Eric Ries and the Origins of the Lean Startup Theory—The Full Xconomy Interview

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not just that I felt it was a great team, not just that it was a cool product, but my co-founders believed in me enough to say “We’ll put you in charge of the entire engineering team, and we’ll do it your way.” I was 25. I didn’t deserve that through my illustrious resume. It was that Will, especially, is somebody who recognizes talent, in the way entrepreneurs do. For whatever reason, he had the confidence that I could do it, and was willing to take that risk and put me in charge of a large swath of this company. Therefore I had a laboratory for trying stuff that was considered crazy. I mean, bona fide crazy.

X: You mean like agile.

ER: Agile was considered the nutty vanguard, and I wanted to push way past that. This was 2004. The agile manifesto was three or four years old. Extreme programming had been around a few years. Unit testing was just starting to enter the mainstream understanding. Continuous integration was considered as advanced as one could reasonably get. Pair programming was still considered nuts. But I wanted to do stuff like continuous deployment, which didn’t even have a name at that time, because it was considered something that only a truly crazy person would do. I wanted us to take agile into the business. I wanted us to integrate with customer development, Steve Blank’s stuff. I wanted to do stuff that was really wacky.

X: You just mentioned Steve Blank. Were you already reading his stuff? I’m not even sure it was out yet at that point.

ER: No, I was not reading his stuff. It was not out. Here’s how I remember it. Steve had been on the board at There, and was kicked out of the board. He was trying to prevent the disaster at There, and failed. I honestly don’t remember if he quit or was kicked out. I wasn’t privy to those conversations. I had heard his name. I didn’t know him. Will was the savvy one who said we should get Steve as an investor at IMVU. I was like, “We just lost him million of dollars of his money as an investor, why would he do that?” and Will understood this way better than I did, and he said, “If we do everything right, we can get Steve.” So when we did raise our first angel round, he was the real focus of our fundraising and eventually we convinced him to do it. And part of the deal was, I think that was the first year he was teaching customer development at Berkeley, at the Haas School of Business. He basically said, “Why don’t you guys audit my class.” He didn’t exactly say, “In exchange for this check of $50,000 I am going to give you.” But I understood him to be saying, “I believe in you guys, but you do have a problem that you need to fix, and if I am going to be on board here, you need to fix this thing.” So we agreed to audit his class. But even then, we hadn’t read his book. We didn’t know there was a book. He didn’t say, “Here’s my book.” I was doing my due diligence on this Steve Blank guy and I found his website, and there was the book. It was self-published. So I said, I’m going to check it out. I remember reading it and I’m like, “Oh my god, this is what we need. This is cool.”

X: I picked up part of the story in an interview with Steve Blank himself, and the way he explained it to me, he really wasn’t all that familiar with agile software development, and it was actually you, in the context of this class, who brought that to his attention and said “Steve, I love this customer development stuff, and agile is sort of the software development version of that, and it would be much more powerful if we brought them together.”

ER: I felt like I was taking a class in peanut butter, and I had learning about jelly my whole life. I was that annoying student in class who would be like, “But Professor Blank, the way you’re talking about product development offends me. That’s wrong. We don’t do it like that anymore.” My mental model had shifted already to imagining that [agile] was how product development was and should be done, and that that was obvious to everybody. But if you think about the year it was when we had that conversation, he was much more correct than I was. His notion of what constituted product development was still accurate, but it was dead to me already. I could see that it was changing. I believed 100 percent that the agile revolution would be victorious. And the frustration that he was talking about [was the frustration of] trying to be more iterative in marketing when the engineers are all linear. But the marketers in my career were the ones who were the problem. I was used to thinking that we were trying to be more agile in engineering but it’s marketing who is dragging their feet. It never occurred to me that we could have a company-wide dialogue around marketing and engineering together as peers in a more learning orientation. That inspiration came from having that confrontation in this class.

X: So, he was already saying that you need to get “out of the building,” but the whole customer development methodology wasn’t yet as focused on iteration as it is now?

ER: Yes, that’s part of it. You’ve seen the customer development diagrams with four circles. He’s been doing that diagram since the beginning. Each of those circles is an iteration. The reason they’re circles is that you iterate, you move to the next stage, you iterate. What I would say is that the circles he was talking about had no product in them at all. They were learning circles, but it was strictly about … Next Page »

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Wade Roush is a freelance science and technology journalist and the producer and host of the podcast Soonish. Follow @soonishpodcast

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2 responses to “Eric Ries and the Origins of the Lean Startup Theory—The Full Xconomy Interview”

  1. Wait…now that we built it leveraging Lean Start-up principles…”THEY WILL COME?” I understand the “Customer Development” component of Lean Start-up…but am still missing ideal strategies to generate new customers and users, especially for B2B startups providing a “disruptive technology/solution”

    It sounds like all you now need to do next is implement a sales/marketing 2.0 tool, add a “PRICING AND PLANS” section on your website and hire some internal telemarketers?

    Sounds like a single point of potential failure to me…Should these start-up’s also target big company “C-Suites” and communicate their value prop towards “C-Suite” sponsored initiatives? Should a “top down” sales approach be ignored? “Bottoms up” / viral approach only?