Eric Ries: The Lean Startup Revolution in an AI-Driven World

Eric Ries, entrepreneur and author of the bestselling book "The Lean Startup," ignited a movement that reshaped how founders and corporations build and scale businesses worldwide. 

Drawing from his experiences in Silicon Valley startups, Ries introduced a methodology centered on rapid experimentation and iterative development that encouraged entrepreneurs to create minimum viable products (MVPs), test assumptions with real customers, and pivot quickly to maximize success. 

He is host of The Eric Ries Show where he discusses with founders and business leaders how to build profitable companies for the long-term benefit of society.

In this episode we discuss:

•    Origins and Rise of the Lean Startup Movement

•    Misconceptions and Applications of Lean Startup Principles

•    Expansion to Corporations and Broader Contexts

•    Founder Well-Being, Business Philosophy, and Governance

•    AI Developments, Risks, and Eric's Current Projects

And, of course, much more!

The Eric Ries Show 

Something Ventured

Episode Transcript

Kent Lindstrom (00:01):
It is hard to overstate what a big deal the
lean startup movement has beenin Silicon Valley. Eric Ries, my
guest today, is the initiator, Iguess you would say the leader
of that movement. It's hard togive you a sense of when that
book came out. I think it was2011 what an impact it made and

(00:22):
continues to make today. And ifyou've never been to one of the
events, the Lean Startupconferences, or any of the talks
that Eric gives to 1000s ofpeople, it's incredible. It's
like going to a rock concert.And you know, in Silicon Valley,
there's a million venturecapitalists, maybe not all good
ones, but a million, and there'sa million founders, and they're

(00:45):
probably all good actually,because it's pretty damn hard to
start a company. But in terms ofpure thought leaders, there's
not a lot. I mean pure thoughtleaders, you know, not. Here's
my hot take on the market. Or,you know, it's really hard to
raise a venture fund these days,thought leaders, I mean, people
who really have an idea thatanimates, a lot of people. There

(01:06):
aren't a lot of those in SiliconValley. Maybe Jim Collins before
that, with good to great. Soit's really had a, had a pretty
big impact on Silicon Valley.And Eric's the guy who started
it. You know, the ideas were,you know, as with anything, came
from all kinds of places, fromJapan, from from Steve Blanks
thought, but Eric articulatedit, and he crystallized it and

(01:27):
became a movement. One of theinteresting things about the
lean startup movement is asubiquitous, ubiquitous as it is
in Silicon Valley, it's alsofairly often misunderstood and
in fairly interesting ways. Imake the joke with Eric, which

(01:49):
I'm sure he's heard 1000 times.Well, if you know how to make a
perfect company, and you iterateand you know, why aren't you
running a trillion dollarcompany? And he has, in this
podcast, a very good answer forthat, and explains a lot of what
people get wrong about the leanstartup movement. And in this
episode, he talks about how thelean startup is going to

(02:10):
function in an accelerated AIenvironment. What he thinks
about AI and well, you know theanswer to my joke. In any case,
if you're the type of person wholikes to listen to one good
podcast instead of 10,000podcasts, this is one good
podcast. Eric Ries is fantastic.My guest today, welcome back.
All right.

(02:36):
Welcome back. This is thesomething about your podcast. I
am Kent Lindstrom. I am yourhost. My guest today is Eric
Reese. How are you doing? I'mdoing good. Thanks for having me
on. Thank you so much for doingthis. You are. You're kind of
like my Nelson Mandela. You knowthe Nelson Mandela Effect? Do
you know what that is? It's it'sjust, it's an effect where, like
everybody, collectively, peopleremember that he died in prison

(02:57):
in the 1980s Oh, right. Eventhough not, it never happened.
He died fine in 2013 many yearslater, I told a bunch of people,
having Eric on the podcast, thisis great. They're like, Oh,
you've had him on before. Ohyeah. They're like, they're
positive I've had you before.I'm like, No, I've had a lot of

Eric Ries (03:12):
great early so I think that was a compliment. I
think I Yeah, it's a they'relike,

Kent Lindstrom (03:16):
you've had all the other had a lot of famous
people, and he's a famouspeople. And of course, he's been
on I think that's what it is. Iit is. Maybe it's good. We've
waited, though, because now wecome into the world of AI, which
is kind of interesting, but I'llset it up. Eric was an
entrepreneur, like built acompany. The company did what
the company did, but somewherealong the line, he synthesized,

(03:41):
came up with, put together abunch of ideas in a book, and
that book is famously the LeanStartup, has since wrote the
startup way, but the leanstartup and others can see long
term Stock Exchange. We'll talkabout those. But that piece
where you were an entrepreneur,and then you became a thought
leader, and the Lean Startupbecame like a movement. It just

(04:04):
in a crazy way, like there's alot of ideas in venture capital
and company building and thosekinds of things. You got to the
point where you were having,like conferences where people
were there to discuss yourideas. And I don't think that
there's a founder in SiliconValley to this day who can't,

(04:25):
well, give you theirinterpretation of what the Lean
Startup means. I don't thinkthey've all got it right, but
they all have the book on theirbookshelf. How? What was that
like? What was that period foryou, where you went from like,
I'm gonna start writing, whichis 99% of people don't do to
where it just became this thing,

Eric Ries (04:46):
like, yeah, it wasn't. It was an incredible
phenomenon, and I was veryreluctant to use the word
movement to describe it. Ialways felt like people use that
word, throw it around a lot inin writing and in business,
especially you. But eventually Ihad to embrace it, because it
really was that, like we hadtapped into something very deep
and very primal. And I think,frankly, a lot of it was that

(05:10):
the old ideas aboutentrepreneurship just weren't
very good, but it was all wehad. And so there was this
moment, you know, this storykind of originates around the
financial crisis. 2008 2009 sothere was a kind of a general
discrediting of what camebefore, and a hunger for
something new. So I guess, youknow, like a lot of overnight
successes, you know, if you're,if you I was just explaining

(05:33):
this to a founder, actually, whowas asking me about this history
just today, and we wereremarking on the fact that, you
know, basically every overnightsuccess is like 10 years of
grinding in the making. Peopleonly see the overnight success.
So to rewind the clock, when Ihad done my first couple
startups, for whatever reason,the way that I thought
intuitively, that engineeringshould be done, that startups

(05:55):
should be done, people thoughtwas crazy. Just, I don't know, I
didn't think it was crazy. Ithought it was very natural. I
was maybe just, I was thinkingtoday, maybe I was just a failed
scientist, so I really wish Icould have done science, but
instead I wound up doing this. Iwas like, Look, of course, we're
gonna use a scientific method,obviously, of course, we're
gonna get to the truth likethat. Surely, that's our pride.
And those things seem veryobvious to me, and yet people

(06:16):
thought they were quite, quitestrange, you know, even, even
crazy. And so one of the strangethings was, when I was just an
employee of somebody else'sstartup, or just within the cog
in a larger machine, I couldjust push as hard as I wanted
for the things that I wanted,trusting that the system would
push back against me and wewould compromise. So, you know,

(06:37):
remember when we used to releasesoftware so infrequently, you
could put the name the year thatthe product came out in the name
of the product right windows, 95that tells you how incredibly
slow it was like by design. Infact, when they started
releasing more often, it causeda huge naming problem, apart for
other problems. So I could justsay, Yeah, I want to release
faster. And, you know, peoplerelease it once a year. It
doesn't really matter if I saidwe should release once a day,

(06:58):
once a month, whatever, once aweek. You know, maybe we
compromise it once every ninemonths or something, and I would
count that as a victory. Well,as soon as I was in charge, like
when I started starting my owncompanies and telling people
we're going to do things thisdifferent way, I said we have to
release more frequently. Andthey'd be like, Okay, Boss, how
often? And I'm like, asfrequently as possible. They're
like, You mean, every minute,every day, every month? And I

(07:20):
was like, and I was like, and Ireally, I didn't know. I was
like, Oh, I've actually neverhad to think about this. It was
like, you've been pushingagainst the wall for so long the
wall is removed, you fall over.So I spent a lot of time trying
to figure out the answers towhat I consider to be the most
basic questions inentrepreneurship, like, How
often should you release whenshould you release the first
product? When do you listen tocustomers, and when do you
ignore them? Like, to me, thisis just like basic, basic

(07:41):
questions I wanted to answer to,and nobody could answer those
questions for me. I would voteand ask all these fancy people,
mentors, be like, What should Ido? And they would always tell
me, Well, Steve Jobs did it thatway once in 1989 right? I'd be
like, well, but I'm not SteveJobs. So is that relevant for
me? You know, it's this. Peoplewould tell me these kind of
famous stories. But I was like,but what's the theory? You help

(08:01):
me? Help me understand anyway.The funniest thing happened to
me was these ideas reallyworked. Like I didn't even
really understand how strongthey were until we got a chance
to really put them intopractice. And I could see with
my own eyes the incredibleproductivity they enabled, and
yet the people doing it whoworked for me could not
understand why they worked. Soit's like, if you've learned

(08:24):
your whole life you need to dosomething, and then I show you
that you don't need to do it.You do a different way. It's
actually very disconcerting. Andpeople actually had a really
hard time believing that they'rebelieving the evidence of their
own eyes. You know who you'regonna believe me, or your lying
eyes. Like these ideas, theseideologies that are embedded in
our thinking are so strong it'shard to see the evidence even
what's right in front of you. SoI spent just year after year

(08:47):
grinding, trying to find a wayto explain to people why does
this work? And I read everybusiness book you can imagine,
every book on managementengineering. I studied Toyota
Production System. That's whyit's called Lean Manufacturing.
Why it's called Lean Startupthis day, because of lean
manufacturing. You know, askedme about Taichi. Oh, no, we
could do the whole podcast abouthim, right? And eventually I
stumbled upon this set ofconcepts, which I started

(09:09):
calling lean startup. And Ididn't want anything more than
just for the people who work forme to be able to do what I was
asking them to do, andunderstand why, you know, that
was that was really as far as Ihad thought ahead. Yeah, and
what I didn't understand at thetime was that I was on a career
track, so we don't even normallytalk about entrepreneurship as a
career. Maybe it's more commonnow, but certainly when I was

(09:31):
coming up, that was no no oneever used that language. So I
didn't know what was going tohappen next, although it was
very predictable. I left thatcompany. I was thinking about,
what should I do next? And allthese DCS started calling me,
hey, could we get to know you?Hey, could we would you be an
entrepreneur resident? And moreimportantly, Hey, would you meet
with such and such portfoliocompany of mine and give them
some advice? Sure. And I had theweirdest thing kept happening to

(09:53):
me. I would go to thesemeetings. I would sit down, and
they would say, Okay, well, hotshot, what's your idea? And I.
Were telling these stories.Well, here's how we did things.
We used to release software 50times a day on average. Batch
size was smaller. We would doall this stuff, or proto lean
startup stuff, and people wouldabsolutely lose it and start
yelling at me, that's not true,that can't possibly work. You're

(10:14):
lying. You know, this insane.Just like, and eventually I
would have to be like, listen,sorry, you called me right? I'm
doing you a favor. I don't Idon't work for you. You don't
get to yell at me, like, what'sgoing on? I was actually ejected
from conference rooms. Peoplewere so unhappy about this, and
I had the brilliant idea that Ishould write some of these
stories down. I was soembarrassed about it, by the

(10:35):
way, that I did it anonymously.The blog was called Startup
lessons learned. It didn't sayby anybody passive voice, the
lessons had been learned. Yeah,and I just put them out there,
not for anyone to read, but justso when somebody asked me for
meeting, I'd say, Listen, whydon't you read this? First this
strikes you as moronic, then wedon't need to have the meeting.
You can save me theembarrassment. Boy,

Kent Lindstrom (10:52):
those were the Those were the days today. VC
thinks of like, you know, twoideas and three sentences. It's
like, okay, branded, trademark.

Eric Ries (11:02):
Yeah. Just to give you a sense of how rare it was
for startup people to be writingat that time. First of all,
every VC I asked for careeradvice told me not to do this.
It would be a career ender.Secondly, within a month of me
writing these essays, three ofthe most prominent startup
bloggers in the in the universereached out to me directly to

(11:25):
find out who I was, because theyhad seen the traffic I was
generating to them in theirrefer logs of their web blog.
Okay, that's how that's how lowtraffic it was that a new person
shows up on the scene and sendsyou five clicks. People noticed
and wanted to know, who is thisnew guy on the block? Like,
that's how, that's how differentthe information sphere was at

(11:46):
the time. It was not, it was notlike it is today. No Tiktok, you
know, it was very different. So,so yeah, then it just blew up,
you know, like I said, theovernight success years in the
making. You know, I remember atthe old web 2.0 Expo, if you
remember that, yeah, and I gotinvited to do a talk. Sure, you
know, I never given a talk likethat before, but I took it
really seriously. I had acustomer advisory board for my

(12:09):
talk, and I really worked hardat this law. I really worked at
it hard, and I promoted itheavily on the blog, and I was
really focused on making sure ifI do a talk, I want to be really
good on people to be there. Ididn't realize this, but at the
time, I was like, treating itlike a startup, right? It just
was, that's the only hammer Ihad. So every nail, you know,
every problem, looked like anail. And I showed up, and the
room was totally packed, like tobursting. And I, I didn't

(12:32):
understand this at the time, butthe way the expo worked in those
days, they would have, like, itwas track. So there'll be, like,
six or eight talks going onsimultaneously in equally sized
rooms, and everyone else, Ifound out later, everyone else
who was in that time slot, like,hates my guts because everyone's
I didn't realize, the wholeconference is here. For some
reason that was normal. That wasfirst time I did a big talk.
Like, I know it was unusual. Icome and I give my talk. And

(12:55):
lucky for me, talks weren'trecorded in those days. So lucky
for me, there was somebody inthe in the in the room who had a
first gen iPhone voice memo onrecord. Wow. So there was a
samiz dot illicit recordingbootleg of me giving that talk
circulating around the valleyfor for months afterwards. It

(13:17):
led to all kinds of anyway, itwas grateful. Then it was it was
a crazy time. It was a totallycrazy thing. And just people
were really, really excitedabout it. And yeah, we started
to, you know, we didconferences, and we did all this
stuff. Remember, go, I wastraveling around the world
talking about it, and CharlesHudson, who's now at VC, at
precursor, remember, he sat medown one day and he said,
listen, instead of you travelingall over the world to give these

(13:37):
talks, would it be moreconvenient if people came to
you? And I was like, Yeah, buthow does one go about that? He's
like, I'll do it for you. It foryou. No problem. You know, just
like, it was like, it was like,everything was like that the
right person would show up tohelp make the thing happen.
People started great, leanstartup meetup groups in cities
all over the world. It was justa very, very intense thing. And
then the, then the, here's thecraziest part of the story to

(13:57):
me, I was expecting, I wasgearing up this whole time to
meet our enemies on the field ofbattle. Like, if you went to
those early conferences, if yougo check pictures of them and
stuff like that, it's like areligious revival energy. People
are very pumped. And we arerallying the troops, right
battle. And like, I'm like, theenemies, the advocates of stage,

(14:17):
gate development, waterfalldevelopment, are gonna meet us
out on the field of battle forwhich we will vanquish them, and
we ready for that. And thatdoesn't happen. That's not real.
Nobody ever came out onto thefield. We just won by default,
right? These ideas went fromradical new, crazy things to the
conventional wisdom, kind ofwithout going through any like,

(14:39):
there was no ceremony. It just,it just kind of happened. And
actually, a lot of people whoare part of the very early
adopter phase of the ideas weredisappointed, because it wasn't
cool anymore. You know, they'relike the edgy hipster in
Brooklyn. It was like, That bandis too popular. I can't listen
to them anymore. It was really,it was a fascinating experience.
That psychology of it just to beat the center of that maelstrom.
It was a, really, it was a, itwas a crazy. And wonderful

(15:00):
experience

Kent Lindstrom (15:01):
well, and it goes much further than that,
too. You then, like,corporations take it up, right
as I understand? Yeah, youadvise you hop on whatever play
you go, and the top levelexecutives are dragged into a
conference room and takingnotes. Like, of the the biggest
companies that people kind ofcan't imagine. I'm I don't know
if it's Boeing or whatever itis, but companies of that scale,

(15:22):
what? They could possibly doing,be doing with you. But as I
understand it, there becomes apretty big, pretty big demand
for you to go talk to peoplelike that. Yeah, I

Eric Ries (15:30):
reinvented myself for a time as a corporate
consultant. I was a one manband, you know, I just did it on
my I wasn't trying to build aconsulting company, although now
that, now we have moreinfrastructure, there's a whole
lean startup company. And forthe people who want that, they
can, they can get that training.Get that training. But to me, I
was just intellectually curious.Like from the earliest days of
giving this talk, these talks, Ipeople would come up to me after

(15:51):
the talk. And I remember thisreally well. It happened
multiple times. It took, I'mpretty slow on the uptake, so it
took me a little while torealize what was going on.
People come up to me. They say,Hey, Eric, you know, I'm a
general manager of a division ofbig company X. And I heard your
talk. And in your talk, youknow, you said that a startup is
a human institution designed tocreate something new under

(16:12):
conditions of extremeuncertainty. And you said it has
nothing to do with sector,industry or size of company, you
know, which I was like, that'sThat's true. That's just a
matter of deductive logic, fromthat definition to that
conclusion, they say, Great, Iaccept your challenge, right?
And I'd be like, what challenge?He's like, they'd be like, Well,
you said, this can work for me.So, right? I want, I want to do

(16:33):
it. And the first couple timeshas happened to me, I just said,
well, good luck to you. Youknow, great, go. I'm so glad you
know. Good. Let me know how itgoes. And they're like, no, no,
I'm trying to engage you to comehelp us do it. I said, Oh, you
have the wrong department. Ifelt like it was like a
department store. You've gottenoff on the wrong floor. This is
sports equipment, you know, youneed men's suit. I can't help
you. I don't know anything aboutcorporate politics. I don't

(16:55):
think about corporate budgeting.I don't know. And they looked at
me like with such pity in theirfaces. Did you not hear me? I
told you, I'm a general managerof a division of a large
company. I ate corporatepolitics for breakfast. That's
not the problem. And I rememberthe first time I actually had
to, like, you know, a littleslow. I finally had the
wherewithal to be like, Oh,well, what is the problem? I got

(17:15):
curious. I was like, oh. Andthen they gave me the whole
story about, you know, thishappens in corporations all the
time, where they get theauthority to do some innovation,
but then it's like, okay, nowI'm here with my team. What do
we do every day? Like, what dowe actually do mechanically to
do an innovation? Like, how doyou do it? Anyway? I found that
endlessly fascinating. To go seeentrepreneurship in different
contexts, different domains. Outof Silicon Valley, I traveled

(17:36):
the world. I got to seedifferent startup ecosystems,
but I also got to work on like,deep sea oil drilling and, you
know, cures for cancer andmilitary industrial complex and
defense agencies andgovernments. And it was, it was
really fascinating, becausethere is this brotherhood and
sisterhood of entrepreneurs, nomatter what, like say, no matter
what industry, no matter whatcountry we're tribe. And when

(17:58):
you meet somebody who's in thetribe like you just, you'd know
it, it was actually really funto be like, Oh, I wasn't
expected to meet you here. I wasalways of the finance department
of this massive company, buthere you are. Okay, let

Kent Lindstrom (18:09):
me help. And was there a point where you realize,
like, Oh, I'm not buildinganother, I mean, maybe my own
consulting startup, but I'm, I'mnot building another little, you
know, startup to do whatever.I'm a thing, like, I'm a, you
know, there's, there's venturecapitalists in Silicon Valley,
there's entrepreneurs. A purethought leader is a little more
rare, very rare. Was there apoint where you realize, like,

(18:32):
hey, that's what I'm gonna belike, That guy, you know, I

Eric Ries (18:34):
always had the term thought leader. It was so
stupid. That's like, only, only,only in business can we have the
word thought leader. Well, I hadguru before that, and that
wasn't good. Well, it's funny,because I'm of the Peter Drucker
School. Peter said that peoplecall him a guru because they
can't spell charlatan. That'sgood, but, yeah. But listen, I
love ideas, so I didn't mind itlike to me a startup. I always

(18:57):
thought like a startup was like,a beautiful way to embody an
idea. Yeah. And so the fact thatit also makes money, to me, was
always a bit of a curiosity.Like, to me, it's not, it's not
any more interesting to me thata startup makes money than that.
Like a human body requiresoxygen. You definitely don't
want to run out of oxygen,right? You wouldn't say, like
having as much oxygen aspossible is the best way to

(19:18):
live, you know? So that's how Ialways felt that way, so I
didn't, you know, and I wouldadvise, I've been built a lot of
help people build all kinds ofventure firms. I've been LPS in
firms. I've done a lot of stuffin the venture ecosystem,
basically, like all the kinds ofthings you can do. But I think
my weakness, from a ventureperspective, is I don't care
about getting a good deal. Sosomeone comes to me and pitches

(19:39):
me a startup. I like everystartup I meet, people always so
surprised by this, you know, Isay yes to a lot of things
because I just, I love startups.I love the fact that people are
taking the swing, even if itseems like a terrible idea.
Yeah, you know, maybe I can helpand and so, yeah, it is. I do
feel a little bit of anoutsider, even though I, you
know, I live in Silicon Valleyand I breathe the culture I know

(19:59):
all the people and. Been aroundit for a long time. Yeah, I do
approach it in this, in thisdifferent way. And I, you know,
I consider an honor. If people,if people find the ideas that I
have promulgated independentlyuseful, right, then I consider
that to be an honor. I likethat, whether I make any money
from it or not, it's kind ofsecondary

Kent Lindstrom (20:14):
question. Yeah, I think that's right. I think
with you, once you realize howridiculous it is to start a
company and how hard it is. Evenwhen we see something that's you
would say, this is pretty silly.This is this person should, you
know, this is never going towork. You really got to kind of
just step back and say, Boy, Godbless you for trying. Because
anything is, you know, steppingaway and trying to create

(20:36):
something from nothing is just asoul crushing. Well, as I tell
people you shouldn't do itright? And the people come back
and say, Well, I'm gonna do itanyway. Like, okay, well, then
you should do it

Eric Ries (20:46):
right, right, right, exactly. Yeah. I definitely feel
like if I had really understoodhow hard it was going to be, I
probably wouldn't have gotteninto it as a job in the first
place. Yeah. So I do think thatthat, you know, ignorance is
supposed to some degree. Butagain, I think now we're at a
stage now we can start tocultivate entrepreneurship as a
career discipline. And we canactually, like, what people
don't appreciate is that,although it is hard, and it's

(21:09):
one of these video it's like youplay a video game where you know
the boss of level one is justthe goomba in level two, yeah.
And it just gets exponentiallyharder every time. And like, it
is kind of like that, like yourreward for surviving a phase is
just to go to a new phase. It'seven harder, yeah, so, but you
can actually like my belief nowis you can cultivate and train

(21:30):
that muscle to learn to like itin the same way that elite
athletes start to enjoy the burnof of training. You can kind of
get to that level withentrepreneurship. So I do, I do
think that that we could bedoing things to make it more
accessible to more people, ifwe, if we help people, kind of
going with eyes open andunderstand that the difficulty

(21:53):
is intrinsic, but that doesn'tmean you have to suffer. Yeah.
And the second thing is, one ofthe things that that has been a
big surprise to me in my career.I didn't understand this in the
early days, is that in a lot ofways, if you're willing to make
the upfront investment to dothings the hard way, you make
other things easier. So I callthe principle harder is easier.
Like, if you have you have areally big, ambitious, like,

(22:15):
Earth crushing mission to, like,do the impossible, do something
that everyone knows can't bedone. Do something like fully,
thoroughly and completely solvea problem that people are
nibbling around the edges at.Most people will tell you, like,
that's too hard. Just focus onyour niche. Narrow down, make it
small, whatever. But if youreally have the courage to do
that, those companies don't havea whole bunch of problems that
every other company that I meetwith is constantly complaining

(22:37):
about. You know, talent finding.How do you how do you COVID was
like, how do I find good talent?Like, if you have an exceptional
mission, have an exceptionalmission like that, you have to
worry about that, right? Peoplewill take a massive pay cut to
work on something they trulybelieve in. You know, if you do,
if you treat people right, youbuild a reputation for
integrity, like you don't havecommunication problems, you
don't raising money is a totallydifferent experience for the
companies that are thinking bigversus the ones that are

(22:59):
thinking small. So I thinkthat's also really interesting,
kind of unexpected part ofentrepreneurship, is that if we
teach people to embrace thedifficulty, we can actually make
the problem easier. Yeah, and

Kent Lindstrom (23:08):
so why isn't every company in the world now a
rocket? I mean, the rocket shipevery entrepreneur endeavor,
Endeavor should theoreticallynow be you put up five landing
pages on the week. If it doesn'twork, you don't do it. So that
company never exists, and thecompany that does exist just
does exist just iterates its wayto infinitely quick growth.
Like, what? What are peoplegetting wrong? Because I did it

(23:30):
in my last company that I did,it was in the new space, and
there was a bunch of peopleliked, and we did all this
stuff, and we iterated and allthat, and we just did it for two
years too long probably, yeah,that is the trick. We read your
book like we knew the trick. Youknow, we knew it like, Yeah,
well, let's break

Eric Ries (23:48):
Yeah, that's a great I like that question a lot, and
let's break it down. So firstthing is, you remember when
Chris moneymaker won the WorldSeries of Poker? Yeah? Familiar
with that? Okay, yeah. So, youknow people I've now heard that
the story is kind of in disputenow, whether he really was a
total and total amateur at thetime, he wasn't, but like but
definitely the story goes, youknow, random person with the
perfect name, Chris moneymaker,wins this thing, you know, gets

(24:12):
tons and tons of people to gointo into poker. And all these
professional players since thattime who are exceptionally
gifted poker players have notwon the World Series of Poker.
And you could look at that andsay, But hold on, they've got
all these. They all the theyhave the analytics. We know
there's all we know about potodds. We know about all this,
all this quantitativestrategies, all the thing and in
fact, they can make tons andtons and tons of money playing

(24:34):
poker. How come none of themhave won the World Series of
Poker? Because at the end of theday, poker is a probabilities
gain. So having a slight edge inthe long run is super valuable,
but it's no guarantee of anyspecific thing going your way.
And I think thatentrepreneurship is very much
like that. As you get better atit, you shift the odds in your
favor, but you don't shift themto 100% Yeah, right. You know we

(24:57):
could imagine we could shift theodds from 10% 20% we've, like,
profoundly changed the world inan unbelievable way, and still,
80% of startups would fail,right? So, you know, I feel
like, yeah, if there was a morereliable method that would be,
that would be helpful. Buthonestly, the other thing is,
people are still not that goodat it. You know, it's
interesting, like, a whole newgeneration of people reads The

(25:19):
Lean Startup every year. Yep. SoI meet people, still to this
day, who just read the book forthe first time. So to them, it's
brand new, because some peopletreat entrepreneurship like a
career, but most people don't.For most people, it's a one off
thing that they try. This is solottery ticket. Yeah, we don't
we? I think, I think part of thereason we get lottery outcomes
is because people treat it likea lottery ticket, and so

(25:39):
therefore that we don't get thelearning. Yeah, this is
something. This is like a skillyou perfect over time, and the
people that are good at it arereally good at it. But a lot of
people just dabble, don't getinstantly rich, and then say,
does the method doesn't work? Asif I had promised them easy
riches. Yeah, I tried not to,

Kent Lindstrom (25:54):
right? I find it hard to convey to people that
there's a there's a thing. Andso certainly, there's a
survivorship bias, where youthink that, like, you're you
start a company, you think yourodds of succeeding. You're like,
you know, 5050, like, I'llprobably 50. Oh, yeah. And
there's a thing in SiliconValley, but Mark Zuckerberg is a
great example of it, wherestories, you don't really know

(26:16):
what happened, and the storiesget retold. First of all, a lot
more shady stuff maybe happensearly on than you really knew,
and, and the line is describedas being a lot straighter than
it really was right. Like MarkZuckerberg wasn't. Mark
Zuckerberg when he started, hebecame amazing. And the thing is
amazing, but he was, you know,if you interviewed him at the

(26:39):
time, he wasn't, you know,didn't, well,

Eric Ries (26:42):
there's actually, there is an interview of him. I
gotta find the link to it. Idon't remember where it is now,
but there's an incredible oneof, like, there's an incredible
interview with Mark Zuckerbergon his couch at Stanford. Yes,
just come to Palo Alto for thefirst time drinking out of a red
solo cup. Yeah, he's totallylike, and he's being asked to
describe the vision of Facebook,and it's like, it's so bad,

(27:04):
yeah, and it's, it's actually, Ilove stuff like that, because
it's really helpful to remember.And I remember reading in one of
the Facebook history books, youknow, that summer they go to
Palo Alto, and who's living inthe house, the famous house in
Palo Alto, it's DustinMoskovitz, Mark Zuckerberg, Adam
D'Angelo is there and, and whoelse? And there's somebody else

(27:25):
there anyway, and I don't thinkit's Joe, I think it's the other
guy anyway. There's a couple ofthem live in the house, right?
And they, they've inventedFacebook already, okay? Like,
this is the Facebook is alreadya hit at Harvard, and they're
bringing it to Stanford. And whoin the house is actually working
on Facebook only DustinMoskovitz, right? The the

(27:48):
smarter more like experiencedprogrammers have already moved
on to other ideas. Myrecollection is Adam D'Angelo
was working on a webcam thingwhere he could not program
computer by doing hand gesturesor something. Forget what Mark
was working on and DustinMoskovitz, so the story goes,
taught himself to program sothat he could keep up with the

(28:09):
demand of people who are beggingthem to open Facebook on new
college campuses. It's so like,but what? And then they'll say
what you're saying. He's not avisionary. Well, he was. But
even he, and even with all thatsuccess, he didn't see it yet.
And I think to a surprisingdegree, entrepreneurship is
actually a a process of selfdiscovery. A vision is not

(28:33):
invented. It is discovered.Yeah, and it, and it requires a
lot of inner work, actually, to,like, really figure out, what do
I truly believe? What am Ireally committed to? What is
this vision really and to me, Ithink it's actually very
beautiful that there's failureinvolved, because in the fantasy
plan of a startup, everythingworks out. There are no trade

(28:53):
offs to be made. People love theproduct, the press loves it, and
consumers love it, andenterprise love it, and you can
charge as much money as youwant. You want, you have really
high margins. And the marketingis, everything's great, yeah?
And then reality forces you tochoose. You know, that's what a
pivot really is, right? It'slike, which of these children
are you willing to throwoverboard, yeah, for the success
of the overall? And it's like,it's, it's painful and

(29:15):
difficult. And what I havenoticed is that the same team,
same idea, same everything, buta different founder might make a
different pivot call, yeah,based on what they really feel
inside. And when you've beenthrough that purifying fire of
having to do that, you knowsomething about yourself and
what you care about that youdidn't know before, if you pay
attention, I think

Kent Lindstrom (29:35):
that's actually really cool. Well, what's kind
of funny about that MarkZuckerberg story he was working
it was like wirehog or so was heworking on, like a peer to peer
to peer, you got exactly right.But he was like, the fact when
people are kind of like, Is mycompany, you know, do I have
product market fit? Like, I havea million dollars in ARR and I'm
like, Yeah, you kind of crawledyour way to it. And, you know,

(29:56):
it should I use the term itshould just be growing
energetically. But you can. Sayyou know it when you see it, but
you think about it. There wasMark Zuckerberg with like,
product market fit, pounding onthe front door, pounding on
appreciate it, yeah. And he waslike, I don't know that's
normal, right?

Eric Ries (30:11):
Like that. That's a big part of the problem. Like,
if you, if you study these pivotstories, the other thing people
misunderstand about peoplealways accuse me of a loving
failure, being like, Mr.Failure, I'm like, No, if it was
possible to succeed withoutfailure, I'd be all for it. But,
of course, it's the success wecrave. One of the reasons why
failure is so incrediblyimportant is to help people
recognize success when itfinally comes. Yeah. So like,

(30:33):
you know, in the I rememberwriting in like, sort of about
the Groupon story. You know,this is before Groupon imploded.
Like that has a great foundingstory where they were trying to
do like, two or three versionsof that idea that were just,
like, hopelessly broken for,like, I think it was a year, 18
months. They were at it forquite a while, just getting
absolutely nowhere, and they hiton the idea to do the coupon

(30:54):
thing. And I just remember themtelling me the story of the
first coupon they did, which wasfor, like, it was like a great
MVP. They basically went to thepizza restaurant in the lobby of
their building and justbuilding. And just like, we
print up some coupons and you'llgive them out and get two free
pizzas. And like, you know, Ican't remember the numbers now,
but you know, 28 people came andgot a free pizza, right? And
most founders would be like,Man, 28 people, it doesn't seem

(31:16):
like a lot, yeah, but whatyou've been getting? Zero.
You've been up goose eggs for 18months. You're like, 28 people.
Sign me up. I don't get 56people, you know, you're like,
just, you're there in a way,you're paying attention in a way
that's really difficult. And Ithink, yeah, taking, you know,
just, oh, sorry, one second.

Kent Lindstrom (31:31):
That's the the joke I always make, can you hear
me? Okay, yeah, I hear you.Fine. So the joke I always make
where people have, like, stealthmode on their, you know,
LinkedIn, so nobody knows abouttheir company. I'm like, it's
like, don't worry. Don't worry.You wished one person on this
planet cared about your company,and if you emailed your business
plan to Microsoft tomorrow,they're not going to steal your

(31:54):
idea. So,

Eric Ries (31:55):
yep, yep, that's one of my old one of my old lines. I
used to use it all the time.Yeah,

Kent Lindstrom (32:00):
relax and On you go. What do people get wrong
when they pivot? Seems to be themost misused word.

Eric Ries (32:07):
Yeah, sorry about that. What I did try, what did
try to make it clear, or

Kent Lindstrom (32:13):
people in French, I guess, like, what do
people get wrong? Like, there'sthe sort of, there's companies
that pivot, but they're reallynot pivoting. They're just kind
of like, kind of moving toward alocal maximum, which I've
definitely done, or they're juststarting a different company,
like they're just, you know, you

Eric Ries (32:28):
just, you said it exactly right. It's like the
Scylla and Charybdis of this iseither you're just churning
around, you know, churning,churning, churning, local
maximum, or you're like, wecalled it pivot by because I
wanted to have the metaphor frombasketball, one foot planted,
one foot moving. If you moveboth feet at the same time,
you've traveled right? So that'sthat's where it comes from. Now,
what's interesting to me aboutit is so, so the definition of a

(32:51):
pivot, just for your listeners,just in case anyone doesn't
remember, is a change instrategy without a change in
vision. So vision is in the DEF.And people sometimes say like,
pivot means no vision. So youliterally cannot pivot if you're
if you have no vision, is notpossible. And people get the
same thing wrong about minimumviable product. It's like, oh,
Eric just thinks it's just, he'sadvocating for just doing small,

(33:11):
incremental things. But it'slike, no, you don't. You have it
backwards. If you just doingminimum product, just do minimum
product. You need minimum viableproduct. You only need minimum
viable product in the context ofa big enough vision that it's
hard to know if we're makingprogress or not. So what, what I
think is really interesting isthat still, I still encounter
most startups. And I say, Do youguys know about Lean Startup? Oh

(33:31):
yeah. I'm like, Okay, tell meabout a pivot. And they'll be
like, herp, Derp, no idea what apivot is, right? And I'm like,
Okay, how did you learn aboutLean Startup? Like, did you
really read the book? Andthey'll be like, I think I did.
This is the problem withbecoming conventional wisdom.
There's a whole bunch of peoplethat like, to your point about
the Mandela Effect. They don'tknow if they read the book or
not. It's just in the air. Theyjust, everyone knows what if it

(33:51):
is. Everyone knows thesecontents. Everyone knows minimum
viable product. But it's like,what did you actually read? And
then, of course, the funny partis, lean startup is the most
famous for ideas that sit nicelyon a bumper sticker, right? So a
minimum viable product pivotthat like, people build venture
learn, continuous deployment.People love that stuff. But if
you read some of the laterchapters, there's stuff in there
that I never get fan mail about.You know, no one ever calls me

(34:11):
up to be like, let's talkinnovation accounting. You know,
it's like, that's like, someobscure stuff, but from my point
of view, that stuff's just asimportant, right? It's an
integrated system. I worked itout, you know, like I said,
grinding on it for many years,by a matter of deductive logic
and first principles thinking, Ireally tried to get it right.
And I think people who kind oflike to your point about, why
hasn't it been more effective? Ithink a lot of people just grab

(34:32):
for one tool in the toolbox,right? And it's like, I'm gonna
build a house. And it's like,well, I got a saw, so I guess I
can build a house now. It'slike, Well, you seem doubly
confused to me. You know,there's other tools in the box,
but also, do you know how to usethese tools? What are you even
trying to accomplish? Do youhave a blueprint or what are you
doing? So yeah, it's been, youknow, I I do my best, like as an

(34:53):
author. What's strange is, youput an idea out into the world,
and then you don't control it orown it anymore, right? Things on
a life of its own. And Iconstantly. I'm thinking to
myself, could I have done abetter job? You know, could I
explained it better? Like I knowhow what was in my control and
what wasn't? At the end of theday, you know, it's a reader.
The reader gets to decide whatthe what the ideas mean to them.

Kent Lindstrom (35:10):
Well. And you did go on to write the startup
way, right? And you probablywill write again. I assume it
seems to be something you havesome talent for. I do have
something cooking. That's true.Yeah, that's pretty exciting. So
what have you now that you'vegot, you've ridden that wave up,
you've you've observed SiliconValley now since 2008 from that
perch, or whatever, whatever,the book was a big hit. What

(35:31):
have you observed? Like? How isit? How has it changed? Silicon
Valley changed? Maybe theoutcomes have become kind of
bigger than they used to be.Trillion dollar companies do
exist in the world when theydidn't? Yeah, everything,
everything's bigger.

Eric Ries (35:44):
You know, it's very predictable. Silicon Valley is a
cyclical business. Things are,there's a certain things that
happen on the way up, and thenthere's certain things that
happen on the way down. So,like, so, for example, I wish, I
wish I was more interested ininvesting, because I feel like I
could call the top of thesethings, as soon as someone
writes the article about how youdon't need lean startup anymore,

(36:05):
and such and such company thatraised all this money, is the
proof. Like, every couple ofyears someone writes that
article, I was like, I shouldshort the whole thing, shorting
the document. See that article?I've always called for comment
on that kind of stuff. So, yeah,like, we go through these
cycles, and that's just becauseof the nature of
entrepreneurship, we there's alot of turnover, right? So we
mint new people, and the newpeople do not have the history,

(36:27):
so to them, it's brand new. Soit's like, it's very
interesting. I remember thatfeeling of being new, and all
these grizzled startup veteransbeing like, oh, kid you. You
don't understand you. That's notan original thought, whatever.
And, and now I'm like, Oh, Iunderstand why they did that. I
found that so annoying. Butlike, Oh, I see it now. Like,
there are, there are thesetypes, there are these recurring
patterns. Yeah, what I findfrustrating about it, you know,

(36:48):
and again, this is maybe myperch as a, you know, as the
ideas person, is that as anindustry, there's not as much
self reflection and like, adesire to learn from our
mistakes as I think there shouldbe. And I think that is actually
a business model error in theway that the industry is
constructed that basically,like, when we when we f up

(37:08):
pretty bad, the most importantpeople in the ecosystem make
plenty of money, right? And sowe've actually, like, we have,
in a certain way, severed theconnection between, like, the
ability to make money andactually creating true profit,
creating ventures, yeah, and Ithink that's that's a little bit
dangerous so, so certainly, oneof you know, one of the many
things I try to figure out is,like, how, how could we reform?

(37:31):
Like, that's something that oursociety needs more, even than
just Silicon Valley needs. We Weneed a an economy where the
elite people are, like, reallyyoked to the I feel a sense of
personal investment andincentive in the long term
prosperity of the nation and itsbody politic and its civic
institutions. And when you breakthat connection, as we've done

(37:54):
with a bunch of policy choices,and we could get into the
history of it, I think it'squite dangerous. And you just
look out the window, you can seethe consequences playing out
every day now,

Kent Lindstrom (38:03):
and you've become more thoughtful over time
about the founders themselves.It seems like that you've
thought about who they are andsort of maybe mental health
experiences that they're having,certainly that you might not
have just being a highly paidperson working at Google, you
know, for example,

Eric Ries (38:20):
that has his own mental health challenges? Yeah,

Kent Lindstrom (38:22):
of course, it's lovely, or is it what? What's
the well, so

Eric Ries (38:27):
there's a lot, there's that's a really
complicated question, because,because there's a lot of
psychology going on here, youknow, starting with the fact
that people, you know, a lot ofpeople, get into
entrepreneurship, running awayfrom some demon, you know, some
inner demon, yeah, but I dothink we are doing founders a
tremendous disservice in the waythings are structured. You know,
I don't mean to brag oranything, but I have personally

(38:47):
helped people create billions ofdollars in wealth for
themselves. So I have manyfriends who are multi
billionaires, and many of thosepeople, I knew them before, you
know, I like I've watched themgo from nothing to Titan of
industry, and I have noresentment about it. I don't
begrudge them their success. I'msuper happy for them. I don't

(39:10):
think it's evil to want to tryto make money or anything. None
of that stuff. What pisses meoff, what I begrudge them, is
how miserable so many of themare. I feel like we teach people
a really crap version ofbusiness philosophy. That is
That means that strength isexploitation, that you have to
compromise your vision andvalues eventually, and the best

(39:30):
you can do is to give groundgrudgingly. You know, we have a
system where anyone can havetheir company stolen away from
them at any time, investors havethe prime position. We literally
have a theory called shareholderprimacy, that they are the
primary constituent that makes acompany anyway. It's a set of
things that has left peoplereally unhappy. You know, I know
many founders who, like, soldtheir company and they made all

(39:51):
this money, and they're like, noone. I can't they can't get any
sympathy from anybody. You know,you have $100 million sympathy
for you, but it's like theyactually, they sack. Or vice
their baby, they sold it toGoogle, and Google shut it down,
right? So they're rich, but towhat end anyway? So I could tell
you lots and lots of stories,people take their company
public, and it turns into thismalign thing, and then you have
these people who are likerunning away from their own

(40:12):
legacy, trying as hard as theycan to figure out some way to
rebrand themselves as virtuousand good when their actual
behavior, their actual legacy isis negative. And you just, I
think that is causing actualmental health problems, like, I
think we have people in ourindustry who are melting down in
public, yeah, and I think that'swhy, I think it's actually very

(40:34):
clear to me why that'shappening, and I don't think it
has to be that way. I think thisis like a colossal error, that
we are teaching people the wrongphilosophy of business, and a
better philosophy would producebetter, happier outcomes for
everybody.

Kent Lindstrom (40:45):
And at what stage can you put in place a
structure or a philosophy tofix? Because when you're
starting a startup and you said,hey, you know, we need to really
make sure we have this structureso we don't do evil, everyone's
gonna be like, let's make suresomebody cares about anything
that we do

Eric Ries (41:00):
before we oh, yeah, yeah, it's too early to worry
about that kind of thing. Yeah,

Kent Lindstrom (41:04):
yeah. Once you're public and you've got a
board of directors and as well,the shareholders are going to
want it to, like, when should

Eric Ries (41:11):
I think this is? I think the advice people get
about this is socatastrophically wrong as to be
like, borderline criminal. Sofirst of all, it is always too
early until it's too late. Yeah,that's the simple principle. So,
like, I've literally, I'll tellyou a story. I was sitting,
never forget this. I was sittingwith a pre IPO founder, you
know, prepping for an actualmonster success. IPO. Okay, this

(41:35):
company is great company. Andthere was all this stuff they
wanted to do, structural thingsthey had wanted to do all along
to make sure the company, like,stood for something. It's not
about virtue signaling, it's notabout being woke or whatever the
nonsense people talk about now,like, this is about a company
that can be true to its ownmission. That's all we're
talking about. And just, do youbelieve? I always ask people
simple question. You tell me whothe most evil company in the

(41:58):
world is in your mind? To me,it's Philip Morris. I was my
father's a pulmonologist, solike, tobacco is, like, the most
evil product ever. Okay? IfPhilip Morris comes to you and
says, Hi, I would like to buyyour company for $1 more per
share than it's worth. Yes orNo, every founder I've ever met
in my life, I've ever given thisapathetic to is like, obviously,
no. Sometimes they'll be like,what are they going to use it

(42:19):
for? Oh, yeah, to sellcigarettes to children, right?
Okay, no, definitely not over mydead body. It's like, Oh, funny.
You should mention that. Let'sgo pull your charter from the
state of Delaware. Oh, I have itright here. Look what it says.
Many governance experts wouldsay, because you saw your
signatures right here, you havea fiduciary duty to say yes. So
it's like, okay, if someone hasenough money, remember, it's not

(42:40):
it's often not even their ownmoney. Someone can borrow enough
money from a bank they can forceyour company to die at any time.
You have no say in it. Do youthink that's a good idea? Anyone
says yes to that? Well, I keptlike, okay, great. You're no
founder. You know, not a singlefounder ever has ever said yes
to that. But there's otherpeople who think that's a great
idea. That's considered theapotheosis of good governance,

(43:02):
if you can believe it today.Ridiculous. So okay, you say,
All right, so that's thesituation. You don't want that
to happen to you. No, Idefinitely don't. So I remember
sitting with this founder, andhe's like, we've been prepping
for this IP and working on it.And he, I remember, he turns to
his CFO, he's like, Hey,remember that stuff we talked
about doing to make sure? And Iwon't give it away what it was,
but like, and you told me it wastoo early, the guy's like, did

(43:25):
we ever get around to doing thatstuff? And the guy's like, Oh,
you were serious about that,right? Oh, no, of course, of
course, we didn't. It's like,but it was too early. Then can
we do it now? No, dude, it's waytoo late now. And CEO just blew
up. He's like, wait a minute,when was it the right time?
You're telling me that lastyear, from from July 4 to July
8, there was a window, briefwindow time when it was the

(43:46):
right time. And I could havedone this stuff, and I did. Why
didn't you tell me? And he wasjust so angry, yeah, and the CFO
at the time, I was reallyoutraged with him. I was there
to help. I'm on his side, youknow, so I'm yeah, we're all
bad. The CFO was not theslightest bit perturbed, right?
He was like, Okay, I hear you.He's like, I want you. And was
like, that's my new number onepriority. I want this part of my

(44:07):
IPO. And he leaves the room. Hestorms out of the room, and I'm
just sitting there. I'm in theroom, still. He's left, and
everyone in the room startslaughing. They were laughing at
him. That's funny. And one ofthe guys like, Well, great. I'll
add that to my list of numberone priorities. And they and I
was like, Guys, you can't I waslike, you're gonna get in so

(44:27):
much trouble. And I'm like, thekid is like, I'm gonna tell on
you, because I like, you know,I'm sitting right here and you
know, I'm gonna tell him whatyou said. And I realized at the
time that I thought I was beingso smart, but actually they were
the ones who were smart. Theyunderstood correctly that it
didn't matter what I said, ordid they could just wait him
out, right? They don't give acrap about that stuff. Most of

(44:49):
those people don't even work atthat company anymore. Their job,
they called it, landing theplane. Their job was to complete
this IPO transaction and thenmove on to some other job. And
so all. Is blah blah blah aboutmission and whatever is not
their problem. That's the CEOsthing. So like, I that was
really an eye opening experienceto me. So the answer your
question when to do it as soonas possible, right? I think

(45:11):
anyone who lets themselves betalked out of this at the early
stage is just missing a goldenopportunity to get it right. And
what's funny is, I've gottengood at this now. So like, I've
advised lots and lots, lots offounders. You know, I'll give
you an easy one. The thing Italked about, about selling your
company to Philip Morris, youcould make a two page filing in
the state of Delaware to makethat impossible. Wow. It's like,
maybe the easiest single thing Ican recommend people do. It's

(45:33):
called Becoming a public benefitcorporation, or PPC. I mean,
even Elon Musk, even xi is apublic it's public benefit Corp.
Like, obviously, it's like, anobvious, if you know what you're
talking about. This is anobvious. You're talking about,
this is an obvious thing to do.Of course you should do it. So I
tell founders, and I have awhole bunch of things like this
that I tell people to do. Theygo to their lawyers, they go to

(45:53):
their VC, wherever, and they'relike, Can I do this stuff? And
they're always like, well, ifyou want to, I guess, like,
Well, I do want to, I don'tknow. Man, are you sure people
might not like it? And I alwaystry to train founders to be
like, Well, ask them if theylike it, right? And they're
always like, Oh, no, I thinkit's fine. Whatever you want to
do. I'm founder friendly, right?But other investors might not

(46:14):
like it. Yeah. I was like, who,who are these other investors?
Could I meet them? Could we havea meeting with the other like,
Who are these mysterious otherpeople? I think it's, it's a
again, it goes back to anideological commitment that I
don't know if it's evenconsciously understood by the
people who propagate it. That'swhy financial systems are so
powerful, is they havegravitational influence that is
felt unconsciously. So, yeah, Ithink if there's a founder right

(46:36):
now, I'm starting a companywho's thinking about this, like,
do not compromise on theseprovisions. Like, otherwise
you're just, you're justallowing people to run over you
sometime in the future. And theother thing that's so funny
about it is, if you just thinkfor a second, if you, if you do
these things, if you add theseprovisions, let's say it's true
that some investor in the futuredoesn't like it and you really

(46:56):
want to work with them, youcould always capitulate. Yeah,
right. So let them make it. Takeit out. Okay, so you take it
out. Like, what does it reallycost you to get it right from
the beginning? It's extremelylow cost. Hey, maybe you'll get
lucky. Maybe you'll have achoice to work with people who
actually believe in you and yourvision, and then you won't have
to take it out. And in fact, ifyou think about this for even
five seconds, you'll be like,Wait a second. Would it be nice

(47:18):
to know of the many VCs that Italk to, which of them are on my
side and which ones are justwaiting for the chance to kick
me out to make a buck? Yeah, Ithink that's actually extremely
useful when it comes toallocation. Time to decide who
should get the allocation. Ican't tell you how many founders
I know who give the allocationto the people with the knives
out. It's such a mistake, right?What an

Kent Lindstrom (47:37):
incredible journey from like, where you
started to thinking likethinking about and changing the
world in the way that you are,if you're convincing people to
do these things. So what's what?What happens now? Like, what are
you thinking about? Now? We'vegot AI in the water that could
be a thing. Turns out, like,

Eric Ries (47:53):
what's out? What's, what's, Oh, yeah. I mean,
listen, I'm very busy. So howmuch time do you have to answer
this question? Yeah, you know, Istarted something called the
long term Stock Exchange, whichis still going strong. Actually,
actually made some money for thefirst time last year. Very
exciting for so many years.Yeah, that's cool. Well, it's
long term. So it's long term.Well, we don't, you know, I

(48:14):
every investor before we gotthem involved, I was like, hey,
remember long we put long termon the name of the company. It's
right there on the door. Like,do not expect this to be an easy
one. That has been quite a slog,but it's going strong, and I'm
very proud of what the company'saccomplished there, speaking of
doing the impossible. And yeah,like, I have a AI research lab
called Answer AI, which Istarted with Jeremy Howard

(48:34):
looking at you're just reallytrying to do the fundamental
research about what is AIactually practically useful for
which, to me, is the mostinteresting question in AI,
actually, more than questions ofAGI. And it's kind of modeled on
Edison's invention factory fromthe dawn of electricity, super
exciting, super cool company.And because of my work on the
anthropic long term benefittrust, I think a lot of AI

(48:57):
companies have come to seek outmy advice about governance and
restructuring and stuff. So I'vejust gotten to be involved in a
lot of cool stuff in AI, it'sbeen, it's been super
interesting. And look, I get whypeople who are out of the
industry are skeptical. Because,you know, buzzwords and hype is
like Silicon Valley. It's likesecond and third leading
exports, you know, right? So we,we get excited about Bitcoin or
drones or whatever, and there'snever any accountability. We

(49:20):
never come back and say, well,actually, sorry guys, it wasn't
what we thought it was. So I getwhy people are concerned about
AI, but I do think this time,there's something, there's
something different about it,which is not to say that all the
hype is justified, and I think alot of people are doing a lot of
unethical stuff. So I'm not hereto be a defender of it, but I
think the underlying, if youreally understand the technology
of what has been accomplishedhere, what the underlying

(49:41):
technology is capable of, andyou learn how to use it in a
responsible way. It's, it'sawfully exciting.

Kent Lindstrom (49:47):
I've had a bunch of different AI folks on this
podcast, and I asked them, well,I start asking them kind of
facetiously, but I'm nowconcerned that I get, I get the
answer half the time. I'm like,are we gonna have to blow up the
data centers? You? You know,when the AI decides, like, we're
not really that useful, and afew of them are like, probably
not. Wait,

Eric Ries (50:07):
isn't that crazy? I know it's like, you know the
answer to that question,

Kent Lindstrom (50:11):
what is your sense of how, how risky this all
really well,

Eric Ries (50:15):
here's what I so I'll tell you what I think is really
fascinating. I have my ownpersonal views about AI safety,
and I've done a lot of work inthat area, but it doesn't so
much matter. I think people getreally fixated on predicting the
future. So they say, Okay,here's a scenario I'm worried
about, blah, blah, blah, blah,blah, therefore we have to blow
up the data centers. Thereforewe need a global treaty for

(50:36):
thermonuclear war to do. Theywork backwards from this one
scenario, all the things youhave to do. And the problem with
that line of thinking is thatfor every single one of those
scenarios, I can construct analternate scenario where the
very thing you did to preventyour scenario is the thing that
caused the dystopia in myscenario. So by creating a

(50:56):
global, one world government todo the thing, you created a
centralized control of all AI,and those people became despotic
and took over the world. Right?So people, I think, are very
paralyzed. If we can't evenagree on, like, the basic, basic
stuff, what can we do? And a lotof people have tried very hard
to polarize this issue and makeit as political as possible, to

(51:17):
prevent collective action, whichI think was a despicable thing
to do, no matter whether they'reright or wrong on the merits,
like that's, I think, almostalways a negative EV strategy
for society. So, so here's theframework that I've used to help
a lot of people get out ofparalysis. It's very simple
framework which is, rather thanfocus on one future scenario,
AI, is one of these, likefoundational technologies like

(51:39):
electricity, with very, very,very wide variance of future
outcomes. So we want to considerthe full spectrum of all the
things that might happen withAI, right? Everything from
nothing, it's a fraud, to, youknow, sentient robots or
whatever, and everything inbetween. And ask yourself, what

(51:59):
are the action that you want totake today that would be useful
in a wide variety of thosefuture scenarios, and take those
actions because, like we talkedabout with Lean Startup, these
things evolve over time. Peopleare so focused on like we have
to do. Remember they were like,we have to do the pause. We have
to do this. We have to do that.We have to do it right now. If

(52:20):
we don't do it right now, wefail. And so people build these
coalitions to try to accomplisha thing, and when that one thing
doesn't happen, the coalitiondissolves in failure. That
creates an attack factor fortheir enemies to be, like, we'll
just keep Lucy in the footballyou until you never get anything
done. But like all the issues wehad a year ago, we still have,
and we're gonna have next yeartoo, and we're gonna have to but
as time goes on, we'll alsolearn a lot more, like we know

(52:42):
so much more about how llms worknow than we did a year ago. And
many of the best practices andlaws of scaling and whatever
that we knew last year haveturned out to be not so. So when
you use this framework to saywhat would be useful today in a
wide variety of futurescenarios, just to me, it
creates really obvious, logicalthings we ought to be able to
build coalitions around, right?Like, let's do mandatory

(53:03):
disclosure. Forget, we can getto blowing up the data centers.
But first of all, my questionis, how would you know it's time
to blow up the data centers?Like a lot of these scenarios,
by the time you know it's time,the AI already has control of
your firing codes, right? Howare you going to launch the web?
It's just like, what like, ifyou actually work backwards? So,
like, how do you know it's notso what do we need to know? So,
yes, you could think about, youcould think about things like
mandatory disclosure. We need toharden access points to key and

(53:26):
sensitive infrastructure. Wehave to do that anyway, if you
think about it hard, and I feellike, Wait, we need to do that
anyway, whether whether AGIcomes or not, that's useful to
do. We have to invest in statecapacity like we're
unfortunately, we're strippingstate capacity down to the studs
right now. It's the exactopposite of what we ought to be
doing for safety, and we shouldbe building international
alliances, not shredding them.So like, you know, we're, we're

(53:47):
not only we not doing the thingsI think are the most obvious
things that would be applicablein a wide variety of
circumstance. By failing toapply this, this test of logic
to what we do, we're actuallyhave talked ourselves into doing
a lot of really harmful things.It's just too bad.

Kent Lindstrom (53:59):
Yeah, what? Well, as I said, with Cyan
Banister, the future is stillcool. It always will be pretty
cool. Well, thanks for doingthis. How do people I mean,
obviously they can follow you bybuying either of your books,
lean startup at the start, ofcourse. How else does people
keep up with what your

Eric Ries (54:17):
what's your Yeah, I'm just, I'm just Eric Ries on blue
sky, E R, I C R, i e s, the leanstartup.com, Lean Startup, Bucha
CO is the company that does, asI said, consulting and training
and stuff people who want that,and ltsc.com and answer that I
both have, you know, activeblogs you can follow. Follow us
along for latest developments.And I'm working on a new book,
but I'm not ready to make anyannouncements yet. So follow me

(54:39):
on social media. When the timehas come, I will, I will speak.
I will speak on that topic.

Kent Lindstrom (54:43):
Well, we can't wait. Thanks so much for doing
this. Thank you. I appreciateit. All right, this has been the
something measure podcast. EricReese my guest, Eric Reese my
guest, talk to you next time

Unknown (54:59):
you.