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. ----- 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, How to Start a Startup, 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:
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.
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?
... 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.
Graham calls the alternative a "Hail Mary" strategy: do a lot of planning, generate a big design up front, 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 Undergraduation and What You'll Wish You'd Known. 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. -----