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The Paradox of Lean: Perfectionist vs. Minimalist

A startup CFO wears several hats.  With my accounting or legal hats on, my rule is DIRTFT.  Do it right the first time.  In contrast, when coaching Lean Startup and with my product manager hat on, the rule is MVP—minimum viable product.  With emphasis on minimum

Perfectionist or minimalist—which is right?

The central principle of Lean—“don’t waste”—unifies this paradox.  The way to not waste is to take the “right action at the right time.”  In accounting and legal entity setup, one rarely knows more about the issue in question than at the outset.  Apply the DIRTFT rule and you never have to revisit booking a transaction or setting up founders’ vesting again for example.  This yields a foundation the company can grow on.  But in product development, you rarely know less about what the market needs than at the outset.  Developing the minimum (often just a mockup, drawing, or landing page) lets you get outside the building and engage real customers with your product.  In doing so, you learn things unlearnable inside the building and can create a better product and company. 

MVP is a really big idea that means you approach the startup with substantial humility.  Knowing how much you don’t know, you build:

that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort”

-Eric Ries

Act when you have the information to act.  For accounting and most legal matters, DIRTFT will keep costs down and timeliness and accuracy high.  But as is pertinent to so much of startup innovation, definitely put off until tomorrow what you don’t know enough to do well today.  Make the smallest possible meaningful start and go learn in the meantime.  

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This blog post is simultaneously published on Startup Finance and CFOwise, the outsourced CFO solutions company.

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