A Kickstarter page for Ries' new project, a Lean Startup "field guide" called "The Leaders Guide."
(Editor’s Note: Rob Anderson, director of content strategy for Cranford Johnson Robinson Woods advertising agency in Little Rock, is on the ground at South-by-Southwest Interactive in Austin, Texas. He and his team are filing regular reports throughout the week on what’s hot at this influential annual conference. You can see his first reports here and here. Today’s post is from Zack Hill, CJRW’s director of digital.)
While there have been many high profile speakers at South-by-Southwest Interactive this year, from a business strategy standpoint, it doesn’t get much bigger than Eric Ries.
Ries is widely recognized for pioneering the new-business methodologies known as The Lean Startup, along with his ties to the entrepreneur and venture communities.
The session was presented as “Everything Eric Ries Has Learned Since 2011,” but the discussion between Ries and Wall Street Journal tech editor Ted Greenwald quickly turned to how these “Lean Startup” strategies aren’t limited to upstart tech companies in Silicon Valley.
Ries admitted that, when he wrote a now-famous blog post, “Startup Lessons Learned,” it was the first step of the Lean Startup movement, and it was focused on young tech companies and methodologies used in their growth. But as the movement grew, more companies outside tech started applying the strategies.
“A startup is not just what you see in a movie, it’s anyone trying to create something new under uncertainty,” explained Ries, adding that this is the foundation of just about any business.
Test. Build. Measure.
The Lean Startup movement is based on how quickly you can get to market with your Minimum Viable Product (MVP), test assumptions, collect feedback and iterate.
Don’t focus on a business plan, Ries said, “because your customer isn’t going to read your business plan.” You have hypothesis that you’ve developed, he said, and through science you can test them and quickly find the things that are working. Double down on those.
This shift is called a “pivot,” and Ries describes it as “a change in strategy without a change in vision.” These methodologies allow a business to see what is working and what isn’t, and make decisions as to what product or services to kill.
Ries suggests that business leaders ask themselves, “What’s the evidence that our strategy is working?” If there isn’t any, it’s time to pivot and keep experimenting until you figure out what works.
When launching an MVP, Ries thinks “it’s much better doing something quick than doing something complicated.” The worst-case scenario is not having someone say it’s terrible — the worst case is having nobody say anything at all, he says. With an MVP, your customer might agree that a product or service is low quality — but they are at least looking at it. It’s all about feedback, and adjusting from there, he said.
Change for Any Business
Ries thinks that these methodologies can be applied to any size business or industry sector, and he described working with companies of all sizes, including global giants like GE and Intuit and on down to the most ground-level startup. Through this experience, he said he’s seen how the Lean Startup model can change any organization.
“Most companies make it almost impossible to innovate,” Ries said.
He explained that senior management rarely feels like they have the people within needed to innovate, and they spend a lot of time and energy trying to determine why something isn’t working.
“If you don’t like the results you’re getting from your organization, look in the mirror — you are the problem,” he said. “No matter how big or old a company may be, the entrepreneurs are already there.”
He said he believes that “entrepreneurship is the missing function of companies right now,” adding that a company should consist of mini “startup teams,” each with each a function required to accomplish a goal.
“You wouldn’t be hired at a startup and then told that you will work on the project only 10 percent of the time,” he said. “The team has to be on a mission, and the team has to get the credit.”
Ries referenced his work with automobile titan Toyota, and noted how they don’t refer to their vehicles by common names like “Corolla” or “Camry.” They reference cars by the team members responsible for overseeing their individual success, drastically increasing the ownership responsibility.
Ries encourages business leaders to make the “Lean Startup” principles their own, adjusting the process to best fit their organizations without losing sight of core principles.
As a company, “you can’t be afraid of employees having productive failures,” Ries said.
“Productive failures” allow you to learn something of value, Ries said, and he challenged human resources departments to add “productive failures” to performance reviews — not as a negative, but as another evaluation tool.
“If someone says they have no failures, they either are lying or they didn’t do anything,” Ries said.
What’s Next
To learn more about the Lean Startup movement and how to apply them to your business, you can purchase Ries’s original book, “The Lean Startup.” But he also made a big announcement at the end of the session.
As he’s been working with different companies through the years doing workshops, he’s accumulated a lot of “hands-on” knowledge and tools. For a limited time, he has launched a Kickstarter campaign for a Lean Startup “field guide” called “The Leaders Guide.”
Over the next 30 days, you can contribute to the funding of the book, and within a year you will receive your own copy. These materials won’t be sold in stores, so if you are interested, I’d advise a quick contribution.
Coming Up
As SXSWi comes to a close, we’ll wrap-up the week in trends and cool discoveries, and we’ll share just what it’s like to be on the ground amid the festivities in Austin.
(For more, follow the CJRW team on Twitter at @RobWAnderson, @WeAreCJRW, @ZackHill, @LizzyMichael and @BryceParker.)
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