want market risk removed? Yes. Can you do that quickly with the Lean Startup Model? Yes. They may not say or know if they embrace the Lean Startup Model, but I guarantee you they would want you to lower the risk of your business.
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