Eric Ries and the Origins of the Lean Startup Theory—The Full Xconomy Interview

7/6/11Follow @wroush

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I think we have been able to put the concept of product-market fit on a quantitative basis. And we can give people not a formula, but a quantitative framework for figuring out when to pivot and when not to pivot. I feel like that is a real contribution to the understanding of entrepreneurship that this book is going to provide.

X: Let me ask the question one more time, because I think it’s a really important question. With the idea of product-market fit-and the etymology of that probably has more to do with Marc Andreessen—the premise there is that there is a pre-existing thing called a market, and the assumption is that the product must evolve to fit the market. And I guess what I’m saying is that the best products create a market. If that’s the direction things go, how do you apply any of these methodologies?

ER: That’s not only the direction, that’s the truth. I don’t want to speak for Marc at all, but the way I use product-market fit, it is a retrospective analysis. Whenever an entrepreneur asks me, “Do I have product-market fit?” the answer is no. If you have product-market fit, you just know it. When it happens, you’re like, “Holy shit.”

Some people try to launch a product into an existing market and take market share away from somebody else. But most startups create a new market or explode an existing market and fragment it and then own one of the fragments. So we’re describing what it’s supposed to look like when the engine of growth is firing on all cylinders.

The problem with that concept is exactly what you said: it’s not prescriptive at all. It can’t tell you one thing about what to do. All it can tell you is, “You suck, because you don’t have product-market fit.” I think in the book, I can offer people specific guidance now. I can help you evaluate how close to product-market fit you are. If you are setting out to create a market, how do you know if you’ve been successful at doing that? We can answer that question. Then let’s say I’ve been working on something for six months. Have I gotten closer to product-market fit over these six months or not? If the answer is no, you’re in the wrong business. This doesn’t lend itself to sound bites, the way the more famous parts of the model do, but I think it’s actually the most important part of the book.

X: Do you apply all this stuff to your own content, your own talks? How often do you iterate? Is it possible that at this point your whole framework has become a vision that is so dear to you that you can’t pivot, can’t afford to let it fail? How do you iterate on something you have said in front of thousand of people?

ER: The truth of entrepreneurship is that it just keeps getting harder because the stakes just keep going up. I think that I credit the model with the success that I have had. Because I am under such pressure not to be a hypocrite, I feel obliged to do things that I find unpleasant—to actually test and be responsive to different kinds of feedback. Take like that very first talk I gave at the Web 2.0 Expo. I did the full model on that talk. I had a customer advisory board to help me refine the content. I did a lot of marketing tests to figure out how to get people to come and what topics were important to cover and the description of why you ought to come to this talk. I did a number of test talks including one at Stanford for a 25-person group. I did a lot of stuff behind the scenes to really refine and hone and get it right, so that A, people would be in the room, and B, I would have a message they wanted to here. That was the ignition moment for me. So many good things came out of that experience. And it wouldn’t have happened if I had just followed the standard way that you do these things. It would have been the first time I was delivering the talk, and it wouldn’t have gone over as well as it did. Did I enjoy having a customer advisory board just for a talk? No way. That was not fun at all. It was excruciatingly painful. But do you want to have a good time or do you want to be successful?

X: But now you have written down all of these ideas in the form of a book that’s coming out, on paper. So do you still feel like you have room to keep evolving your message?

ER: I hope so. If five years from now I can point to 10 things from the book that are wrong, I will be really excited, because it will mean that … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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  • http://www.chasminnovations.com Robert DiLoreto

    Wait…now that we built it leveraging Lean Start-up principles…”THEY WILL COME?” I understand the “Customer Development” component of Lean Start-up…but am still missing ideal strategies to generate new customers and users, especially for B2B startups providing a “disruptive technology/solution”

    It sounds like all you now need to do next is implement a sales/marketing 2.0 tool, add a “PRICING AND PLANS” section on your website and hire some internal telemarketers?

    Sounds like a single point of potential failure to me…Should these start-up’s also target big company “C-Suites” and communicate their value prop towards “C-Suite” sponsored initiatives? Should a “top down” sales approach be ignored? “Bottoms up” / viral approach only?

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