TITLE: Agile Start-Ups
AUTHOR: Eugene Wallingford
DATE: April 11, 2005  9:38 AM
DESC: Agile methods aren't just for software development.  They also tell us how to approach the business of business.
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BODY:
Agile methods aren't just for managing individual
projects.  They may be an essential component in
a start-up company's long-term strategy.

In his recent essay,
<A HREF="http://www.paulgraham.com/start.html">
   How to Start a Startup</A>,
Paul Graham talks about how important the choice
of type of software to write is for the success
of a start-up.  He suggests that a start-up
write software for smaller companies, where the
competition and sums of money are smaller.  But
then he says:

<BLOCKQUOTE>
<EM>They're the more strategically valuable part
of the market anyway.  In technology, the low end
always eats the high end.  It's easier to make an
inexpensive product more powerful than to make a
powerful product cheaper.  So the products that
start as cheap, simple options tend to gradually
grow more powerful till, like water rising in a
room, they squash the "high-end" products against
the ceiling.</EM>
</BLOCKQUOTE>

He cites several examples from the recent history
of technology, from digital cameras to desktop
publishing to Henry Ford and the automobile.  In
any case, this sounds like a harnessing of
simplicity-first and piecemeal growth as a
business strategy for product and market selection.

Once you know the kind of product you want to
sell, you have to find out what customers want.
How best to do that?

<BLOCKQUOTE>
<EM>... get a version 1 out as soon as you can.
...  The only way to make something customers want
is to get a prototype in front of them and refine
it based on their reactions.</EM>
</BLOCKQUOTE>

Graham calls the alternative a "Hail Mary" strategy:
do a lot of planning, generate a
<A HREF="http://c2.com/cgi/wiki?BigDesignUpFront">
   big design up front</A>,
develop a finished working product -- and then
pray that enough customers will pay you for it.

Graham's own start-up benefited greatly from its
agility.  ViaWeb's initial target market consisted
of web consultants, but it soon learned that its
software made the consultants disposable which,
needless to say, didn't endear the idea to the
consultants.  As a result of early experience with
customers, the company shifted its market focus to
small merchants and its software focus to ease of
use: making a product that users could actually
use to do their job better.  The customer played
a central role in defining and refining the
requirements of the project.

Graham is not an "agile guy", and from my reading
of him I'd guess he's a bit suspicious of all the
hype around agile methods.  Lisp hackers and
Smalltalk hackers have long had the patterns that
make up the agile development methods.  It seems
that an agile mindset on the technology side of
things is compatible with an agile mindset on the
business side of things -- and perhaps crucial to
the viability of new companies.

While I'm on the topic of Graham's essays, if
you are a student, you should definitely read
his recent articles
<A HREF="http://www.paulgraham.com/college.html">
   Undergraduation</A>
and
<A HREF="http://www.paulgraham.com/hs.html">
   What You'll Wish You'd Known</A>.
They give an interesting perspective on how to
approach your high school and college years.
Heck, even if you aren't a student you might
well enjoy them.
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