Eric Ries has a great post about the 4 myths of Lean Startup methodology. I’d like to add a fifth one 
Myth 1: Lean means cheap. Lean startups try to spend as little money as possible.
Myth 2: The Lean Startup methodology is only for Web 2.0/internet/consumer software companies.
Myth 3: Lean Startups are small bootstrapped startups.
Myth 4: Lean Startups replace vision with data or customer feedback.
Definitely go read the post. As usual, Eric does a fantastic job of explaining the Lean movement. I’d like to elaborate on that fourth myth, though. As a games company, we often find ourselves at the intersection between art and technology. The problem with that (and with may hit driven industries), is that many decisions are based on subjective opinion. Unfortunately, subjective opinions are usually riddled with several biases:
1) Overconfidence: This is our mis-perception of our ability to make estimates. Many, many examples, but the classic is that 84% of college students consider themselves to be above average drivers. Obviously statistically impossible, but it doesn’t stop people from thinking it!
From the CFA program: This is tied to a Bias in Forecasting called “the illusion of knowledge”.
“The additional knowledge experts hold often leads to higher levels of overconfidence. This occurs because of the illusion of knowledge, the belief by a person that he or she knows more than others. The illusion of knowledge is more prevalent in fields where immediate feedback is not always available. In fact, those experts who are most confident in their conclusions are most likely to be dead wrong.”
2) Self-attribution: Basically, when things are good, you take credit for them. But when things go bad, it’s someone else’s fault. Tied to this, are ego defense mechanisms. These are basically excuses for incorrect forecasts, or ways to maintain confidence while defending an error in judgment.
Some mechanisms:
- “if only” defense – the game performance would have been good “if only” their advice or strategy had been followed
- “Ceteris Paribus” defense – latin for “everything else being equal”. Basically blaming other factors (market shifts or changes, audience growing up, competition etc) for poor performance
- “I was almost right” defense – When a predicted outcome does not happen, the predictor avows that it almost did.
For me, the most important aspect of Lean Startup is empirically validating all those subjective assumptions, and providing as much immediate feedback as possible. This helps to reduce the illusion of knowledge and attribution biases, and makes us all better decision makers.
Category : Blog & Development & Lean Startup