Lean Startup fbFund wrap-up

Last week I had a real blast meeting with the companies at the fbFund incubator at Palo Alto. They were kind enough to open the event up to the public, which meant we were seriously stressing the building's HVAC - and I have pictures to prove it:









Thank you all so much!

As usual, I'd like to post the slides and then offer some additional commentary. Since I tried out some new material in this talk, it was especially educational to see the reaction. (Note: there is video from this event, but it's not online yet. I had a flip cam with me, and the organizers captured their own video with a tripod and everything. If you're interested in seeing it, leave a comment and I'll see if I can get it online.)

Without further ado...

The Lean Startup fbFund Edition

View more documents from Eric Ries.

Now for the feedback. Always have to start with a little praise; thank you all so much!

edzschau: Just returned from great prez by @ericries, don't miss him, great presenter, #leanstartup

mashagenzel: Eric Ries live blows the Eric Ries webcast out of the water, a delightful presence #leanstartup

davemcclure: wow: SRO full house @fbFund REV incubator for @EricRies talk on #LeanStartup (164 Hamilton, Palo Alto) http://yfrog.com/11of5mj

Next, here are the key concepts that people seem to have taken away:

manukumar: A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty @ericries #leanstartup

It sometimes feels strange to talk to a group of startup founders and try to tell them what a startup is. Yet, I think this definition is too important to leave out. I think it makes explicable why so-called "best practices" that people bring to startups from other contexts fail so miserably. If your practice is not designed to cope with uncertainty, it has no place in a startup - even if your startup is located in government or enterprise.

alasaarela: Eric Ries: the most profitable business you can build is a Ponzi scheme :) LOL #leanstartup

This was a new meme that I'm trying out. We tend to equate startup success with making money, but that is a poor choice. I think we have to raise our sights a little higher; after all, Ponzi schemes make a lot of money, at least until they blow. They don't really create value. The same has been true of an unfortunate number of startups, they manage to generate a lot of hype, raise a lot of money, and sometimes make some of their investors, employees, or founders rich. But did they leave the world a better place than before they existed? Now, I don't think even most dot-com era founders were bad people, I just think traditional startup methods make it too easy to become confused about whether we're creating real progress or not.

bigs: @ericries says Stealth dev is a (undesirable, failure-presaging) customer-free zone. #LeanStartup

Of course, a big enabler of those kinds of mistakes is stealth-mode. Another recent meme that I hope more and more startups will take to heart: "stealth is a customer-free zone." There are rare times when stealth is a good strategy, but it amplifies risks without necessarily improving rewards. Danger, Will Robinson.

davemcclure: amazing concepts on Continuous Development => "Cluster Immune System" @EricRies #LeanStartup @fbFund http://yfrog.com/bf50cj

dalelarson: Because most features take longer to argue and prioritize than to build. -@ericries #leanstartup

Another new idea in the section on continuous deployment and the cluster immune system. Although there is cost and overhead associated with continuous deployment, the benefits are immense. One such benefit is that, when combined with A/B testing, you can try out small features in less than the amount of time it takes to argue or prioritize them. Nothing is more demoralizing to an engineering team. Prioritizing in a vacuum is a leading source of waste.

jellytheory: Ask WHY? 5X when something unexpected happens: behind every tech problem is a human one. #leanstartup

bmorrow: Not just for engineers: ask why 5x every time something unexpected happens. Find and fix the cause, not just symptoms #leanstartup #fbFund

There seemed to be a lot of resonance about Five Whys this time around, and I'm glad to see it becoming part of the discussion, hence yesterday's "How to conduct a Five Whys root cause analysis."

mashagenzel: Absolutely true, "Startups' competitive advantage is being able to go through customer validation loop faster" via @ericries #leanstartup

dalelarson: Progress == validated customer learning. Iterating at whiteboard != progress. #leanstartup

With so many startups in the room, I could see the stricken faces when I started to talk about the fact that most of us founders are pretty good at keeping people busy - but aren't necessarily sure if we're making progress. Getting clear about what constitutes progress is probably the biggest shift in mindset required to build a lean startup. See Validated learning about customers for more info.

biganderson: Visionary (paying) customers: more visionary than founders, bc they live with the problem that fdrs are trying to solve #leanstartup #fbfund

manukumar: Difference between a vision and a delusion is that a vision is grounded in reality/facts. :@ericries #leanstartup

jordym: "3 types of people have reality distortion fields: good startup founders, bad startup founders, and crazy people." - @ericries #leanstartup

jellytheory: At fbFund REV, listening to @ericries: Is your startup based on a delusion or vision? They often get blurred by entrepreneurs! #leanstartup

OK, let's talk about the vision thing. It's so important, and also so dangerous. Being able to convince other people around you (those within the "reality distortion field") is necessary to sustain the passion and energy that a startup needs. But it can also be used for evil - to convince people to abandon their senses and work on something that nobody will ever want. How can we tell the difference? I saw a lot of people stealing glances at someone else in the room while I was talking about this. I've been there: is it me or my cofounder that's crazy? What if it's both of you? Use some customer development to find out.

daphnecarmeli: "if you don't A/B test, features get PRETTIER over time; if u do A/B test they get more EFFECTIVE over time" @ericries #leanstartup @fbfund

And last but certainly not least, I wanted to try out a line that I haven't used in a long time. The power of A/B testing is so under-exploited in product development, that I'm trying new ways to explain its benefits. Remember that we can use split-testing for both the problem team and solution team, and that causes a lot of confusion. Split-testing is great for linear optimization; making our landing pages, conversion rates, and retention metrics incrementally better day-in day-out. But it's also amazing for testing big hypotheses, like what our customers really want to get out of our product. If you're not doing both, you're missing out.

Last, I was really struck by one section of the talk that seems to have been completely ignored: a new section on the power of Small Batches. Given that this is one of the most powerful concepts for building and iterating faster, I'm surprised that it didn't register. So, here's a request: how can I make this punchier, clearer, or just generally better? Any ideas?

Anyway, thanks so much to everyone who came out. I had an incredible time. See you next time.