All Segments
A Conversation with Eric Ries
48 segments available
Speaker: Eric Ries Chair: Dr Linda Hickman Recorded on 6 March 2015. Eric Ries (@ericries) is an entrepreneur and author of the New York Times bestseller The Lean Startup: How Constant Innovation Creates Radically Successful Businesses, published by Portfolio Penguin. He graduated in 2001 from Yale University with a B.S. in Computer Science. While an undergraduate, he co-founded Catalyst Recruiting. Ries continued his entrepreneurial career as a Senior Software Engineer at There.com, leading efforts in agile software development and user-generated content. He later co-founded and served as CTO of IMVU, his third startup. In 2007, BusinessWeek named Ries one of the Best Young Entrepreneurs of Tech. In 2008 he served as a venture advisor at Kleiner Perkins Caufield & Byers before moving on to advise startups independently. Today he serves on the advisory board of a number of technology startups and venture capital firms. In 2009, Ries was honored with a TechFellow award in the category of Engineering Leadership. In 2010, he was named entrepreneur-in-residence at Harvard Business School and is currently an IDEO Fellow. The Lean Startup methodology has been written about in The New York Times, The Wall Street Journal, Harvard Business Review, Inc., Wired, Fast Company, and countless blogs. He lives in San Francisco with his wife, son, and golden retriever. Dr Linda Hickman is Visiting Senior Fellow at the London School of Economics and Political Science in the Department of Management. LSE Entrepreneurship (@LSEship) runs a series of lectures, short courses, networking platforms, debates and social exchanges that explore entrepreneurship's extreme potential for change.
Segments Timeline
Welcoming Eric Ries Back to LSE
Dr. Linda Hickman introduces Eric Ries, highlighting his achievements and the format of the evening's event. The audience is informed about the conversation structure, including a Q&A session and a book signing. This segment sets the stage for a deep dive into Ries' entrepreneurial insights and experiences since his last visit.
"Good evening. Does it too? Hello. Hello. Hello. I think they can hear us. Everyone can hear all the way in the back. Wave to us. Thank you. Thank you. A warm welcome to everyone that's come this eveni..."
Eric Ries: A Journey Through Entrepreneurship
Eric Ries shares his background, starting from his education at Yale to co-founding startups like IMVU. He reflects on his experiences in agile technology and the challenges he faced in the early days of his entrepreneurial journey. This segment emphasizes the importance of experimentation and hypothesis testing in the startup world.
"evening. So what I'd like to say also is please put your phones on silence and note that there is a hashtag that we have for the evening. And now a little more introduction for those of you who don't ..."
The Evolution of Lean Startup
Ries discusses the transformation of the Lean Startup methodology from a novel concept to an accepted practice in entrepreneurship. He recounts how initial skepticism has turned into widespread recognition, illustrating the growth of the Lean Startup movement and its global reach. This segment highlights the shift in perception of entrepreneurial practices over time.
"sounds very scientific. And in fact that's what the lean startup, the lean startup book is talking about hypothesis testing for the concepts of entrepreneurship. But we'll also see that they can be ap..."
Lean Startup: A Global Movement
Eric Ries elaborates on the global adoption of Lean Startup principles, noting how they have transcended the tech industry and are now applied across various sectors. He shares anecdotes of working with large organizations and government initiatives, showcasing the versatility of Lean Startup methodologies in diverse contexts.
"startup movement there was no conceptual vocabulary around lean startup it was just coming in to tell people about the approach that I had used myself in my own career. And not only did those conversa..."
Understanding Lean Startup Principles
Ries explains the foundational concepts of Lean Startup, linking it to lean manufacturing principles. He emphasizes the importance of rapid experimentation and customer feedback in the innovation process, illustrating how startups can navigate uncertainty through validated learning. This segment provides a clear overview of the Lean Startup framework.
"personally worked with companies you know with with not just hundreds not just thousands but hundreds of thousands of employees. So applied this at huge massive scale you know I've worked on products ..."
The Challenge of Scaling Startups
In this segment, Ries discusses the challenges startups face as they scale, particularly the need for continuous innovation. He contrasts traditional management techniques with entrepreneurial approaches, stressing the importance of adapting to new market pressures and fostering a culture of innovation within growing companies.
"and I said before startups are are those companies that exist in a condition of extreme uncertainty meaning we're not able to make plans and forecasts about the future we're in a situation where we ha..."
From Business Plans to MVPs
Ries critiques the traditional business plan model, advocating for the use of Minimum Viable Products (MVPs) to test market assumptions. He explains how startups can validate their ideas through experiments rather than relying on forecasts, encouraging a shift in mindset towards agile and iterative development. This segment underscores the practical application of Lean Startup principles.
"friend's, company, maybe., Uh, I'm, going to strike on my own. I'm going to do everything right the way that I think a company should be run from the start. I always say to my uh entrepreneurs I work ..."
Building and Validating MVPs
Ries discusses the process of creating a Minimum Viable Product (MVP) to test customer interest quickly. He highlights the importance of compressing the time to market and using feedback loops to improve the product based on real customer data, rather than assumptions made in isolation.
"we uh run an experiment. We call that a minimum viable product or MVP. The idea is to say, well, instead of spending a year, two years, five years building a product, then launch it, then find out if ..."
Navigating Confusion in Startups
Eric Ries addresses the confusion entrepreneurs face when applying Lean Startup principles. He clarifies that the methodology is not a rigid doctrine but a framework that requires adaptability and rigorous thinking, emphasizing the challenges of real-world application versus theoretical models.
"That sounds very codified like there's steps that you know and that you can take but sometimes we run into situations wi which maybe are outside that. So what kind of advice do you give to people who ..."
The Importance of Pivots
Ries elaborates on the concept of 'pivoting' in startups, explaining that it involves changing strategy while maintaining the overall vision. He shares insights on how entrepreneurs can recognize when to pivot based on evidence and the dangers of stubbornly sticking to failing ideas.
"mean the most classic thing if those of you have multiple founders, you run an experiment. It's one thing to disagree about what direction you should take next, but in real life, founders will disagre..."
Learning from Failure: A Personal Story
In a candid reflection, Eric Ries recounts a personal experience at IMVU where a product launch failed to attract users. He discusses the emotional challenges of recognizing failure and the lessons learned about the necessity of pivoting when initial assumptions do not hold true.
"here's the cool part about it. At the end of the day, entrepreneur entrepreneurial decisions are based on human judgment. You know, some people are like, "Oo, science means we're going to turn on robo..."
Zombie Startups and the Sunk Cost Fallacy
Ries warns about 'zombie startups'—companies that show slight progress but ultimately fail to succeed. He discusses the psychological traps entrepreneurs face, such as the sunk cost fallacy, and emphasizes the need for rigorous evaluation of business strategies to avoid prolonged failure.
"company helped you. Sure. I tell a story in the book about a time that I built a product at Invue in the early days. We spent six months building a product that absolutely nobody wanted. And that was ..."
The Science of Entrepreneurship
Eric Ries concludes by discussing the application of scientific methods to entrepreneurship. He argues for a rigorous, theory-oriented approach to decision-making in startups, contrasting it with intuition-based methods and emphasizing the importance of learning from data and evidence.
"you're just going to go. We call these zombie startups. The living dead. They don't qu they won't quite fail, but neither will they succeed. And I know very talented people who are like stuck in such ..."
Mathematical Models for Pivots
In this segment, Ries introduces the concept of using mathematical models to determine when it's time to pivot in a startup. He draws parallels to scientific paradigms, explaining how certain indicators can signal diminishing returns in experiments, thus guiding entrepreneurs in making informed decisions about their product strategies.
"certain uh mathematically mod like mathematical models that can help us know with some certainty that it's time to pivot. and they're borrowed from those of you who studied the history of science you ..."
Understanding Sustainable Growth
Ries elaborates on the definition of sustainable growth, emphasizing that it occurs when new customers are acquired through the actions of past customers. He critiques the common practices of startups that fail to model their growth on a per-customer basis, advocating for a more rigorous understanding of product-market fit.
"you know most entrepreneurs are not that rigorous and so we also have all kinds of easier rules of thumb. heristics that, you know, are good enough for those that don't want to go into the into the ar..."
The Importance of Testing for Growth
In this segment, Ries discusses the necessity of testing hypotheses that lead to sustainable growth. He warns against the dangers of focusing solely on vanity metrics and stresses the importance of understanding what truly drives growth in a business, advocating for a more disciplined approach to entrepreneurship.
"in business knows it's going to be the growth of sustainability course that's important. So how to test for growth? Yeah. Again we're having a more abstract conversation than than is typical for this ..."
Engines of Growth Explained
Ries introduces the concept of 'engines of growth,' outlining three models—sticky, paid, and viral—that can lead to sustainable growth. He emphasizes the need for startups to identify the right metrics that indicate compounding growth and how to measure their progress towards achieving it.
"the things that we're testing are things that matter. And see, entrepreneurs have a really bad habit. It's a a universal bad habit, which is that we love to spend other people's money. And it doesn't ..."
Recognizing Product-Market Fit
In this insightful segment, Ries explains how to recognize product-market fit and the common misconceptions entrepreneurs have about it. He shares his belief that if an entrepreneur is questioning their product-market fit, it likely indicates they do not have it, contrasting this with the overwhelming demand experienced by successful startups.
"of sustainable growth. It is growth that happens when new customers come from the actions of past customers. That's that simple. And most companies that I talk to that are having growth don't know if ..."
Testing Concepts Without Building
Ries addresses the challenge of validating startup concepts without incurring significant costs. He discusses the importance of engaging with potential customers to test hypotheses and emphasizes that understanding customer needs is crucial before investing in product development.
"early days. There's no time for philosophizing about product market fit. You're just trying to keep the servers up because the demand is overwhelming." Now, that's a great useful definition except for..."
The Pain of General-Purpose Platforms
In this segment, Ries discusses the common struggle technologists face when trying to create general-purpose platforms. He highlights the necessity of developing specific applications first, as successful platforms often emerge from singular applications that prove their value in the market.
"Uh, here's how close we are to that growth. Now that's pretty abstract for most startup people. So this is not by no means is this the dominant way that people are measuring growth today. And startups..."
Commitment to Vision and Strategy
Ries emphasizes the importance of maintaining a commitment to the overarching vision of a startup while being flexible with the strategy. He encourages entrepreneurs to explore various applications of their technology and to persist in finding the right market fit without abandoning their core vision.
"boom, when the money is flowing and there's a huge amount of people raising money in order to be able to raise more money, there's just a a seduction that comes that kind of pulls people towards this ..."
Validating Real-Time Tracking Ideas
In this practical segment, Ries provides insights on how to validate a startup idea related to real-time tracking without extensive investment. He suggests engaging with potential customers, such as logistics companies, to gauge interest and feasibility before committing to product development.
"itself. Mhm. And so could you perhaps help us? There's a project where they would like to know whether the concept is a good one or not. How can they test that? Basically very cheaply or even complete..."
Commitment to Innovation
Eric Ries emphasizes the importance of commitment among co-founders to explore every possible avenue before abandoning a vision. He discusses the necessity of testing hypotheses in real-world scenarios, using the example of real-time tracking technology for companies like DHL. This segment highlights the iterative process of innovation and the need for persistence in entrepreneurship.
"world but whatever they are we'll try the next thing and the next thing and the next thing. And our commitment to each other as co-founders has to be we will try everything that we can try before we a..."
The Challenge of Adoption
In this segment, Ries addresses the difficulties of getting major companies to adopt new technologies. He explains that while it may seem easy to propose innovative solutions, the reality is often much more complex. The discussion focuses on the importance of validating ideas through direct engagement with potential customers, emphasizing the need for strategic pivots when initial approaches fail.
"almost guarantee you, you will not have to apologize to DHL because they are not going to want to install your technology. In fact, I don't know what this team is. I don't know who to look at. But lik..."
Exploring New Strategies
Ries encourages entrepreneurs to think creatively about alternative strategies when faced with obstacles. He suggests looking beyond traditional shipping companies to find new opportunities in package delivery, including the potential for individuals to act as their own shipping services. This segment underscores the value of disruptive innovation and the importance of testing various hypotheses in entrepreneurship.
"hypothetically you do this what we just described. You try to get a meeting with a major shipping company and tell them about your risky new technology and you can't do it. You just can't. Then you sa..."
The Lean Startup Movement
Eric Ries discusses the emergence of the Lean Startup movement, sharing how it began and evolved into a widespread phenomenon. He reflects on the growth of meetup groups and the community's collective efforts to advance entrepreneurial practices. This segment highlights the significance of collaboration and shared learning in the entrepreneurial ecosystem.
"this to make it a type of question of how do you test a concept for a particular idea. Yeah. I'd like to sort of move into the area of what um the people can do here if they want to learn more. We're ..."
Resources for Entrepreneurs
In this segment, Ries outlines the plethora of resources available for entrepreneurs interested in the Lean Startup methodology. He warns against analysis paralysis and emphasizes the importance of taking action rather than getting lost in theoretical learning. This discussion serves as a motivational call to prioritize practical experience over excessive planning.
"awesome way to get involved. There is a lean startup circle mailing list which has people from all over the world discussing these ideas 247. Of course there's a lean startup hashtag for those who are..."
Sneak Peek: Upcoming Book
Ries shares a sneak preview of his upcoming book, which will serve as a successor to 'The Lean Startup.' He discusses the importance of addressing new questions that arise as the Lean Startup methodology is applied at scale in various industries. This segment provides insight into the evolution of entrepreneurial practices and the ongoing relevance of Lean principles.
"is it worthwhile all this other work that we do. What do you plan to do with the announcement that you made recently in February for sort of it was just a short announcement saying watch for Kickstart..."
Q&A Session: Startups in London
In this interactive segment, Ries engages with the audience during a Q&A session, addressing questions about the viability of launching startups in London versus Silicon Valley. He reassures attendees that great startups can emerge from various locations, emphasizing the potential of London as a thriving entrepreneurial hub. This discussion encourages local entrepreneurs to believe in their capabilities regardless of geographic constraints.
"kind of a notannounced, not launched sneak preview of what is to come. Fair. We we have an understanding between us. Thank you. And and we really look forward to learning a little bit more in just a f..."
Silicon Valley: A State of Mind
Ries elaborates on the unique culture of Silicon Valley, describing it as a 'company town' where entrepreneurship thrives. He emphasizes that while physical location matters, the mindset and culture of innovation are crucial for building successful startups anywhere.
"tricky question and I want to give you a really honest answer, which is I live in San Francisco for a reason, okay? That I I chose I was not born there. I chose to move to San Francisco. I make that m..."
Building a Thriving Startup Hub
Discussing the essential ingredients for a successful startup ecosystem, Ries highlights the importance of transparency, openness, and community support. He argues that with the right conditions, cities outside Silicon Valley can foster vibrant entrepreneurial environments.
"that's pretty important. The second thing is Silicon Valley is a state of mind, not a place really. Like there are certain things about the way that people pursue entrepreneurship in Silicon Valley th..."
The Myopia of Silicon Valley
Ries critiques the trend-driven nature of Silicon Valley, noting that it can lead to a lack of diversity in startup ideas. He encourages entrepreneurs to explore opportunities beyond mainstream trends and to consider unique niches that may not be represented in Silicon Valley.
"from what I hear London is has proved positive that that can happen the other thing is that the physical place of Silicon Valley is myopic we are fad driven just like Hollywood so we know drones is th..."
The Challenge of Strategic Partnerships
Ries shares insights on the complexities of forming strategic partnerships, particularly between startups and larger companies. He warns that many partnerships can be detrimental and emphasizes the importance of ensuring mutual benefit for success.
"And the other thing is that there are different kinds of startups and and Silicon Valley is very much geared for a very specific kind what we lately been calling unicorns which I think is funny becaus..."
When Partnerships Can Work
In this segment, Ries discusses rare instances where partnerships can lead to significant success, using historical examples. He cautions entrepreneurs to be wary of the allure of partnerships and to focus on building their own strengths first.
"different reasons to be somewhere different than Silicon Valley even though of course I personally would like you all to relocate uh as soon as possible. So I think I think honestly this, is a, questi..."
The Importance of Proving Demand
Ries emphasizes the necessity of validating customer demand before pursuing partnerships. He advises entrepreneurs to focus on developing their products and understanding their market before engaging with potential partners.
"That's a tough topic. Um most of the time uh partnerships in the startup context are a disaster. I mean just an unmitigated disaster and and it's and there's two kinds. There's partnerships between st..."
Multitasking as an Entrepreneur
Responding to a question about managing multiple projects, Ries reflects on the experiences of successful entrepreneurs like Mark Zuckerberg. He discusses the balance between multitasking and focusing on a single venture, offering insights into effective strategies for young entrepreneurs.
"that's really really helping me understand what customers want and then this big dumb company are we sure that they know what customers want I mean they're very confident but like do they actually kno..."
The Facebook House: A Misunderstood Story
Eric Ries shares an intriguing anecdote about the early days of Facebook, highlighting how the popular narrative often overlooks the multitasking nature of its founders. He emphasizes that while Mark Zuckerberg and his peers were seen as solely focused on Facebook, they were actually exploring multiple projects, showcasing the unpredictable nature of entrepreneurial success.
"um maybe would you have any advice on how to do so efficiently and if you don't then why is it not possible? Sure. Well, we know it's possible because people do it. Uh now is it the is the optimal str..."
The Dangers of Multitasking in Entrepreneurship
Ries discusses the risks associated with multitasking as an entrepreneur, drawing from his own experiences. He warns that while some products may succeed with minimal focus, many require dedicated attention to pivot and adapt effectively. He stresses the importance of self-awareness in managing multiple projects and the critical skill of saying no.
"Zuckerberg working on? An app called I think it was called Wireshark for peer-to-peer file sharing or something. Adam D'Angelo is working on some kind of app where you can program your computer by usi..."
Aligning Projects with Personal Vision
In this segment, Ries reflects on the significance of aligning entrepreneurial projects with one's personal vision. He shares his struggles with focusing on too many ideas and emphasizes that true passion for a project is essential for success. He encourages entrepreneurs to evaluate how many visions they can realistically pursue.
"and that were aligned with my vision. What I would ask yourself is how many visions can one person have? Truly, if everything that you're working on is part of a vision that you personally feel really..."
Applying Lean Startup Principles to Nonprofits
Ries addresses the application of Lean Startup principles in the nonprofit sector, highlighting the similarities between for-profits and intentional nonprofits. He discusses the importance of measuring progress without revenue and the need for a sustainable funding model, encouraging a mindset shift among nonprofit leaders.
"absence of revenue, what can you use to measure progress? Now, some of us are deluded to thinking the revenue will show up magically by itself. And a lot of people in the not for-p profofit world are ..."
Innovative Approaches to Nonprofit Funding
In this segment, Ries shares a compelling example of a nonprofit focused on reforestation in developing countries. He discusses the challenges of demonstrating viability for long-term projects and suggests innovative funding strategies that emphasize incremental growth and measurable outcomes to attract funders.
"sustainable way. Oh, I I got an example finally hit me. Uh there was a um a nonprofit that was working on uh this is was it's a little complicated. And I'm like I'm not going to get all the details ri..."
Finding Your Entrepreneurial Idea
Ries reflects on the journey to finding a viable entrepreneurial idea, emphasizing the importance of passion and vision. He advises aspiring entrepreneurs to seek deep domain expertise or work alongside established entrepreneurs rather than pursuing entrepreneurship for its own sake, highlighting the value of genuine interest in a field.
"helpful? Blue right there. Hi, thank you very much for being here tonight. My question is about uh what happens before startup. So to apply your methodology you need an idea or an opportunity and how ..."
Education and Entrepreneurship
In this segment, Ries shares his views on the value of education for entrepreneurs. He contrasts his own liberal arts education at Yale with the challenges faced by uneducated entrepreneurs, suggesting that a solid educational background can provide critical insights and understanding that are often taken for granted in the business world.
"concerned for you. And what I actually would say is either like like a lot of people are always like, should I go to college? is I get a liberal arts education if I want to become an entrepreneur. Now..."
Navigating Startup Ideas
Ries addresses the common dilemma entrepreneurs face when it comes to their ideas. He emphasizes the need for humility and the importance of being open to feedback, rather than stubbornly clinging to a single vision. He references the work of others, like Tina Seelig and Paul Graham, who provide valuable insights on generating and evaluating startup ideas.
"teaches creativity in the engineering school at Stanford has a whole book on the topic. So she she's or maybe it's that book and maybe is coming out and I've read it in a galley. I'm not sure. Um but ..."
The Balance of Vision and Strategy
In this insightful discussion, Ries explains the distinction between a startup's vision and its strategy. He stresses that while the core idea should remain steadfast, the approach to achieving it must be flexible and adaptable based on customer feedback and market realities.
"at the top. Say hello. Um, as as exactly as we're starting at the moment, as you you mentioned, um, when you have an idea, you become very stubborn. you know you love it so much that you don't want to..."
Customer Insights vs. Entrepreneurial Beliefs
Ries shares his experiences with the tension between visionary ideas and practical implementation in startups. He argues that entrepreneurs should not rely solely on customer opinions but rather observe customer behavior to validate their hypotheses about what the market truly wants.
"hypothetical questions. I just know it. It's like my friend has a startup and uh this thing is happening. And listen, I feel your pain. I personally have been there so many times. And um here's how he..."
The Challenge of Innovative Ideas
In this segment, Ries uses the hypothetical example of teleportation to illustrate the challenges of introducing groundbreaking ideas to the market. He emphasizes the importance of understanding customer acceptance and the need for entrepreneurs to focus on how to commercialize their innovative concepts.
"strategy we have in mind is disposable. If it's not right, we want to find that out before it's too late. We have the opportunity to pivot. So our goal is to find that synthesis between what our visio..."
Final Thoughts on Startup Success
As the conversation wraps up, Ries reflects on the importance of channeling energy into productive discussions about customer needs rather than getting caught up in conflicts over vision. He encourages entrepreneurs to prioritize understanding their customers and running experiments to validate their ideas.
"questions that have to be answered. And the energy that you and your co-founder not you, but one and one's co-founder spend arguing with each other is not actually productive energy. I wish I could ha..."