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Appropriate Technology for Lean Startups [Entrepreneurship
Posted on September 29, 2016 @ 05:59:00 AM by Paul Meagher

In my last blog I discussed the beginnings of my garage mini-winery project. I consider this to be, in part, an exercise in appropriate technology so in today's blog I want to discuss the idea of appropriate technology in relation to starting a business.

Wikipedia defines Appropriate Technology as:

... an ideological movement (and its manifestations) encompassing technological choice and application that is small-scale, decentralized, labor-intensive, energy-efficient, environmentally sound, and locally autonomous. It was originally articulated as intermediate technology by the economist Dr. Ernst Friedrich "Fritz" Schumacher in his work Small is Beautiful. Both Schumacher and many modern-day proponents of appropriate technology also emphasize the technology as people-centered.

There was a time when most wine was made using appropriate technology. It didn't cost you alot of money for a wine press and you could legally sell or barter your wine product. When I look at some wineries now I marvel at the large stainless steel variable-capacity fermentation tanks and the rows of oak barrels used to age the red wines. One of the steel tanks probably costs around $20,000 a unit and each oak barrel can set you back $1000. Considering that you don't make any money for a few years when you are putting in a vineyard, to then have to shell out the massive amounts of money for the winery equipment makes the prospect of becoming a profitable vineyard/winery operation a longer term goal than I would like.

I used to think that I would have to go into significant debt to get my winery operation started but reading a book by Sheridan Warrick (2nd Edition, 2015) helped to convince me that I could produce quality wine in my garage using cheap wine making equipment you can find in a local wine store (which I already have from making kit wines).

The stainless steel fermentation tanks are not a requirement for making wine and don't necessarily produce a higher quality wine than you can in a garage with plastic and glass carboys, but they are nice when you have lots of grapes to process. I'm not in that situation now so what is appropriate for me is quite different than what is appropriate for a more established winery. I could shell out lots of money for a mechanical wine press but my own wine press, while not as efficient, can still effectively extract wine out of my grape harvest. Next week my wine press will be powder-coated around the collection tray so the pressed grape juice is not in contact with any rust/oxidized metal.

It is easy to have equipment envy when you are starting any business. You see all the images of supposedly successful people with their expensive equipment and you think you have to have the same equipment. Resist the urge because it is often a business fault to lose your leanness too early in the startup game. If you buy expensive equipment you don't have the benefits of being lean anymore and your future actions are more cash constrained and determined. You should be trying to define what the appropriate technology is for your current situation, not what the appropriate technology is for a more established business that can afford the shinier new equipment.

Another meaning of appropriate technology is that it can be appropriated by most people without having to spend a lot of money. The concept finds wide usage in developing economies where western technologies are either too expensive, not locally maintainable, or not sustainable. If you find yourself in a situation buying equipment that is too expensive or not maintainable by you then you should be asking yourself if you can find a technology that is more appropriate to a lean startup that will still get the job done. Perhaps you have to trade more manual effort for the automation and motors that might be used in the higher-end equipment. That is a tradeoff we should be expecting and making when starting a business as that is often the nature of appropriate technology (see definition above).

One more reason to focus on appropriate technology for your startup is because it is generally a good idea to start small. In Permaculture, we don't put in an acre garden unless we know how to manage a much smaller garden first. Gardeners make the mistake of going too big too fast all the time, myself included. The concept of "appropriate technology" can help put the brakes on a similar mistake that startups make when selecting technology for their business.




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