The Lean Startup by Eric Ries and other such works provided a great playbook for the last wave of internet startups. They detailed a clear methodology that founders could follow when developing reasonably simple technologies to address consumer needs. We have therefore seen a whole generation of startups executed using this highly effective approach. The lean methodology made launching a startup relatively simple for even a novice because it was possible to follow a series of simple well defined steps from validating the idea to scaling up, and like a well formatted Excel workbook, it was easy to follow.
The startup scene went through a transformational shift during 2016. We saw a move away from these relatively simple consumer apps to more substantial technologies such as AI and machine learning. These demand a more complex set of relationships to get them to market, often involving universities, education and health services, corporates and regulatory bodies.
However, the processes for creating startups have not adapted to reflect this. Peter Thiel’s, Zero-to-one and Steve Case’s, The Third Wave, do a good job of describing the changes we are encountering but don’t give much guidance for creating startups in this environment. Both point to the idea that we will be using deeper technologies to solve big problems and therefore suggest that lean methodologies will are too incremental in approach to deliver the complexity required. However, this is of little help if you are talking to investors about getting funding for your big idea.
This year, 2017, will see the mass adoption of technologies such as AI, AR/VR, Robotics, Blockchain and Genomics. Startups leveraging such technologies will no longer be able to slavishly follow the lean methodology. It is simply not designed to accommodate complex partnerships and development cycles needed in the next phase. Firstly, I would predict that universities will play a greater role in conducting the pure research needed to get these technologies to a point where they are commercially viable. Therefore Lean 2.0 will need to accommodate partnerships in a way that the original Lean is unable to do.
I think the key to this next stage of internet development is ‘Startup Culture’ itself. We have seen how startup founders have an amazing capacity to move mountains when they set out to do so. They are also prepared to take risk in a way that cannot happen in the corporate environment. I therefore feel that any new methodology needs to promote this ‘can do’ execution oriented approach but apply it to commercialising the deep research coming out of the academic sector.
Europe and London in particular is well placed to lead this next wave. We have strong universities that well connected and close to a vibrant startup scene. We need to think more about how startups will develop in a more technology driven environment and make sure that Governments encourage the right approach. We also need to adapt our own methodologies so as not to lose the agility that we have built up over the last few years.