As usual I spent my vacation with my head buried in books. One of them was Running Lean by Ash Maurya.
Running Lean is a systematic process for iteration from Plan A to a plan that works, before running out of resources.
Most startups still fail
If you’ve been following Toshl you might have noticed we are part of the 500 Startups family (batch 4). Writing about my experience in the program is a topic for another time, but if you need a quick insight into what we learned from that whole process, then this book is a great summary.
We live in an age of unparalleled opportunity for innovation. With the advent of the Internet, cloud computing, and open source software, the cost of building products is at an all-time low. Yet, the odds of building successful startups haven’t improved much. Most startups still fail.
And this failure is entirely our fault. We as entrepreneurs tend to get so caught up in what we think is right for our product that we ignore all the signs. We ignore all the metrics, or skew them so that they meet our plan. We don’t ask if our customers actually need a solution to a specific problem, we just kinda do it and hope for the best.
Product development gets in the way of learning.
Pick a problem worth solving
This book is full of excellent advice and examples of what to do at specific moments in your startup, what to be especially wary of and what to ignore outright. You don’t get many chances to do what you love, so you better do it right.
Startups can consume years of your life, so pick a problem worth solving.
If you feel passionate about a specific problem and think there is a viable market, go for it. You don’t even need to quit your day job right away, in fact it’s better that you don’t. The first couple of brain storming and interview sessions can be done in your spare time.
I’ve spent better part of this year surrounded with all the hoopla about getting your startup attractive to potential investors, but if anything, this book will show you that you probably don’t even need VC(Venture Capital) money. Bootstrap for as long as you can. Charge for your service from day one. Build a sustainable business and learn from your customers.
With less money, you are forced to build less, get it out faster, and learn faster.
One last thing. The author does present a viable argument against the freemium model which was popularised by Fred Wilson. Your signal-to-noise ratio will be low because free users aren’t really free - they will cost you precious support time, not to mention server and bandwidth costs. Your metrics will be skewed and you will spend time optimising your product for the wrong customers. The solution is to focus on the paying customers and the premium part of your product.
If you are thinking about starting your own company, or have already launched your product, you need this book. It is a fountain of knowledge, and you might be surprised how clueless you are about your business.