The Fat Vs Lean Debate

Ben Horowitz and I debated Fat Vs Lean on stage at TechCrunch Disrupt yesterday morning. At the end, Erick Schonfeld asked for a show of hands and there was overwhelming support for my argument in favor of lean.

But to be honest, I had the easy task. Arguing for lean startups in front of a web crowd is like arguing for smaller government in front of a bunch of republicans. Not much argument there.

I think Ben did a great job making the contrarian argument in front of a dubious crowd. And he got in the best one liner for sure when he accused my math heavy argument of taking “all the joy out of being an entrepreneur.”

I know the Kid likes to see blog beefs, but there really isn’t one between me and Ben. He’s such a smart person and very easy to get along with. No wonder he was a great CEO before becoming a VC. I am sure he’ll be a great one.

So, all that said, here is the debate.

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Comments (Archived):

  1. Bruce Wayne

    I found the Fat Vs Lean Debate very disturbing… I come from a background of poverty in the U.S……Many people young people in my community had good ideas that if funded could have done very well….and this could have broken the cycle of poverty……For many of us there was and still is not choice of Fat Vs Lean…..The discussion about how much investment should be taken seems at times from another universe where “all” entrepreneurs have the option of Fat Vs Lean…..The truth is that this is not the case….Many of the best ideas will never become reality because investment capital does not flow in the direction of the disadvantaged..

    1. kidmercury

      it’s a monetary policy problem, current monetary policy ensures a “rich get richer” system. this is mistaken for capitalism but really it is fascism/communism, and is a feature of the welfare/warfare state.

    2. ShanaC

      100% it’s an up in the air debate. Even the numbers are an up the air concept. If ben wanted to win on the grounds of the math he should have destroyed Fred’s use of Bayes’s Rule, by saying there are non-discrete elements to getting to product-market fit.Of course, that could be why one wants to keep valuations low- minimize what you already have to prevent any blowups…but you prevent upside…..

  2. David Semeria

    You’re both right, mainly because you’re both arguing slightly different points.Your starting point (from both an investor and entrepreneur perspective) is that lean generally provides the best upside/risk combination. Sure.Ben doesn’t dispute this, but he points out the sometimes your need a lot of capital just to get a seat at the table (hence the VM Ware example).Ben is merely pointing out that some opportunities cannot be tackled with a lean ethos. He’s right about that.You’re arguing the general case, Ben is arguing the edge case.

    1. Philip J. Cortes

      I completely agree with you David – It would have been interesting to hear Fred’s opinion on how VM Ware and Tesla Motors could be started with lean(er) budgets…ie…taking the fat examples and suggesting how a leaner approach could have helped them. The Zynga debate was an interesting one – perhaps if both Fred and Ben argue next time it could be structured around 2-3 different “case” studies…I think that would make for a fascinating debate and exchange of strategic opinions.

      1. fredwilson

        If I could figure out how to do tesla or vmware lean, I would be an entrepreneur making the big bucks. I’m just an investor riding on their coattails.That said, I bet someone out there could figure it out and do it

        1. Daniel Gibbons

          Might be interesting to compare Tesla to Gordon Murray’s upcoming T.25 car, and more importantly the modular platform-based approach that underpins it. Their claim is that they have radically transformed the way cars are built, and reduced the capital required to manufacture the vehicle by approx. 80%.I don’t know how much capital Gordon Murray Design raised for the T.25 project, but what’s interesting is that their model is fundamentally lean compared to what seems to be a pretty traditional approach from Tesla.

    2. fredwilson

      That is true. Ben and I agree about most parts of this issue. The nuanced part of this debate is when can you do something lean that most people think can’t be done that way

      1. David Semeria

        Yes, that’s it. And it all hinges on the definition of ‘lean’.Can a 10 person engineering team (annual cost $1mm) be described as lean?Is ‘leanness’ a function of revenues?etc.

        1. akharris

          I don’t think that lean is a strict function revenue at all. It’s a function of agility and willingness to change while defining your market fit and your product’s function within that market.If you have a 10 person engineering team that costs $10mm a year, but it can turn on a dime, and is closely linked to the customer development process, then your company is, I think, still fairly lean.

          1. David Semeria

            I think you might be confusing leanness with agility.FB is certainly not lean anymore, but it’s still agile.Leanness basically translates to ‘small’. Both in terms of manpower and capital requirements.My point is that even ‘small’ is a relative term – depending on what you’re comparing it to.

          2. akharris

            That’s fair. It’s the ‘relative to what’ that is important.You could say that ‘lean’ changes based on the industry and the product. You couldn’t build a power plant (or Tesla) for the same amount of money as foursquare, even if you had the same ethos around wanting to keep things as lean as possible. Maybe they’re both actually lean?

          3. ShanaC

            Actually, I’m not totally sure how agile Facebook is. They know their space well. I want to see how the next year plays out. They’ve gotten big, too big, and while certainly it is possible to be agile while big- there is a reason ballerinas have small bones and american football players are big. You need that extra weight on the field to push people over. You need to be small to jump and stay moving if you dance.I would trust a ballet dancer to outmove an american football player in a heartbeat based on size alone. (yes I know football players take ballet to improve agility- however it’s different when you work in a field that is largely about being small and agile rather than trying to compensate for being large).Small fish can generally outmanouver large ones, it is their greatest strength.

          4. David Semeria

            FB turned their 400mm user SN inside out to respond to competition.Within a few weeks of their privacy controls being widely criticized they rolled out a simpler version.For me, that’s agile.

          5. JLM

            Damn right. Shoot, move, communicate.

          6. ShanaC

            This never showed up so:They have massive holes because of their size. Users are both leaving and restarting themselves. There is plenty of room to manouver if you want to do something and Facebook can’t do anything really in return because they are too big.Their Agile for what they are doing, but at some point really targeting certain demographics for certain tasks is going to be beyond them. They can’t move anymore, whereas before they once did.

          7. ShanaC

            They have massive holes because of their size. Users are both leaving andrestarting themselves. There is plenty of room to manouver if you want todo something and Facebook can’t do anything really in return because theyare too big.Their Agile for what they are doing, but at some point really targetingcertain demographics for certain tasks is going to be beyond them. Theycan’t move anymore, whereas before they once did.

          8. JLM

            Point well made as it relates to lean v agile.I know that folks are becoming more accomplished also.Businesses will ultimately draft athletes and teach them what they need to know.Business schools continue to spit out finance majors who have never even laid eyes on a loan document and marketing guys who have never sold anything.Companies then have to teach them the practical skills.There should be a finishing school for MBAs to teach how to apply their massive but unfocused knowledge. That is why MBAs with extensive industry experience before grad school are so much more valuable.

          9. Matt A. Myers

            I think that finishing school is called entrepreneurship. 😛 For some at least..

          10. JLM

            Entrepreneurship is a disease you may be born with or catch.I am talking about a practical apprenticeship wherein folks who have all this book learning are able to translate it into actual marketplace behaviors which work.Difference between ground school and flight lessons.

          11. Matt A. Myers


          12. joeagliozzo

            Actually in my opinion lean doesn’t mean small. It means “minimal waste”.Think about meat – the portion of fat is how “lean” it is, without reference to how much total meat you have.In the company sense, lean means “don’t waste time or resources”. The way you avoid waste is through agile development and also the feedback look wherein you want to put the minimal product/feature set out there and see what resonates in terms of use or payment.Don’t waste a lot of time on prior planning, or on adding a bunch of features when you don’t know what the audience wants.So again, lean isn’t necessarily small (or cheap). Someday (maybe there are already cases right now) – very large companies will be organized on “lean” principles and will kick serious _ss.

          13. David Semeria

            That’s all true. The business concept of ‘lean’ stems from production techniques first employed by Toyota, and is -as you point out – focused on waste avoidance than than absolute size.But within the context of the debate between Fred and Ben, lean does, in fact, map pretty accurately to small.Small teams take limited capital to solve a specific problem well. They do not boil oceans or try to bite off more than they can chew.The lack of waste stems directly from the specific focus combined with small teams and capital.

          14. joeagliozzo

            Agreed. Lean (and custdev methodology) which to me is the most interesting part of lean thinking is most appropriate when you are attacking an existing market (as I mentioned in another reply to this thread). This means generally you have a specific known problem. Only my opinion, but I believe that 90% of all entrepreneurial opps fit this category (also with highest chances of success).Youtubes, Palms and even Twitter where your product is creating a new market are an entirely different story and in most cases would require a lot more startup capital (absent some great luck or great happenstance, like viral marketing, etc..!)

        2. Matt A. Myers

          “Can a 10 person engineering team (annual cost $1mm) be described as lean?”Shouldn’t it be relative to the undertaking at hand?If you have 10 people who make a good agile team, well, I know I could get a shit ton done with that over a year, mostly because I have my plans pretty thoroughly thought out so I know what the objectives I’m leaning towards … no pun intended..! 😉

      2. Deyan Vitanov

        This comment captures the essence of the debate to me: I think both of you agree (more than it appeared) that lean is a great tactic to use. I think Ben is concerned that lean can promote “thinking small” (I personally expressed a similar reservation a while ago: and many people weighted in).In any case, great food for thought, thanks for the debate Fred!

      3. JLM

        I suspect that there are a whole lot more people in the world — not just VCs and entrpreneurs — who are learning or at least exploring the concept of “lean”.As it should be given the times.In addition, everybody is learning how to become more of a 360 degree businessman particularly as it relates to management, finance, marketing and product development.

        1. awaldstein

          JLM-great point.I think the concept of an entreprenerial approach has gone further. In this blog and others, we are discussing the people who think, run and manage the company. My belief is that this has become a ‘quality’ of our times. An approach to doing more with less and thinking creatively that rolls out from the founders to all members of the team.Being agile, creative and perspicacious are hallmarks of a new approach to work. And a great one at that.Teams are what make leaders win and those teams are as entrepreneurial in some ways as the leaders themselves.

          1. JLM

            Agree completely. Leaders influence everything including what kind of coffee folks drink.An interesting phenomenon I see developing is the “genius” of creating a new product v the “entrepreneurism” of developing a company to actually get the product to market.I am seeing a bit of genius = product idea/creation while entrepreneur = turning the idea into a marketable product and a real company.It is a why there a a lot of complementary teams with one guy having the technical genius and the other guy being the company running, money raising, people getting, etc. guy.

          2. Elie Seidman

            In my experience, it’s very rare that in one person you get all attributes at high levels of excellence. It’s why I’m such a big believer in having co-founders and a very very tight knit senior team. It’s trite to say but a perfectly running team is a vastly more productive machine than what any one person could ever be.

          3. PhilipSugar

            Agreed.It is not possible to get one person with all attributes at high levels.That is why you need at least co-founders if not tri-founders.One point I would add is that all members have to have functional competence.Not all star capabilities, but the ability and willingness to understand what the all star is doing.I.e. I’m just a marketing person ewww..don’t talk to me about technology. Or I’m just a tech guy I don’t understand finance. Everybody seems to think the understand marketing :-)Just look at Fred as example. He says his strength is marketing but he buys and tries all technology and understands finance.

          4. Elie Seidman

            I agree.Vis a vis marketing – Marketing is accessible which is why most everyone thinks they’re good at it. But clearly its a talent like any other and some people are better at it than others.

          5. Dave Pinsen

            “Leaders influence everything including what kind of coffee folks drink.”At Waldstein Enterprises that would be Black Kat espresso.And by the way: congrats on your quarter. Nice sequential and y-o-y gains there.

          6. awaldstein

            So true…about expresso, that is;)

          7. ShanaC

            ….try the single origins…really…

          8. awaldstein

            Will do.

          9. awaldstein

            Interesting pt of view JLM. I agree mostly.Product/tech person plus a market developer/fund raiser/IPO front person has been the mix, I think, whether in a start-up or relaunch or IPO for most companies…with some exceptions of course.In my career, I’ve usually partnered with the tech/product guy and played the fundraiser/market/front person and biz dev guy. I’m betting that that is the normal pairing in the tech sector at least. It has changed somewhat on the web social front where tools are simpler and exceptional founders can sometimes play both roles until you get farther along the J Curve.

          10. Mark Essel

            Speaking of money raising (my job, Tyler’s the stronger web techy), I wonder if there are any interested angels in Maui, or our return trip through the Bay Area. I should put together a crafted pitch just in case.Michelle may kill me, but it could be one of a few opportunities to court west coast investors, or at least meet some folks while travelling through without any official “pitching”. I pitched one of my best friends 2 and half year old twins to start web programming while they were navigating an ipad yesterday. You never know when you’ll come across great talent 😉

          11. Donna Brewington White

            “Teams are what make leaders win and those teams are as entrepreneurial in some ways as the leaders themselves.”Love this insight.It seems that the leaders who are able to foster this type of entrepreneurial team are a special breed especially since hiring more entrepreneurial types creates a leadership challenge. But when you see a team of entrepreneurial types working together even though one of them wears the founder/ CEO hat but is secure enough to surround him/herself with that type of talent and visionary capacity, it’s powerful.”Being agile, creative and perspicacious are hallmarks of a new approach to work. And a great one at that.” Are you seeing new approaches to leading teams that correspond with this new approach to work?

          12. awaldstein

            Hi DonnaYes, absolutely. But I think great entrepreneurial leaders have always tended to hire those with strengths that challenge and complement their own. I think the reason that we don’t see it is that great leaders, great teams, winning start-ups and breakaway companies are the exceptions…always. We conceptualize the perfect and the best and strive towards it…especially in staffing and team building. But the vast majority are always somewhere below perfect and all companies are iterating towards this…well, forever. That’s why building your team like building your product are never done.

          13. Donna Brewington White

            Thank you, Arnold. This response really engages my thinking.”But I think great entrepreneurial leaders have always tended to hire those with strengths that challenge and complement their own.” Very true…on a few occasions I’ve had the privilege of seeing this. I’ve also, and sadly, more frequently, seen ventures that would have gone to a whole new level if the leaders had done this rather than hired the people they felt comfortable with or who didn’t intimidate them. They might go for a while on the strength of product, but eventually the lack of strength in their team seems to undermine the potential for greatness…even if financially they experience success. (Success and greatness are not always one in the same.) Although, in the end, I don’t think the real problem is the quality of the team…it’s the quality of the leader…one is a function of the other.By the way, visited your blog — really appreciate your insights.

          14. awaldstein

            Hi DonnaYou are of course correct…the quality of the leader sets the scene, drives hiring and establishes the culture. But I do really believe that entrepreneurial spunk is a characteristic that permeates a winning team and is hired in all levels of the organization.And yes, many if not most founders and leaders take the easy and comfortable path when recruiting and it invariably breaks unless success comes quickly bundled with a lot of luck. Success. Great leadership. Great teams…all of these are, of course, the exceptions. That’s why serial entrepreneurs, serial problem solvers and experts are so valuable, so bankable and a new variant of super heroes of sorts today.This was an interesting discussion. Hiring and team building is something I’ve done a lot but not written on much. It’s an important topic.And thanks much for the kind words on my blog.

        2. Mark Essel

          I’m experiencing this first hand with a lean wedding. It’s still much more expensive than I would have liked but it’s something Michelle and I can afford. Plus we have many friends and relatives that in very desperate financial situations. A sober reminder of just how fortunate I am to be able to generate income from work, whole pursuing my business ideas with the majority of my energy.

    3. Makarius

      I agree almost completely with your assessment, though I would argue that Ben’s arguments are not necessarily the “edge case.” Lean and “fat” startup methodologies are two different tools and you need to use the right tool for the right job. If the business someone is looking to start is capital efficient (most internet companies, for example), going lean is a great choice. It allows the owners and investors to both see a better return on their investments.By comparison, if your startup is capital intensive (most manufacturing companies, for example), then you may need to go fat in order to have any success at all. In those cases, owning a smaller piece of a larger company is better than owning a large piece of a failed company. The trick is looking at what sort of resources the company will need in order to be successful and raising an appropriate amount depending on the market, the product, the competition, and the business strategy. While Fat startups may be relegated to the “edge” in what Fred rightly observes is a “web crowd,” another group of entrepreneurs might find that the need for large amounts of capital upfront is the norm and the lean startup is appropriate for their outliers only.

      1. ShanaC

        Anything with major distribution problems also would fall into this issue…

    4. JLM

      What a damn good insightful, smart comment.The fact of the matter is that folks often are talking the general v the specific/edge case.Damn well played!

      1. David Semeria

        Thanks JLM

  3. kidmercury

    a few observations on the wilson/horowitz showdown:1. both ben and fred did a good job of honoring their opponent — always a wise beefing strategy. even if you don’t actually respect your opponent, pretending you do makes you look honorable, respectable, credible — all extremely valuable in earning votes. 2. as i told fred and ben on twitter, i think fred rockin’ the blazer was the real catalyst for the victory. i also think it was an especially prudent to go with a color besides black. the silver or gray or whatever color fred’s blazer is was a great choice IMHO; black is too cliche, to easy to ignore, too standard — not disruptive enough. the blazer established authority and captured attention in a way that was not distractive or outlandish. well played fred.the internet is a great place for monetizing memories. a wilson vs horowitz shirt? affiliate links to buy the clothes worn by the participants in the beef? i know it’s on the tip of everyone’s tongue…..fredwear!

    1. RichardF

      livestream certainly missed the opportunity to have mouse over functionality that produced a pop up with “Fred’s jacket by (“insert make” – I won’t make a presumption) click here to buy it now”

      1. fredwilson

        I believe that one is zegna

        1. David Semeria

          I bet you can’t pronounce Zegna’s first name !

          1. fredwilson

            er-men-giliois that right?

          2. David Semeria

            Almost! Er-men-e-gildo.It verily flies off the tongue…

          3. fredwilson

            wowi learn something from this community every day.thanks!

          4. ShanaC

            *snicker* boys discussing fashion…….I really want to fall on the floor laughing (though I do respect that you guys know good tailors….)

          5. David Semeria

            Snicker indeed. You seem very D&G in your profile picture Shana.It’s the sublime combination of velvet, ruffles and too cool to care specs ;-)Embroidered slippers would set that off nicely.

          6. ShanaC

            It’s actually a super simple necklace (purple silk covering various sized plastic balls). I don’t have the body to wear frilly stuff. I’m 5’6 and boyishly built. I wouldn’t wear Dolce this season if I could afford it – some of it is too frilly…. reminds me too much of home and I would look really odd with the clothing looking outsized (though maybe the stockings…) I do avant guarde or really simple. Say if I had the money, someone like Lanvin.That picture was impossible to take- it’s a meta-picture of me and me. (I drew the drawing in the background, and it is a self portrait). It’s part of a series (the rest are sort of disturbing though). Because the entire series was drawn in a surrealist style, no matter where you stand, the eyes of that drawing will stare at you. Including when you try taking a picture. So it took forever to stare at the camera because I kept trying to look at the drawing, which looked terrible.The specs are See Eyewear (I used their SF branch). Highly recommend them… I have a hard to fit face, and they were very helpful. They were the only people to recommend at one point children’s frames. (These are adult frames, but….) Much bigger frames are very very in in NY. Though if I had to make a guess- granny glasses/those frames lenin wore and clear big frames will be back. (these frames are old, hence I’ve been looking…)

          7. David Semeria

            I was only messing about Shana. After living in Milan for 20 years, I’m totally bored by the superficiality of the industry.Your outfit looks great, and remember the best-dressed people always spend less on clothes than you would think.It’s the combination that counts. That said, I would like a pair of embroidered D&G man slippers for xmas.

          8. ShanaC

            In reality- I buy jeans and t-shirts, and I tend to wear flats….

    2. fredwilson

      I’m glad you liked my choice of battle fatgues kid!

    3. Brent Halliburton

      Hmmm, I think this actually answers a question I had recently: What clothes are associated with victory in the online game today:…Silver blazer, now we know.

    4. JLM

      Hahahahaha, that is genius!Fred Wilson goes one name ID — he ain’t Diddy, he’s FRED!When does the perfume come out?

    5. ShanaC

      You are so not a newyorker at heart- Black makes you look thin and goes with everything. I heart good quality black cotton ts that are not expensive. Look like a million bucks with an awesome piece of jewelry or something…and that is how to dress cheaply…

      1. kidmercury

        indeed, i am not a new yorker at heart, as i don’t believe cities shouldhave a cop on every block, nor do i like the idea of paying thousands ofdollars a month to live in a tiny apartment. nor do i like hightaxes. though i may be returning to NYC, albeit a bit reluctantly, in thenear future, as i may have to return to the unfortunate world of offices,jobs, and taxes deducted from you before you get the money. lol, one of myfavorite signs of modern day for black…..pfft. my game is based largely on differentiation, black istoo much of a cliche. though i will concede that a black collared shirt ihave is probably my favorite shirt, and is my go to piece of garment when iintend to dress to impress.

  4. RichardF

    I watched this yesterday and reread Ben’s blog and where I think he is correct (particularly in B2B) is that you do need to have enough money to be able to produce a great product and keep investing in the product to ensure that you stay ahead of the competition.Also raising money can be real drain on time and if you are so lean that your founders are still up to their eyes in code or out pitching for business it will be a big distraction from the day to day of running the company.

    1. awaldstein

      Hi RichardOne of the pertinent pieces that I take away from the debate was Fred’s statement about dollars and first-time entrepreneurs. It’s the old story…you need a product to raise the money and you need money to build the product.Raising funds against a big idea without a prototype and without a track record is well…almost unapproachable. The lean approach addresses this well. The term ‘lean’ didn’t exist when I started raising dollars for startups. But lean as in no money to buy much certainly did.

      1. RichardF

        Arnold that was a great remark by Fred. Completely agree with you about raising against a big idea.I don’t have a problem with lean Per se – I just think once you get to the point that you are raising VC (as opposed to angel or seed) that you want to try and ensure you raise the optimal amount to help you execute.The other thing is that it’s one thing to be a lean start up with Fred Wilson and USV behind you but perhaps a different game with XYZ Venture Capital.

        1. awaldstein

          Agreed.The other point that Fred articulates well for the entrepreneur is to raise with an eye towards your ownership at exit. Surprising how few take this equation into consideration at the beginning of the process.

          1. ShanaC

            For whatever the reasons, a few people have asked me about this. I have explained this to them. I don’t think it is bad for innovation at all.It’s like the difference between a short pose and a long pose. Way before you do a long pose, you do a short pose (and by short, we mean 30 seconds, maybe less) Why? You want to be able to see the essence of the person. Over time, it becomes easier to see the planes and lines. Long poses are for perfection’s sake.Keeping things short and with an eye towards the door means knowing you have the ability to junk and build off the paper…same with companies…

          2. awaldstein

            Agreed…being smart about the economics of your efforts encourages and fuels innovation.

      2. Aviah Laor

        actually you need money, and than you need a product to raise money and so forth. It’s not a real chicken and egg problem 🙂

        1. awaldstein

          Aviah…maybe but it’s a problem nonetheless 🙂

          1. Aviah Laor


  5. Aviah Laor

    Fred won the debate, but one point remains unanswered: What about competition?So the real question is: Do few people in a lean startup are enough to gain the minimal competitive advantage, which is enough to hold late joiners, some with a lot of cash?

    1. RichardF

      it’s a good point Aviah, Ben made that point on his blog. He states that he used his cash to put pressure/out execute a competitor when he was running Opsware.

      1. Aviah Laor

        yes. The lean startup says that the biggest risk is to build something without market, which is true, but there is a second step – once you find that, than what?Netscape lesson is burnt, but I think that unlike the myth that is does not matter, it does happen a lot: you have a head start and suddenly everybody try to catch it.

        1. David Binetti

          Steve Blank talks about this extensively at http://steveblank.comBasically: use lean tactics when you are a startup, which is the *search* for a business model.Then, transition to…A sustainable model where the goal is execution of the model found in stage one, which requires working capital, resources, etc., and is a “big company” game.Search stage looks VERY different from execution stage. The devil is, of course, in the transition — which is why we all get paid the big bucks. (sic)

        2. David Binetti

          Steve Blank talks about this extensively at http://steveblank.comBasically: use lean tactics when you are a startup, which is the *search* for a business model.Then, transition to…A sustainable model where the goal is execution of the model found in stage one, which requires working capital, resources, etc., and is a “big company” game.Search stage looks VERY different from execution stage. The devil is, of course, in the transition — which is why we all get paid the big bucks. (sic)

    2. fredwilson

      Gowalla raised 8mm vs foursquare’s 1mmFoursquare has 5x the users and is growing at about 5x as fast right nowCash is not a competitive advantage. Product, promotion, buzz, users, and engagement are

      1. Christian Brucculeri

        2 P’s, a B and a U…..taking the 4 P’s to the web (where place is obvious and everything is free at first).

      2. Eric Leebow

        That’s interesting. It’s true, cash is not a competitive advantage, yet if foursquare had raised nothing, would they still be on top? It’s about having the right team, and raising the right amount. I also think foursquare users are optimistic about the promotions, which has only been helpful. The fact that I can go to a Starbucks and know that I might become the mayor, and get a coupon is quite inspiring to do so. Starbucks is benefitting, the mayor is benefitting, and this all makes Foursquare benefit.

        1. Aviah Laor

          good point. Raising 8M “fat” vs. 1M “lean” = x8so 1M “fat” to 125K “lean” = 8x, but here the “fat” has clear advantage.

      3. ShanaC

        I can’t say I know their business plans, but beware of just eyes.

      4. Aviah Laor

        Fred, I saw the Foursquare/Gowalla example coming, off course agree. It’s the “mythical man months”: in software it’s **hard** to convert cash into better products/faster shipping. But if Gowalla would pop up when FS. was pre series A?Not fat, but minimum funding to keep the advantage is required.The idea of minimum product, lean, and early disclosing of everything to find a market while ignoring potential competition may have gone too far.(p.s. Foursquare has the dodgeball rebe gellt inside?)

      5. ErikSchwartz

        If Foursquare’s series A had been $5M instead of $1M would Gowalla have been able to raise $8M?What seems to have happened with Gowalla was the founders and investors thought that Foursquare’s small raise and lack of capital was a competitive disadvantage that could be leveraged, so they came in big and tried to run foursquare off the road with money.When you’re paying poker and have K-K you often want to chase people out early (if the flop comes 7-2-2 you want to make sure you’ve chased the 2-7 offsuit out before the flop). If Foursquare had bet bigger early would Gowalla still be in the game?

        1. Mike

          Insightful comment, and nice poker analogy.If Gowalla’s $8M raise is = KK, what does that make yahoo’s decision to purchase Koprol?

          1. ErikSchwartz

            Yahoo!’s been on tilt for 10 years.

      6. David Binetti

        Take it further — can cash be a competitive DISadvantage?Chris Brezina at least suggests that had Xobni raised a huge round they might spent more time building a first-iteration product that ultimately no one wanted. Instead, they had to go through several pivots out of pure (cash) necessity — which eventually led to their Product/Market fit.…I’ll bet if you look you’ll find many other similar examples.

      7. David Binetti

        Take it further — can cash be a competitive DISadvantage?Chris Brezina at least suggests that had Xobni raised a huge round they might spent more time building a first-iteration product that ultimately no one wanted. Instead, they had to go through several pivots out of pure (cash) necessity — which eventually led to their Product/Market fit.…I’ll bet if you look you’ll find many other similar examples.

    3. ShanaC

      He won as soon as he talked math and admitted he was talking as an investor and as alignment. Ben really should have nitpicked about the math in his rebuttal, there were wide open spaces there about discrete versus non-discrete functionality and risk. Truthfully, risk is non-discrete and that is why he is advocating fat. It’s knowing what moments to hedge…

  6. Dan Ramsden

    I wonder if fat vs. lean is another way of saying “revolutionary progress” vs. “evolutionary progress”. Because it really boils down to upside opportunity. Perhaps if Ben felt the upside potential to be more modest than in the past, or the home run percentage to be lower, he would be more inclined to go lean? This isn’t to suggest that Fred’s stance is bearish, but I think it’s fair to say that with a maturing web, there will be fewer Groupons ahead than there were Ebays in the past. And capital has to adjust accordingly.

    1. ShanaC

      I would say- we don’t know that quite yet. Bohr’s and Einsteins can pop in at any moment…

  7. kidmercury

    “Arguing for lean startups in front of a web crowd is like arguing for smaller government in front of a bunch of republicans.”i disagree with this analogy boss. remember, rethuglicans are the geniuses who voted for bush TWICE (and now refuse to apologize or take responsibility for what is probably the worst decision they ever made in their whole entire life). bush is a guy who tripled the size of government. not to mention his moral crimes, i.e. lying about 9/11 being an inside job.bush voters should make amends for their decision to vote for a traitor — TWICE — by supporting 9/11 truth. soetoro fans, don’t chuckle just yet: this will likely be you in due time. (US national debt just passed $13 trillion USD yesterday)but i agree with the point that fred had the easier side in this beef. that’s why i wanted to bet on it. too bad arrington and schonfeld dropped the ball on that, easily could’ve been the bookie here and made some extra cash (or crunchbucks, if they truly wanted to put the disrupt in TC disrupt).

    1. fredwilson

      Republicans might be the wrong word. How about truthers?

      1. kidmercury

        while most are, not all truthers are limited government advocates. some likebig government.

    2. brmore

      Oh please … it’s a metaphor. Poetic license allowed.

      1. kidmercury

        The metaphor doesn’t make sense as rethuglicans do not advocate small government. Poetic license can be used however it would like, although I think most would agree it should make sense, as most forms of communication should.To clarify I did not mean to diss fred, rather I saw it as an opportunity to diss rethuglicans, who, inspite of all their tough talk about market-based competition and strong military, lack the courage to tell the truth. How embarrassing.

    3. JLM

      As I have said before. Bush was a fabulous Governor of Texas and had huge bipartisan support with the Democratic Lt Gov endorsing him, contributing to him and campaigning for him.He is a good man, of that I am convinced.However, I have to admit he did not exercise any financial discipline. I can’t figure out what happened to him in DC.

      1. kidmercury

        we are operating from two different perspectives of history. my perspective of history operates from an understanding of the bush lineage and how they are very much related to the secret government that has hijacked the united states, most blatantly on 9/11. i understand and sympathize that you may find this psychologically unacceptable given your military background, which i am quite confident is an honorable one, though it does not change the unfortunate truth of the situation. if you study 9/11 truth and the alternative history that it is a part of — the history the web is here to reveal so that we may find the truth that sets us free — then you will see what i am saying is quite obvious and non-controversial, and you will see that he is not so good of a person (albeit not as bad as his father). “what happened to him in DC” will then become obvious as well — he’s a puppet, and he just did what his puppetmasters made him do.

        1. JLM

          You will get no argument from me on the “puppet masters” perspective. Some wealthy folks made sure that W made a bunch of money on the Rangers while mostly just lending his name to the effort.The financial independence created thereby made it possible for him to run for Gov and Pres with no particular money problems.If you look at BHO’s book deals and the money that poured into his pockets just before his inauguration, you see the same charade at play.I like the Bush Old Man — GHWB — a lot more than his son. GHWB was the real deal. Pres, VP, Cong, Amb to China, Dir of CI, Amb to UN, Party Head, oil guy.W was a spoiled frat boy by comparison.I will also concede that the Bush family was operating in some pretty rarefied company prior to WWII and their involvement with certain German interests though not as pernicious as alleged.

          1. kidmercury

            i just realized the unauthorized bush biography has been put online for freeby the author; you (and other fredlanders of course) may enjoy skimmingthrough it. even if you find it lacking in merit, it’s some of the strongestanti-bush media out there IMHO, and will help folks see the kook perspectiveon the bush family. lots of good dirt.…<http:”” online-books=”” george-bush-the-unauthorized-biography=””/>incidentallythe same author, webster tarpley, has a couple books on president soetorothat are also quite shocking and IMHO very credible.

  8. marfi

    You both did well! And yes, you had the easier task. I will be very happy if we can have the same debate and elaborate further if we manage to bring you to Sofia 🙂

  9. Justin Herrick

    I think it was a great debate, but its really a non-issue. You, Horowitz, and nearly everyone in the crowd all knows that its about context of the startup. What I think everyone took away from the debate was that there is no best way of running a startup, because it all comes down to execution.I was personally hoping for a Q&A session after the debate, my head was buzzing with lean vs fat startup related questions after that. I feel like the “debate” aspect was really played up when it may have been more beneficial for everyone to simply discuss the pros and cons of each and impart knowledge towards teh crowd.Either way it was great, hrmm I should probably pay attention to the conference now.

  10. alan p

    Fred,What is not usually admitted by proponents of Lean is that it takes a lot of planning, organising and execution to make it work – far more than running “Fat”. And when it goes wrong it can go seriously wrong, whereas Fat systems have some excees to live off for a short time.In fact, part of Fat is what us old time engineers (who worked with physical stuff) used to call “redundancy for reliability”In other words, one can be too Lean as well as too FatIn the very early days of a startup, IMO “Lean” works as it forces focus on all but the most critical things. But pretty soon, reliability starts to overtake leanness as the “Key Success factor” for a serviceBut there is also another aspect to Fat, and that is cost of market entry. Some markets just do cost more to enter – or, in the case of some consumer markets they cost a lot to stay in the game (I’m thinking of small dotcoms that enter markets cheaply but then find the marketing spend of their competitors is in the big numbers, and they have to match up or exit). It’s very useful to know which type of market you are talking about in such a debate.

    1. joeagliozzo

      Not sure this is true:”What is not usually admitted by proponents of Lean is that it takes a lot of planning, organising and execution to make it work – far more than running “Fat”. And when it goes wrong it can go seriously wrong, whereas Fat systems have some excees to live off for a short time.”What you avoid with “lean” is “wasted” planning, organizing and execution – because you have to avoid it, and you want to have enough runway left to make a pivot (if need be and almost certainly it will be needed).In a “fat” company, you can blow through all your runway in the same period of time (faster burn than lean) because you spend so much money on planning, organizing and execution – IN THE WRONG DIRECTION.Lean is about decreasing cycle times and increasing cycles before you run out of available capital – without regard to how much capital you have.So a “lean” startup should get more cycles from less capital than a “fat” startup.Once you have a business model that works, then I think most everyone agrees that more capital – used to grow the business, will always be an advantage, so get as “fat” as the numbers allow.

    2. fredwilson

      i like to think of guerilla warfare and how that allows an underfunded, undermanned army to kick the shit out of a big powerful army. i don’t accept that it costs a ton of money to enter some markets.

      1. JLM

        That’s a great observation. It also speaks to the depth of motivation. Guerillas typically are prepared to die for the cause because the proposition of repatriation is not realistic.

  11. giffc

    I thought you did a nice job Fred, although “lean” in terms of capitalization is not the same thing as “lean startup” as espoused by Blank/Ries. You were the one who stuck up for the less-proven entrepreneurs out there. As i blogged yesterday, if you are unproven, you might have big ideas but “fat” is simply not an option. Duffield and Andreesson are out-of-reach examples to the up and comers.If ben is seeing small ideas, that is the fault of the entrepreneurs, not “lean startup”. You can start with a small core but drive towards a huge vision.

    1. theschnaz

      If you’re looking for a similar debate, but more grounded in the lean idea from Blank/Ries check out @dhh vs @ericries (David Heinemeier Hansson and Eric Ries).

  12. leeschneider

    Fred, suggestion for the links in your blog posts. Have the default be to open up in a new window. Just one man’s opinion, but I dislike having to navigate back and forth to your site when the links open in the same window. I like to open a handful of the links, read what you’ve written, then go and read what’s on all the linked pages. Can’t really do that in the current format, aside from right-clicking and hitting open in new tab/window. It’s all about the user experience, right?

    1. JLM


    2. RichardF

      I agree but it’s to do with web design convention i.e what a user expects when they click on a link. I’ve had to train myself to right click on my laptop or press down on the mouse wheel.

    3. Donna Brewington White

      This is especially true for the links in the comments because then when you return to the original page you have to scroll down again to find the comment.

    4. fredwilson

      i think i’ll do a blog post on this and see how the community votes. great topic. i like it your way as well.

      1. David Semeria

        …and very easy to do. Just add target = “_blank” inside the ‘a’ tag.

  13. ErikSchwartz

    This should be a conversation about capital efficiency not about the amount of capital.A siberian husky (~50 pounds) pulling a sled eats (and uses) 5000 calories a day. If you can effectively use a large amount of capital you are not a “fat” start up (the negative connotations of the word fat are not helping here). There’s some companies that will take a lot of capital to prove their model. As soon as you model starts to include dealing with a fair number of molecules and not just bits you’ll spend more money. Tesla and WebVan are not going to happen on the cheap. The start up that solves the last mile bandwidth problem that will let everyone stream video will need a billion dollars.I am wrestling with this now in my new project (there’s a hardware piece). Everyone I’ve showed the prototype to thinks this is a very big idea, but it will require a big bet to prove it. I am working on ways to try to hedge those bets (and google helped me a lot last week with GTV, which it seems lessens the hardware requirements greatly).

    1. kidmercury

      i do think tesla and webvan can be done on the cheap. IMHO the power of open source production communities is grossly underestimated. at one point people would have said it would cost a lot of money to create a comprehensive global encyclopedia. now we have a doom and gloomer i think such methods will need to be the primary means of driving innovation going forward as the macroeconomy continues to collapse.good luck with your project, as a hardware play it seems like it might embarrass crapple in some regard which would be fun.

      1. ErikSchwartz

        In a steady state I think open source production can work very well. In a growth/iteration phase (particularly if it needs to be rapid) it’s much harder.Thanks for the good wishes. What I am building makes AppleTV, Google TV, Boxee, Tivo and the rest of that crowd better. I’d prefer not to build any hardware, but getting others to integrate into their hardware is not simple. The Google TV thing is great because it is open source, runs android and I can just do it all in SW.

    2. fredwilson

      avner came in and showed me the boxee box three years ago. i told him i wouldn’t fund it. he came back with an open source software company and i funded it. the boxee box is going to ship in a few months but he got someone else to build it

  14. Mike McGrath

    I tend to agree with the thesis of lean, but seem to remember seeing data that the more money you raise each round, the greater likelihood of high acquisition price.

    1. Pascal-Emmanuel Gobry

      I think that’s survivor bias. A lot of companies raised a lot of money and then petered out or got exits that made few insiders happy, but that’s not the ones you hear about.

  15. Ted Carroll

    An interesting and well executed spotlight on the classic early vs. late stage investment strategy wars. Fred I think “won.” Ben is new to the investment business and following a kind of “bid ‘em up Bruce” capital allocation approach projects. Elevation Partners is doing this now also as are some non U.S. entities. These large cash balances transfer much of the control an experienced investor can exercise over the evolution of their companies over to the company founders who may not be disciplined managers. Much trouble can follow. Ben may not be able to fix problems without yet another oversized cash injection with all the associated negative economic and team interaction consequences. Less cash – injected over time equals more investor control. Or in Fred’s case I’d say it’s more like light adult supervision. Small is beautiful.

  16. sweller

    For me, lean really starts with how you manage your time. If you treat your time as being an opportunity cost, then you will try to maximize every moment. You may not always make the right choices, but at least you tried. This hopefully bleeds into everything else you do (when/how/how you hire, how you spend money, what business models you go after).Market windows don’t beep and wave when they pass you by. So, you need to be constantly aiming for launch and tightening down on how you iterate with your features. I am always amazed when I talk to developers who sit in daily 2 -3 hr discussions with founders over project planning. This is where lean starts.

  17. simonbrocklehurst

    Really great debate – as others have said, both Fred and Ben said a lot that’s bang on correct. I’d add just one layer of subtlety. It speaks to the point Fred made in the comments about whether you can do things with a lean model that most people think would require a fat model; and also to the point Fred made in the debate about Entrepreneurs optimizing for personal wealth.It’s this: when you’re working on an idea that requires significant capital at start-up to allow you to execute, there are two questions that an Entrepreneur can ask that could enable a lean model:- First, how much of the capital can be obtained from non-dilutive sources?- and second, does your company really have to build everything it needs and to do everything itself?On the first question, up to a certain quantum cash, you can obtain capital from corporate partners without that cash needing to come from a budget where the partner will require an equity stake in your company.On the second question, if you need cash to invest in expensive infrastructure like specialized buildings or equipment; and/or people that aren’t absolutely at the very core of your company’s value proposition, you may be able to get a significant gearing on your own own resources (human and non-human) by finding a larger corporate partner with a mutual interest. They might give you space in their premises to work on parts of your project and let you use their equipment; and their employees may work jointly with your team to achieve certain goals; meaning you can avoid building infrastructure and hiring extra people yourself.As a side benefit, for many ideas, especially when your future customers will be corporations, working with corporate partners early is also a great way of ensuring you get a product-market fit as early as possible.I’m not saying doing these kind of deals is easy – might be more difficult than raising venture capital. You need a significant personal credibility in your field to make them happen, because even with huge credibility and a great track record, when you’re a new, tiny company, potential partners will be worried about the ability of a small team to execute. By comparison, VCs are more used to this kind scenario. I guess you could say – early stage VCs really like to invest in founders/management teams; whereas corporate partners are more interested in investing directly to solve problems that are meaningful to them.The bottom line, though, is that both these tactics can let a company stay leaner for longer, while value is being created. And businesses can be created this way that conventionally would require significant venture capital to get started.

    1. JLM

      Extraordinary comment. In the money game, it is very important to decide and plan how much is going to stick to your own fingers.It is equally important to never mix your own personal finances with the company’s finances. More so as you become more successful.

      1. simonbrocklehurst

        Was that supposed to be a reply to my comment, or someone else’s? That reply has nothing to do with what I wrote…

        1. JLM

          Sorry, I was just reading your mind.”…Entrepreneurs optimizing for personal wealth…”v”…it is very important to decide and plan how much is going to stick to your own fingers…”Perhaps a notch too subtle. Sorry.

    2. fredwilson

      “revenues are non dilutive”that’s why i brought up zynga in the debate

  18. Peter Fleckenstein

    I watched this debate via the live stream yesterday. Although the topic was fat vs. lean and it was instructive, what impressed me the most was the way that you “debated”. You took this an opportunity to discuss ideas rather than compete for debate points. The way that you discussed it was a lesson for all of us in providing value in whatever we do and you did that consistently. The best proof of this is when Ben asked you a question at the end of the debate. Most people being asked a question in a debate would tense up, fold their arms, etc. You turned to Ben and opened your body up to him. That speaks volumes. Thank you again for providing value in so many ways.BTW – Count me in the Lean column. 😉

    1. fredwilson

      that was not conscious. i really like and respect Ben. i have never accomplished what he has. and i guess that shows

      1. Peter Fleckenstein

        “that was not conscious” <— That’s what made it even better. I respect and admire Ben as well and the both of you have accomplished and added value in your own unique ways.P.S. – Love the new design. So much cleaner!

  19. ErikSchwartz

    OT: Are Disqus email updates running really slowly for anyone else?

    1. kidmercury

      yes. happens somewhat regularly for me. (regarding disqus emails)

      1. ErikSchwartz

        That notification of your reply took an hour.

    2. Aviah Laor

      maybe not OT: more servers >> more cash

    3. RichardF


    4. fredwilson

      I was having that issue last night. Daniel told me they rolled out a bunch of stuff and things are slowly getting back to normal

  20. Patrick Vlaskovits

    @FredI enjoyed the debate but it appears that both you and Ben are a bit off with what appears to be your shared definition of a “Lean Startup”. A Lean Startup is not defined by how much money it raises or does not raise, or whether it brings a “simple” product to market or an expensive/sophisticated product.From my book available at—–A Lean Startup is a concept coined (and trademarked) by Eric Ries, a Lean Startup is one that combines fast-release, iterative development methodologies (e.g., Agile) with Steve Blank’s “Customer Development” concepts. Eric writes that Lean Startups are born out of three trends:• The use of platforms enabled by open source and free software• The application of Agile development methodologies• Ferocious customer-centric rapid iteration, as exemplified by the Customer DevelopmentprocessAnd we would add a fourth element, and that is the use of powerful, low-cost, and easy-to-use analytics.—–Nowhere does Eric define a Lean Startup as a bootstrapped or “scrappy” startup. This is a common misconception. Eric has addressed this and other misconceptions here.

    1. RichardF

      Seems to me that Fred and Ben are addressing an issue that is currently omitted in the definition of the term “lean startup” you have given above.Startup encompasses more than the processes you’ve outlined and the use of capital is an important part of the start up process.I think the misconception here is that there can be outright ownership of a phrase.

  21. Elie Seidman

    Good thoughts from both of you. One nitpick that I think both you and Ben left out is that you need to normalize by product category. There are “lean” startups that require 10M to get to product/market fit and there are those that require 1M or 2M. If you bring 2M to a product area that requires 10M to get in the game and get over the “activation energy hump”, you’ll likely become one of the many who launched lean and nothing came of it. As for dilution, I agree that while doubling capital does not double likelihood of success but obviously doubles dilution, I think that Mark Pincus said it very well when he said that as entrepreneurs, we tend to overoptimize for valuation and percentage dilution whereas we should be focused on the qualitative things that drive success, namely insuring that the right people (entrepreneurs and management) control product vision. 50% of 0 is still 0. Lastly, I very much agree with two of Ben’s stronger points 1) product/market fit is not signaled by a gong ringing in the office – rather, it’s on a continuum where some amount of vision is always needed to extrapolate from current data to future results and 2) your competitive landscape is not standing still. If you’ve got some measure of product/market fit – but it’s by no means a certainty – competitors who are better funded might realize what you realize and fast follow out-execute you.

  22. Matt A. Myers

    Ben should have said “can’t build big companies that are capital intensive without big capital”I see where Ben’s coming with getting say $10-$50 million immediately to steal a market.But I think you’re both right overall.I think with proper guidance and planning and a healthy small team that frameworks can be developed, almost like an advanced prototype that will allow for even more thorough thought (and parts tested to see traction levels).I’d say though that if someone’s confident enough to want to put $50 million into a company because they can eventually foresee a huge return every year then it shouldn’t really matter if they take 10% or 40% of the company.I do agree with Ben that it could be more exciting having $10s of millions as an entrepreneur to play with, but that’ll make you sloppy and/or perhaps overwhelmed. I think on a per project basis finding a proper balance of who’s needed / how many are needed will make everyone happy.End point goes to Fred though.With well-crafted financials and operating plan you can more cheaply get to the point of getting the big amount, the $10s of millions, needed for grabbing market share / sales force, and you’ll lose less equity.You need to make sure you have enough for start though, lean but not anorexic.

  23. Patrick Vlaskovits

    @RichardForsterClearly capital and capital structure are important to startup (“Lean” or otherwise), but I believe that a close reading of Eric Ries’ blog will demonstrate that he intentionally omitted those concerns from the definition of a “Lean Startup”, which I take to be a set of meta-rules.Specifically:a) You have to be “getting out of the building” and talking to actual, living, flesh-and-blood people.b) You have to iterate and test your hypotheses regarding your product, market, customers etc etc (You should be learning as you iterate!)c) You are not shoveling coal madly on the fire (scaling) before having passed through proof-points such Product-Market fit (how you define that is admittedly very subjective).d) You have to be doing all three for it count as a Lean Startup.e) How you go about doing the above is entirely up to you and falls into the bucket of Lean Startup as long as it doesn’t conflict with a) through c)In sum, you can be a Lean Startup whether you have taken zillions from the most rapacious of VCs or whether you are in a garage and saving money by eating Top Ramen topped with the srichacha sauce you stole from the pho place down the street.

  24. LIAD

    lean methodology just makes sense.customer development leading to product/market fit is logical and intuitive. doing things any other way is simply wasteful.Ben’s point about some ideas and markets requiring huge amounts of money to get started is granted but still doesn’t detract from the logic and capital efficiency of following lean methodology

  25. Rogelio Serrano

    how lean can a virtual company get? only one employee and the rest temporary developers. and yet capable of doing big stuff.

  26. Jeffrey Leventhal

    Lean is an edge, it prioritizes thinking and execution. When money starts becoming the answer to solving problems or catch 22s the problems will be solved sub-optimally. Execute, Prove your concept, add rocket fuel.

    1. fredwilson

      that is what Bill Gross said on twitter during the debate. lean is a mindset that forces companies to develop good habits. when you have bootstrapped a company or two (as you have Jeff) it starts to become second nature.

  27. Norbert Mayer-Wittmann

    I enjoyed watching this live — but I was a little distracted and it was so fast-paced, that I will enjoy savoring it again at leisure.Thanks for the meta-commentary — very heartfelt!:) nmw

  28. Salwar Kameez

    Nice video. your article really good. thanks for sharing.

  29. Marcos Galperin

    Great debate. Fred, as you know, and I believe once posted in your blog what makes great entrepreneurs, any entrepreneur who is mathematically calculating the value of his exit, has 99.9999% chances of failing. Best

  30. ShanaC

    The biggest thing, honestly: Get a bunch of teenagers to loan their time to read to 3 and 4 year olds after school.Head start enrichment apparently is a big deal. You can tell when a kid did head start or not. It gets kids screened for all sorts of things, plus gives them the language and math enrichment stuff that puts them ahead with the rest of the class so that they read and do math…

  31. Bruce Wayne

    Very coool…..I m working on a similar project….Can we chat about this…..?

  32. Donna Brewington White

    Very, very cool, Charlie. Would love to see how this develops.

  33. JLM

    Good luck and great idea.Always ask for more, create a trophy experience through the amount contributed and attribute every success to the largest contributors.Back when I used to have little school children, I raised money for school bond support campaigns — $500K in 30 days — by assembling an industry cross section (bankers, chip manufacturers, VCs, real estate developers, law firms) of “askers” and then getting one check from each industry segment.I usually would go get the first check or my askers would bring it in from their company.I made the “askers” show the first check to every other company in the same industry and simply ask them whether they wanted to “match” or “raise”. I was amazed at how often it worked. Approching 100%.I would then publicize the results in the order of the size of the check annointing the largest giver as the “industry leader”. Thank them profusely. Have a couple of parties and invite everybody, including the ones who had not contributed.It was just a notch below a tent revival.I would shame them into contributing and I never lost a second of sleep over it. Never lost a school bond campaign I raised the money for but I must admit that I also never really studied the issues.Good luck.

  34. joeagliozzo

    Nobody that I’ve read in “lean” theory ever suggests you stay lean once it’s time to scale. Lean is all about the period when you are searching for a business model, which by definition is prior to time to scale ..So nobody would suggest you should try to scale with a “lean case reserve”..

  35. joeagliozzo

    Not taking issue with your typo, I didn’t actually notice, I thought you meant case, as in “business case”. I run companies too, in fact I’ve started 5 of them since 1998 and didn’t catch on to customer development and lean principles until number 2, and briefly forgot them on number 3, much to my chagrin!Going back to the point, in my opinion scaling (to demand) is a good problem to have and plenty of investors will jump in to help you if you need more cash.The real issue is getting to scale and customer/product fit and that’s what this debate is mostly about. I think we agree that lean is the way to go, unless you are in a new markets situation where you need tons of cash from day one to educate people on why they need the product anyway. That’s a total crapshoot, there is no real custdev to be done, product either catches on or it doesn’t!