The Lean Startup - Eric Ries [60]
Second, those building reports must make sure the mechanisms that generate the reports are not too complex. Whenever possible, reports should be drawn directly from the master data, rather than from an intermediate system, which reduces opportunities for error. I have noticed that every time a team has one of its judgments or assumptions overturned as a result of a technical problem with the data, its confidence, morale, and discipline are undermined.
When we watch entrepreneurs succeed in the mythmaking world of Hollywood, books, and magazines, the story is always structured the same way. First, we see the plucky protagonist having an epiphany, hatching a great new idea. We learn about his or her character and personality, how he or she came to be in the right place at the right time, and how he or she took the dramatic leap to start a business.
Then the photo montage begins. It’s usually short, just a few minutes of time-lapse photography or narrative. We see the protagonist building a team, maybe working in a lab, writing on whiteboards, closing sales, pounding on a few keyboards. At the end of the montage, the founders are successful, and the story can move on to more interesting fare: how to split the spoils of their success, who will appear on magazine covers, who sues whom, and implications for the future.
Unfortunately, the real work that determines the success of startups happens during the photo montage. It doesn’t make the cut in terms of the big story because it is too boring. Only 5 percent of entrepreneurship is the big idea, the business model, the whiteboard strategizing, and the splitting up of the spoils. The other 95 percent is the gritty work that is measured by innovation accounting: product prioritization decisions, deciding which customers to target or listen to, and having the courage to subject a grand vision to constant testing and feedback.
One decision stands out above all others as the most difficult, the most time-consuming, and the biggest source of waste for most startups. We all must face this fundamental test: deciding when to pivot and when to persevere. To understand what happens during the photo montage, we have to understand how to pivot, and that is the subject of Chapter 8.
8
PIVOT (OR PERSEVERE)
Every entrepreneur eventually faces an overriding challenge in developing a successful product: deciding when to pivot and when to persevere. Everything that has been discussed so far is a prelude to a seemingly simple question: are we making sufficient progress to believe that our original strategic hypothesis is correct, or do we need to make a major change? That change is called a pivot: a structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth.
Because of the scientific methodology that underlies the Lean Startup, there is often a misconception that it offers a rigid clinical formula for making pivot or persevere decisions. This is not true. There is no way to remove the human element—vision, intuition, judgment—from the practice of entrepreneurship, nor would that be desirable.
My goal in advocating a scientific approach to the creation of startups is to channel human creativity into its most productive form, and there is no bigger destroyer of creative potential than the misguided decision to persevere. Companies that cannot bring themselves to pivot to a new direction on the basis of feedback from the marketplace can get stuck in the land of the living dead, neither growing enough nor dying, consuming resources and commitment from employees and other stakeholders but not moving ahead.
There is good news about our reliance on judgment, though. We are able to learn, we are innately creative, and we have a remarkable ability to