They set this tent up next to a plastics factory, and it apparently smelled horrible. And I believe that every business is an experiment. It drove our investors crazy. In the case of the “pivot,” it’s a set of assumptions about changing strategy without changing your mission. Since Eric is widely recognized as having coined the term, of course I had to ask him about it. You have to tell it where you want to go. It’s gonna be like, “Hey, road closed.” “Well, what other roads are there?” It’s like, “Well, you could take this other road.” You say, “Oh, let’s go check that one out.” And you try that one and that one. I’m like, he’s missing a concept. Eric pulled from a wide variety of sources: from management theorists and military strategists, to Toyota’s “Lean Manufacturing” system, which identifies and eliminates waste at every step of the process. RIES: I was studying the history of management very extensively. The distance from hypothesis to experiment to results got shorter and shorter. And even though the contamination turned out to have happened far outside of the manufacturing process, the company was still terrified its name would be sullied forever. And he’s trying to explain this phenomenon without the vocabulary for it. They learned what was driving their customers away and pivoted their strategy. © 2021 Wait What Inc., All Rights Reserved –. was first published. “A heavy thing falls faster than a light thing” seems to make sense, especially if you compare, say, a feather with an anvil. So anyone got any ideas?”, A lot of entrepreneurs have taken Eric’s advice since. HOFFMAN: This failure, while catastrophic in the moment, gave Eric the critical insight to develop his signature theory. REID HOFFMAN: Our storyteller here is Nick Means, director of engineering at GitHub and a passionate student of aviation history. If the thing is so wrong – that product, I remember we couldn’t even pay customers in a usability test to use it. It was just a practical set of problems to avoid what had happened to me over and over again: you build a product that customers don’t want and then you’re sad about it, even though you made it perfect. So how would you build on this piece of advice that I usually give people when thinking to pivot is to say, just like. Are you going to make it cheaper to stay here? every business is an experiment. But to Eric, this wasn’t a leap. This link will go right to the episode and will open the episode in whatever podcast app your friend uses. I haven’t got to the theory yet. The tight feedback loops between designer, engineer, and fabricator allowed an idea to go from pencil sketch to tangible part in a matter of hours. BOHANNA: Harry’s wand actually, in the first two films, is half ebony and half Mexican Rosewood, but in the third film, a new director came along, Alfonso Cuarón, and he changed a lot of the visuals. He considered a new experiment. But you might know him as author of. RIES: I stumbled on lean manufacturing as a, like, concept and intellectual vocabulary. Actually, most teams that I’ve worked with over the years, that’s the easy – actually, they secretly had this idea, and they’re like, everyone at the team’s afraid to say it out loud, but they’re like, “Do you think we should do enterprise? We’re not pivoting away from the question on pivot. RIES: In retrospect, the Long-Term Stock Exchange is a completely natural extension of the work I was doing with Lean Startup, so much so that I don’t even really recognize when it shifted or when it happened, it was just this completely natural thing to me. They had an urgent question that needed answering. It was how much effort had been wasted building the wrong thing. So often you have to make samples, and make samples, and make samples. It was like 50 pages of just the most eloquent prose, the data in there was sourced from the U.S. census, and all this analysis. If you think of a corporation as a corporate republic, a nation-state unto itself. He’s the host of the new podcast Out of the Crisis. RIES: But for startups in particular, if you don’t know who your customer is, you literally don’t know what the word “quality” means. IMVU got data from those usability tests, the ones that, at first, they couldn’t even pay people to complete. But Aristotle never ran an experiment. Our storyteller here is Nick Means, director of engineering at GitHub and a passionate student of aviation history. 35 talking about this. RIES: I was literally on a plane flying from one Lean Startup workshop to another, and I was like, “Boy, wouldn’t it be great if really long-term oriented companies and really long-term oriented investors could get together and support each other for mutual benefit? The company has been live for about five years, with their first money raised in 2016. It might sound like something of a leap from fast-paced iteration to a stock exchange that fosters long-termism. So you can’t make something higher quality by yourself. But in terms of winning the public’s trust, they said, “No, this is what matters, more than the bottom line.” But actually, it was very good for the bottom line to do right by your customers, because you’re trying to establish a position of trust with them. Can you help me get an Airbnb?” That’s what they care about. With the company now up and running smoothly, Eric left IMVU. I’m going home, road trip over.” But your GPS can help you. Official author page for Eric Ries Startups are my passion, but I’ve come realize that that term has been too narrowly understood. Eric didn’t invent the pivot, any more than Galileo invented gravity. RIES: Yeah, that’s exactly it. The first business plan I ever wrote for a startup, it was beautiful. There should be a way to incentivize corporations to make decisions based on more than just the next quarter’s results. I wanted to talk to my friend Eric Ries about this, because Eric has made a career of applying the scientific method to startups. We’re not breaking any really new ground here, but just to apply those lessons to business. For the experiment to succeed, you need to test your hypothesis, measure the results, and follow wherever they lead. Eric Ries - Manager - Apple TV App 3rd Party Platform Integrations - Apple | LinkedIn [10][14], In 2015, he released The Leader's Guide, a self-published version of the curriculum used in his consulting work, exclusively through Kickstarter, raising $588,903 for its publication. Think of our old friend Galileo: the more he challenged the wisdom of Aristotle, not to mention the Catholic church, the less warmly his experiments were received. So they experimented. Eventually they got it right – their avatars caught on, as part of a standalone social network – and their company started to scale. , Eric introduced some ideas adapted from manufacturing to bring some new, some might say ‘heretical’, ideas to entrepreneurship. And listen, now maybe you make so many detours. HOFFMAN: Alright, that’s enough magic for one day. You need empirical data from actual users. You have to look at a series over time. In the world of design, you can’t always measure results in numbers. And then you have these other times when the experiments are just not very productive. Is your revenue chart about to look like a hockey stick? First, get out of the way! Or as Eric would come to describe it: “Build, Measure, Learn.”, A great example of this is from 2007, when Samsung premiered the Galaxy Note 7. Terms & Conditions. Thirty years after the ball drop experiment, Galileo was excommunicated and put under house arrest until his death for saying that the Earth moves around the sun. strategy to build something so complex and tightly regulated? And that can work, so long as you really, really, really know what you’re doing. [5] IMVU deployed code to production nearly 50 times a day, an unusually rapid development cycle. In other words, you might need to… pivot. Like, what is your theory of change? And I spent a lot of time on Toyota, and the research on what makes great companies truly great. I wanted to talk to my friend Eric Ries about this, because Eric has made a career of applying the scientific method to startups. [4] IMVU investor Steve Blank insisted that IMVU executives audit Blank's class on entrepreneurship at UC Berkeley. I haven’t got to the theory yet. It drove our employees crazy. They started shipping code more frequently – sometimes multiple times a day – to get product updates in users’ hands. Any meeting that starts with a client expecting Tinkerbell is probably destined to fail. This feedback loop meant less time drafting blueprints and more time building things, collecting data, and iterating based on results. And in full disclosure, one of their early investors was me. It’s clear now that their decision was correct – not just morally, but totally. They came from real-life experiments, not all of which were successful. [22][23], Venture Capital: Eric Ries, author of "The Lean Startup", “Lean Startup” evangelist Eric Ries is just getting started, Upstart Eric Ries Has the Stage and the Crowd Is Going Wild, Eric Ries, the Face of the Lean Startup Movement, on How a Once-Insane Idea Went Mainstream, The youth beat goes on -- Phonebites and IMVU score funding, Interview: Eric Ries, Author Of The Lean Startup, How Eric Ries Changed the Framework for Startup Success, The Follow-Up to The Lean Startup Is Available Only on Kickstarter, "Editor's Choice: The Startup Way: How Modern Companies Use Entrepreneurial Management to Transform Culture and Drive Long-Term Growth", "Famed 'Pivot' Strategy of Startups May Not Work For GE", "A group from Silicon Valley has a serious plan for creating a totally new US stock exchange", "Long-Term Stock Exchange, Inc.; Notice of Filing of Application for Registration as a National Securities Exchange under Section 6 of the Securities Exchange Act of 1934", "U.S. regulators approve new Silicon Valley stock exchange", "Silicon Valley-backed venture cleared to become 14th U.S. stock exchange", https://en.wikipedia.org/w/index.php?title=Eric_Ries&oldid=990991227, Short description is different from Wikidata, Wikipedia articles with PLWABN identifiers, Wikipedia articles with SUDOC identifiers, Wikipedia articles with WORLDCATID identifiers, Creative Commons Attribution-ShareAlike License, This page was last edited on 27 November 2020, at 17:57. That plane actually was the first American plane to fly 500 miles an hour in level flight. This is just a system, it’s a method for organizing your work in a more productive way.”, And they’d be like, “Okay kid. , we have a mathematical discipline called innovation accounting. The scientific method starts with observing the world around you. In the scientific method, this is when you assess the results of your experiment. HOFFMAN: Great question, anonymous workshop attendee. … Remember: you can’t just look at the results of a single experiment to judge what’s good for your business. had been inspired in part by the “lean manufacturing” system at Toyota, it’s natural that Eric had that company on the brain. In this … Yeah. Official author page for Eric Ries Startups are my passion, but I’ve come realize that that term has been too narrowly understood. In Lean Startup, we have a mathematical discipline called innovation accounting. The company has been live for about five years, with their first money raised in 2016. It wasn’t even a change. It’s impossible, because you’re wrong about what quality means, therefore you need to get this information. Think of our old friend Galileo: the more he challenged the wisdom of Aristotle, not to mention the Catholic church, the less warmly his experiments were received. From the third film till the end of the series, the art department had freer rein with all of the characters’ wands, and they experimented with bone, crystal, metals. And when they answered the phone they weren’t allowed to say what they were up to because it was a top-secret project. Official author page for Eric Ries Startups are my passion, but I’ve come realize that that term has been too narrowly understood. You can find articles on many fan sites about the wand iteration under director Alfonso Cuarón. It’s going to crash their computer and the headline in the newspaper the next day, it’s going to be, ‘Idiots at that company don’t know how to build quality software.’ Subtitle, ‘Never hire that guy again.’ Big arrow pointing to my mugshot, and my career was over.”. And it requires such convoluted language. It wasn’t just that they got the product wrong. In the midst of your experimenting, and pivoting, and iterating, and learning, it’s hard to know where you are on the growth chart. He is also the author of … RIES: So I had this genius idea that as an emotional defense mechanism, I would write a blog post or two, writing some of these stories down. But they’re super-flexible about how the vision is realized, but they wouldn’t compromise on the essential things.”, And it’s just like four pages of trying to explain it. But if you gather your facts and act on them the moment you can process the new data, a pivot can feel quite organic. He knew that some heavy things, like an anvil, would fall faster than some light things, like a feather. We would ship software to production 50 times a day on average.” And people would say, “That’s impossible.” And I’d be like, “Well, that’s not a theory. They didn’t even have the engine in house yet. We know the feather will drift gently to the earth, while the anvil… won’t. They were tapped. You look up to the top, just in time to see the scientist Galileo drop two balls, a cannonball and a wooden ball, at the same time. I was so embarrassed about it, I did it anonymously. The sooner you leave your assumptions behind, the faster and farther you’ll go. Then it becomes roughly hewn and then the tip is very refined. I believe every business is an experiment. HOFFMAN: This idea of innovation accounting can get deeply mathematical very quickly, so let me summarize it this way. HOFFMAN: But no one else had written it. That’s Pierre Bohanna, a prop maker for feature films. And it flew fast. You’re going to be like, “Oh, the road is closed. He basically remade Harry’s wand. Construct a hypothesis. If you go to a tourist, you’re like, “Hey” – a real-world tourist that comes to visit San Francisco, who is like, “Oh, I love looking at the Golden Gate Bridge.” “Hey, we’re going to reform San Francisco’s voting laws to have ranked-choice voting instead.”. HOFFMAN: It’s pretty funny to imagine a world in which new customers read the business plans of all their favorite products, to find out how they’re supposed to behave. What he did was put a simple name to an elusive idea. See the complete profile on LinkedIn and discover Eric’s connections and jobs at similar … RIES: I didn’t expect this to be like such a big deal in the world when I started talking about it, truly, but it’s actually – it’s just a necessary concept to talk coherently about startups at all. Pierre Bohanna is a prop maker for feature films like Titanic, The Dark Knight and the Harry Potter series. You can’t run your experiment using old census data or generic market research. But if you gather your facts and act on them the moment you can process the new data, a pivot can feel quite organic. But to Eric, this wasn’t a leap. At 25, he was cofounder and CTO of IMVU, that’s I-M-V-U. You start driving, and the road is closed. In the case of the “pivot,” it’s a set of assumptions about changing strategy without changing your mission. Or, “I thought this would be B2B, oh no, it’s B2C. Or do you need to make adjustments? That requires a little bit of formalism from this vague concept of feedback to the more precise concept of experimentation. Nick Means is the director of engineering at GitHub. [20] Ries had proposed the idea of the LTSE in his book The Lean Startup. And I believe that every business is an experiment. The company itself is five years old, and we first raised money in 2016, so you get a sense of the scale of it. the idea of the pivot as calibration. This is just a system, it’s a method for organizing your work in a more productive way.”. Did it bear out your hypothesis? Eric and his team did learn. Often part of the process of developing something is getting it wrong before you get it right. MEANS: If you worked in the engineering offices, you would probably be called to the production floor multiple times per day to consult on something that the fabricators were seeing as they were building one of these initial prototypes. 31 talking about this. And then the next time someone called me for a meeting, I would first say, “Hey, why don’t you read this blog post, and if you think I’m crazy, then maybe we don’t have to have the meeting – and please don’t yell at me.” Honestly, I really did not like that experience. And as you’re encountering and it’s not working, and you’re trying new things, you try to track what the rough value of your ideas are. These meetings were a disaster. So anyone got any ideas?”, And someone’s like, “Let’s make the button blue.” It’s like, “We already changed the button color 15 times. It’s not what I meant. And that’s not a magical thing, that’s a very human thing. HOFFMAN: I’m Reid Hoffman, cofounder of LinkedIn, partner at Greylock, and your host. If you’ve ever looked at this academic research, it is overwhelmingly clear that having a philosophy of long-term thinking is a prerequisite for doing anything great. HOFFMAN: To create the very first onscreen version of Harry Potter’s wand, Pierre and his team had to experiment. HOFFMAN: After nearly five years of working with his team, converting them one by one to his developing theory, this approach finally took hold.
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