Eric Ries Quotes

Science and vision are not opposites or even at odds. They need each other. I sometimes hear other startup folks say something along the lines of: 'If entrepreneurship was a science, then anyone could do it.' I'd like to point out that even science is a science, and still very few people can do it, let alone do it well.

There is no greater country on Earth for entrepreneurship than America. In every category, from the high-tech world of Silicon Valley, where I live, to University R&D labs, to countless Main Street small business owners, Americans are taking risks, embracing new ideas and - most importantly - creating jobs.

The problem with entrepreneurship is we are often working really hard producing high quality products that no-one wants. The creation of stuff is not valued.

The tremendous success of general management over the last century has provided unprecedented material abundance, but those management principles are ill suited to handle the chaos and uncertainty that startups must face.

All innovation begins with vision. It's what happens next that is critical.

In the industrial world we have the problem of having more productive capacity than we know what to do with. That's at the root of the unemployment crisis: we've got so productive at making things, we don't require people to be involved in making the basics of life any more. Or nearly as many people.

The Lean Startup works only if we are able to build an organization as adaptable and fast as the challenges it faces. This

At its heart, a startup is a catalyst that transforms ideas into products.

At IMVU, the cost of customer acquisition through our five-dollar-a-day AdWords campaign was less than twenty-five cents. Our revenue from those same customers was more than a dollar.

It was 1999, and we were building a way for college kids to create online profiles for the purpose of sharing ... with employers. Oops. I vividly remember the moment I realized my company was going to fail. My co-founder and I were at our wits' end. By 2001, the dot-com bubble had burst, and we had spent all our money.

Customers don't care how much time something takes to build. They care only if it serves their needs.

Cycle after cycle, the team is working hard, but the business is not seeing results. Managers trained in a traditional model draw the logical conclusion: our team is not working hard, not working effectively, or not working efficiently.

If the plan is to see what happens, a team is guaranteed to succeed - at seeing what happens - but won't necessarily gain validated learning - If you cannot fail, you cannot learn.

One remarkable part of the SnapTax story is what the team leaders said when I asked them to account for their unlikely success. Did they hire superstar entrepreneurs from outside the company? No, they assembled a team from within Intuit. Did they face constant meddling from senior management, which is the bane of innovation teams in many companies? No, their executive sponsors created an "island of freedom" where they could experiment as necessary. Did they have a huge team, a large budget, and lots of marketing dollars? Nope, they started with a team of five. What allowed the SnapTax team to innovate was not their genes, destiny, or astrological signs but a process deliberately facilitated by Intuit's senior management.

We need to reengineer companies to focus on figuring out who the customer is, what's the market and what kind of product you should build.

People are accustomed to thinking of accounting as dry and boring, a necessary evil used primarily to prepare financial reports and survive audits, but that is because accounting is something that has become taken for granted.

Most start-up companies fail and it is smart public policy to help entrepreneurs increase their odds of succeeding. But, the biggest loss to our economy is not all the start-ups that didn't make it: It's the ones that might have been created but weren't.

As new mainstream customers are acquired and new markets are conquered, the product becomes part of the public face of the company, with important implications for PR, marketing, sales, and business development. In most cases, the product will attract competitors: copycats, fast followers, and imitators of all stripes.

The only person who can put you out of business, in the early days, is yourself.

A Start Up is an institution designed to thrive in the soil of extreme uncertainty

The way forward is to learn to see every startup in any industry as a grand experiment.

there is no bigger destroyer of creative potential than the misguided decision to persevere.

The mistake isn't releasing something bad. The mistake is to launch it and get PR people involved. You don't want people to start amping up expectations for an early version of your product. The best entrepreneurship happens in low-stakes environments where no one is paying attention, like Mark Zuckerberg's dorm room at Harvard.

The goal of every startup experiment is to discover how to build a sustainable business around that vision.

Meritocracy is a good thing. Whenever possibly, people should be judged based on their work and results, not superficial qualities.

Customers don't know what they want. There's plenty of good psychology research that shows that people are not able to accurately predict how they would behave in the future. So asking them, 'Would you buy my product if it had these three features?' or 'How would you react if we changed our product this way?' is a waste of time. They don't know.

The Lean Startup has evolved into a movement that is having a significant impact on how companies are built, funded and scaled.

The goal of a startup is to figure out the right thing to build-the thing customers want and will pay for-as quickly as possible. In other words, the Lean Startup is a new way of looking at the development of innovative new products that emphasizes fast iteration and customer insight, a huge vision, and great ambition, all at the same time.

managers in most companies are already overwhelmed with good ideas. Their challenge lies in prioritization and execution,

Except in very narrow cases, where there's breakthrough science that needs patent production, worrying about competitors is a waste of time. If you can't out iterate someone who is trying to copy you, you're toast anyway.

Better to have bad news that's true than good news we made up

Entrepreneurs always pitch their idea as 'the X of Y', so this is going to be 'the Microsoft of food.' And yet disruptive innovations usually don't have that character. Most of the time, if something seems like a good idea, it probably isn't.

achieving failure: successfully executing a plan that leads nowhere.

Build-Measure-Learn

it's human nature to assume that when we see a mistake, it's due to defects in someone else's department, knowledge, or character,

This is a classic case of "achieving failure" - successfully executing a flawed plan.

Famous pivot stories are often failures but you don't need to fail before you pivot. All a pivot is is a change is strategy without a change in vision. Whenever entrepreneurs see a new way to achieve their vision - a way to be more successful - they have to remain nimble enough to take it.

Learning to see waste and systematically eliminate it has allowed lean companies such as Toyota to dominate entire industries. Lean thinking defines value as 'providing benefit to the customer'; anything else is waste.

Most of the time customers don't know what they want in advance.)

The lesson of the MVP is that any additional work beyond what was required to start learning is waste, no matter how important it might have seemed at the time.

Start-ups make so many mistakes that the challenge to identify the root cause of a failure is tough. But believing in your own plan is probably the worst.

If your goal is to make money, becoming an entrepreneur is a sucker's bet. Sure, some entrepreneurs make a lot of money, but if you calculate the amount of stress-inducing work and time it takes and multiply that by the low likelihood of success and eventual payoff, it is not a great way to get rich.

What if we found ourselves building something that nobody wanted? In that case what did it matter if we did it on time and on budget?

A solid process lays the foundation for a healthy culture, one where ideas are evaluated by merit and not by job title.

Innovation is a bottoms-up, decentralized, and unpredictable thing, but that doesn't mean it cannot be managed.

Part of the special challenge of being a startup is the near impossibility of having your idea, company, or product be noticed by anyone, let alone a competitor.

I would say, as an entrepreneur everything you do - every action you take in product development, in marketing, every conversation you have, everything you do - is an experiment. If you can conceptualize your work not as building features, not as launching campaigns, but as running experiments, you can get radically more done with less effort.

dot-com flameouts that erroneously believed that they could lose money on each customer but, as the old joke goes, make it up in volume.

HubSpot has used the lean startup method to build a spectacularly successful company. What I particularly love about HubSpot is that they are so geeked out on data analysis and making evidence-based decisions, which are at the heart of the Lean Startup process.

Progress in manufacturing is measured by the production of high quality goods. The unit of progress for Lean Startups is validated learning-a rigorous method for demonstrating progress when one is embedded in the soil of extreme uncertainty.

We must learn what customers really want, not what they say they want or what we think they should want.

Fire that customer," I'd say to the person responsible for recruiting for our tests. "Find me someone in our target demographic." If the next customer was more positive, I would take it as confirmation that I was right in my targeting. If not, I'd fire another customer and try again.

we think we can truly short-circuit the ramp by killing things that don't make sense fast and doubling down on the ones that do.

In the twenty-first century, we face a new set of problems that Taylor could not have imagined. Our productive capacity greatly exceeds our ability to know what to build. Although

As Cook says, "Success is not delivering a feature; success is learning how to solve the customer's problem."4

The biggest start-up successes - from Henry Ford to Bill Gates to Mark Zuckerberg - were pioneered by people from solidly middle-class backgrounds. These founders were not wealthy when they began. They were hungry for success, but knew they had a solid support system to fall back on if they failed.

Visionaries are especially afraid of a false negative: that customers will reject a flawed MVP that is too small or too limited.
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The solution to this dilemma is a commitment to iteration. You have to commit to a locked-in agreement - ahead of time - that no matter what comes of testing the MVP, you will not give up hope. Successful entrepreneurs do not give up at the first sign of trouble, nor do they persevere the plan right into the ground. Instead, they process a unique combination of perseverance and flexibility.

When I worked as a programmer, that meant eight straight hours of programming without interruption. That was a good day. In contrast, if I was interrupted with questions, process, or - heaven forbid - meetings, I felt bad.

It's a really paradoxical thing. We want to think big, but start small. And then scale fast. People think about trying to build the next Facebook as trying to start where Facebook is today, as a major global presence.

Product managers figure out what features are likely to please customers; product designers then figure out how those features should look and feel.

This is the same problem that established companies experience. Their past successes were built on a finely tuned engine of growth. If that engine runs its course and growth slows or stops, there can be a crisis if the company does not have new startups incubating within its ranks that can provide new sources of growth. Companies of any size can suffer from this perpetual affliction. They need to manage a portfolio of activities, simultaneously tuning their engine of growth and developing new sources of growth for when that engine inevitably runs its course.

Learning is the essential unit of progress for startups.

For example, in one early experiment, we changed our entire website, home page, and product registration flow to replace "avatar chat" with "3D instant messaging." New customers were split automatically between these two versions of the site; half saw one, and half saw the other. We were able to measure the difference in behavior between the two groups.

engineers agree to adapt the product to the business's constantly changing requirements but are not responsible for the quality of those business decisions.

We want to keep believing in our ideas even when the writing is on the wall.

Nowadays people talk about PayPal's founders as prescient geniuses who would inevitably change the world. It was, however, not so obvious that PayPal would taste its first major success by helping people sell Beanie Babies on eBay. But they had a vision, a hope, and the perseverance to try multiple iterations until they got it right.

Dropbox needed to test its leap-of-faith question: if we can provide a superior customer experience, will people give our product a try? They believed - rightly, as it turned out - that file synchronization was a problem that most people didn't know they had. Once you experience the solution, you can't imagine how you ever lived without it.

The attributes for entrepreneurs cut both ways. You need the ability to ignore inconvenient facts and see the world as it should be and not as it is. This inspires people to take huge leaps of faith. But this blindness to facts can be a liability, too. The characteristics that help entrepreneurs succeed can also lead to their failure.

Sustainable growth is characterized by one simple rule: New customers come from the actions of past customers.

In my first start-up, I had an initial advertising budget of $5 per day total. That would buy us 100 clicks per day. At $5 per day, marketing people scoffed and said that is too small to matter. But if you think about it, to an engineer, 100 real humans everyday giving your product a try means you can really start improving.

Vanity metrics are the numbers you want to publish on TechCrunch to make your competitors feel bad.

As is typically the case in large-batch development, both groups had been willing to sacrifice the team's ability to learn in order to work more "efficiently.

learn whether to pivot or persevere.

There is much that public policy can do to support American entrepreneurs. Health insurance reform will make it easier for entrepreneurs to take a chance on a new business without putting their family's health at risk. Tort reform will make it easier to take prudent risks on new products in a number of sectors.

Some people are natural inventors who prefer to work without the pressure and expectations of the later business phases. Others are ambitious and see innovation as a path toward senior management. Still others are particularly skilled at the management of running an established business, outsourcing, and bolstering efficiencies and wringing out cost reductions. People should be allowed to find the kinds of jobs that suit them best.

Most companies are busy making their products worse, not better. Updating is almost always a disaster.

Using the Lean Startup approach, companies can create order not chaos by providing tools to test a vision continuously.

The question is not "Can this product be built?" In the modern economy, almost any product that can be imagined can be built. The more pertinent questions are "Should this product be built?" and "Can we build a sustainable business around this set of products and services?" To

A startup's job is to (1) rigorously measure where it is right now, confronting the hard truths that assessment reveals, and then (2) devise experiments to learn how to move the real numbers closer to the ideal reflected in the business plan.

Innovation accounting

In fact, entrepreneurship should be considered a viable career path for innovators inside large organizations.

When Steve Jobs and Steve Wozniak created Apple computer in a garage in Palo Alto, it heralded the beginning of the PC revolution that ultimately dealt a death-blow to dozens of older companies.

The lean startup method is not about cost, it is about speed.

I believe for the first time in history, entrepreneurship is now a viable career.

The minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.

Leadership requires creating conditions that enable employees to do the kinds of experimentation that entrepreneurship requires.

For one thing, everyone would insist that assumptions be stated explicitly and tested rigorously not as a stalling tactic or a form of make-work but out of a genuine desire to discover the truth that underlies every project's vision.

There was a study done in the early 20th century of all the entrepreneurs who entered the automobile industry around the same time as Henry Ford; there were something like 500 automotive companies that got funded, had the internal combustion engine, had the technology, and had the vision. Sixty percent of them folded within a couple of years.

This is an important rule: a good design is one that changes customer behavior for the better.

we figure out what we need to learn and then work backwards to see what product will work as an experiment to get that learning.

You know how people always talk about how vision is the key to entrepreneurship and perseverance and really seeing what other people don't see? We can actually redeem a fair amount of that folk wisdom.

This is one of the most important lessons of the scientific method: if you cannot fail, you cannot learn.

Here in Silicon Valley, I have taken part in hundreds of conversations trying to convince people to dive in and become entrepreneurs. All too often, innovators with good, safe, jobs are unwilling to put their family's access to health care at risk by walking away from company-backed medical insurance.

We do everything wrong: instead of spending years perfecting our technology, we build a minimum viable product, an early product that is terrible, full of bugs and crash-your-computer-yes-really stability problems. Then we ship it to customers way before it's ready. And we charge money for it. After securing initial customers, we change the product constantly - much too fast by traditional standards - shipping new versions of our product dozens of times every single day.

What differentiates the success stories from the failures is that the successful entrepreneurs had the foresight, the ability, and the tools to discover which parts of their plans were working brilliantly and which were misguided, and adapt their strategies accordingly.

Prove to yourself that your business, in micro-scale at least, creates value. If you believe it, you'll find it that much easier to convince potential investors, partners and employees, too.

Building the right product requires systematically and relentlessly testing that vision to discover which elements of it are brilliant, and which are crazy.

If we stopped wasting people's time, what would they do with it?

A lot of entrepreneurs hate big companies. But if you hate them so much, why are you trying to build a new one? The truth is, as soon as a startup has any kind of success whatsoever, it will face big company problems.

Peter Drucker said, "There is surely nothing quite so useless as doing with great efficiency what should not be done at all."2