The media and startup community had a ball last week bashing Juicero, a company I have some familiarity with. On the face of it, they seem to have overtired, overbuilt, and overengineered a fairly simple juice business, representing the excess that can and has occurred in SV when money pours in.
Before we bash close this chapter, I wanted to address something I call the 'Big Build' which Juicero certainly believes it's amidst.
Eric Ries made lean, iterative, user-driven building the mantra of SV, and for good reason - most companies and ideas can be tested in an iterative manner that allows the company, its investors, and all other actors to turn more cards over before pouring in the funds. But is this always the best way to operate?
I think there's several examples of longer-term, larger builds that require a different leap from those around the table - think big mission and infrastructure companies like Tesla, SpaceX, Oscar, Affirm, etc. In nearly all these cases, the solution for the industry is well known, talked about by 'innovative pundits', and nearly impossible to execute within an existing business in the space. The challenge is execution and building a standalone business from scratch, with mundane systems (albeit upgraded to the latest tech standard), plugging infrastructure together thoughtfully, and adding patches of innovative and optionality for upgrade/expansion along the way. Again, because of the complexity of the task at hand, millions of dollars are at stake before the first customer touches a product (although the brand is often shared prelaunch to build early momentum).
Funding for these concepts are often passion-plays for the VCs involved, as the track record on these concepts is not much different from typical lean startups where the checks are considerably smaller early on. A breakout success following this process can get quite large and industry-transformational, in a manner that lean startups with more narrow mandates rarely can (for example, consider something like Waze, which obviously became a billion dollar exit to Google and had a small team at the time of acquisition focused on mapping turn by turn directions vs. Tesla, building a proper car manufacturer and distribution network, which has 100x the employees, and a far more complex product to deliver). Just for clarity, from a capital efficiency perspective, I would assume the former is quite a smarter investment than the latter, given its extreme capital intensity.
Now Juicero was definitely a passion play for its founder and core team - they aren't trying to just sell a Juice Press, they want to improve the entire logistical operation of getting fresh, clean, organic produce to their customers. They defined the product that way, attacked the market that way, and built the supply chain to back up the machine. Given the dollars raised (representing some form of patience) and the time the infrastructure would take to build, the team perfected many prototypes before they landed on the current press design. As was shared by Bolt.io, this was a very detail-oriented team who were mission driven, and clearly were not worried about being lean. I'm not going to pass judgement on whether the concept deserved that investment, that level of precision and care, or whether a lean team could produce something simpler and cheaper following 80/20 - all distinctly possible. My point is that they were oriented towards the 'Big Build', where scope creep and over-engineering is often a byproduct of putting great minds to a larger, long-term project.
i just experienced this quite personally on my passion project of the last three years - building a new bank. An MVP in Consumer Banking is whatever you normally get from a local dinky bank, plus some additional functionality / experience elements to differentiate. The required build to get this off the ground is fairly sizable - core banking system to store customer records, transaction workflow and processing system including connections to traditional payment networks, risk/fraud and analytics infrastructure, front end UX, customer service, marketing, and accounting. Not something anyone can build in a weekend.
Dependencies on the outside, be it vendors, networks, partners, or regulators take the project's timeline out considerably, even if everything that must be built/bought is done so efficiently. The challenge in this scenario is staying lean on the individual workstreams in the project - e.g. When do you close v1 of the app design, when APis and the backend are being stood up alongside its development (and often uncover small tweaks that need to be made)? If a delay occurs on one workstream, do you take the extra time on other workstreams to improve the design, experience, or sit and twiddle the thumbs? Needless to say, scope creep was inevitable, but we constantly struggled with each 'upgrade' decision and its impact on overall timeline - we were prudent, but probably not as disciplined as we could have been.
While I am not a juice drinker, I know Doug's passion and believe the team worked hard to develop this product. They seem to have runway to examine the learnings from this chapter in their development and adjust their go-forward strategy for success. I wish them luck.