Venture Hacks

“Lean startups are built from the ground up for learning about customers.”

– Eric Ries

I recently sat in on Eric Ries’ presentation on lean startups at Berkeley. The slides and audio are below. The presentation is about one hour long and it is gold.

Audio: The Lean Startup (mp3)

Slides: The Lean Startup (pdf)

The audience consisted of students from Steve Blank’s course on customer development. So you will hear an occasional remark from Steve or his students. When Eric refers to a “case”, he is talking about this Stanford GSB case about his company, IMVU, and his previous company, there.com.

Built to learn

Many founders believe that early stage startups are endeavors of execution. The customer is known, the product is known, and all we have to do is act.

Eric takes a different approach. He believes that many early stage startups are labors of learning. The customer is unknown, the product is unknown, and startups must be built to learn.

IMVU learned its way to product/market fit. They threw away their first product (40,000 lines of code that implemented an IM add-on) as they learned customers didn’t want it. They used customer development and agile software development to eventually discover customers who would pay for 3D animated chat software ($10M in revenue in 2007). IMVU learned to test their assumptions instead of executing them as if they were passed down from God.

Learning to learn

This is the scientific way of building startups. It requires a commitment to learning and thoughtfulness. It is being documented in books like Steve Blank’s Four Steps to the Epiphany and blogs like Eric Ries’ Startup Lessons Learned. It represents the triumph of learning, over the naive startup creation myths we read about in the media. 

IMVU learned to learn. This process can be replicated at your company. Please do try this at home.

Update: Eric writes a follow-up to this post on his blog.