The Lean Startup philosophy and Marc Andreessen are themselves two institutions in Silicon Valley, so when one weighs in on the other, it’s good to take note. The famed investor spoke Monday about his three pet peeves in investor pitches, most of which are related to entrepreneurs misappropriating or misusing the Lean Startup approach, an approach that encourages quick scaling to achieve success.
“I feel like we’ve discovered the theory of relativity,” Andreessen joked on the Lean Startup approach, noting seriously that he admires Eric Ries’ now-ubiquitous approach to building startups. Ries’ model, which encourages quick iteration and inexpensive prototyping before investing big money, has become somewhat of a guiding principle for many companies in Silicon Valley.
But Andreessen, speaking with Ries Monday at the Lean Startup conference in San Francisco, noted that there are three ways entrepreneurs can run astray:
Not all startups can be Lean Startups
Andreessen noted that as popular as the theory can be, there are still some areas where it can’t really apply.
“I would serve this as a challenge for the Lean Startup community. Especially the ones with the really audacious goals. Sometimes they start audacious because otherwise the product will never get to market. The Macintosh, that product had to exist in its entirety for people to wrap their heads around it,” he said, pointing to modern entrepreneurs like Elon Musk’s ventures as ones that can’t be done on a small scale at first. “You got to get the rocket into space.”
And Andreessen noted that investors should be careful not to take the theory so far as to reject companies that have ambitious aspirations.
“I don’t think the Lean Startup idea, as brilliant as it is, and as widely applicable as it is, should halt us from investing in these big ideas right out of the gate,” he said.
Don’t use the Lean Startup as an excuse to skimp on sales and marketing
While focusing on the product and getting it right before hiring on lots of employees is a good idea, Andreessen said he’s seen companies use it as an excuse not to care at all about sales and marketing, when in fact they do need to think about those when growing a business.
“We see Lean Startup methodology being used inappropriately as an excuse to not take sales and marketing seriously,” he said. “Founders tell us that all that matters is product, and sales and market will happen automatically. The ‘if they build it it will come,’” mantra, which he noted is not always an acceptable approach for those looking to grow.
And for those hoping their product will speak for itself and grow virally?
“I’m totally in favor of viral, but it’s really hard to find a real-world example for someone who gets the money without taking this stuff seriously,” he said.
Don’t develop a “fetish for failure”
Part of what makes Silicon Valley special — or especially insane — is a general willingness among the startup community to fail and fail often. But Andreessen noted that sometimes, founders take this too far, and use it as an excuse to not keep trying.
“The pivot. It used to be called, ‘the fuck-up.’ Taking the stigma out of failure is very exciting,” he said. “But we see founders who give up too quickly. It’s permission to give up very fast. Are they really going to do the heavy lifting over time?”
Andreessen said it’s certainly okay to fail, as long as those lessons from failure lead you down the path to success — not just another series of failures.
“We joke around the office that the worst is the fetish for failure,” he said. “You want to preserve the good of the idea when it comes to pivoting, but you don’t want people to be intentionally encouraged to fail. Maybe it’s time to add a bit more stigma. The entrepreneurs I admire, I admire the ones who pivot but I really admire the ones who have persisted.”