(Founder Stories) Eric Ries Tells Lean Startups: “Stop The Line So That The Line Never Stops”

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Startup Japan: A Silicon Valley Entrepreneur Visits Onlab, A Young Japanese Incubator

In part III of Chris Dixon’s Founder Stories interview with Eric Ries, the Lean Startup author explains how Toyota’s “lean manufacturing” production model can be applied to startups.

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.

Watch the entire episode to hear to find out why Ries thinks Mark Zuckerberg defines vision. Also be sure to watch episodes I and II of this interview. Past Founder Stories episodes are here.