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

7/6/11Follow @wroush

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having arguments with people that I won. That was how I knew I was on the right track. I was trying to change people’s behavior, and if you can’t answer questions like “How do you know it will work for me in my enterprise software business, maybe it’s only for consumer Internet?,” if you can’t answer that question with facts, with truth, then no one is ever going to take you seriously. No one is going to change their behavior on a whim. But once I started to be able to walk people from first principles to here’s why it’s going to work for you, I could feel the difference, and I had a real sense the advice I was giving people was true.

X: You’ve said several times, though, that the ideas still sounded crazy to most people. So where did you turn for the evidence, the analytics needed to convince people this was going to work?

ER: There was no evidence. I mean, look, evidence requires academic study. To truly know that this thing works—we are still years away from that, to be honest. There is a difference between scientific knowledge and folk wisdom. Almost all of entrepreneurship right now is run on folk wisdom. Not to dis folk wisdom. For thousands of years humanity has relied on folk wisdom to get by, and there’s a lot of knowledge that accumulates in folk wisdom. But the reason we do science is that we know a lot of crap gets accumulated in folk wisdom too.

So at the beginning, I had really well told stories. People told me I had well told stories. And I felt like I was speaking to a lot of real challenges and dilemmas that a lot of entrepreneurs faced that nobody else was talking about. But let’s not kid ourselves, it was a story, it was a good story. And it was enough to tell people “You should try this yourself and see what happens.” There is a recording of the very first time I gave this talk, and you can go back and listen to it. I’m telling people not to go nuts. I’m saying just think of one specific thing you could do along these lines and go and test it out for yourself. Because if this is a scientific theory you should be able test it out scientifically.

So people then took me up on this offer, and they became the evidence that it works. Because then we started to have the phenomenon of these meetups starting to organize. I’m not the evangelist. It’s the entrepreneurs who did this and told people about it and organized, they are the unheralded people who really made this happen. I started being ask to speak everywhere. I’ve traveled more in the last two years than in the rest of my life combined. I started getting invited to go to all kinds of obscure places and by the time I got there, there was an entrepreneur who had arranged talks and meetups and conferences. I mean they had my itinerary blanketed. They did the hard work of figuring out who would be willing to listen to me and I just showed up and talked.

X: The enterprise software example is an interesting one. When people would ask that question, would you try to find commonalities between enterprise software development and startup software development and try to say it’s not that different?

ER: No. I tried that. It didn’t work. What worked, the best thing I could come up with, was to tell people you can’t translate tactics situationally. They are just too different. We could argue about it all day. Who’s to say is enterprise software similar enough. I got questions about bioscience, cleantech, clothing stores. I got everything. So my solution was, let’s abstract out the principles behind this and show deductively that those principles are universal within a certain context.

I have a definition of entrepreneurship. That definition is that within a certain zone of work, our primary mission is to deal with uncertainty. That is what it means to be an entrepreneur. So I would ask people, “Do you feel like you have high uncertainty in your business?” “Oh, why yes I do.” “Okay, well do you see how these techniques are fundamentally about uncertainty and not about engineering?” And if I could make that conceptual link, then I could say, “Okay good, do you see how reducing cycle time helps you cope with uncertainty faster?” “Yes.” “Okay, what’s your cycle time? And let’s talk about how we might reduce it.” Then we get away from an argument about “Can I ship 50 times a day like IMVU does,” which everyone always thinks the answer is no (though often the answer is yes, but we could argue about it all day long) but now I can say, “Let’s talk about your business and let’s reason about it using this theory and then let’s test it.” I thought that was the key that unlocked everything that happened later.

X: So how long did it take between that first formalization of the idea, the first diagram in the meeting at Mike Maples’ office, and you getting all these speaking invitations? Less than a year, right?

ER: It was very fast. Which is all about the Internet.

X: But it also seems like there was very fertile ground for the ideas.

ER: The timing could not have been better. To be talking about something called Lean Startup right when the financial crisis was happening—I mean, very good timing. I wish I could say I thought about that, but I was very lucky.

X: But it wasn’t just the financial crisis. There was something else about this moment in the evolution of entrepreneurship.

ER: The way I experienced it at the time, it was that people had an almost unlimited appetite for new ideas about entrepreneurship. Fundamentally, our discourse about entrepreneurship had become completely stale. And that the old model was discredited but … 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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