Is the Lean Startup Model Killing Product Innovation?

“Build it and they will come”….that’s what a lot of us techies were taught in school and used to believe. I thought that the cooler the design, the more elegant the technology, the bigger the “wow” factor, the more successful a product would become.  Not so.  The tech startup world has a lot of great inventions, fabulous technology, and amazing high-tech products that never lived up to their hype.  Times are changing, and the lean startup movement  is revolutionizing the way tech startups conceptualize, launch and grow their businesses.  Early stage customer development, market validation, and traction are the new keys to success and early stage investments…but wait!  How does innovation play into this new strategy?  Is there any value in technical product innovation any more?

First, let me begin with my definition of product innovation:

Product innovation is the means of solving a problem in a new, more efficient way.

Simple.  If your product doesn’t solve a problem or if it solves a problem but in a less efficient means than before, it isn’t innovative.  Innovation is about progress – if you aren’t solving problems more efficiently – there is no progress and thus no innovation.

Now, there is no question that the process of launching new tech startups is changing.  Building “top secret” products behind closed doors with no customer interaction is a failed approach.  The Segway is a perfect example – developed in secrecy, heavy up-front investment, hyped as a transportation revolution, and a brilliant technology (even more impressive in its original form as the iBOT, in my opinion) – but never lived up to the hype in the marketplace.

The lean startup strategy places a lot of focus on the customer development and market validation stages during the early stages of a tech startup.  Finding the customers’ real pain – and quickly iterating to a product that addresses that pain directly is the key to success.  However, with this new focus on customer development, minimum viable product (MVP), and building products with fewer features rather than more — where does product innovation fit in?  Or is product innovation losing value in this strategy?

Lean startup practices haven’t changed the importance of product innovation for tech startups – rather it is changing the way startups develop products.  Innovators are beginning to recognize that they need to engage customers early in the design process and potentially kill product development projects that don’t address a real pain (before launching into a non-receptive market!).  This only happens by letting would-be customers touch/feel early prototypes, provide feedback, and drive the product development agenda.

For our team, adopting lean startup practices has strengthened our business model.  As important as early customer development and market fit are, product innovation remains a critical aspect of all our developments for these primary reasons:

Barrier to entry:  There are startups that come flying out of the gate with a great concept, grow rapidly, but their product presents little to no barrier to entry for competitors (Groupon anyone?).  Quickly, the “blue ocean” becomes infested with competitors. Product innovations let you stay ahead of competition AND buy you time.  While competitors are trying to figure out how your product works (the “magic”), you have time to figure out your customers and perfect your market strategy.

Competitive Advantage – a truly innovative product allows users to resolve a pain in a new, efficient manner which allows your startup to command a higher price.  As opposed to being a me-too product and having to price-match the competition, you can command higher value in the market.

Patient early adopters –  if your product innovation gives users a new, improved experience – they are a patient group and willing to accept your faults.  As you continue to improve your product, they also become your strongest advocates.  When your product has no innovation or added benefit – users’ patience runs out quickly (and so too does the opportunity).

Early stage value – when it comes to early-stage investment, many investors see value in real innovations.  This helps gain favorable terms in early stage seed investments.

Geek-factor – that’s right, we’re geeks.  We could build non-innovative products and maybe even make money at it (there are products in the market that prove that this is possible!), but we don’t want to.  It’s the fun factor for us – we’re inventors, building cool innovative products is what gets us fired up.

For innovative entrepreneurs, lean startup practices allow you to focus your inventive energy on the most meaningful customer “pains” which will result in a receptive market when you launch.  If we all learn to take this approach, there will be far fewer “cool technical inventions” launched into markets that have no buyers!
Follow me on Twitter (@tburke_quark) for more on innovation, tech startups and entrepreneurship – thanks!


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2 thoughts on “Is the Lean Startup Model Killing Product Innovation?

  1. Is the Lean Startup Model Killing Product Innovation? This framework can produce great results within the intended context of a Startup – a group of individuals going from selecting and refining some concepts with the intention of having a successful Version 1.

    Some of practices with the Lean Startup model such as validating your theories with customers using prototypes of the appropriate fidelity throughout the development effort are not exclusive to the Lean Startup movement. @EricRies and other have provided their insights on a refined version of this within the context of evolving an “organization dedicated to creating something new under conditions of extreme uncertainty.”

    The Lean Startup model should not be enforced as a Procrustean Solution (http://en.wikipedia.org/wiki/Procrustes) in other contexts.

  2. thanks Mark for the feedback and insights

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