LEAN START-UP MANAGEMENT

ASSESMENT-1
Name: Tanay Kharche

Reg no: 17BEC0463

Slot: TE2

Present a critique of this speech in about 2000 words

The last 20 years have seen a revolution in the way startups develop. This critique is based on the speech of Eric
Ries, which had taken place at Google. The welcome speech introduces Eric Ries as the God of Lean StartUp
Management and urges him to have a talk with the audience.

Eric Ries starts his speech by asking the audience whether they have read the referred article or not, this way at
an early stage he tried to get the audience involved by asking them for a show of hand. Indicating that he
intends to make this talk interactive.

A few moments after that he asks in favor for the audience to get their cell phones outside their pockets and
keep the laptops on the desk so that in case someone finds the talk boring then they can use devices or "other
tools" to pass their time. This way he shows how flexible he is willing to be with the audience and he
understands the perspective of a listener and the constant attention required to grasp such sessions. Also a few
moments later he mentions that if someone were to use twitter then he requests them to use the tag
"#leanstartup", hence promoting his work at the same time.

After that he gives a formal introduction of himself as a book writer and mentioning his purpose of being there,
followed by a brief talk about the book.
Then he goes on talking about his journey of becoming a professional writer about management of startups, he
does mention that at some point earlier he was a coder too, hence relating himself to all the coders and other
technical workers present in the audience. He went on from being a coder to writing a book about managing a
company of coders. He was quite proficient in one language and used to love coding, that’s all where it started.
Slowly as time passed, he started managing levels of people before the actual ones who are involved in
technology can be accessed.

Followed by that he describes the problem he wanted to discuss in the talk, and that was wastage of manpower
and energy in product development and the inefficiency of the whole process in general.

It is to be noted here that right after the promotion of the book, rather than jumping to the contents of the
book he chooses to speak about himself, his journey and the actual reason beind writing this book. This makes
the further content for the audience more intriguing to listen to, and it also indicates the well planned
chronological order of the speech.

He then firmly introduces his piece of work, a book written by him on Lean Startup management. The book
underlies the following 5 principles which state that entrepreneurs are presents everywhere, entrepreneurship
can be considered to be management. Following were the points mentioned in his powerpoint presentation:

1. Entrepreneurs are everywhere

2. Entrepreneurship is management

3. Validated learning

4. Build- measure – learn

5. Innovation accounting

After that he starts with actually defining what the term “lean startup” means. According to him Lean startup is,
that there are entrepreneurs in all kinds of places you would not necessarily expect. Entrepreneurship is
management. But not the kind of general management we are teaching MBA’s and that we have studied for last
hundred years, something fundamentally different. It is management of a kind of work that is measured by
validated learning, rather than just making stuff. We accelerate that learning theory into something called the
“Build – measure – learn feedback loop”. And then we measure and hold entrepreneurs accountable using a
new accounting system called “Innovation accounting”. He expresses it as a human institution, which have the
responsibility for delivering a new product or a service, under adverse condition.

He then mentions the famous movie “Ghostbusters” and relates it to strategies applied in practical situations.
He breaks it into three parts:

1. The plucky protagonist, his character, his character flaws and how he came up with his amazing idea.
2. What he call the photic montage. It’s usually about two minutes large, it goes from “they finally get the thing
to work”. Then they are writing on whiteboard and drinking some beer, pounding on some keyboards. And then
they get their first customer. And then that’s pretty much it. No dialogues or anything in the photo montage.

3. Now that we are on the cover of magazines, how we divide up the spoils? And who’s incharge? And how we
deal with the EPA and all that stuff.

This way by relating his content to a movie he keeps things casual and helps the audience understand his
message in a much clearer way.

A few moments after that he talks about failures and success rate in this field. Entrepreneurship is considered to
be an experiment of science which has a certain hypothesis to avoid wasting people’s time and help in
efficiency. The biggest failure startups face is due to development of a product or a service which has a very high
efficiency which is not accepted by public. Yet again he takes Web 2.0 as an example to explain it, the Web 2.0
suffered massive failures for its developers and investors after they were collaborated with large companies.
Diving right to the fundamental reason of this matter according to him it is the lack of knowledge of theory to
blame for such matters.

It is to be noted that while delivering his talk Eric often walks to both the sides of the platform and keeps quite
an evenly distributed eye contact with the audience.

Giving the audience some insight about the history of this field and the people who have made important
contributions it. He talked about Frederick Winslow Taylor. Taylor invented something called “scientific
management” in the early 20th century, which we now call “management”. He invented something called “The
Task and Bonus system” which we just call “Tasks”. The idea was if you want to do a large project, the best thing
is to do is decompose that project into a series of individual tasks, assign those tasks to functional specialists.

Later he starts with a very important term which is generally used in this field and specially Silicon Valley. The
universal constant of all successful startups is the word “pivot”.

According to New York Magazines, there was an advertisement, which read, “I am not leaving you, I am pivoting
to another man”, this particular part was displayed in his presentation which is yet another good attempt by him
to keep things casual while mocking the heavy usage of the word “pivot”. Since this is a commonly used term,
he gives 2-3 examples like basketball, how pivoting can provide an extra runway to move in some direction and
others to convey the meaning to the audience with clarity. According to Eric, most of the successful startups do
not have a very great idea at first but instead it is based on the idea that faster we are capable of reducing the
time between pivots, the faster we can make money out of it, profits generated before we run out of money.

Followed by that he talked about the importance of failure and the learning we can derive from that, failure is a
part of learning and it is indeed something people come across very often before achieving success. In his
words, we spend a lot of time planning. We even make contingency plans for what to do if the main plan goes
wrong. But what if the plan goes right, and we still fail? This is the my most dreaded kind of failure, because it
tricks you into thinking that you're in control and that you're succeeding. In other words, it inhibits learning. My
worst failures have all been of this kind, and learning to avoid them has been a constant struggle. According to
me ultimately, we will all fail but that’s not what we should focus upon. Instead, we should think about how we
failed and what we learnt from it. And the first step for either is to start talk about failure. Talking about
personal experience of failure and its importance in his journey, that would convince the audience to the a
better extent that his talk would be realistic and that there is a lot to derive from that.

The manufacturing metaphor of software development is the waterfall model. This model works as when the
problem and solution both are very well known. The problem with this model lies in the fact that you are able to
successfully build and boast about a wrong product. Eric provides us with an analogy of how startups fail, it is
similar to drive a car off a cliff where we are just concerned about the mileage it provides, yet again using a joke
to convey his point. He also talks about how milestone check meetings go to relate to all the corporate working
people present in the audience.

According to Demming, the customers are the most important component of a production. The idea lies that
whatever you do, it should meet the needs of a customer. Agile Product Development is the new recent
development. It deals with customer development, an idea to check who your customer actually is. It is a
company loop of learning and discovering.

The speech ahead talks of various other learning milestones of how to establish a baseline, turn the engine and
pivot or persevere.

The three learning milestones for innovative accounting:

1. Establish the baseline  Build a minimum viable product  Measure how customer behave

2. Time the engine- Experiment to see if we can improve matrices from the baseline towards the ideal

3. Pivot or persevere- When experiment reach diminishing returns, it’s time to pivot.

Later on by the end of the speech he gives his contact information to the audience and he encourages them to
use it freely and contact him if they want to, this shows that his is willing to engage more with his customers and
help them view the book from a vivid and more importantly his perspective. He also invites them to yet another
conference regarding the same topic as a token of appreciation, and making them fell privileged. During the
Q&A session he very patiently listens to the audience’s questions and tries to answer them with clarity, later on
he makes sure whether his talk did actually answer their question.

Eric’s argument on a successful startup is an interesting and a challenging one. In his speech. He successfully
manages to draw numerous life stories to vividly establish his points. There is a lot to learn from Eric’s speech,
his facial expressions, voice modulation, the patience he shows when he was asked questions, the well planned
chronology and the quality of content he spoke about.