Why "Lean Startup" model is already dead

Many people embraces the book "Lean Startup".  It is a book that formalizes an approach to entrepreneurship and innovation.  Basically the four steps outlined are:

1. Identify a problem, think of a solution;

2. Make an MVP to address the problem;

3. Test the MVP to the audience;

4. Improve it.

The author is clearly trying to make a movement out of this book.  It is an "agile" innovation model suitable for solopreneurs and perhaps small organizations.   It is very appealing to young people, who are most likely without jobs, without experience, without management maturity, and without too much detailed skills outside of coding websites and APPs.  Now, this is good for letting a lot of young people get involved.  But it is also missing on many important points.

Point One: Solving a problem and offer the solution model is dead

If a customer has three problems, and you solve his/her number two problem, the customer would not care.  If you go around offering things like charity to complete strangers through social network - I know it will not work.  There are ALWAYS exceptions.  Amazon is started by one person.  ExciteHackers is started by one person, and so on.  This "get rich quick" scheme is very fulfilling good news in bad times, I understand.

Point Two: The "Make it and they will come" model is dead

The world really has everything.  If it does not have something, you need to make it in a heart beat through a factory, not in your "garage".  The only way to startup a business in the future is to have experience in the market and understand the problem completely, and offer a solution that will both disrupt and benefit the entire ecosystem.  This way you can be accepted by the customer and the network.

Point Three: All ideas are good, only a few can penetrate to the market.  Startup success is based on two important factors - whether sales will fall and whether the network allows you to access the audience.  This is what kills the majority of startup ideas

The "lean startup" book will bring a lot of people out of the woodwork and start to tinker and trying to "ask for opinions".  These group of people will be very disappointed in the end.  Although experience is priceless and it is always to have some experience, many young people would be missing the important timing to learn through jobs and excel at "boring work" first.  In the end they will not be able to recover.

So be careful.  "Lean startups" is a good book, but it emphasize a "guess and projecting" scheme and a "get rich quick" fantasy.  The worst, is that this has a lot of following - the serious voice in the silicon valley is drowned. 

If you like Lean Startup, treat it as a very very good appetizer.  Read other more serious books that do not go into the "chicken soup" category.  I recommend "Traction" and "Zero to one".  They are written by much more experienced veterans who suffered from the setup of the market acceptance. 

IN THE END, IT IS NOT WHAT OFFER THAT MATTERS.  IT IS WHETHER PEOPLE WANT AND WHETHER THEY HEAR FROM YOU. 

The idea that you can do a customer survey and get opinions is wrong - people will tell you all kinds of feedback and suggestions, and in the end whether they buy it or not, whether they give you the price you want or not, is the unknown left for the very long end of the startup journey.

Straight Talk for Startups: Table of Contents of 100 Rules

The Straight Talk for Startups is a book that veterans can appreciate.  It is so full of wisdom from years of operations.  Unfortunately beginners who are most vulnerable may not appreciate the contribution.  Here is the Table of contents for Straight Talk for Startups.

Cover of Straight Talk for Startups

Straight talk for startups
By Randy Komisar and Jantoon Reigersman

1. Starting a venture has never be easier exceeding has never been harder
2. Try to act normal
3. Aim for an order of magnitude improvement
4. Start small but be ambitious
5. Most failures result from poor execution not unsuccessful innovation
6. The best idea originates from founders who are users
7. Don't scale your technology until it works
8. Manage with maniacal focus
9. Target fast growing dynamic markets
10. Never hire the second-best
11. Conduct your hiring interviews as see if you're an airline pilot
12. A part-time game changer is preferable to a full time seat filler
13. Manager team like a jazz band
14. Instead of a free lunch, provide meaningful work
15. Team of professionals with a common mission makes the most attractive investment
16. Use your financials to tell your story
17. Create to business plans, an execution plan and a aspiration plan
18. Know your financial members and their interdependence by heart
19. Net income is an opinion but cash flow is a fact
20. Unity economics tell you whether you have a business
21. Manage working capital as if it were your only source of funds
22. excellent exercise district its financial discipline
23. Always be frugal
24. To get where you are going you need to know where you are going
25. Measurement comes with pitfalls
26. Operational setbacks require swift and deep cutbacks
27. Safe surprises for birthdays not for your stakeholders
28. Strategic pivots offer silver linings
29. Don't accept money from strangers
30. Incubators are good for finding investors but not for developing business
31. Avoid venture capital unless you absolutely need it
32. If you choose venture capital pick the right type of the investor
33. Conduct detailed due diligence on your investors
34. Personal wealth is not good investing
35. Choose investors who think like operators
36. Deal directly with the decision makers
37. Find stable investors
38. Select investors who can help future financings
39. Investors syndicates needs to be managed
40. Capital intensive ventures required deep financial pockets
41. Strategic investors pose unique challenges
42. Raise capital in stages as you remove risks
43. Minimizing dilutions is not your fund raising objective
44. Don't let a temporary fix become a permanent mistake
45. Pursue the lowest cost capital in light of your circumstances
46. Escape the traps of venture debt
47. Choose one of four approaches to determine how much money to raise
48. Always have your aspirational plans ready
49. More ventures fail from indigestion since from starvation
50. Never stop fundraising
51. Venture capital moves in cycles
52. Fund raising takes more time than you think
53. The pitch must answer the fundamental questions about your venture
54. Make it personal
55. When pitching carefully read the room
56. Use white papers for deep dive follow-ups
57. Prepare your financing document ahead of time
58. Obsessively drive the close
59. Consistent communication is important in convincing investors
60. Milestones can solve irreconcilable valuation differences
61. Liquidation preference will change your outcome safe
62. Do not take rejections personally
63. Boards are deliberation bodies not collection of individuals
64. Conflicts of interest and conflicting interest are elephants in room
65. Your board should be operational rather than administrative
66. Small boards are better than big ones next one
67. Lead investors ask for board seats quantify them first
68. You need a lead director
69. Add independent board members for expertise and objectivity
70. True board diversity is a competitive advantage
71. Each director must commit to spending meaningful time
72. Review director performance regularly
73. Your chief financial officer has a special relationship with your board
74. The founder should choose the best CEO available
75. Find a coach
76. It is the CEOs job to run efficient productive meetings
77. Don't oversell your board
78. Board agenda should look like this
79. Prepare thoroughly for board meetings
80. Use your daily management materials for board meetings
81. Too many unanimous board decisions is a sign of trouble
82. Use a working sessions and committees to reinforce your priorities
83. Your bored should spend time with your team
84. Building companies to last, providing liquidity along the way
85. Who liquidity is not limited to initial public offerings and acquisitions
86. If you go public don't slip and fall
87. Investors and management's interest in liquidity often conflicts
88. Individual needed liquidity too
89. Your evaluation will have a local maximum
90. Ventures aren't just bought they can also be sold
91. Choose an acquisitor, don’t wait to be chosen
92. If you want to sell your business you need to know the decision-makers
93. Determine whether you are a good fit for acquisition before contacting them
94. Know your acquisitor’s acquisition history in detail
95. Make yourself visible
96. Build a relationship with potential acquisitions don't cold call
97. Be ready when they are
98. Success is not linear
99. Prepare for your lucky break
100.  Learn the rules by heart so you know when to break them

Links:

Amazon purchase link

Hear the author's interviews:

The Red Book of Startup - Startup 101

Startup 101

By Chang Liu

Table of Contents

Part I
The Core

Part II
The Process

Part III
Elements of startup design

Part IV
Essential business, humanity, economics, and philosophy

Part V
The Startup Tools
(for starting business, running business, and obtain funding)
Templates

Appendix and resources

The Teensharks startup video stories library
The book library
The dictionary and vocabulary
The pictorial cards gallery
The case studies library
The Q&A vault
The Quotes cards
Social media: youtube, instagram, pinterest, and Twitter.

The indexes
Important Tips #important_startup_tips  ☝
Hard rules #startup_hard_rules (important lessons earned on battlegrounds, veteran hacks)  ✌
The myth #startup_myth ☕
#startup_quotes

Starting up a business is to establish a business from new.  It is not just to startup a company.  The company only facilitates the business.  A startup business consists of three parts: (1) THE BUSINESS; (2) THE STARTUP; (3) THE FOUNDERS.  A founder is the chief builder - the founder build (1) the business and sale; (2) the company; (3) the offering; (4) the name.

 
TOC EXPANSION

Part I

The Core

Part II

The Process

Chapter 1: Cooking up a startup - the essential ingredients and steps

Four essential processes: Offering to Market to Customer; Curiosity to Product to Merchandise, Personal Knowledge to Experience to Maturity (link)

Other flows of larger scale: history, discovery, society, war, diffusion

The required elements of a startup
Managing the two jumps: focus to growth, early to mature

Chapter 2: Readiness evaluation
Startup Readiness Levels
Startup Personal Readiness
Startup Product Readiness
Startup Market Readiness
Startup Funds Readiness

Chapter 3: The learning and practice of startup skills

Business startup process (two lifetime in one)

Time axis

Chapter 4: Participate in the connection and flow

Business supply chain
The flow and transactions of money and value

Part III

Elements of startup design

Chapter 1: The frame work of design

Heaven, Earth, and Human

The Builder in Chief: Founders, Investor, Talents
Time, repeat and accumulation
The world refreshes itself.

[Link1]

Chapter 2: Beginning and End of Startup

The only element that matters: SALES

You can invent anything, but you need to steal a sale. The era of "make something and they will come" is over.

The startup process ends with a brand

The exit of various players

Chapter 3: Choosing a business to start

Types of business to start

Definition of a good business

Repeated sales and continuous operations

Chapter 4: Mixing the high and low, big and small

An idealistic person making money, and a technical person making sales

The mixing of dream, details, money and sweat

The elements that are rare and relative: Sales, Quality, and Talent

No one will buy anything.  The value to money exchange

Chapter 5: Business if Final Level of the Game

Business is war, not a war game

Business is survival, cash is survival, innovation is survival

Quality is only barrier you can count on
You are the chief builder: vision, trust, talent around you, money, and quality

Business is about collaboration. Business model - Ecosystem

Business is about extreme focus.

Business is about giving maximum joy.

Business is about relentless money and profit making.

Chapter 6:  The Elements and their connections

The elements and contradictions (dream and focus; focus and scaling)

The elements and confusions

The chains of elements

Chapter 7: You understanding yourself and managing your life

Personal career planning: livelihood and employment process

Managing the three opposite: Grand and Detailed, Focus and Grow, You and World

Innovation of world renewing itself, not you renewing
Startup is giving people what they want, not to make them pay for what you intend to sell

You are not the center of business (give what people want; give more to make money)

For the first three years, you are your worst enemy

Chapter 8: How do investors see your business and offering

#startup_quote Investors may not be as clever, but they are not fools

Investment and investors - what do they want and what do you want?

Chapter 9: Hard way is the only way to go, the easy way is a setup

Ideation fantasy busters

New is not the answer (novel and new; different and new)

Offering to satisfy a need is bad way to start

Getting rich should not be your motivation
Cleverness is not the answer

Chapter 10: The Long Haul Finisher: Rule of thumb target numbers as reference

The numbers from reliable sources

Part IV

Essential business, humanity, economics, and philosophy

Types of knowledge

Talent Equals Balance of Integrity, Skills, Aspiration

Catch All For Future
Hash tag collection
Index

Part V

The Startup Tools

(for starting business, running business, and obtain funding)

The entire startup is build on three preconditions: sales, quitting your job, and two people.  If not, it is called a hobby or prequel.

Templates for ideation

Tools for managing production of quality products
Tools for bringing your products to markets
Tools for enticing your customers to the same market

Business plan tools
Business model generation tools
Business choice tools
Product development tools
Startup school homework and quizzes

A brand is a name that you decide to own and monopolize, so that people can find you.

 A sale is someone else's livelihood you decide to steal.

The NEW in innovation is the new strategy for doing an old business much better (called a disruption).  The SECRET in innovation is the details of your method.   

Startup is not about participation and hope.  It is to monopolize a very well defined sector of business and provide maximum value to your customers but prevent others from doing the same.

Should Co-founder Be Given Equity?

A lot of startup companies are better off with two people on board.  After all, the name "Company" literally means "more than one person".  When someone invite another person to be a cofounder, what are the points of discussions associated with equity share?

Here are a couple of major points to consider.

(1) Does the cofounder pay cash into the company coffer?
(2) Does the cofounder need to quit current job and forego salary?
(3) Does the cofounder need to take a pay cut from current level or industry standard?
(4) Should the cofounder be given private equity?

Keep in mind that a cofounder is important.  The founder is a status, a position, and a responsibility.  These three goes together.  The status means it is obviously a later badge of honor.  But the cofounder has to earn it with what he/she does for the company.  A cofounder should be a builder in chief - building the product, the sales channel, or something critical.

Later when the team goes to ask for funding from an investor, the investor WILL ASK this question "are both you working full time for the company".  It is important to keep this in mind.  If when you go to investor and one of you have not given up your job, it just looks bad.

A cofounder is not a high level employee.  A cofounder is a founder. 

Cofounder is not a gig.