The lean startup and the grid founder

Lean startup cover

I recently read Eric Ries’ book The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses and as I was reading it, I kept thinking, “This would be great advice for grid owners!”

Ries was the co-founder and CTO of IMVU, which I’ve never used, but which apparently started out as a social chat app and evolved into a more-popular but less hyped version of Second Life.

I’m going to summarize the book right now, then go into more depth in follow-up posts, with some ideas about how to apply the lean principles to starting a grid.

Test everything

There’s an old saying in journalism: “If your mother tells you she loves you, check it out.”

The same applies to starting a new grid. People might tell you that they love your idea of a vampire-themed grid set in virtual Oklahoma where everyone has to grow corn to earn money. And it might seem obvious to you that combining two favorite things — vampires and farming games — is a guaranteed success. But before you spend your life savings on it, your health, and your sanity, do some testing.

For example, you might start with a vampire-and-corn-themed region on someone else’s grid and see if you can attract users.

The faster you can find out the truth, the faster you can move on to something with a higher chance of success.

The runway

The “runway” concept for startups dates back to the old dot-com days, and it means the number of days you have before all your money runs out.

In the lean philosophy, the runway is the number of times you have left to test whether an idea is viable, and to adapt if its not. By speeding up the tests and making them more efficient you can actually extend your runway without getting more money.

So, for example, if you have just enough money to launch a basic vampire-and-corn grid — the content, the hosting, the initial marketing push — and you build the grid and run your marketing and sit back and wait for customers, that’s one learning cycle.

If the result of that learning cycle is that nobody wants a vampire-and-corn grid, then you’re out of business right then and there.

By testing with a small region first, you might find out that people don’t want a vampire-and-corn grid, but are crazy for vampires-and-wheat, not only have you saved your company and found a profitable niche, but you might even be getting some revenues from your test region.

Which brings me to the next concept.

The minimum viable product

Entrepreneurs often feel that they have to have a serious product in hand before they can go to the market. A fully-stocked and well-designed welcome center, plenty of customized avatars, buildings, animations, and themed games, anchor merchants, a classy website, a functioning currency.

If any pieces are missing at launch, then customers might not give the grid a chance.

Lean principles turn this kind of thinking on its head.

Instead of putting in effort and time and money into creating a polished, finished product, entrepreneurs should discover what the minimum viable product is, and focus on getting that out, instead.

For the vampire grid, that might be a region on someone else’s grid.

Or it might be a game where users download and use game HUDs and play on multiple grids, or chase each across across grids via hypergrid teleport.
Or it might be a series of short stories posted on a blog, narrating the history of the imaginary world the game will be based on.Or it might be a Kickstarter video.

By showing interest in any of these products, your potential customers are also showing that they might be interested in your grid. And you’ll be getting money coming in while you’re building it.

The lean bootstrap

Usually, when people talk about entrepreneurship and startups and runways there’s startup capital involved. Money from friends and family, or from venture capitalists, or from the sale of your previous company.

A bootstrapped startup doesn’t have any money to start with. Instead, you’re relying on the founder’s time, and revenues coming in from initial customers.

Consulting companies and enterprise software companies are often bootstrapped. You go out to your client, and they pay you for building your software product, or providing consulting services for them. Then you go after a second client, using the revenues from your first client to hire an assistant, or to improve your software. With each new client, your company gets a little bigger, or your product gets a little bit better.

Lean principles, with their focus on getting out to the market as fast as possible, adapting quickly, and bringing in revenues early, are a perfect fit for bootstraps.

Say you’re a guy creating a new grid, by yourself or with your partner. You have limited funds — namely, no funds. But you also have limited time. You think you can put in twenty hours a week of work until the grid is ready to go, so you might think your “runway” is infinitely long, but there’s a practical limit to that.

You will get bored. Or tired. Or your partner will get bored. Or your spouses will put their feet down. Or you’ll get pregnant, or lose your day job, or your parents will kick you out of their basement.

If your first grid project fails, are you going to be able to spend the same amount of time and energy on your second? Will your partner? How about your third or your fourth?

By using lean principles, you can dramatically shorten the time to that first failure — or first success — and get more use out of the runway time that you have.

The result is that you’ll be more likely to end up with a profitable grid, and get there much faster than you would otherwise.

Maria Korolov