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The Way Forward Is To Learn To See Every Startup In Any Industry As A Grand Experiment.

-Eric Ries

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The Way Forward Is

Eric Ries

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The Way Forward Is To Learn To See Every Startup In Any Industry As A Grand Experiment.

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If You Cannot Fail, You Cannot Learn.

At Imvu, We Opened Up Our Board Meetings To The Whole Company.

Better To Have Bad News That's True Than Good News We Made Up

The Lesson Of The Mvp Is That Any Additional Work Beyond What Was Required To Start Learning Is Waste, No Matter How Important It Might Have Seemed At The Time.

The Grim Reality Is That Most Start-ups Fail. Most New Products Are Not Successful. Yet The Story Of Perseverance, Creative Genius, And Hard Work Persists.

The Hardest Part Is The Grueling Work Of Constantly Being Wrong.

Because Startups Often Accidentally Build Something Nobody Wants, It Doesn’t Matter Much If They Do It On Time And On Budget. The Goal Of A Startup Is To Figure Out The Right Thing To Build - The Thing Customers Want And Will Pay For - As Quickly As Possible.

Most Start-up Companies Fail And It Is Smart Public Policy To Help Entrepreneurs Increase Their Odds Of Succeeding. But, The Biggest Loss To Our Economy Is Not All The Start-ups That Didn't Make It: It's The Ones That Might Have Been Created But Weren't.

Every Startup Has A Chance To Change The World, By Bringing Not Just A New Product, But An Entirely New Institution Into Existence.

What Differentiates The Success Stories From The Failures Is That The Successful Entrepreneurs Had The Foresight, The Ability, And The Tools To Discover Which Parts Of Their Plans Were Working Brilliantly And Which Were Misguided, And Adapt Their Strategies Accordingly.

This Is One Of The Most Important Lessons Of The Scientific Method: If You Cannot Fail, You Cannot Learn.

Scientific Method

Zero Invites Imagination, But Small Numbers Invite Questions About Whether Large Numbers Will Ever Materialize.

Most Phenomenal Startup Teams Create Businesses That Ultimately Fail. Why? They Built Something That Nobody Wanted.

Start-ups Make So Many Mistakes That The Challenge To Identify The Root Cause Of A Failure Is Tough. But Believing In Your Own Plan Is Probably The Worst.

By The Time That Product Is Ready To Be Distributed Widely, It Will Already Have Established Customers.

Entrepreneurs Always Pitch Their Idea As 'the X Of Y,' So This Is Going To Be 'the Microsoft Of Food.' And Yet Disruptive Innovations Usually Don't Have That Character. Most Of The Time, If Something Seems Like A Good Idea, It Probably Isn't.

Entrepreneurs Can't Forecast Accurately, Because They Are Trying Something Fundamentally New. So They Will Often Be Laughably Behind Plan - And On The Brink Of Success.

Leadership Requires Creating Conditions That Enable Employees To Do The Kinds Of Experimentation That Entrepreneurship Requires.

Entrepreneurship

There Is No Greater Country On Earth For Entrepreneurship Than America. In Every Category, From The High-tech World Of Silicon Valley, Where I Live, To University R&d Labs, To Countless Main Street Small Business Owners, Americans Are Taking Risks, Embracing New Ideas And - Most Importantly - Creating Jobs.

There Was A Study Done In The Early 20th Century Of All The Entrepreneurs Who Entered The Automobile Industry Around The Same Time As Henry Ford; There Were Something Like 500 Automotive Companies That Got Funded, Had The Internal Combustion Engine, Had The Technology, And Had The Vision. Sixty Percent Of Them Folded Within A Couple Of Years.

Products A Start-up Builds Are Really Experiments…learning About How To Build A Sustainable Business Is The Outcome Of Those Experiments [which Follow] A Three-step Process: Build, Measure, Learn.” “[a Startup Is] … An Organization Dedicated To Creating Something New Under Conditions Of Extreme Uncertainty.

In The Old Economy, It Was All About Having The Answers. But In Today’s Dynamic, Lean Economy, It’s More About Asking The Right Questions. A More Beautiful Question Is About Figuring Out How To Ask, And Answer, The Questions That Can Lead To New Opportunities And Growth.

Learning To See Waste And Systematically Eliminate It Has Allowed Lean Companies Such As Toyota To Dominate Entire Industries. Lean Thinking Defines Value As 'providing Benefit To The Customer'; Anything Else Is Waste.

Progress In Manufacturing Is Measured By The Production Of High Quality Goods. The Unit Of Progress For Lean Startups Is Validated Learning-a Rigorous Method For Demonstrating Progress When One Is Embedded In The Soil Of Extreme Uncertainty.

Most Companies Are Busy Making Their Products Worse, Not Better. Updating Is Almost Always A Disaster.

The Goal Of A Startup Is To Figure Out The Right Thing To Build-the Thing Customers Want And Will Pay For-as Quickly As Possible. In Other Words, The Lean Startup Is A New Way Of Looking At The Development Of Innovative New Products That Emphasizes Fast Iteration And Customer Insight, A Huge Vision, And Great Ambition, All At The Same Time.

Don’t Be In A Rush To Get Big. Be In A Rush To Have A Great Product.

Entrepreneurship Is Not Really Building A Product, It's Not Having An Idea, It's Not Being In The Right Place At The Right Time. It's Fundamentally Company Building.

Entrepreneurship

The Goal Of Every Startup Experiment Is To Discover How To Build A Sustainable Business Around That Vision.

The Only Way To Win Is To Learn Faster Than Anyone Else.

The Lean Startup Method Is Not About Cost, It Is About Speed.

When Steve Jobs And Steve Wozniak Created Apple Computer In A Garage In Palo Alto, It Heralded The Beginning Of The Pc Revolution That Ultimately Dealt A Death-blow To Dozens Of Older Companies.

When Blame Inevitably Arises, The Most Senior People In The Room Should Repeat This Mantra: If A Mistake Happens, Shame On Us For Making It So Easy To Make That Mistake.

All Innovation Begins With Vision. It’s What Happens Next That Is Critical.

A Solid Process Lays The Foundation For A Healthy Culture, One Where Ideas Are Evaluated By Merit And Not By Job Title.

A Pivot Is A Change In Strategy Without A Change In Vision.

The Mistake Isn't Releasing Something Bad. The Mistake Is To Launch It And Get Pr People Involved. You Don't Want People To Start Amping Up Expectations For An Early Version Of Your Product. The Best Entrepreneurship Happens In Low-stakes Environments Where No One Is Paying Attention, Like Mark Zuckerberg's Dorm Room At Harvard.

New Customers Come From The Action Of Past Customers

We Need To Reengineer Companies To Focus On Figuring Out Who The Customer Is, What's The Market And What Kind Of Product You Should Build.

What If We Found Ourselves Building Something That Nobody Wanted? In That Case What Did It Matter If We Did It On Time And On Budget?

Building Something

I Believe For The First Time In History, Entrepreneurship Is Now A Viable Career.

The Attributes For Entrepreneurs Cut Both Ways. You Need The Ability To Ignore Inconvenient Facts And See The World As It Should Be And Not As It Is. This Inspires People To Take Huge Leaps Of Faith. But This Blindness To Facts Can Be A Liability, Too. The Characteristics That Help Entrepreneurs Succeed Can Also Lead To Their Failure.

As An Entrepreneur, I Knew That If My Company Failed, I Could Always Try Again. So I Often Felt That The Only Real Risk Of True Financial Ruin Came From The Possibility Of A Serious Illness That Either Exceeded My Insurance Plans Lifetime Limits, Or Was Not Covered Due To Rescission.

Serious Illness

We Must Learn What Customers Really Want, Not What They Say They Want Or What We Think They Should Want.

If You Can’t Out Iterate Someone Who Is Trying To Copy You, You’re Toast Anyway.

If The Plan Is To See What Happens, A Team Is Guaranteed To Succeed - At Seeing What Happens - But Won't Necessarily Gain Validated Learning - If You Cannot Fail, You Cannot Learn.

At Imvu, The Cost Of Customer Acquisition Through Our Five-dollar-a-day Adwords Campaign Was Less Than Twenty-five Cents. Our Revenue From Those Same Customers Was More Than A Dollar.

If We Stopped Wasting People's Time, What Would They Do With It?

The Only Person Who Can Put You Out Of Business, In The Early Days, Is Yourself.

A Start Up Is An Institution Designed To Thrive In The Soil Of Extreme Uncertainty

Lean Thinking Defines Value As Providing Benefit To The Customer; Anything Else Is Waste.

The Big Question Of Our Time Is Not Can It Be Built? But Should It Be Built? This Places Us In An Unusual Historical Moment: Our Future Prosperity Depends On The Quality Of Our Collective Imaginations.

In A Startup, Both The Problem And Solution Are Unknown.

Problems And Solutions

Except In Very Narrow Cases, Where There's Breakthrough Science That Needs Patent Production, Worrying About Competitors Is A Waste Of Time. If You Can't Out Iterate Someone Who Is Trying To Copy You, You're Toast Anyway.

Customers Don't Know What They Want. There's Plenty Of Good Psychology Research That Shows That People Are Not Able To Accurately Predict How They Would Behave In The Future. So Asking Them, 'would You Buy My Product If It Had These Three Features?' Or 'how Would You React If We Changed Our Product This Way?' Is A Waste Of Time. They Don't Know.

Science And Vision Are Not Opposites Or Even At Odds. They Need Each Other. I Sometimes Hear Other Startup Folks Say Something Along The Lines Of: 'if Entrepreneurship Was A Science, Then Anyone Could Do It.' I'd Like To Point Out That Even Science Is A Science, And Still Very Few People Can Do It, Let Alone Do It Well.

Learning Is The Essential Unit Of Progress For Startups.

The United States Is Locked In A New Arms Race For That Most Precious Resource - The Future Entrepreneurs Upon Whom Economic Growth Depends. Substantial Research Shows That Immigrants Play A Key Role In American Job Creation.

You Know How People Always Talk About How Vision Is The Key To Entrepreneurship And Perseverance And Really Seeing What Other People Don't See? We Can Actually Redeem A Fair Amount Of That Folk Wisdom.

As You Consider Building Your Own Minimum Viable Product, Let This Simple Rule Suffice: Remove Any Feature, Process, Or Effort That Does Not Contribute Directly To The Learning You Seek.

Nowadays People Talk About Paypal's Founders As Prescient Geniuses Who Would Inevitably Change The World. It Was, However, Not So Obvious That Paypal Would Taste Its First Major Success By Helping People Sell Beanie Babies On Ebay. But They Had A Vision, A Hope, And The Perseverance To Try Multiple Iterations Until They Got It Right.

The Minimum Viable Product Is That Version Of A New Product Which Allows A Team To Collect The Maximum Amount Of Validated Learning About Customers With The Least Effort.

Meritocracy Is A Good Thing. Whenever Possibly, People Should Be Judged Based On Their Work And Results, Not Superficial Qualities.

Vanity Metrics Are The Numbers You Want To Publish On Techcrunch To Make Your Competitors Feel Bad.

There Is Much That Public Policy Can Do To Support American Entrepreneurs. Health Insurance Reform Will Make It Easier For Entrepreneurs To Take A Chance On A New Business Without Putting Their Family's Health At Risk. Tort Reform Will Make It Easier To Take Prudent Risks On New Products In A Number Of Sectors.

It Doesn't Matter If You Call It A Boom Or A Bubble. The Startup Business Moves In Cycles, And What Goes Up Will Eventually Come Down.

If We Do Not Know Who The Customer Is, We Do Not Know What Quality Is.

If You Don't Know Who Your Customer Is, You Don't Know What Quality Is.

If Your Goal Is To Make Money, Becoming An Entrepreneur Is A Sucker's Bet. Sure, Some Entrepreneurs Make A Lot Of Money, But If You Calculate The Amount Of Stress-inducing Work And Time It Takes And Multiply That By The Low Likelihood Of Success And Eventual Payoff, It Is Not A Great Way To Get Rich.

Sustainable Growth Is Characterized By One Simple Rule: New Customers Come From The Actions Of Past Customers.

Using The Lean Startup Approach, Companies Can Create Order Not Chaos By Providing Tools To Test A Vision Continuously.

In My First Start-up, I Had An Initial Advertising Budget Of $5 Per Day Total. That Would Buy Us 100 Clicks Per Day. At $5 Per Day, Marketing People Scoffed And Said That Is Too Small To Matter. But If You Think About It, To An Engineer, 100 Real Humans Everyday Giving Your Product A Try Means You Can Really Start Improving.

A Head Start Is Rarely Large Enough To Matter, And Time Spent In Stealth Mode-away From Customers-is Unlikely To Provide A Head Start. The Only Way To Win Is To Learn Faster Than Anyone Else.

The Way Forward Is To Learn To See Every Startup In Any Industry As A Grand Experiment.

The Lean Startup Has Evolved Into A Movement That Is Having A Significant Impact On How Companies Are Built, Funded And Scaled.

Innovation Is A Bottoms-up, Decentralized, And Unpredictable Thing, But That Doesn’t Mean It Cannot Be Managed.

Unpredictable Things

Our Educational System Is Not Preparing People For The 21st Century. Failure Is An Essential Part Of Entrepreneurship. If You Work Hard, You Can Get An 'a' Pretty Much Guaranteed, But In Entrepreneurship, That's Not How It Works.

Start-up Success Is Not A Consequence Of Good Genes Or Being In The Right Place At The Right Time. Success Can Be Engineered By Following The Right Process, Which Means It Can Be Learned, Which Means It Can Be Taught.

Reading Is Good, Action Is Better.

I Would Say, As An Entrepreneur Everything You Do - Every Action You Take In Product Development, In Marketing, Every Conversation You Have, Everything You Do - Is An Experiment. If You Can Conceptualize Your Work Not As Building Features, Not As Launching Campaigns, But As Running Experiments, You Can Get Radically More Done With Less Effort.

The Biggest Start-up Successes - From Henry Ford To Bill Gates To Mark Zuckerberg - Were Pioneered By People From Solidly Middle-class Backgrounds. These Founders Were Not Wealthy When They Began. They Were Hungry For Success, But Knew They Had A Solid Support System To Fall Back On If They Failed.

I Asked All Of Our Recruiters To Give Me All Resumes Of Prospective Employees With Their Name, Gender, Place Of Origin, And Age Blacked Out. This Simple Change Shocked Me, Because I Found Myself Interviewing Different-looking Candidates - Even Though I Was 100% Convinced That I Was Not Being Biased In My Resume Selection Process.

A Startup Is A Human Institution Designed To Deliver A New Product Or Service Under Conditions Of Extreme Uncertainty.

Here In Silicon Valley, I Have Taken Part In Hundreds Of Conversations Trying To Convince People To Dive In And Become Entrepreneurs. All Too Often, Innovators With Good, Safe, Jobs Are Unwilling To Put Their Family's Access To Health Care At Risk By Walking Away From Company-backed Medical Insurance.

Customers Don't Care How Much Time Something Takes To Build. They Care Only If It Serves Their Needs.

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