Photos from the Event:
Eric Ries commenced the event by asking the Audience how many were part of a startup, both founders and aspiring Engineers; and the Audience consisted of a significant number of aspiring Entrepreneurs. Following that Eric started the talk about how most startups fail and only a handful succeed. And the rest of the presentation addressed issues with failed startups and what needs to be amended to address the high mortality rate of startups.
The key difference between failed and successful startups as noted by Eric is that the successful startups find the right solution after several iterations of the product before they run out of money. For example, successful companies like PayPal, Microsoft and Flikr all started out with slightly different ideas than the solution they offer today. But, after a few product iterations, these companies managed to incorporate customer feedback and deliver the right product to the market.
With all this talk about startups, everyone perhaps had the following question in mind... what is a startup exactly? Eric quashed the whimsical definition of 2 bright Guys in a Garage cranking away code perpetually for several months resulting in a ground-breaking solution. Yes, true, that has been the story of a few successful startups, but in today's environment, working in a vacuum hardly ever benefits a company. According to Eric, a startup is a a human institution designed to deliver a new product or service under conditions of extreme uncertainty.
Next, Eric used the example of two startups to demonstrate the idea of a lean startup: The first one, his previous failed startup and the second one, his current successful startup(IMVU).
In the first example of a failed startup, they seemed to have what is traditionally considered a recipe for success: they had a good plan, long-term vision, plenty of capital, best and brightest people in the team, experienced management, focus on product quality, world-class technical platform and they built buzz in the press. But, they still failed! Eric thinks that the main reason for failure of this startup was "Shadow Belief".
Eric describes "Shadow Belief" as:
- We know what/will customers want
- We can accurately predict the future
- Advancing the plan is progress
In the story of the second startup, IMVU, Eric and his team decided to defy conventional wisdom and try a new plan. They made several new mistakes as a result, but learned several valuable lessons along the way. As for the plan, they shipped (a horribly buggy beta) in 6 months to get customer traction. This startup adopted the model of continuous deployment and shipped on an average 50 times a day. Eric reflects that being lean made the startup go faster. He recommends using commodity technology stacks (like open-source products) - this drives down cost and speeds up development. Continuous deployment helps incorporate customer feedback in the development cycle quicker.
In the traditional product development methodology, unit of progress is measured by advancement of plan. Whereas in lean startup, unit of progress is measured as validated learning about customers.
At a lean startup, Eric says customer development is key and the question "what do our customers want" needs to be asked frequently!
Eric also recommended the book: The Four Steps to the Epiphany by Steven Gary Blank.
More information about building lean startup can be found on Eric's blog at :
Slides from the Event can be found here.
You can also follow Eric on twitter.