Masters of Scale – Reid Hoffman: Lean Startup’s Eric Ries
Forget writing that business plan. Design an experiment instead. So many products and companies fail because the assumptions in their beautiful business plans were just wrong. So stop writing and start testing. No one knows this better than Eric Ries, author of The Lean Startup and founder of the Long Term Stock Exchange.
After his first product failed, he developed a new method of product design based on running small, fast experiments, measuring the results, and learning from them.
It starts with establishing your own measure of success — then experimenting, improving, and trying over and over again. The feedback loop never stops.
Produce top-quality products in no time
- With a skilled team and the willingness to think creatively and outside the box, it’s possible to produce top-quality products in a short amount of time, even in challenging circumstances.
- Testing hypotheses and measuring results is crucial for businesses to succeed. Embracing experimentation challenges assumptions and allows for informed decisions to pivot towards success.
- Successful entrepreneurship requires real-life experimentation, iteration, and listening to customer feedback to improve products and achieve perfection. Business plans are not enough; failure can lead to valuable learning experiences.
- Startups should aim for iteration rather than perfection from the start. Releasing a product early, gathering feedback, and continuously improving are keys to success. Testing before launch is crucial to avoiding failure.
Pivot and use the data
- Collect data and make small adjustments or pivots to improve your strategy. With a lean approach, entrepreneurs can achieve success without requiring large amounts of capital or development time.
- Pivoting is a strategic tool that helps entrepreneurs redirect their startup’s strategy when faced with obstacles. It enables informed decision-making, fosters innovation, and accelerates big ideas, making them less intimidating.
Pivoting and staying flexible
- Stay flexible and track the value of your ideas. If the value is decreasing, consider pivoting. Use innovation accounting to evaluate experiments and strive for significant improvements rather than small ones.
- To succeed, rely on data and facts, experiment with a trial and error process, and be willing to adapt and change direction when necessary. Failure is part of the process, and iterative cycles are necessary for ultimate success.
Long-term stock exchange
- Long-term orientation is essential for achieving success in business, as demonstrated by the creation of the Long-Term Stock Exchange, which encourages companies to focus on their long-term goals rather than short-term gains.
- Making decisions that prioritize customer trust may negatively impact stock in the short run but lead to long-term success. The Long Term Stock Exchange empowers long-term investors to ensure companies prioritize their success for all investors.
The skunk works project – a remarkable innovational response.
During World War II, the U.S. needed a response to the Germans’ first operational jet-powered fighter plane. Lockheed Martin took on the challenge but had no factory space and no spare engineers. Kelly Johnson, the chief engineer at Lockheed, was given the project and hand-picked a team to design a new way.
They worked under a circus tent and said that his engineers and fabricators were free to fabricate parts. They were able to create a prototype in a mere 143 days, which is remarkable for a jet aircraft. The Skunk Works project used a Minimum Viable Product concept before it became popularized in Silicon Valley.
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.
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.