You Don't Understand Lean Startup!

You can't fully understand Lean Startup if you don't have a deep understanding of Disruptive Innovation. It's a a term coined by Clayton M. Christensen in his famous book "Innovator's Dillema". The book goes to extraordinarily deep levels to explain how Disruptive Innovation emerges, how it redefines market realities and what it means for both: established companies as well as attackers / startups. Let me explain how this relates to Lean Startup.

Read why Lean Startup is important in a previous post.

Disruptive Innovation - Scary and Unpredictable

There are many of un-obvious and non-intuitive properties of Disruptive Innovation that make it scary and unpredictable. For example, the fact that the Disruptive Technology always underperforms in the beginning. Or the fact that it's usually too late for the big companies to catch up once the Disruptive technology gains significant market share...

Christensen clearly states in his book:

"Markets that don't exist cannot be measured."

That's where the majority of large companies fail. Their primary reaction in the face of the unknown is to "hire a consultant" to tell them what is happening and how to react.

The thing that nobody knows - not even the best consulting company - is whether the Disruptive Innovation will succeed and how big of a market it will create. Moreover, nobody knows what the value chains in the new market will be, what the typical margin or dominating design will be like, etc.

How To React To Disruptive Innovation?

Christensen also states the cure for the uncertainty connected to Disruptive Innovation:

"Teams or organizations setup for learning!"

Christensen claims that in the face of extreme uncertainty the only option is to try a lot of inexpensive experimentation focused on learning. That's where Lean Startup shines! It's primary focus is learning about the customer, their needs and about the market itself. It's the best answer to the problem of Disruptive Innovation.

So if you want to really understand the context of Lean Startup, when it's best applied and where it really shouldn't be used, I strongly encourage you to grab a copy of "Innovator's Dilemma". It's one of the best business books I have ever read, even though it's almost 20 years old.