FAST COMPANY: Really, should we become entrepreneurs or should I buy an instructional book on poker and take my chances in Atlantic City?
Eric Ries: If your goal is to make money, becoming an entrepreneur is a sucker’s bet. Sure, some entrepreneurs make a lot of money, but if you calculate the amount of stress-inducing work and time it takes and multiply that by the low likelihood of success and eventual payoff, it is not a great way to get rich. So you might be better off becoming a professional poker player, and certainly better off working at Goldman Sachs.
The way you describe characteristics of great entrepreneurs make them sound, well, off their nut–you know, like some members of Congress.
The attributes for entrepreneurs cut both ways. You need the ability to ignore inconvenient facts and see the world as it should be and not as it is. This inspires people to take huge leaps of faith. But this blindness to facts can be a liability, too. The characteristics that help entrepreneurs succeed can also lead to their failure.
What are the biggest mistakes entrepreneurs make?
The biggest challenge is identifying the root causes. In medicine, understanding the real cause of a disease is much harder than treating symptoms. For startups the obvious symptoms are not having enough money, premature scaling or underinvesting in growth, and believing you have a good product fit when you don’t or overestimating its appeal to consumers. But the root cause has to do with the way we teach management, which is largely based on executing a plan to get good results. But we don’t have a long enough history as entrepreneurs to know which management tools work. That leads to forecasting fallacy.
How do you know that your theories of the lean startup are correct and don’t simply reflect your own experiences?
This movement is less about how to make web startups more successful and entrepreneurs richer than it is a fundamental reexamination of how to work in our complicated, faster-moving world. What we know about entrepreneurialism is merely the tiniest tip of the iceberg. The ultimate question is how do we do high quality work during a period of great uncertainty. I’ve talked to thousands of entrepreneurs, but this lean startup movement is only two years old, and we’re just at the very beginning of it. I’m the first to say we don’t know the whole truth; we need more data, more evidence, although I’d say we’re making good progress. But the lean startup theory makes predictions under specific circumstances, so it can be tested empirically. As entrepreneurs adopt these methods, they can see if it plays out.
You have the last word.
One of the most exciting things is that entrepreneurialism is becoming a career choice. It’s not just about living in a garage. You don’t even need to be in a small company to work as an entrepreneur. I argue in the book that big companies should have people whose jobs involve being entrepreneurs to help companies reinvent themselves. When this happens, entrepreneurialism will become mainstream.