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The Lean Startup | Eric Ries | Talks at Google

Talks at Google・61 minutes read

Entrepreneur Eric Ries discusses lean startup principles, emphasizing validated learning, pivoting, and reducing cycle time for success. He highlights the importance of distinguishing between value and waste in product development, advocating for innovation accounting and celebrating successful pivots in startup management.

Insights

  • Eric Ries, founder of the Lean Startup movement, challenges traditional views of entrepreneurship and management, advocating for a more rigorous approach to entrepreneurship that emphasizes audience engagement and interaction.
  • The Lean Startup methodology, focusing on validated learning and reducing time between pivots, highlights the importance of distinguishing between value and waste, emphasizing the need for continuous learning and the celebration of successful pivots to establish a sustainable business model.

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Recent questions

  • What is the Lean Startup movement?

    The Lean Startup movement emphasizes audience engagement and interaction, challenging traditional views of entrepreneurship and management. It advocates for a more rigorous approach to entrepreneurship, defining startups as human institutions operating under extreme uncertainty. The methodology focuses on reducing time between pivots to increase success odds, merging customer development with Agile development to address uncertain customer preferences.

  • Who is Frederick Winslow Taylor?

    Frederick Winslow Taylor, known for scientific management, introduced concepts like time and motion studies and task decomposition. His Task and Bonus System rewarded workers for exceeding expectations, shifting from penalizing them. Taylor's work in the 19th Century aimed to improve efficiency and productivity in the workplace, influencing modern management practices.

  • What is the importance of validated learning in startups?

    Validated learning in startups involves distinguishing between value (what customers want) and waste (everything else). It emphasizes learning how to establish a sustainable business through quantitative data, focusing on continuous learning throughout product development. The concept of a "minimum viable product" is crucial, including only what's necessary to validate a business plan and accelerate learning processes.

  • How does Lean Startup view the concept of pivoting?

    In Lean Startup, pivoting is seen as a natural part of the process, not a failure. It involves making significant changes based on feedback loops to improve the product and business model. The methodology emphasizes the importance of innovation accounting, shifting focus from vanity metrics to actionable metrics based on customer behaviors to make specific predictions and improve judgment over time.

  • Why is obscurity advantageous for new products?

    Obscurity can be advantageous for new products as it allows for mistakes without public scrutiny. It provides a safe space for experimentation within teams, fostering innovation and creativity. Launching risky products under a different brand name can facilitate pivoting and encourage organizational growth by celebrating successful pivots rather than failures.

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Summary

00:00

"Eric Ries: Revolutionizing Entrepreneurship with Lean Startup"

  • Thomas Sharon introduces Eric Ries, founder of the Lean Startup movement
  • Eric Ries emphasizes the importance of audience engagement and interaction
  • Eric Ries promotes his upcoming book, available for pre-order at lean.st
  • Eric Ries discusses his transition from a programmer to a professional expert
  • Eric Ries criticizes current approaches to product development and entrepreneurship
  • Eric Ries outlines the five principles of the Lean Startup
  • Eric Ries challenges traditional views of entrepreneurship and management
  • Eric Ries advocates for a more rigorous approach to entrepreneurship
  • Eric Ries defines a startup as a human institution operating under extreme uncertainty
  • Eric Ries highlights the failures of startups, using Web 2.0 companies as an example

11:09

"Entrepreneurship: Building Sustainable Businesses in Uncertainty"

  • The dominant question in today's software companies is not whether something can be built, but if a sustainable business can be created around a product.
  • The future economic growth relies on the quality of collective imaginations.
  • Most startups face failure, and it's common in entrepreneurship.
  • Frederick Winslow Taylor, known for scientific management, introduced concepts like time and motion studies and task decomposition.
  • Taylor's Task and Bonus System rewarded workers for exceeding expectations, a shift from penalizing them.
  • In the 19th Century, workers were penalized for improving efficiency, leading to a culture of intentional slow work.
  • The great man theory of work, where managers select the best person and leave them alone, still influences knowledge and innovation work management.
  • Entrepreneurship requires a different management paradigm, focusing on concepts like pivoting and validated learning.
  • The Lean Startup methodology emphasizes reducing time between pivots to increase success odds.
  • Agile methodologies, originating in IT departments of big companies, are designed for known problems with unknown solutions, unlike the uncertainty in startups.

22:33

"IMVU's Failed Strategy and Dramatic Pivot"

  • Lean Startup focuses on products where customer preferences are uncertain, merging customer development with Agile development.
  • IMVU, a company created in 2004, aimed to revolutionize instant messaging with 3-D avatar technology.
  • IMVU's strategy involved creating an interoperable 3-D avatar add-on for existing IM networks.
  • The strategy was based on flawed assumptions, as customers did not have high switching costs for IM networks.
  • Customers in usability tests refused to invite friends to use the product, leading to a failed strategy.
  • IMVU pivoted to create its own IM network after realizing the flaws in their initial strategy.
  • Despite months of effort, all code developed for the initial strategy had to be discarded.
  • The realization that customers wanted to make new friends, not connect with existing ones, led to a dramatic pivot.
  • The importance of learning from failures was highlighted, emphasizing the need for continuous learning throughout product development.
  • Reflecting on the process, the founder questioned the necessity of extensive code development, suggesting a simpler approach could have yielded the same learning outcomes.

32:19

Lean Startup: Validated Learning for Sustainable Growth

  • Startups aim to learn how to establish a sustainable business through "validated learning" backed by quantitative data.
  • Lean Startup emphasizes distinguishing between value (what customers want) and waste (everything else).
  • The concept of "minimum viable product" in Lean Startup focuses on including only what's necessary to validate a business plan.
  • Lean Startup emphasizes reducing cycle time to accelerate learning and decision-making processes.
  • The Lean Startup approach views startups as catalysts turning ideas into code, which generates data for learning and improvement.
  • The concept of a "pivot" in Lean Startup involves making significant changes based on feedback loops.
  • Advice for startups should prioritize minimizing total time through feedback loops for effectiveness.
  • "Innovation accounting" shifts focus from vanity metrics to actionable metrics based on customer behaviors.
  • Establishing baselines and using actionable metrics help determine the success of a minimum viable product.
  • The "audacity of zero" highlights the challenge of transitioning from no results to initial results in startup management.

42:30

"Startup Success: Pivot or Persevere?"

  • Revenue should be zero at the start to avoid unrealistic expectations
  • Celebrate finding the truth of the current situation as progress
  • Tune the engine by making product development changes to improve conversion numbers
  • Two cases observed: one aiming for 10% conversion, the other hitting an asymptote
  • Schedule a meeting in advance to decide whether to pivot or persevere
  • Use innovation accounting to make specific predictions and improve judgment over time
  • Minimum viable product is crucial for obtaining initial information
  • Pressure to predict the future can hinder product development
  • Principles of the build-measure-learn feedback loop apply across industries
  • Pivoting should be seen as a natural part of the process, not a failure

52:52

Advantages of Obscurity for Product Innovation

  • Obscurity can be advantageous for new products, allowing for mistakes without public scrutiny.
  • Putting the Google brand on a product can hinder pivoting due to high expectations and pressure.
  • Leadership should focus on creating safe spaces for experimentation within teams.
  • Launching risky products under a different brand name can facilitate pivoting and innovation.
  • Celebrating successful pivots rather than failures is crucial for organizational growth.
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