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LEAN STARTUP 2013- PUBLIC INTEREST GROWS 350% IN THE LAST 18 MONTHS, WHERE TO NEXT?

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Public interest in the Lean Startup management discipline has grown 350% in the last 18 months. Major media outlets such as Forbes, CNN, and Time have featured stories on the movement and its leader, Eric Ries. Lean Startup concepts such as Pivot and MVP are beginning to penetrate mainstream business usage. The rapid growth of interest and media exposure has evoked a question: is Lean Startup an emerging management discipline, or a passing business fad?

The Gartner Hype Cycle, while primarily used to assess new technology adoption, can also be used to evaluate IT methodologies and management disciplines. 1

Gartner Hype Cycle

The Gartner Hype provides a useful and descriptive tool for evaluating innovation adoption. Underlying the Hype Cycle is a basic recognition that human enthusiasm for innovations often creates expectations that are out of sync with reality. 2.

The Gartner Hype Cycle exists to navigate innovation adoption. The enthusiasm exhibited at the early stages of a legitimate innovation is very similar, if not identical, to that of fading business fads. The key difference in determining the long-run success is the underlying innovation value.

An innovation rarely delivers on its promise when people are most excited about it. Expectations rise quickly and are easily frustrated, while innovations develop slowly, step by step.

Gartner Hype Cycle = Hype + Innovation S Curve

The Gartner Hype Cycle, represented by the solid line in the graph above, is actually the sum of two different functions. The model combines the initial emotional response graph with Rogers’ innovation “S curve” function.

Hype- The emotional and social response, driven by expectations, is represented by the dotted line in the graph above.

Innovation S Curve – Rogers’ innovation S Curve is represented by the dashed line.

Applied to Lean Startup

An analysis of Google interest data for the period covering August 2008-December 2012 shows extremely rapid growth. Searches for “Lean Startup” in December 2012 were five times the August 2011 volumes and 50 times the August 2009 volume.

When plotted, the numbers exhibit a “parabolic uptrend” that closely resembles the upward slope of the hype phase in the Gartner Hype Cycle.

raw data plot

Year Period Value Y/Y % Growth Total % Growth
1 August 2008 – August 2009 2 N/A N/A
2 August 2009 – August 2010 7 250% 250%
3 August 2010 – August 2011 22 214% 1000%
4 August 2011 – August 2012 61 177% 2950%
4.5 August 2012 – December 2012 100 N/A 4900%

Source: Google Trends searches for “Lean Startup”- December 10, 2012

Conclusion

Lean Startup appears to between the Trigger and the Peak. This is a highly advantageous time for first movers and fast followers to adopt the methodology. Anecdotal observations correspond to the evaluation criteria outlined for this stage3.

  1. Lean Startup methodology requires significant customization to work in an operational setting. This becomes more true when applied outside of software and product development.

  2. Media coverage, while occasionally skeptical, is still generally positive. Some contrarian opinions are surfacing within the entrepreneurial community, but are generally restricted to selective differences over: the proper application of concepts(pivot, MVP) and the destigmatization of failure.

  3. A high percentage of Lean Startups are more “likely funded by seed rounds of venture capital”.

Resources

For additional information and insights on the Gartner Hype Cycle, I strongly recommend Mastering the Hype Cycle: How to Choose the Right Innovation at the Right Time by Jackie Fenn and Mark Raskino.

  1. “While new technology is the catalyst for many of these wild rides through the hype cycle, the same effect occurs with higher-level concepts and abstract ideas such as management trends. Organizations have greeted innovations such as business process reengineering, knowledge management, activity-based costing, and Six Sigma with unquestioning enthusiasm and often heavy investment. And many of those organizations have gone on to the same kind of disillusionment they felt over the failure of some technical marvel to deliver on its initial promise.” Fenn, Jackie; Raskino, Mark (2008-10-14). Mastering the Hype Cycle: How to Choose the Right Innovation at the Right Time (Kindle Locations 323-327). Perseus Books Group. Kindle Edition.

  2. Fenn, Jackie; Raskino, Mark (2008-10-14). Mastering the Hype Cycle: How to Choose the Right Innovation at the Right Time (Kindle Locations 570-574). Perseus Books Group. Kindle Edition.

  3. Fenn, Jackie; Raskino, Mark (2008-10-14). Mastering the Hype Cycle: How to Choose the Right Innovation at the Right Time (Kindle Locations 1380-1381). Perseus Books Group. Kindle Edition.