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Help me decide: Lean Startup Methodology (Eric Reis) v/s Blue Ocean Strategy/Zero to One Strategy (Peter Thiel)

By Aayush Srivastava on 8 Comments / 3339 views

I find it extremely difficult to reconcile between Eric Ries’ school of thought (lean methodology) and that of Peter Thiel’s (blue ocean strategy).

The former suggests finding an existing problem and talking to the consumer to solve a problem, while the latter is about building a new market. The latter disregards asking consumers because they will only want “more for less” of existing features provided by the existing players in the market.

Another limitation of lean startup methodology is how it stifles innovation by brining in complacency. If you have an MVP which is good enough then you only make incremental changes and not something remarkable as Seth Godin puts it. I recently read in an excellent article on The Atlantic. Ten years before Apply Pay came, M-pesa was already having mobile-to-mobile transactions. 

But if you wait too long to do build something truly innovative without testing the MVP in the market, you may invest a lot of money in something useless.

So which strategy is better? 

You can reply to this in theory or in context of a project I am working on.

My project is Amicus – “Anti-virus for E-commerce agreements”. 

The market here has existing players focusing on providing solutions after disputes (such as Gripe, Yelp etc) and not preventive solutions. Should I go by consumer demand and also give solutions after a dispute(complaint resolution etc.) or go on a limb and build a purely preventive solution (like an anti-virus)?

The former requires me to do something consumers want (one stop solution) but it compromises integrity. The latter is something new and consumers don’t know how effective it will being preventing disputes, but they wont want to pay for it.

Also, the latter will mean the revenue comes from consumers like anti-virus softwares (higher user acquisition cost) and the former will mean revenue comes from businesses – Google, Facebook etc. (compromise neutrality and privacy issues).

Twitter: @amicusco @aayush1990sri

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8 Comments

  1. Hey Aayush,

    In my limited experience, I believe its all about what works for you. I am a HUGE Lean Methodology guy, and living it (or trying to live it) everyday.

    Still haven’t read Zero to one (its in my reading list though) but recently got exposed to Effectuation (https://www.effectuation.org/) by Prof. Saras herself.

    Then when I was contemplating this new way of thinking about Startups..I realized all these models are worth looking into, trying and experimenting with. A lot of people have become successful with them, important thing though is to find which one works for you? Where do you find most clarity and which makes sense to you an an Entrepreneur 🙂 

    Once you figure that out, you can find things from all of these models/methodologies and will probably end up using a hybrid version of your own 🙂

    I hope this helps. If you have any questions on Lean, I will be happy to help out 🙂 

  2. hey aayush

    Can we use also lean to find new markets as per zero to one  ?

    Thanks natwar for sharing about effectuation – looks useful.

    Thanks and best regards

    Karan Ahuja

    @karan_ta

  3. Aayush – I have worked for many ecommerce sme clients to provide development and data driven marketing services in india and abroad.

    In case you need my views about sme ecommerce guys – feel free to call me :

    Karan Ahuja – 9820011185

    TC,

    Karan

  4. Hallo, two points-

    1. We need to strike a balance between both the strategies, both of them co-exist and apply to different contexts. It is possible to build a lean startup while creating a new market altogether.

    2. Consumers are not demanding cure, they might as well seek prevention. Your competition is not offering prevention. Consumers are paying for what is available. Their core issue is the virus. Help them do away with it in any way you can and they will pay you for a cost effective solution.

    cheers

  5. This is not related to the topic.

    You cant decide a methodology based on theory or what people have written or said.

    You have to do what is MEANINGFUL and INNOVATIVE.

    Technically, e-com was a ‘done’ idea so Flipkart and co should NOT have come about if they would follow Theil!

    I like your ‘preventive’ approach! WORK ON IT

  6. I understand that I need to develop a hybrid version. It is difficult to often reconcile such things when different people give different advise. Thank you for the link. 🙂

  7. Thank you Karan. I think you may be of great help. Will get in touch with you. 🙂

  8. Aaysuh… Business theories cannot decide what business you want to run… Dont decide your product basis whats written by authors (I am an Author myself) – Great businesses / products are not built by following books or pre written theories, but by doing what you are most passionate about. you can build a lean startup in a new market as well… 

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