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- Startups - Eric Ries of Lean Startup - TWiST #199
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Join our new mailing list and be the first to learn about upcoming guests! Jason interviewed Eric Ries, entrepreneur and author of The Lean Startup. Eric gave advice for all levels and phases of startups, from idea inception and shortening incubation times to managing the inevitable pivots. Later in the episode, Jason and Eric team up to deliver an 'Old Time Revival,' where audience members bring their business woes to the stage to have them healed by these two experts. Click here to stream the audio version of this episode. Click here to stream the video version of this episode. 0:00-2:00 Hey everyone this is ThisWeekIn Startups, my guest Eric Ries of Lean Startups is here. 1:00 What is Lean Startups? 2:45 It's all about addressing the customers needs. 4:10 Talking about the shortening gestation period for new startups. 6:19: Being lean isn't about how much money you raise. 6:55: What's the one piece of advice that makes people so drawn to it? Is it the Minimum Viable Product? 7:00-13:00 Survey Monkey 14:45 Software VS. Hardware startups. 15:33 The impact of Web 2.0 on startups. 16:30 The 'Summer of Startups' which are creating money, which are glorified ponzi schemes? 17:50 It's so much easier to make money today, with ecommerce. Will we not see a lot of these companies meander, when they make enough money to exist but not to progress? 19:09 All overnight successes had 2 years of failure under their belts. Twitter is an example. 20:00 Jason talks his Twitter past. 22:00 Eric talks network effects. 23:00 The key to getting over the fear of costumer feedback: feedback doesn't tell you about you, it tells you about them. 23:49 Haters are the best sources of great feedback, your fans won't get into details. 25:20 Feedback is the key, and entrepreneurs are afraid of feedback. 25:50 Discussion of the 'Steve Jobs Philosophy.' 29:16 Quality vs. Speed and 'Avatar Teleportation.' 31:50 Let's unpack testing. 32:00-36:00 MailChimp 40:10 Discussion of Facebook, World of Warcraft, and Viral Coefficient 41:30 You left out a couple of ways to build a business. 42:39 What do you think of Groupon? 44:49 Eric's Accounting Revolution 46:17 Greatest entrepreneurship movie of all time, Ghostbusters. 48:10: How do you know when to pivot, or when to perservere? 51:30 #1 Signal that teams need to pivot 52:35 Early launch is prematurely marketing your own demise. 53:30: Eric on the indicators of traction 54:30 Democratization of entrepreneurship 56:00 No audience questions, but audience horror stories, and Jason and Eric try and save your companies. Who is struggling in their business, let's have a revival! 57:00 The startup revival begins. 60:00 A pivot is a change in strategy, without a change in vision. 61:55 Woosh Traffic; what to do when your expenses match your revenue. 67:30 Gradebuddy.com; note-taking program for universities. How to get through a pivot, how to get through institutional sales. 1:12:55 If you can measure it, you can manage it. 1:13:30 Terry, Stumeroom (Netflix for costumes). What kind of metrics are needed to be used to see where the business will go, how to generate interest? 1:18:30 How to balance between assessment of business, without exposing yourself to being ripped off 1:20:00 Ideas mean nothing, execution is everything 1:21:10 An empty can makes the most noise. Talking about your idea before a consumer can engage is useless. 1:22:00 Quantifying viral coefficient. 1:24:00 Is there such a thing as over-iteration? 1:28:06 Jason and Eric break down Mahalo. Youtube Vs. iPad apps, which has better sustainable growth? 1:32:00 How do you build an organization on an operational basis? 1:35:00 In a startup, rip up your job description. Your job is to do whatever it takes to make the company succeed. 1:35:00 This has been a great night. Give it up for Eric, let's all go to Main Street!
Segments Timeline
Introduction to Lean Startups
In this segment, Jason introduces Eric Ries, the author of The Lean Startup, and sets the stage for a deep dive into the principles of Lean Startups. Eric explains the foundational concepts of Lean Startups, emphasizing the importance of addressing customer needs and the iterative approach to product development.
"today's episode of this weekend startups is brought to you by SurveyMonkey go to try. surveymonkey.com twist and sign up for a free trial and MailChimp manage lists with up to 2,000 subscribers and se..."
What is Lean Startups?
Eric Ries defines Lean Startups by drawing an analogy to lean manufacturing. He discusses how the Lean Startup methodology applies scientific and customer-centric approaches to entrepreneurship, aiming to make the process more rigorous and less reliant on guesswork.
"go I programmed computers for a living and that's a job I really understood well I was I was a pretty good programmer I've been programming you know since I was a kid and then I was doing startups and..."
The Importance of Customer Feedback
Eric shares his experiences with startups that failed despite having great technology. He emphasizes that the core issue often lies in building products that customers do not want, highlighting the necessity of obtaining customer feedback early in the development process.
"achieving failure we successfully executed the plan it's just we hadn't bothered to double check along the way hey is this actually a good plan at all we were so excited that we did the plan so effici..."
Continuous Deployment Explained
In this segment, Eric discusses the concept of continuous deployment, where code is released into production multiple times a day. He explains the methodology behind it and how it can significantly enhance the speed of learning from customer interactions.
"right there's really especially now that is that part of the because I'm not you know I'm I'm an old guy now I've been doing startups for 20 years I don't take part in The Lean Startup movement I take..."
Achieving Failure: The Launch Experience
Eric recounts a personal experience of launching a product after years of development, only to find that customers were not interested. He introduces the concept of 'achieving failure,' where a startup executes its plan perfectly but fails to validate the plan's viability.
"right hey everybody it's Jason kakanis the host of this weekend in startups the award-winning huge program that everybody is talking about and I want to tell you today about a product I've been using ..."
Learning from Mistakes
Reflecting on his past experiences, Eric discusses the importance of learning from failures in startups. He questions the lengthy timelines often associated with product development and advocates for quicker validation of ideas through minimal viable products.
"title okay twist survey twist survey this we can start off survey yeah we're going to do a demographic survey let's say oh very nice and we're going to copy an existing survey you can do that or you c..."
Creating a Landing Page for Validation
Eric suggests that entrepreneurs can test their ideas by creating simple landing pages to gauge interest before fully developing a product. This approach allows for early feedback and can save time and resources.
"very cool so now and also the response is randomized as well yes okay now there's I see over there they have a new feature on the top left what is that the question bank so the question bank is an awe..."
The Role of Money in Startups
Jason and Eric discuss the misconception that being lean is solely about how much money a startup raises. Eric emphasizes that different businesses require varying levels of complexity to reach their minimum viable product.
"don't even have to think of the questions anymore no I didn't even when did they add that feature that's awesome I didn't even know they had that very new wow so you can construct a survey with the me..."
The Minimum Viable Product (MVP)
Eric explains the concept of the Minimum Viable Product (MVP) and its significance in the Lean Startup methodology. He discusses how the MVP allows startups to test their hypotheses and gather valuable customer feedback.
"why I don't want you buying this thing and then telling me you don't like it I know you're going to love it it is the best product value for dollar pound for pound it's super affordable and they keep ..."
Techniques that Attract Entrepreneurs
Eric shares insights on what draws entrepreneurs to the Lean Startup movement. He highlights specific techniques like continuous deployment and split testing that have proven effective for many startups.
"for how long 6 months uh nine nine months wow Seems Like Only Yesterday When you started you've done an amazing job I'm really fond of you and the job you've done and I'm really fond of survey Mony an..."
Evolution of Product Development
Eric highlights the rapid evolution of product development in today's tech landscape, contrasting it with the challenges of Web 1.0. He illustrates how modern startups can quickly transition from concept to product, thanks to advancements in technology and infrastructure.
"differen sized companies different situations to you know different amounts of venture capital raised yeah I mean if you're building the flip cam right you know or a hardware product the minimal viabl..."
The Rise of Zombie Startups
Ries warns about the potential rise of 'zombie startups'—companies that generate just enough revenue to survive but lack the innovation to thrive. He discusses the implications of easy entry into entrepreneurship and the importance of distinguishing between value-creating companies and those merely chasing vanity metrics.
"possible now was not possible then do you worry that because it's so simple to start a company now that people are making too many companies well we'll see you know I've been saying that winter is com..."
Lessons from Twitter's Early Days
Eric shares insights from Twitter's early struggles, emphasizing that many successful companies had significant failures before achieving success. He recounts a personal anecdote about his initial skepticism towards Twitter's concept, illustrating the unpredictable nature of startup success.
"is so much easier to make money today though in the world of AdSense existing and yes networks existing um Google Wallet existing ppal existing all this infrastru I mean it's 20 years ago 1995 2000 I ..."
Understanding Vanity Metrics
Ries discusses the pitfalls of vanity metrics, using Twitter's early customer engagement as an example. He stresses the importance of actionable metrics that reflect true engagement and progress towards product-market fit, rather than superficial numbers that may mislead investors.
"lunch with Biz we're having breakfast and he said uh yeah so you and the website didn't exist they talk about minimal V product it was only SMS and he's like here I signed your phone up I said well wh..."
The Importance of Early Adopters
Eric explains the significance of early adopters in the success of network-oriented products. He highlights that achieving network effects often starts with a small, interconnected group before scaling to a broader audience, emphasizing the need for targeted growth strategies.
"business you can prove that it works that it's viable in microscale before you go huge right it's Facebook on the Harvard campus doesn't have to be on every campus in the world all at once you can pro..."
Facing Customer Feedback
Ries addresses the common fear entrepreneurs have regarding customer feedback. He emphasizes that feedback reveals insights about customers rather than the product itself, encouraging entrepreneurs to embrace criticism as a valuable tool for improvement.
"effects going even in tiny microscale and that for Network effects business really is the key do you feel that people are uh so afraid of talking to customers that they like to distract themselves wit..."
The Value of Haters
Eric shares his perspective on receiving negative feedback, suggesting that critics often provide the most valuable insights. He recounts his experiences with customer feedback, highlighting the importance of engaging with both supporters and detractors to refine products.
"you're stupid I hate you um this technique is wrong and for this reason ABC and d and I tried it at these four companies and I've seen it happen this way you're like oh wow this and I hate you and you..."
The Reality Distortion Field
Ries concludes by discussing the 'reality distortion field' concept, originally associated with Steve Jobs. He reflects on the entrepreneurial mindset that drives innovation and the balance between optimism and the harsh realities of customer feedback.
"great feature if 10 people in a row say that same thing oh I have a great idea why don't we go do that other feature I'm a genius all of a sudden but when people don't that is hard that's the name of ..."
Learning Through Experimentation
Eric emphasizes the importance of experimentation in understanding customer behavior. He critiques traditional focus groups and advocates for a build-measure-learn feedback loop, where entrepreneurs test their ideas in real-world scenarios to gather actionable insights. This approach helps startups discover what customers truly want rather than relying on assumptions.
"Steve Jobs um he doesn't listen to anybody right I mean he's like you want to have a USB port you want to you want to have a CD ROM drive you know what I'm taking everything out you get nothing you kn..."
Minimum Viable Product Misconceptions
In this segment, Eric clarifies the concept of the Minimum Viable Product (MVP). He argues that an MVP is not just about creating the simplest version of a product but about determining the least amount of work needed to learn about customer needs. This shift in perspective is crucial for startups aiming to validate their business ideas effectively.
"going back to my example at mvie we spent six months building a product you know when we look at it as an engineering exercise that was the absolute minimum we could imagine we had just pruning out ev..."
Quality vs. Customer Needs
Eric discusses the balance between product quality and meeting customer needs. He shares a personal anecdote about a product feature that initially seemed inferior but turned out to be a favorite among users. This highlights the idea that customer satisfaction is paramount, and understanding their preferences is key to defining quality in product development.
"development methodology from Le manufacturing to uh Six Sigma to software craftsmanship movement quality is the key and in the book I make the claim that if you don't know who the customer is you don'..."
Mastering Split Testing for Growth
Eric Ries explains the importance of split testing in startups, where different versions of a product are shown to customers to determine which performs better. He emphasizes the significance of defining success metrics and introduces the concept of 'engines of growth,' which helps startups measure their progress towards product-market fit.
"know all the pizza and Mountain VI and everything um customers interact with that code which generates data which we can measure and then we if we want can learn from them impacting our next set of id..."
Understanding Viral Growth Engines
In this segment, Eric discusses the viral engine of growth, using Facebook as an example. He explains how measuring the viral coefficient can indicate whether a product will grow exponentially. Eric contrasts this with sticky engagement models, like World of Warcraft, where retention and engagement are key metrics for success.
"closer and closer to that goal fact what I try to argue in the book is that engines of growth allows us to take Mark Andre's con concept of product Market fit and put it on a quantitative basis so it'..."
The Power of Paid Growth Engines
Eric Ries outlines the paid engine of growth, where startups generate revenue from customers and reinvest it into marketing. He explains how to determine if a business will grow by calculating the lifetime value of a customer against the cost of acquisition, emphasizing the importance of sustainable growth metrics.
"grow so in each engine of growth there are specific top level metrics that are the key to measure and the the nice thing about it is it allows you to ignore the other metrics that don't matter so if y..."
The Groupon Pivot Story
Eric shares the origin story of Groupon, detailing its initial failure as a platform for collective activism before pivoting to social coupons. He highlights the significance of learning from early failures and how the team recognized the value of customer engagement through their first successful coupon offering.
"things over many years if any of you have done that need to be here brand and Word of Mouth exactly is a 10-e process the things you're talking about could be a 10day 10 week process yeah I mean and t..."
The Accounting Revolution in Startups
In this segment, Eric discusses the challenges of accounting for high-growth startups like Groupon. He argues for a revolution in accounting practices to better reflect the realities of modern entrepreneurship, emphasizing the need for metrics that accurately capture customer lifetime value and business sustainability.
"because they had spent that year failing they knew how significant it was to get 20 people to do freaking anything and that allowed them to then have the courage to understand the engine of growth and..."
The Reality of Entrepreneurship
Eric Ries candidly describes the day-to-day realities of entrepreneurship, contrasting the glamorous portrayal in media with the actual hard work involved. He emphasizes the importance of product prioritization and the often tedious decision-making processes that entrepreneurs face.
"and which to ignore and whether to Pivot or persevere and like arguing with your co-founders constantly about what features absolutely have to be in the product is like really deeply deeply uninterest..."
Knowing When to Pivot or Persevere
Eric discusses the critical decision-making process of knowing when to pivot or persevere in a startup. He suggests scheduling regular pivot meetings to assess progress and metrics, advocating for a structured approach to managing uncertainty in entrepreneurship.
"they're out of business and so's Manhattan and so's Manhattan Manhattan's doomed so it's a really good thing that Zu happen to have the perfect timing to to invade Manhattan right at the first time mo..."
Scheduling the Pivot Meeting
Eric Ries emphasizes the importance of scheduling regular pivot meetings for startups. He suggests that instead of waiting for a crisis to assess whether to pivot or persevere, teams should proactively set a timeline for evaluation. This approach helps manage uncertainty and ensures that teams are prepared to make informed decisions based on key metrics.
"repeatedly making predictions testing failing and learning that's you know that's the essence of a scientific approach but I think we can do a lot better than the current model which is basically like..."
The Importance of Metrics
In this segment, Eric discusses the significance of focusing on key metrics rather than vanity metrics in business plans. He highlights how understanding the percentage of customers who sign up for a free trial can be a crucial indicator of future success. By prioritizing meaningful data, entrepreneurs can better assess their progress and make necessary adjustments.
"progress what are the uh metrics what are the key metrics that would it would tell me what I'm doing and when you do that let me just do a quick quick survey here who who here has ever written a busin..."
Recognizing Diminishing Returns
Eric explains the concept of diminishing returns in startup growth. He warns against the complacency that can arise when metrics show slight improvements but fail to meet critical targets. This segment stresses the need for entrepreneurs to recognize when their efforts are not yielding significant progress and to consider pivoting before it's too late.
"so what we're trying to do to decide whether you want to Pivot or not you have to first find out where we are right now I always say it's much better to have bad news that's true than good news that w..."
The Danger of Premature Launches
In this insightful discussion, Eric warns about the risks of launching a product prematurely. He argues that early exposure can lead to negative perceptions and ultimately harm a startup's reputation. This segment emphasizes the importance of ensuring that a product is ready for market before making it public.
"one signal that teams need to Pivot it feels like you're not working hard enough that is the symptom I often get called in to consult with companies because the engineers have stopped working hard and..."
The Need for Vision in Pivots
Eric discusses the critical distinction between a pivot and giving up. He stresses that a pivot should involve a change in strategy while maintaining the original vision. This segment highlights the importance of staying true to one's vision even when faced with challenges, ensuring that any changes made are aligned with long-term goals.
"right so launching premature launch is the worst because you're telling tons of people that your product's no good you know that just helps them be like great I'm not going to use your product thanks ..."
Democratization of Entrepreneurship
In this segment, Eric talks about the democratization of entrepreneurship and the rise of crowdfunding. He predicts that more people will have access to funding opportunities, which can lead to a more diverse range of startups. This discussion emphasizes the potential for innovation and growth in the entrepreneurial landscape.
"of success and just kill all those companies in the land of the living dead or merge them and get more teams together right I mean it it seems to me like this uh democratization of Entrepreneurship an..."
Separating Idea Failure from Company Failure
Eric shares his philosophy on the importance of distinguishing between idea failure and company failure. He encourages entrepreneurs to fail fast with their ideas to avoid larger failures down the line. This segment reassures listeners that experiencing failure is a natural part of the entrepreneurial journey and can lead to greater success.
"administration uh would be very good for the Obama Administration to make Kickstarter uh for Equity right as opposed to just for credit on the back of the CD um yeah I mean this is how people but what..."
Learning from Small Failures
In this segment, Eric discusses the advantages of being a small startup. He highlights how having a limited customer base allows entrepreneurs to learn and adapt quickly without significant repercussions. This approach fosters innovation and experimentation, which are vital for developing successful products.
"right I mean the the companies where it cause the maximum embarrassment are ones like the one I told you about before where you do the giant launch and then you realize it's disaster well now you got ..."
Startup Revival: Audience Interventions
Eric and Jason invite audience members to share their business struggles in a revival-style intervention. This segment showcases real-time problem-solving as they address specific challenges faced by entrepreneurs, providing insights and advice to help them navigate their difficulties.
"will take I will I will take the failure out of you right now give me that give me that microphone give me that Praise Jesus who wants to do it come on now who wants to take the failure out of that st..."
Navigating Compliance Issues
During an audience intervention, Eric provides guidance on handling compliance issues in startups. He emphasizes the importance of staying true to the original vision and not getting sidetracked by external pressures. This segment encourages entrepreneurs to focus on what truly matters to their business and to be willing to let go of distractions.
"tell me your pain son let's do it our let it out so but we all have pain here okay go ahead let it out so we started off on an idea to help uh coaches connect with other coaches in sports to recruit b..."
Breaking Free from Personal Networks
In this segment, Eric advises an entrepreneur on how to grow a business that has relied heavily on personal connections. He stresses the need to expand beyond familiar networks and develop strategies for attracting new customers. This discussion highlights the challenges of scaling a business and the importance of diversifying outreach efforts.
"tomorrow Jes no more compliance deal BR you it's very courageous we have an intervention here we had an intervention here who else had to start off need who has to start out here Praise Jesus you brin..."
Navigating Customer Acquisition Challenges
Eric addresses the challenges Erica faces in customer acquisition and the need for a clear growth strategy. He highlights the importance of understanding customer metrics and the potential for using paid advertising to drive growth, while also acknowledging the constraints of a self-funded business.
"know it got to be that one for one replacement so yeah we haven't done that the options are viral growth right make each person praise you know [ __ ] God you really get me this is I'm starting to get..."
The Pivot: Embracing Change in Business
In this segment, Eric discusses the significance of pivoting in startups, especially when faced with challenges in sales channels. He encourages entrepreneurs to embrace the learning process and adapt their strategies based on customer feedback and market demands.
"we live in an age I call it the rship of the means of production for those that remember all Carl marks you don't have to own the factory you can rent it you don't have to own giant Billboards and dis..."
The Journey of Institutional Sales
Eric and a participant share experiences with institutional sales, discussing the complexities and challenges involved. Eric emphasizes the importance of understanding the sales cycle and the need to pivot when faced with bureaucratic hurdles in the education sector.
"taking program where they would send students to take notes but the ridiculous thing was they would sell them notes in hard copy so we created pretty much a digital distribution platform and uh what w..."
Finding the Right Growth Metrics
Eric advises a participant on how to identify the right metrics for their startup, emphasizing the need for a clear growth hypothesis. He discusses the importance of defining customer pain points and aligning business strategies to effectively address them.
"um actually one thing really important let me tell you how much time we spent on the sales we actually even flew to Washington to speak to the founders of the you know the largest learning management ..."
Leveraging User-Generated Content
In this segment, Eric explores the potential of user-generated content as a growth strategy. He encourages participants to think creatively about how to engage users and leverage their experiences to drive business growth, particularly in the context of a college environment.
"company that we call the consumerization of Enterprise is like a big thing right now where things that used to have to be sold through Channel instead you go directly to the end user you get them to a..."
Preaching the Startup Gospel
Eric humorously reflects on the challenges of startups, likening his role to that of a minister preaching the startup gospel. This light-hearted moment underscores the passion and dedication required to navigate the entrepreneurial journey.
"more fun than your last one I promise if you could measure it you can manage it okay thank you very much thank you my son thank you thank you it's very another intervention it's a lot of Holy Ghost he..."
Navigating Growth Metrics
Eric Ries discusses the importance of selecting the right metrics for startup growth. He emphasizes that startups must choose a clear engine of growth and make decisions based on hypotheses rather than random experimentation. This segment highlights the significance of understanding customer needs and tracking relevant metrics to ensure effective pivots and strategic decisions.
"basically when to Pivot and persevere and or um basically what kind of metrics we would need to use to see like how or like where our business should go this is going to be an easy one for you go ahea..."
Concierge MVP Strategy
In this segment, Eric introduces the concept of the Concierge Minimum Viable Product (MVP). He suggests that startups can manually serve customers to gather feedback and validate their business ideas before investing in technology. This approach allows entrepreneurs to learn directly from their customers and refine their offerings based on real interactions.
"that experiment and see how it goes um I think the concept sounds really smart I mean you seem like you identified a clear customer paino it's around you know specific thing and so you won't be able t..."
Creative Marketing Tactics
Eric shares innovative marketing strategies for startups, particularly for college students. He encourages leveraging social events, such as themed parties, to engage potential customers and promote costume rentals. This segment illustrates how grassroots marketing can effectively build a customer base without significant advertising budgets.
"yeah and uh I have another thing to add to that just on the marketing front and PR um you're a student there yes and you have friends who are students there yes and uh are you in a sorority um I'm in ..."
The Fear of Idea Theft
Eric addresses the common fear entrepreneurs have about their ideas being stolen. He reassures that execution is far more critical than the idea itself and suggests testing this fear by attempting to get a second-best idea stolen. This segment emphasizes the importance of focusing on execution and the reality that many good ideas exist, but few can be successfully executed.
"there it's like a chocolate peanut butter right now where you been on my life oh my God now we got everybody wants that Holy Ghost spirit everybody we got too many people here how much how much time d..."
The Value of Execution Over Ideas
In this segment, Eric reinforces the notion that ideas are worthless without execution. He shares anecdotes about how many startups fail not due to a lack of good ideas but because they cannot execute effectively. This discussion highlights the importance of focusing on actionable strategies rather than getting caught up in the idea phase.
"would but but but you know we totally would well yeah we're ripping it off right now actually you already said we're entrepreneurs right rund anything you talk about getting the advice from haters but..."
Understanding Viral Coefficient
Eric explains how to quantify the viral coefficient, a crucial metric for measuring growth in startups. He breaks down the formula and emphasizes the importance of understanding how invitations and conversions work in a viral context. This segment provides practical insights into tracking growth and ensuring that product development aligns with customer engagement.
"company can do that I mean look at the truth is talking one of the other things I can tell you though is um an empty can makes the most noise talking about your idea before you have it in the market a..."
The Dangers of Over-Iteration
Eric discusses the concept of over-iteration in product development, warning that constant changes can confuse customers. He shares examples of companies that have lost sight of their core value proposition due to excessive iteration. This segment stresses the importance of maintaining a balance between innovation and stability in product offerings.
"basic idea don't even wait for your analytics package to do it just do it by hand to go into your spreadsheet like go just write it down it's not that complicated we're talking about multiplication uh..."
Learning vs. Optimization
In this segment, Eric differentiates between learning and optimization in the context of startup growth. He argues that many companies focus too much on optimizing small variables rather than learning from larger experiments. This discussion encourages entrepreneurs to prioritize learning and understanding customer needs over minor adjustments.
"so confusing customers is generally not an issue unless you're selling to Enterprise customers who have a real release issue and that that's something that can be mitigated but it's a little bit compl..."
Pivoting Towards Profitability
Eric and Jason discuss the challenges of pivoting a startup towards profitability. They explore the balance between pursuing high view counts on platforms like YouTube versus focusing on monetizable products like iPad apps. This segment highlights the strategic decisions entrepreneurs must make to ensure sustainable growth and revenue generation.
"would you do my company the uh what's that my my company and my need yeah should we uh right now do it right now yeah yeah oh yeah okay you're not going to charge me AR you is that how much you charge..."
Sustainable Growth Challenges
Eric elaborates on the concept of sustainable growth within the YouTube ecosystem, highlighting the difficulty of retaining customers and generating revenue from views. He discusses the importance of creating a product ecosystem that allows for reinvestment and long-term customer retention, which is crucial for startup success.
"and build a huge 300 million view brand what's the fundamental constraint on your ability to produce uh new highquality videos uh cost so if the return the return on the investment so if it cost hundr..."
Selling the Pivot to Employees
This segment focuses on the challenges of communicating a strategic pivot to employees. Eric emphasizes the need for leaders to effectively sell the new direction to their teams, addressing the emotional difficulties that come with admitting past strategies may have been flawed. He underscores the importance of aligning the team around a shared vision for success.
"it's not to say that you can't have a great web product and what I kind of the challenge that I thing is bothering me about what you said is that I I find it hard to believe that it's really about web..."
Culture and Process in Startups
Eric discusses the relationship between company culture and operational processes in startups. He argues that changing processes is essential for fostering a culture of accountability and learning. This segment highlights the significance of having a shared understanding of data and metrics to facilitate effective decision-making and reduce blame-shifting among team members.
"I mean the thing with pivots is and you know being a leader of you know large number of uh startup employees you actually have to sell the pivot to the employees absolutely do and selling a pivot mean..."
The Role of Engineers in Startups
In this segment, Eric reflects on the evolving role of engineers in startups, particularly in agile environments. He stresses that in a startup, everyone must contribute to the company's success, regardless of their job title. This discussion emphasizes the need for a collaborative culture where all team members are engaged in the company's mission and are accountable for its outcomes.
"curse of vanity metrics with vanity metrics when the numbers go up everyone always thinks it's because of whatever they were working on at the time right so if I yeah if I talk to an engineer they're ..."