We host startup guru Eric Ries on September 15 at Live Talks Business…Everything you know about starting a company is wrong. At least that’s what Eric Ries says. The former entrepreneur has developed a counterintuitive strategy he calls the Lean Startup. The philosophy has been endorsed by Silicon Valley royalty like Tim O’Reilly, Marc Andreessen, and Mitch Kapor. His new book is, The Lean Startup. WIRED magazine had a few questions for him. Here’s an excerpt….
Wired: What are the most common misconceptions that people have about starting a company?
Eric Ries: We still believe that entrepreneurial success is about being in the right place at the right time with the right idea. But there’s no empirical evidence that’s true. In fact, there’s actually tons of evidence that it isn’t true.
Wired: Like what?
Ries: There was a study done in the early 20th century of all the entrepreneurs who entered the automobile industry around the same time as Henry Ford; there were something like 500 automotive companies that got funded, had the internal combustion engine, had the technology, and had the vision. Sixty percent of them folded within a couple of years.
Wired: What was Henry Ford doing that his competitors weren’t?
Ries: Well, we say it was about his vision, but if you look at the documentary record, you see a different story. He didn’t know what was going to happen, but he had a process for adapting to situations as they revealed themselves.
Wired: So the key is to be able to change your vision—or your entire company—on the fly?