October 12, 2017

Q&A with Eric Ries, Entrepreneur and the Founder of the Lean Startup Methodology

In our industry, the name Eric Ries needs no introduction. As the founder of the Lean Startup methodology, he started a huge movement which fundamentally changed how products are built and brought to market. Eric Ries - The Startup Way

Ries is coming to Cambridge on October 19th for a fireside chat with Harvard Business School professor, Tom Eisenmann. The event is scheduled in conjunction with the publishing of his second book titled The Startup Way which is available starting on October 17th.

I had the opportunity to speak with Ries about his early entrepreneurial pursuits, his new book, and his upcoming event next week.

Keith Cline: Where did you grow up and what brought you to Yale?

Eric Ries: I grew up in San Diego and both of my parents went to Yale. I almost attended MIT, but after touring the campus at Yale, I fell in love with the place.

I wanted to study computer science, but not only computer science. I liked the idea of getting a broad Liberal Arts education and the way they did it at Yale was very captivating. I had the opportunity to study philosophy, politics, and history, plus computer science. It was the right mix for me.

KC: How did you get involved with startups?

ER: I started in school actually. I probably would have been more successful if I was at MIT at the time. The dot-com bubble happened when I was in college and New Haven, CT was the last place on earth to get the memo about it. I got in at the very tail end of the mania when people were looking to fund college startups.

I launched a startup with friends from my dorm back in 1999. I took a leave of absence to pursue it. The bubble collapsed quickly, so the company went out of business in time for me to go back and finish my degree only one semester late. That gives you a sense of how bad my timing was.

KC: What was the idea behind your first company?

ER: It was a recruiting company. The idea was to create a website for college students from Ivy League schools to create online profiles for the purpose of sharing, which as you know turned out to be a kind of a good idea a few years later.

We were almost on to something, but we were so adamant that we wanted to build a “real business.” We wanted something that felt serious and was going to make money, which is one error that separates us from Mark Zuckerberg.

We were focused on recruiting, so we were going to sell access to the database of student profiles to employers. Getting students to sign up and do the profiles was easy, which was the real value. However, we were so fixated on trying to turn it into a business that we were always trying to figure out how to sell access to employers. We didn’t have any idea how to do enterprise sales. The bubble dropped out from under us and we were toast.

It was a good learning experience. By failing in a catastrophic way, it set me up to be ready to learn some important lessons that I just did not have the humility to learn before that. So, at the time it was super painful, but I don’t think I would have been able to figure things out the way I’ve have since then if it wasn’t for that early failure.

KC: What prompted you to write the first book - The Lean Startup - and were you surprised at how it essentially established a movement?

ER: Oh, very much so. I was quite surprised.

If you fast forward the story from my first company to a few years later, I had some more failure, then finally some success in Silicon Valley. I was in between startups trying to figure out what I wanted to do next.

I had always been the CTO and technical co-founder. At that time, I was imagining that I should probably try my hand at being a CEO at a startup. Before I do that, I figured that I should go find out what a CEO is supposed to do.

So, I just started interviewing everyone and I kept asking people what I considered to be the most elementary question about startups: When do you release the product so that it is good enough where you can get feedback but not too late where you have wasted time making it gold plated?

I only started writing about this topic because I was struggling to find the answer. People couldn’t really answer my question. Most of the people I would ask for advice would just tell me a story of what Steve Jobs had done or what they had done themselves to great success based on their own careers.

But, how would I know if that would work for me?

At the same time, I was getting asked to give advice to companies, which they didn’t like hearing. People would call me into their office as a favor, ask me to meet with their leadership team, and explain to them some of the things we had done at my most recent company that had made it so productive. I would explain continuous deployment, what we now call build-measure-learn, and minimum viable product - all of these concepts. Not only would people not listen to me, but they would yell at me. I would tell them that it is not a theory, but what worked for me.

I was telling a story that was different and not welcome because it contradicted things that people felt very passionately about. So, that is when I started writing about it, in an attempt to get people to stop yelling at me. They could at least pre-qualify me and read my blog. If you think I’m crazy, please don’t call.  

That is about as far ahead as I thought. Certainly, I never expected it to turn into this huge movement. It was quite a surprise.

KC: What has it ultimately meant for you, in terms of the success of the Lean Startup movement?

ER: It was surreal at first. I’ve gotten used to it now. But, as it got bigger and bigger, I felt more of a responsibility to try and figure out how do we harness all this energy and direct it to a positive purpose. This movement is not about me, it’s about a lot of people who have contributed intellectually and substantially to the discoveries we’ve made. So, to build a community around it and to get other people to take the ideas further than I could. That has really been my focus.

KC: What was the inspiration behind your new book, The Startup Way?

ER: I didn’t know if people were going to take the idea seriously about this new kind of management challenge that could apply to any company of any size.

For example, Dropbox was a tiny startup when the Lean Startup methodology first began getting traction and they now have thousands of employees. The companies who were around the ideas originally, they grew and now all of a sudden the management side of a lean startup becomes more interesting. They start to have management challenges that are different than MVPs and pivots from the earlier days in the company.

There has been an interesting congruence in my life as the work I was doing with startups as they grew larger started to overlap with the work I was being asked to do with the multi-nationals and public companies. I found that there were more similarities to those two situations than I expected, which was the spark behind the new book.

KC: How did you contribute to Harvard Business School as an Entrepreneur in Residence back in 2010?

ER: Tom Eisenmann, who I’ll be on stage with at the event, had the vision to bring me in. The purpose was to figure out ways to incorporate the practical Lean Startup way of thinking into the HBS curriculum and to have the business school students try hands-on entrepreneurial and product management challenges in real life. I think it was a real departure for HBS to move away from case methods to what they started to call a field method.

The insight that Tom had, which I thought was really brilliant, was that entrepreneurial management is going to become a core part of the general management discipline that everyone has to master and learn going forward. It applied to all the students, not just the ones studying entrepreneurship. It is not just founders who need these concepts, it’s a much broader literacy that is needed in the management practice of all companies.

KC: You achieved a great level of success with your first book, how do you determine success for The Startup Way?

ER: I focused a lot of this book on testing the concepts before I wrote it. My goal was to make it super practical and actionable. I’m not looking to match the success of The Lean Startup. I think if this allows companies to stop wasting so much of their employees’ time, energy, and creativity, then that is the sign of success that I will look for.

Every startup that intends to grow is going to have these types of problems. I just don’t think we pay enough attention to it. Founders think of themselves as the innovator for life, but as soon as you have product-market fit and a substantial number of customers, you start to face challenges that look a little bit more like a VC than a founder. How do I allocate resources? How do I train and encourage my employees to think in an entrepreneurial way? How do I know when and how to invest in the next big thing? I would like us, as an entrepreneurial ecosystem to take those ideas a little more seriously.

Don’t miss Eric Ries’ book launch event on October 19th.  Details here.

Keith Cline is the Founder of VentureFizz.  Follow him on Twitter: @kcline6.

Images courtesy of The Lean Startup.