The virtue of scarce resources

In the startup world a lot of noise has been made about the Lean Startup Movement, made popular by Eric Ries, first through his blog and, most recently, through his best-selling book.  One of the tenets of a Lean Startup is the Minimum Viable Product (MVP), which he defines as the “fastest way to get through the Build-Measure-Learn feedback loop with the minimum amount of effort.”  I won’t go into the MVP too much, mostly since I can point to other blogs who have done it far better than I could (like here and here).

What’s fascinating to me though is that there is a comparable approach in the theater world for the development of new plays: staged readings and so-called bare-bones productions.  These pared-down approaches (often readings or workshops with minimal set/costume/lighting design) force the simplicity of stories, characters, and dialogue to stand on their own before significant support is invested in a full-scale production.  The key to the whole endeavor is the audience, not the packaging.  (A professor once pointed out that theater isn’t theater without an audience — it’s just crazy people talking to themselves.  I might postulate that that definition also applies to a business without customers…)  Where the audience chooses to laugh (or not laugh), clap, sigh, or get restless in their seats is important feedback for the playwright to develop the next iteration of the piece, and they don’t need spotlights, corsets, or painted drops in order to give that feedback.  For artists who truly embrace this approach they may have up to a dozen of these cycles before the final play is ready for its full-scale premiere.

So what’s the driving force behind this philosophy, something so universal that it has parallels in both business and art? What do startups and the arts have in common?

A scarcity of resources, most notably money and time.

If money were no object and there was no competition and we were going to live forever and customers knew they would want the same thing a decade from now as they want today and audiences promised to come back whenever we happened to be ready for them, then, theoretically, we could take our sweet time developing our product, service, play, composition, etc. and make it perfect before we sought feedback.

But would we want to?

I have often found that a scarcity of resources forces creativity, and that the process of iterating until something fits within strict parameters leads to a more sophisticated, inspired, and ultimately better result.  Whether it was designing a set for my honors thesis production of Three Days of Rain on a budget of $400 or seeing what college programmers could piece together in 24 hours at last weekend’s hackNY “hackathon,” I’ve seen these limitations force the difficult decisions early on: what can be scraped away, pruned down, translated, or inferred without sacrificing the kernel at the core?

Moreover, seeking feedback off of a less-than-finished version means resources are left to make improvements.  Money is still in the bank and time remains on the clock to edit and create and cycle through the feedback loop once again.  Scarcity increases value and suddenly each dollar and hour can be deployed to greater returns.  More than that, the cost of each iteration is much less, which increases a willingness to change directions mid-stream. Sunk costs are sunk costs either way, but psychology shows that pivoting away from a cheap experiment is much more palatable than from an expensive one.

(A great example of this would be the Broadway production of Spiderman, which seemed to have both unlimited money and time while the producers and creative team kept doubling-down on the original vision despite delays, injuries, and repeated feedback that it wasn’t working.  It was only after delaying the opening six times and throwing $70M+ at the problem that they replaced director Julie Taymor and a new team attempted to right the ship. Yet even under new direction and more time and money the musical opened to middling reviews.)

So what prevents us from widely adopting this approach to all of our work, artistic or entrepreneurial? Ultimately, I believe it boils down to two things: fear and expectations.

First, we fear that if a customer or audience is exposed to the early version then all they will see are the flaws, and they will judge the creator based on those flaws.  It’s certainly something we struggle with at Quincy, as we develop our first designs and prepare to show them to consumers.  So here’s the hard truth: some might.  But some will be honored that you gave them the opportunity to provide early feedback, and, if you choose those early collaborators well, they will be honest with you because they want you to succeed.  When you find these willing confidants, keep them close and listen with open ears. Reward their honesty with real change and you’ll have evangelists for life.

Second, there must be a culture that expects failure, embraces it even, as long as the failure informs learning.  As Tom Eisenmann, my entrepreneurship professor at HBS, continues to exhort in emails to my co-founder and me: “It’s not a true test if you can’t fail.”  As artists, are we willing to take chances, commit to an authentic point of view, and ask for honest feedback, or would we rather hide behind our work and ask, with a twinge of insecurity in our voices, “so do you like it?” And as entrepreneurs, have we created a culture that values failure, and thus improvement? Or do we prefer fake experiments designed only to succeed, and thus save face in the short-term, only to fail irrevocably in the long-term?

Yes, one approach hurts more in the moment. But isn’t that the point? Pain indicates something is wrong, and thus redirects. That’s the virtue of scarce resources.

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