Posts from lean startup


I've been reading Eric's book which I am very much enjoying. And on wednesday night I spoke to the NYC Lean Startup Meetup with the help of Giff who interviewed me.

Eric and his fellow lean advocate Steve Blank have both written at length about the methodologies associated with the lean startup approach. If you have not read their books (Steve's here), I suggest you do.

But the most interesting part of the discussion on wednesday night for me was when Giff asked me about a comment I had made that "you need more than a lean methodology, you need a lean culture."

To me, lean is a state of mind that a founder and his/her team needs to have across all aspects of the business. The specific product and engineering approaches that are at the core of the lean startup movement are paramount for sure. But if you can apply lean to hiring, sales, marketing, customer service, finance, and everything else, you will be rewarded with a fast, nimble company. That's a winning model, especially when things are moving fast in many dimensions as they are right now.

Later on in our conversation on wednesday night, I got a question about lean and venture capital. To me, USV is a lean VC firm. Brad and I set it up that way because we talked about all the things we didn't like about venture capital firms when we were setting USV up in late 2003.

My prior experience at Flatiron was instructive. In the first two or three years of Flatiron, it was basically just me and Jerry. We were deeply engaged in all of our investments and we had one or two employees other than ourselves. We did very well in that period. In mid 1999, we went on a binge, raised a huge fund ($350mm), moved into a massive office, hired a staff of 25, made investments we weren't engaged in, and got fat. We did poorly in that period. We shuttered Flatiron in 2001 and I took over the entire portfolio with the help of Jerry and Bob. It was basically back to the early model. We did very well in that period.

I do not believe that venture capital scales. I believe you need a small team of highly engaged partners and not much else other than great relationships with entrepreneurs. We do have a small team of non-partners at USV. Dorsey runs the office. Christina runs the investment stuff. Gary runs the portfolio engagement stuff. That's it. It works really well. We've kept USV lean and I believe that has allowed us to focus on what matters most, to react quickly to opportunities, and to be focused externally as opposed to internally. And when I look at most of the VC firms I admire, I see similar lean approaches. It's a winning model.

#VC & Technology#Web/Tech

Startup Lessons Learned

There are no shortage of conferences you can attend in the startup world. Everyone knows the big ones. But I find the little ones are often much better. One that I have my eye on is Startup Lessons Learned from Eric Ries and his Lean Startup gang.

The conference is in SF on May 23rd. It is a one day affair, which I also like. And they are simulcasting the conference in a bunch of cities around the world. This is a very cool concept and I wish more conferences would do this.

I am shocked that NYC does not have a simulcast location for Startup Lessons Learned yet. If our new USV event space was open, I'd fix that but it won't be open for a few more weeks. So if you have a space that can hold a bunch of people (my guess is up to 50??), then please apply to simulcast this event in NYC.

I think it's well understood that I am a big fan of the lean startup methodology and the program looks excellent. No panels!!! Just case studies, short talks, and keynotes. That's the way to do it.

It's on a Monday so I can't make the whole thing (our team meets on Mondays), but if a NYC simulcast location opens up, I'll certainly stop by to take in parts of the show.

#VC & Technology

MBA Tuesday

Yesterday I went up to Harvard Business School and participated in a lunch and a class. My friend Jeff Bussgang arranged the trip and we were hosted by HBS Professor Tom Eisenmann. Jeff and I sat in front of Tom's class Launching Technology Ventures and talked for almost 2 hours on topics like Lean Startup Methodology, Pivoting, doing a startup vs joining a startup, and more.

I can tell you this, the HBS I visited is not the HBS I used to know. The students I had lunch with had all built a startup and exited before going to HBS. The knowledge and passion for startups evident in Tom's class was off the charts. If business school is turning into entrepreneur school, then that's a damn good thing.

Anyway, Jeff took notes from the day and posted them on his blog. Every time I talk in front of a large group and take questions, some things come out of my mouth that are new thoughts that I've not expressed before. Between Jeff's post and the tweet stream from the class, I was able to review the talk and a few thoughts struck me as good enough to share here.

– There is a very high correlation between lean startup approach and the top performing companies in our two funds.

– Lean startup methology is great, but it is really a lean startup culture you want.

– Lean startup is a machine, garbage in will give you garbage out.

– Early in a startup, product decisions should be hunch driven. Later on, product decisions should be data driven.

– Hunches come from being a power user of the products in your category and from having a long standing obsession about the problem you are solving.

– Domain expertise to the point of obsession is highly correlated with the most successful entrepeneurs in our portfolio.

– Ideas that most people derided as ridiculous have produced the best outcomes. Don't do the obvious thing.

– Monetization should be native and improve the experience for users.

– If you have an idea that you can't get out of your head, do a startup. Otherwise join a startup.

– If you are not technical, get product experience. Get your hands dirty and work with engineers.

– Take risks when you get out of business school. If you don't take risks, you won't find yourself in an interesting job and career.

Finally, I'd like to say that Tom encouraged his class to tweet during class. I think that is fantastic. The tweet stream is like publicly available course notes for the class we did yesterday. Every time I talk to a class full of students I am going to call out a hashtag at the start of class and encourage tweeting.

I'm very encouraged with what is going on at HBS and some of the other top business schools I've visited this year. Entrepreneurship is alive and well and a growing theme of business education. As it should be.

#MBA Mondays#VC & Technology