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The Lean Startup is now a ubiquitous, well understood approach to business innovation, but it often unravels when put into practice. The bias of the entrepreneur or technology executive can lead to delays, expanded budgets and aimless results. This should not be wholly unexpected, as misuse has long plagued Lean’s forebear, the scientific method.

While the principles that make up the Lean Startup Methodology derive most directly from those of Steve Blank’s Customer Development, Agile Software Development and Toyota’s Lean Manufacturing, fundamentally, it’s a method for acquiring novel insights in business. Like the scientific method, hypotheses are not sufficient to stand on their own as fact, but should be tested empirically. In this way, the scientific and lean methodologies share a similar burden, in that they are merely guides – scientists and businessmen still need to drive the learning process.

As irrational humans we make imperfect scientists, prone to cognitive bias and error in judgement. And when actually making decisions, many of us would find ourselves being more comfortable looking to our intuition rather than data when weighing options. How we understand and interpret evidence can then become skewed. One example of this type of mistake is a social bias called group think, whereby our natural human yearning for consensus leads us to agree to a harmonious but incorrect course of action.

Another example is called confirmation bias, and it drives us to ignore evidence contrary to an outcome that we would prefer. For instance, we may not want to abandon an initiative, and in turn could ignore signs that it would not work. Ignoring the odds against you is part of startup lore, but in practice, don’t be a lemming – each step you take should be grounded in impartial results. While recognizing that a test is a failure could be tough, so too can changing direction when it happens as we’re all prone to sunk-cost fallacy.

Loss aversion can cause us to take fewer risks, but in business we need to be constantly exploring new ways to create value. Because of that, we recommend to taking smaller, calculated, and controlled risks, like those you’d expect of a lean practitioner. But the “lean” elements of the lean startup methodology also fall prey to biases. The goal of lean here, is to be efficient, formulating only the smallest reasonable test of a prediction, building it with a modicum of time and cost. But it’s common for people to betray that goal, as they succumb to action-oriented biases such as over-optimism, putting unrealistic expectations on the effort and team, and setting up a failure.

While bias can often be unavoidable, there’s steps we can take to mitigate this. For one, behavioral economists have outlined numerous ways that our minds play tricks on us. Learning some of those ways could help you avoid being tricked. In the least, simply understanding that your perception may be flawed at all, could make you more cautious before committing to a conclusion, or stay a bit more open minded to an opposing view during a debate. Of course, none of this is easy. But there are some great communities and resources available to help you get started, notably the blogs Overcoming Bias and Less Wrong.

Another thing, is that with continued experience with the process, pattern matching will help you refine your judgement. The subconscious is a powerful thing, and spending time practicing Lean Startup tactics will tune your instincts. Of course, you don’t want to end up relying on your intuition, or letting it take hold of you. But it’s part of us, and can help, or at the very least, be less of a hindrance when you’ve been around the block a few times. This is one of the reasons successful founders trend older – nothing trains you better for the rigors of startup life than experience.

Finally, you can look to an advisor to help give an impartial opinion. A third party may care about your success, but isn’t emotionally invested in an outcome, and is likely not a direct member of your team. Because of these factors, they may be able to see the correct path more clearly than you’d be able to yourself. In our practice, this is where we often provide the most help to our clients.

In the end, you should aim for a multifaceted approach. Educate yourself, and ask for outside help from more than just one person. If you’re part of a team, gather everyone’s insight, and use it to derive the best guess solution. And it’s good to accept that overcoming bias will be a lifelong process – not just in business but in all of life’s endeavors. Gathering the tools to begin learning now will set you up for success in the future.


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In future posts, we will share more perspectives of a CTO. Until then you can always reach out to find out more.


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David Kuchar

CTO

San Francisco

+1 844 946 SVSG ex. 709

David left a PhD program to found two companies. The first, ASPNetMedia which licenses software to web developers, was built while living in Thailand. LendFriend, which was part of AngelPad and funded by Google Ventures and Science, helps people who know each other lend money to one another safely, legally, and with peace of mind.
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