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(Chris Price/© Copyright Chris Price 2008)
(Chris Price/© Copyright Chris Price 2008)

Start: Mark Evans

'Lean start-up' concept has its flaws Add to ...

According to a recent article in The New York Times, the “lean start-up” is all the rage.

It's based on the idea that new high-tech companies can get a lot done with minimal investment and few employees by using free, open-source software development tools, and embracing agile development techniques.

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This approach is combined with the creation of “minimum viable product,” and then building more features based on customer feedback. In other words, you develop something simple rather than packed with features so that there's lots of room to be flexible based on what the customer wants.

The “lean start-up” sounds like a reasonable approach given the economic climate and the terrible track record that venture capitalists have when it comes to pouring millions of dollars into new companies that, by their very nature, have a high failure rate.

The flaw in the lean start-up approach is how these companies manage to attract enough customers to get the feedback they need to add more features that will make them successful.

In theory, a company offering a great service or product will be able to attract customers but, in many cases, that's not enough. To get traction, new companies have to market and advertise just like everyone else. Some of it may be traditional such as public and media relations, while some of it can be leveraged through social media.

Regardless of how you cut it, marketing can play a key role in whether a start-up is a success or failure, which is why it's curious that it's not discussed much as part of the lean start-up approach.

Even start-ups hailed as organic, viral successes take advantage of marketing. Mint.com, for example, is widely proclaimed to be a start-up that came out of nowhere to attract millions of users before Intuit bought it for $170-million last September.

Truth be told, Mint.com was marketing through an aggressive public relations campaign, blogging and search engine marketing. While it may have seemed that Mint.com was an overnight success, there was a lot of behind-the-scenes marketing going on to bolster its success.

Perhaps the reason that marketing doesn't get the attention it deserves when it comes to high-tech start-ups is that few marketers are involved in launching start-ups. It's only after a product has been developed that marketing and sales people are brought into the mix.

While there are exceptions to the rule, it's difficult for new businesses to come out of nowhere based on viral marketing and word of mouth. Every business needs to market itself in one way or another to attract the attention of users, otherwise they risk operating in isolation.

Special to the Globe and Mail

Mark Evans is a principal with ME Consulting, a content and social media strategic and tactical consultancy that creates and delivers ‘stories' for companies looking to capture the attention of customers, bloggers, the media, business partners, employees and investors. Mark has worked with three start-ups – Blanketware, b5Media and PlanetEye – so he understands how they operate and what they need to do to be successful. He was a technology reporter for more than a decade with The Globe and Mail, Bloomberg News and the Financial Post. Mark is also one of the co-organizers of the mesh, meshUniversity and meshmarketing conferences .

 

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