Eric Ries, author of The Lean Startup, sounds ready to give up his comfortable life as a technology management guru for diving back into entrepreneurship. Speaking at the #BCTECH Summit in Vancouver on January 18, the sometime Silicon Valley entrepreneur let on that he intends to disrupt the capital markets, which he blames for what he sees as the dysfunction in the startup ecosystem.
When an audience member posed the question, “What business would you start today and why?” Ries answered: “This is not actually a hypothetical question for me because I’m in the middle of starting a business right now.” And it’s one close to his heart. “I believe that most of the problems in the entrepreneurial ecosystem have their origin in the philosophy of short-termism that infects our companies, our investors and our public markets,” he said. “So I wanted to do something about that.
“I wanted to build a new public equities market that would compete with New York and the Nasdaq, to give companies an alternate venue to go public on, and use the regulatory power of the exchange to modify the rules to foster long-term thinking on the part of both investors and management. So we call it the Long-Term Stock Exchange or LTSE.”
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It’s easy to see why company founders might be attracted to a market with greater patience, but investors? The again, Ries would be the first to point out that most successful startups end up being something quite different from what they initially set out to be.
The Lean Startup has become something of a dissident movement within the tech sector. It dials back every founder’s expectations for their baby, and considers every startup an experiment involving extreme uncertainty. Instead of trying to come up with a groundbreaking, fully-formed technology, the book argues that companies should try to create a “minimum viable product” in a compressed time frame at the least possible cost.
If it sells even one unit, you learn something about the appropriateness of the technology for the marketplace. That learning is the real value you are creating in the company, Ries argues. When a project experiences diminishing returns, the organization should take what it has learned and pivot to a potentially more viable project.
Ries has a follow-up book (somewhat boringly) called The Leader’s Guide in progress—and, despite offers from publishers, available by pre-ordering on Kickstarter. He’s promised a third volume, The Startup Way, to be distributed the same way. Given his management philosophy, though, don’t be surprised if these projects come out in different forms and on different timelines than expected.
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Have you read The Lean Startup? What do you think of Eric Reis’ new venture? Let us know by commenting below.