If you think about the fact that as of 2019, 90% of start-ups fail, the big question is what is the key differentiator? And what if you are still failing despite supposedly doing everything right, according to conventional wisdom?
Indeed, while there is no guaranteed roadmap when launching a start-up, the insights offered here are relevant to anyone who is looking to maximise their chances of being one of the ones to succeed.
Written in the first person, the author Eric Ries walks us through his story, of how at the beginning of his career he failed and with the benefit of hindsight why he did, before going on to describe his journey at IMVU, an avatar-based social networking site, which currently has 6 million users worldwide.
It was during his time at IMVU he came up with the methodology which he writes about in this book. In the first instance, he argues the starting point for the founder is not to ask what customers want, instead assume they don’t know what they want, especially when innovating. Asking customers or clients conceptual questions about what they may want is inevitably going to result in wasted time and energy, when instead he argues, the solution is to experiment extensively and expose clients & customers to the variations and see what sticks and what people are prepared to pay for.
The method this is then done by is through assembling an MVP, where its primary objective is to test the business hypothesis. It is here he tells a great case study of how dropbox before they had a working solution, increased registrations by 15x on their waiting list, solely by producing a video that mimicked the functionality that the end product would do. With that surge in interest they were able to prove the demand to VC firms and build their product. The rest as they say is history.
It is at this point he argues early adopters don’t expect a new product to be perfect, they understand the trade-offs and are happy to use solutions they conceptually buy into, even if they don’t work properly. It is this group the entrepreneur should harness, utilising their feedback on what they like that is there, what they want to be removed and what they would change. At this point he makes a brilliant insight, which is well worth remembering:
“Customers (or clients) don’t care how much time something takes to build. They care only if it serves their needs.”
Later, he talks about the need for the Entrepreneur to adapt also, which is a fascinating recognition that the job the founders need to do evolves as the business grows, were with that, so the responsibilities change from being operational (doing everything yourself) to managerial (tasking others) where at that moment, there are two golden rules:
- Be tolerant of all mistakes the first time
- Never allow the same mistake to be made twice
With that in mind, then adopt the five whys method to problem-solving. Repeating why, five times can help uncover root causes so you can fix them and create a more robust solution, indeed, the Toyota production system has been built on this method. To conclude, overall this is a book well worth reading for anyone who is involved in either entrepreneurship or within a business, in project or change management. The principles he outlines are conceptually easy to understand, where the philosophy he espouses for me anyway, intuitively feels correct, where overall this book is full of insights that can only be helpful for someone in this field.