These days, things look pretty grim. Our currency is losing value. Prices are rising. Unemployment is high. From GM to Wall Street, many of our favored industries have lost face in the international community. The USA has hit the debt ceiling and is at risk of default.

In short, it’s a stressful time to be alive, and a stressful time to be young. But the next generation of business has grown up in the shadow of these mistakes, and I think we’ve absorbed some valuable lessons. I’m 25. The stock market plummeted and layoffs began the week after I finished school. I’ve worked for non-profits, small businesses, and done some government consulting. I admit that my perspective is limited. I’m not an expert in business, but what I have seen, particularly the contrast between new and old, bureaucracy and flexibility, gives me hope.  My experience in coming to Mutually Human from a decidedly stodgier old-school employer has initiated me into a surprising world wherein profit is not the end-all be-all, but only one in a handful of company goals.  Among them is creating real change in the community, being a thought leader, and caring about the market success of our customers.  What’s more, the approach is sensible, measured, and effective.   Yes, a small flicker of optimism is growing in my cynical heart.

Culture and technology are shifting in favor of the homemade business. You can start from your home. You can start from a rolling stand. You can start with a website. You can start at the Starbucks counter. You don’t borrow money, you don’t lease storefronts. You start small and you build out until you need the storefront and you have the money. This may seem awfully shoestring and cavalier, but the truth is, it’s smart. It’s low-risk and test-driven in the real world of incomprehensible human behavior. Suits be damned. This is the era of Lean Startup.

These ideas were already kicking around in my head when I went to the Michigan Lean Startup Conference on Thursday. The conference drew a targeted crowd of regional startups and entrepreneurs. The large hall was filled with coffee mugs, horn-rimmed glasses, printed t-shirts, and iPads. It was decidedly scarce on ties, grey hairs, or anything resembling a briefcase. Is this a sort of age-ist, ra ra feel good camp? I don’t think so. Anybody can hop on board. But I do believe that growing up in the 80’s, 90’s, and early 2000’s cultivated a particular philosophy of business.

Lean Startup goes one step further in outlining a specific method to support this philosophy.  In essence, it means understanding your market (namely, whether there is one), determining your Minimum Viable Product (MVP), putting it out there, measuring customer results, revise, rinse and repeat. Scale as needed. All of these steps are taken in a matter of months or weeks. That which saves you time through this cycle is gold; that which adds time is waste. I’m not without criticism of this system, but I think the takeaway here is that you should not be afraid to test your product on your actual market. Largely, you will not be able to predict what people want until you give them a chance to try it and respond. You want to be results-driven. You don’t want to hedge huge bets on something that you discover too late is a useless product.

It was clear that this kind of thinking was in the air at Lean Startup, along with a few other cheerful tendencies. Eric Ries was first up to speak. He patented the term Lean Startup, and has since been touring the country professing its gospel.

“Take your phones out and turn them on,” he says with a smile. “I don’t want your undivided attention. That would be boring.”

The #leanstartupmi hashtag was announced, and immediately the tweets started rolling in. They were streamed onto projectors and conference attendees began communicating furiously and silently with each other, making connections, asking questions, retweeting, quoting and challenging the speakers. Not only was it a brilliant method of promoting Lean Startup to the outside, non-attending world (as every person there started advertising their location), but it created a new layer of conversation, adding dimension, dissent and praise to the speakers.
There were other signs of an auspicious future. “We want to make technology that is disruptive, we want to change the world,” he said. “If you want to make money, go work at Goldman Sachs.”

Later in the day Jeff Epstein, founder of zferral.com and Funded by Night, echoed the thought. “I make the least of all my friends,” he said. “but I’m the hero.”

One of the standout moments actually came from the investor’s panel, only slightly more formal in their light blue collared shirts and khakis. Conference attendees got to ask them questions about approaching venture capitalists. Many of them said similar things, that the lean startup model was usually beneficial to them because it was a system of minimizing risk. Not only do they start small and measure frequently, but often, lean startup companies have been bootstrapping and market testing on their own for some time, so there is a history of validation.  As Eric Ries puts it, “Achieving Failure” happens when you successfully execute a bad plan. After all, what does it matter if your project is beautiful, on time, on budget, and high quality if nobody wants it? You could have a 50 page business model, but a plan is only working foundation. It’s nearly impossible to measure the effectiveness of a business model without a long history of validation.

Yet more interestingly – and I realize this may still be the exception – the thirty-something whipshot VC guy Joel Yarmon was refreshingly frank with his feelings. “I’m not interested in companies looking for a quick flip,” he said to a spontaneous round of applause. In essence, you can make money selling your idea off to someone bigger, but what’s the point of that?

This seems to be the prevailing feeling. We want to change the world. We are interested in sustainability. We desire freedom and innovation over cashing in. We risk ideas, not capital. We put our products out in the real world as fast as possible. When it doesn’t work, we change it. We hate errors, we love customers. Smallness can be a virtue: we are fast, smart, available, bold and indebted to no one.

Some people might think that tech is a flash in the pan. It’s true that the raging popularity of consumer software (like iPhone apps) might die down in a little while. But software is more than consumer products. Software is in the back-end of everything. Software runs public transportation. Software builds buildings. Software designs toilets. Software spreads the news. Software boxed that cereal. Software ran that hospital. It’s not going away any time soon. What’s more, it might just be providing a new model for viable, ethical industry. I consider that a reason for optimism.

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