Mentor Scott Rafer, CEO of Lumatic, spoke to 50 entrepreneurs at plug-in@blk71 today as part of the JFDI–Innov8 2012 Bootcamp. Scott is an entrepreneur focused on building profitable businesses that solve the usability problems posed by new technologies.
Scott surprised the crowd by complaining about the lean startup movement. The Lean Startup by Eric Ries has been a bible of sorts for tech startups, including those in seed accelerator programmes like the bootcamp.
Scott noted two things that disappointed him with the obsession with lean startups: details and dominance. He quipped, “I [see] the urge for neither [when talking to startups]. I blame the lean startup movement.” He added that since the lean startups became popular, he’s seen too many startups not doing enough preparation or research in their industry. ” Customer discovery is not a replacement for background research and everyone treats it like it is.”
“What everyone’s lost sight of is that being a lean startup sucks -the idea is to stop being a lean startup as soon as it is justifiable.” Scott advised starts that once they are in valuations over US$1-2 million, they should not pivot. Instead, they should give up, give back the money, apologize and declare bankruptcy rather than waste millions of dollars and year(s) of their life. This advice came from direct experience: in 2007, Scott built an app on Facebook, which lost 97% of its traffic after Facebook’s first redesign, and then spent a year afterwards trying to recover by doing a bad pivot.
Slides for his talk are available at http://slideshare.net/rafer
