Ries tells Dixon one of the phrases Toyota uses on the production line is “stop the line so that the line never stops.” It means “if you want to be able to sustainably have high productivity you have to stop as soon as you have a quality problem and remove it because quality problems pile up and compound… eventually you can grind your whole development organization to a halt.”
He thinks Toyota’s workflow can be applied to product development in what he calls “continuous deployment.” Relating the concept to software development Ries says teams who think they are saving time by releasing on a monthly schedule, for instance, are actually not doing so. After each rollout an inordinate amount of time is wasted fighting fires and this “takes away from your ability to do a good job on the next release.” Ries advocates for a fix it when its broke approach.
Below, Dixon asks Ries if Lean Startup principals can apply to venture capital? Ries offers that it could be advantageous for investors to make smaller, more consistent investments versus offering fewer, larger rounds—but notes the problem to this approach is “we don’t currently have any objective data about who is making progress and who is not.”
Dixon points out that large upfront rounds offer value in the sense that they provide a mental security blanket so founders can focus on building instead of continuously worrying about fundraising.
Splitting the difference, Ries thinks, “we have to figure out a way to give people that same psychological sense of comfort but still have the investors and entrepreneurs together be able to work together on creating some incentive to be able to pivot sooner.” All too often Ries say, founders build for months only to realize its too late to switch gears.
Eric Ries is the author of the book, The Lean Startup. Previously, he co-founded and served as Chief Technology Officer of IMVU. He is the co-author of several books including The Black Art of Java Game Programming (Waite Group Press, 1996). While an undergraduate at Yale Unviersity, he co-founded Catalyst Recruiting. Although Catalyst folded with the dot-com crash, Ries continued his entrepreneurial career as a Senior Software Engineer at There.com, leading efforts in agile software development and user-generated content. In...
Chris Dixon is a Partner at and co-founder of Founder Collective. He is also a contributing writer for TechCrunch. He previously was the CEO and Co-founder of SiteAdvisor, which was acquired by McAfee, and Hunch, which was acquired by eBay. In addition to his work with Founder’s Collective, Chris is a personal investor in early-stage technology companies, including Skype, TrialPay, DocVerse, Invite Media, Gerson Lehrman Group, ScanScout, OMGPOP, BillShrink, Oddcast, Panjiva, Knewton, and a handful of other startups that...