Two of my New Years resolutions are to maximize serendipity and stop worrying about spending money, so I spent $30 to hear Eric Ries talk about lean startups yesterday in San Francisco.
- Ries’s basic message is that most startups fail, but if you are able to get feedback quickly and change your idea (“pivot”), you can test out more ideas, and maximize your chance of finding a profitable idea before you run out of money. Instead of spending tons of money building out a product and then testing it on customers, you should get feedback as quickly as possible, to make sure that your product will actually have customers.
- I think of Ries’s ideas as checks against human bias. People are extraordinarily protective of their ideas and projects, don’t like to be told that their product won’t be successful, and especially don’t like to be told that the 6 months of work they just put into a product is useless. If startups fail because of the hubris of their founders, then a methodology that tells you to learn from customers early, and tighten your feedback loop will improve the success rate of startups. One of the two questions I would have asked would have been about the root causes of startup failure, whether they are related to too little feedback, or just poor execution.
- Conventional wisdom says startup founders are supposed to be irrationally optimistic about their product; anything less and they might not have the werewithal to persist through the trough of disillusionment, persuade VC’s to give them money, etc. Lean startup says that you should be more realistic about the prospects of success. Ries pointed out there are tradeoffs for each approach. Irrationally optimistic founders won’t have problems getting people to put out 120%, getting money from VC’s, and selling people on a product, even if the product doesn’t exist. However, if a startup organized like that has to pivot to a different idea, the employees might find it hard to switch. With lean startup/more realistic approach, every employee has a tougher mental burden, but it’s easier to pivot, and decisions will be based more on data (instead of “vision”).
- By default people should be skeptical of someone trying to sell them advice. If the lean startup is such a useful tool, why isn’t Ries founding startups and crushing the competition with it? Thus my second question was going to be about how Ries measures the success of his philosophy, especially at the margin. In Ries’s defense, he was at a profitable company (IMVU), and probably is applying the lean startup approach to his own brand.
- Someone asked Ries about hiring, and I was interested to hear the answer. Ries said he didn’t really have any special advice, except that hiring committees use the fundamental attribution error too often; they attribute qualities to a candidate that are really factors of their environment. (As an example, it would be a fundamental error to say that a Microsoft programmer was going to produce more bugs and be a more boring person than an average software developer).
- I was the only college student at the event out of about 30 people. Most people were happy to talk to me, give advice, etc. I suspect this is because it was a pricey event and it was marketed to professionals. Either way, it would be good to go to more events like these.
- However, one thing I need to continue to work on is trying to get to know one or two people very well, so that I can gain mentors and friends instead of making a good impression on six different people. I would do better if I focused my energies.
- As usual I was pretty nervous about approaching strangers. My usual strategy is to a) ignore the voice in my head telling me to leave immediately, and b) warm up with someone “easy” before moving on to people I really want to talk to. That strategy continued to work.
- If you close your eyes, Ries and Andrew Warner sound like the same person.
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