Innovative Thinking and Entrepreneurship: LinkedIn Speaker Series with Reid Hoffman and Eric Ries
November 8, 2013
At a recent User Experience (UX) meetup, a well-known UX researcher declared that Eric Ries' book, The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses, was a seminal work of business innovation.
If you’re like myself, you might ask what would cause such an exclamation. Well, earlier this month we had the opportunity to hear from Eric when he came to Linkedin as part of our Speaker Series.
LinkedIn’s co-founder Reid Hoffman interviewed Eric Ries to explore why the phenomenon of "Lean Startup" is having such an impact on our industry. Eric is no stranger to entrepreneurship. Beginning with his undergraduate days at Yale, he co-founded Catalyst Recruiting, and later co-founded two other companies, including IMVU, which is a social entertainment company connecting users through 3D avatar-based experiences.
During his talk at LinkedIn, Eric clarified his (hard-learned) principles that he’s experienced as an entrepreneur:
Minimum Viable Product (MVP): In situations of high uncertainty in terms of end user product acceptance, continuously building, delivering and evaluating the effectiveness of small slices of your product functionality is crucial. The end user feedback gained from these small slices of new functionality is then used to further refine your product in future MVPs. And, the best way to design and deliver an MVP is through validated learning, which is essentially learning from your end users’ reactions to small experiments as delivered in your MVPs.
Quality is in the eye of the beholder: The success of a product, as viewed by your customers, is best determined by the feedback from your end users. Cleanly separate product quality, which is the quality experienced by your end users, from the execution quality of your internal processes and software. Let the product quality, as perceived by your end users, lead your product strategy. Your execution strategy is very important of course, but the risk of letting that lead your product strategy is that you may deliver an excellently built product that no one wants.
Pivot: Another key concept of Lean Startup is the Pivot. This comes from the concept of Pivot or Persevere, which is knowing when to change your direction or continue with your current strategy. Oftentimes, we get stuck in optimizing a particular feature, when in fact there may be a different, and much more valuable, path to follow -- this means that you significantly change your strategy, or do a “pivot.” The key here is to always maintain fidelity to the vision of what you are trying to do, even if you have to change the specific implementation or strategy that you are currently working on.
Entrepreneurship can work in large companies: Entrepreneurship is about managing the uncertainty of a strategy, and is not about the size of an organization. The fundamental question of how do you know you if are making the right progress if you don’t exactly know the end goal, is the same for startups as it is for large companies. Large companies most often have established profitable products in a portfolio. However, newly conceived products within the portfolio most likely have uncertain futures, such as bringing an established product to a new platform, a new geography, a new use case, or a new distribution channel. And then there are competitors that are trying to make your existing product’s lifespan as uncertain as possible. Manage that part of your portfolio that is in high uncertainty by using the same entrepreneurial lean startup organizational techniques -- with autonomous, cross-functional, and dedicated teams. This can be hard to do in larger companies, so be sure to give those teams proper support and leadership.
Overall, the most important rule to remember is that in situations of high uncertainty, “whoever learns the fastest wins.” In our modern world of hyper-speed competition, mastering the Lean Startup principles of validated learning, as executed through fast build-measure-learn cycles, gives you that necessary edge to win.
Here is the full video from Eric’s talk at the LinkedIn Speaker Series: