What do Lean Startups have in common with Chinese characters? By the end of this article, you’ll have learned a new visual vocabulary, inspired by Oriental wisdom, to help grapple with challenges in your startup journey.
You’ve heard of problem/solution fit. You’ve heard of product/market fit. But did you know there are twenty-six other fits that could help you win at startups?
Steve Blank and Eric Ries will tell you, if you haven’t got problem/solution fit, you haven’t got a customer. If you haven’t got product/market fit, you haven’t got a business. After you clear these hurdles, you stop being a startup and start becoming a real company. These are the fits everybody’s heard about.
That got me thinking: what else needs to fit? Surely a well-oiled startup has more than four moving parts. Over the past six years, I’ve invested in, and mentored, over 70 startups. I’ve watched them succeed and fail for all kinds of reasons. A four-element model isn’t enough. How about eight?
That’s more like it. Now we can say things like:
Oops, customers lie.
The Fit Compass
So, that’s the Fit Compass: a useful way to talk about startups visually.
How does your startup fare? Which fits are strong, and which are weak?
Now, you might look at some of these fits and ask: do these things even fit together?
For instance, what does investor/solution fit even mean? Maybe it means that a VC is a specialist in SaaS or blockchain or biotech.
What does solution/product fit mean? Maybe a lack of fit means that your prototype works, but you haven’t got the UI/UX design skills to build a user-friendly skin around it, you lack the writing skills to produce good documentation, you lack the community management skills to set up a peer support forum, or you lack the business savvy to build a training and certification program — in other words, you don’t know how to build a whole product.
Some investors, the first thing they want to hear about is the problem you’re solving; some want to bet on the team; some just want to understand the market.
Companies build products; entrepreneurs build companies. But in the early days, the founding team must have the skills needed to design and build the product.
The Fit Matrix
There are, in fact, a total of sixty-four fits that help companies, young or old, think about business. Let’s convert the eight-pointed compass into an 8x8 matrix:
That’s 28 one way, 28 the other way, and 8 down the diagonal. A total of 64 startup fits: hence #64SF.
You might think we have twice as many cells as we need, so let’s project our favourite innovation dualism onto the matrix.
A given fit can mean different things to a startup than it means to a big company. For example, in startup land, investor/founder fit may mean “how well do we get along during the pitch? Is there mutual respect? Can we work together?” In Big-Company land, investor/founder conflict may mean Steve Jobs getting kicked out of Apple.
To a startup struggling to reach customers, company/market fit may mean distribution channels. To a big company that’s conquered its category, company/market fit may mean antitrust scrutiny.
In a startup, founder/customer empathy is either there from the start (because you’re scratching your own itch) or the product of disciplined customer discovery. As the startup grows, to maintain the same degree of customer orientation, it may be necessary to institute a policy that all staff start out on helpdesk, no matter their intended role. Eventually, the first interaction an employee may have with a company is as a customer first – most franchisees eat at a McDonald’s well before they go to Hamburger University.
An element may fit itself, reflexively. Founder/founder conflict – we’ve all been there. But the generative grammar forces you to consider certain vectors. What does market/market fit mean? Maybe it means a business scales trivially from Australia to New Zealand, or from Canada to the US; but market/market conflict might mean it does not scale trivially from India to China.
A Chinese Dictionary of Startup Patterns
The dictionary problem is this: if you read a word you have never seen before, how do you know which page to go to? In English, it’s easy: everything is sorted alphabetically, so flip through the dictionary, doing a rough approximation of a binary search. You know that the word “abecedarian” comes after “abatement” and before “abetment”. But in Chinese, how do you know where to find 部?
Well, you would take advantage of the fact that most Chinese characters decompose into left and right chunks, or top and bottom chunks—more respectfully, semantic and phonetic chunks. The chunks are called radicals. If you declared that each word had two parts, you could construct a two-dimensional array of radicals, and you could then serialize that matrix into, well, a dictionary. Early dictionaries identified 540 radicals; nowadays they use 214. (The radicals themselves were sorted by stroke count.)
Our matrix, by contrast, is merely 8 by 8.
How is this relevant to Lean Startups and the first-time founder?
Well, with respect, a problem that’s new to you is probably not new to the world. But if you don’t know what the problem is called, how will you ever find it on Google, or on Quora?
That’s where the Chinese-dictionary approach of problem decomposition, 2x2 vectorization, and serialization comes in. It might turn out to be a useful way to deal with business problems: if you break down your problem into primary components, you might be able to look up your problem in a “business dictionary” of patterns and solutions. You could say, “halp, I’m having trouble with X/Y fit” and you could expect to find a relevant response.
And that’s what learning Lean has in common with learning Chinese!
(Construction of such a dictionary is left as an exercise for the reader.)