strategy+business Winter 2013 : Page 91

conference, and counts among his clients General Electric, Intuit, and, of course, a slew of ventures you’ve not (yet) heard of. Along the path of his entrepre-neurial adventures, Ries began to notice some “truths” about what worked in launching new business-es, what didn’t, and why. He cata-loged and chronicled those observa-tions in what became a must-read blog called Startup Lessons Learned. with the Toyota production system developed after World War II. Over the course of the 20th century, lean revolutionized traditional business in a range of industries and func-tions, eliminating waste and boost-ing efficiency in manufacturing, the back office, healthcare, marketing, and so on. Later it spread to product development. At the core of the idea is that you can look at an enterprise facturing—fast cycle times, boost-ing efficiency, eliminating waste— and apply them in situations where the traditional tools of planning and forecasting don’t work because of uncertainty. S+B: Applying the principles of a 60-year-old manufacturing process doesn’t sound like a rallying cry that will get the blood pumping for aspiring entrepreneurs. RIES: We make movies about bril-“Entrepreneurship is management. It is fundamentally about organizing people to do something.” His thoughts began to gain greater traction, first within Silicon Valley and then beyond it. His book ce-mented his reputation as one of the most important and influential young management thinkers. In a wide-ranging interview at Ries’s home in the Ashbury Heights sec-tion of San Francisco, Ries present-ed a view of startup effectiveness— whether achieved by an individual or by a company—grounded in mastery of what he calls “the boring stuff: how to measure progress, how to set up milestones, how to priori-tize work” ( see “The Five Principles of the Lean Startup,” page 96 ). Known by some for his aphorism “You don’t have to work in a garage to be in a startup,” Ries also makes the case that no matter the size of your orga-nization, you need to embrace some of the spirit of the garage if you are going to survive in an unpredictable, innovation-driven economy. S+B: First, the basics. Define lean . RIES: Lean refers to a body of through the eyes of a customer and discover which things really deliver value versus which do not. Every-thing that does not is wasteful and can be eliminated. Maybe the most famous lean idea focuses on the fun-damental cycle time between when you receive an order from a custom-er and when the customer receives a high-quality product that meets his or her needs on time at a good price. You do everything possible to drive that cycle time down to increase efficiency. S+B: And your definition of startup ? RIES: It’s a human institution de-thought and practice that originated signed to create something new un-der conditions of extreme uncertain-ty. I’ve been using that definition for a long time, and during the last cou-ple of years I realized that the most important aspect of that definition is what it doesn’t say. It doesn’t say you’re in a garage. It doesn’t say what industry you’re in, or the size of the company. It’s completely agnostic. With the “lean startup” con-cept, we take ideas from lean manu-liant entrepreneurial visionaries be-cause that’s what’s interesting, but a startup is an organism—a human institution. It is not just the creation of a heroic individual. It is a system of individuals working together to-ward a common goal. And so entrepreneurship is management. It is fundamentally about organizing people to do some-thing. Everything else that happens is a side effect of that organization. Nothing gets me in more trouble than when I speak to audiences about this, because I’m supposed to talk about cool, hip startup stuff like minimum viable products [MVPs], and I come in and say, “We’re going to talk about management, and in a minute we’ll talk about accounting.” In San Francisco, that’s considered uncool. But that’s what startups and entrepreneurship are really about. And I think we’re going to have to confront that if we’re going to get better at it. S+B: So a core tenet of your ap-proach is the need to apply rigorous management in a context that’s naturally resistant to it. Is that fair? RIES: That’s definitely fair. But I thought leader 91 wouldn’t necessarily put it that way, because I want us to reclaim the word management and take it away from an association with bureau-

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