In Eric Ries’ new book, he tells companies to turn every unit into a cash-strapped ‘startup’


All companies are startups until they aren’t. Many struggle to find their way back, too. It’s not the days of constrained resources or terrible pay or the heart-stopping uncertainty that they’re missing, of course. Instead, the problem is that it’s a lot harder to implement change at an “established” organization, particularly one that’s making money. Yet the smartest companies know change is crucial. As journalist Alan Deutschman wrote a dozen years ago, including in a book of the same title: “Change or die.”

Because that’s easier said than done, CEOs are always seeking out new ideas. Enter the brand-new book of engineer and entrepreneur Eric Ries, whose last tome, The Lean Startup, became an instant best-seller when it was first published in 2011.

In his latest effort, The Startup Way, Ries says the way to stay on top can be traced to two things: treating employees like customers, and treating business units like startups — replete with their own constrained budgets, and even their own boards. Ries offers fairly concrete suggestions regarding how to implement both, too. “A lot of people write manifestos and basically say, ‘Do what I say,’” says Ries. “I try to get away from that. The details matter a lot.”

We caught up with Ries earlier today to learn more about the book, which will be available to buy beginning Tuesday.

TC: You established a name for yourself with The Lean Startup, which basically told founders to get a minimally viable product into the market, then fix it. Can founders still do that in an age where big companies are getting bigger and moving faster to either copy products, or else acquire their teams?

ER:  People said that years ago about Microsoft, too, that it was going to dominate the internet with its monopoly power. Disruption still brings new power players to the fore. But today, because Facebook and Amazon and Google are so good at what they do, startups do need to up their game. There was a time when you had one innovation that you could ride for decades. That’s over. Continuous reinvention is crucial now. Otherwise, you’re toast.

TC: What about the giant financing rounds of today, even at the seed stage — do they signal the death of the so-called lean startup? 

ER: “Lean” never referred to the size of a round. It’s about lean manufacturing and using resources more effectively. Also, huge rounds are really for the privileged few. I’m in Columbus right now, and [local startups] aren’t experiencing the jumbo seed round.

I will say that one commonality that Silicon Valley has with corporate innovation is that we often overfund things, which can be just as lethal as underfunding them.

TC: How did you move from advocating for lean startups to writing this new book? 

ER: When a lot of small early founders heard about the lean startup, they were excited about minimal viable products and about pivoting and learning, but they didn’t pay close attention to more boring parts like management and the need to do continuous innovation. In some cases, as these companies passed 100 employees, or even 1,000, they’d ask me to come help teach lean startups to people who work for them. You go from the person who is making innovation decisions, to supporting entrepreneurs who work for you, and they might not be as good as you or you’d be working for them.

These were my friends and I was happy to help them. At the same time, big companies were asking how they could recapture their innovative DNA and I realized how similar these issues are and thought it was worth exploring.

TC: Obviously, the need to innovate continuously isn’t a new concept. How is your advice to companies different? Is this about pulling in opinions and ideas from a more diverse group of people, either internally or externally?

ER: I’m a big believer in that thesis — diversity. But in this book, I tend to focus on structural changes: who gets promoted, how we make product decisions, the general accountability layer of a company. [In other words] how do you figure out who is doing a good job and who isn’t? Because there’s a lot of B.S. at the higher levels otherwise that distorts the decisions that are made and consequently makes it hard to attract top talent.

TC: Give us some concrete examples. Who in Silicon Valley was doing this wrong and figured it out?

ER: I talk in the book about Twilio and Dropbox and Airbnb; they all had to go through a metamorphosis to empower their internal innovators.

Dropbox, for example, had some failures and was willing to admit that some products didn’t work. Some of its product development was happening internally and some externally, but it doesn’t matter if you plant in the wrong soil. But it has since developed a much better process that looks closer to entrepreneurship.

TC: By doing what differently?

ER: You first have to look at whether you’re treating the people who work for you like entrepreneurs or something different; if you’re expecting your product managers to achieve instantaneous success, that’s not [the standard] to which you were held in the early stages of your company.

Along the same lines, if you aren’t [giving teams] clear, metered funding, how are they going to have that scarcity? It’s that mindset, that hunger, that let’s you say “no,” [to delaying product launches]. [Companies have to fight] that entitlement funding because the more money you have, the less you want to expose yourself to risk.

TC: Interesting idea. How else do you recommend that companies treat their teams like startups?

ER: We also talk about creating a growth board.

Right now, most corporate employees exist in a matrix management structure, reporting to different people and having lots of different managers who have veto power over what they do. But each time a middle manager checks in, he or she exerts a gravitation influence, and most product mangers who I meet with say they spend 50 percent of their time defending their existing budget against middle manager inquiries. That’s a massive tax on most product teams.

So we treat [these units] like a startup and create a board of [say] five execs who they report to infrequently. That way, if any middle manager has a concern, [the head of that unit] can say, “Talk to the board.”  It’s like at [ venture firm] Andreessen Horowitz. It has something like 150 employees [yet] not every person who works there gets to call a portfolio company founder. Not every limited partner who has invested in Andreessen Horowitz gets to call its founders. There are well-defined processes in place so that founders [aren’t fielding calls all day.]

TC: Of course, the downside to that is that VCs often don’t know when things go off the rails at startups. How do you convince executives that they aren’t running that risk by giving these teams so much autonomy?

ER: It only works if you do limited liability experiments. Often asking, “What’s the worst that could happen?” is like a death sentence, but you have to think through the possible downsides to mitigate them. So you only let 100 people buy the product [at the outset] and add in extra provisions and securities to ensure they have a great experience and you’re smart about the liabilities.

TC: Say that works. What happens to the already oft-maligned middle managers of the world? 

ER: There haven’t been any layoffs at the companies I’ve worked with. Companies still have to run their core business; there’s plenty for [middle managers to do] Most are horrifically overworked. Others become reborn as entrepreneurs and entrepreneurial coaches. Intuit and GE have a whole program for coaching and mentoring, and that becomes part of [managers’] job description.

This all culminates in preparing a new org chart, one that treats entrepreneurship like a corporate function that’s owned and managed. Right now, if you ask [many executives], “Who is in charge of the next big innovation,” they’ll sometimes say that everyone is in charge of it. Can you imagine if they said that everyone is in charge of marketing or finance or HR? Entrepreneurship is no different. Someone should have operational responsibility for it.

TC: Do you run into much resistance when you talk with CEOs about empowering employees in this way? It’s easy to imagine that some feel threatened, even as they know their companies need to keep innovating.

ER: What distinguishes really good CEOs is that they care about their legacy, and they’re committed to the long-term health of their organization.

But you’re right. Most CEO are not serious about change because it requires senior managers to change their behavior. You know how corporate bosses can be. This is not always a very welcome method. I’ve been kicked out of plenty of boardrooms.


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2018 Honda Accord Hybrid gets rid of the compromises


Family sedans may be passé in this increasingly crossover SUV-dominated market, but they still offer the best blend of practicality, drivability and economy for your typical small family. And that’s why they still dominate the sales charts. Now, with fuel prices on the rise again, efficiency is returning to prominence. For 2018, the Honda Accord Hybrid offers that efficiency without compromising the other parts of the package.

In earlier Accords, selecting the Hybrid model meant making do with a trunk that yielded to the demands of battery packaging. Those big, heavy cells that provide the electric part of the driveline equation need to live somewhere, and on the 2017 and earlier models they only fit behind the rear seats.

For 2018, the Accord rides on a new chassis that makes room for those batteries beneath the rear seats. The new, smaller lithium-ion battery pack now disappears into the structure of the car, meaning exactly the same 16.7 cubic feet of trunk space as the normal sedan. That’s 0.9 cubic feet up over the 2017 Honda Accord — the non-hybrid. And, with the batteries situated beneath the seats, the Hybrid also gets the same 60/40 split rear seatback.

Up front, a new 2.0-liter, Atkinson-cycle four-cylinder engine provides 143 horsepower and 129 pound-feet of torque, delivering an incredible 40 percent thermal efficiency. That may not sound like much, but it’s Honda’s most efficient production engine ever. That’s paired with an electric motor that boosts total system output to 212 horsepower, 20 more than the base Accord’s 1.5-liter turbocharged four.

Interestingly that hybrid system is configured in series, meaning the car can run entirely on the electric motor and use the gasoline motor just to recharge the batteries, a la the Chevrolet Volt. But, when engine speed or acceleration demands, both motors can work in parallel to provide maximum performance.

2018 Honda Accord Hybrid

That, dear readers, is what we call a big ‘ol trunk. 


But don’t expect too much on that front. I was able to drive an early version of the 2018 Accord Hybrid and found the acceleration to be on the relaxed side, more than acceptable but lacking the EV-style rush of torque that we’ve come to expect from cars like the Volt. But, this was just a hand-built prototype that had spent the day getting flogged by journalists, so a fresher car with a full battery pack may very well perform better.

The big question, of course, is overall economy and, sadly, that we don’t have an answer for yet. The 2018 Accord in its most efficient configuration, with the 1.5-liter engine and CVT, offers a combined 33 mpg. The 2017 Honda Accord Hybrid manages 48 combined, so don’t be surprised if the new car pushes that figure well into the 50s. Despite that, we should actually see a decrease in price. For 2018 the Accord Hybrid will be available in the base LX trim, losing some interior niceties in exchange for a lower MSRP. 

The 2018 Accord Hybrid hits dealers early next year and, while I was quite impressed by my time behind the wheel of the traditionally powered sedans, if you’re not in a hurry I’m inclined to think the Hybrid will be well worth the wait.


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Tesla has fired hundreds of employees after performance reviews


Tesla fired hundreds of employees following what the company said is an annual performance review process, the company told TechCrunch. The news was first reported by The Mercury News.

“Like all companies, Tesla conducts an annual performance review during which a manager and employee discuss the results that were achieved, as well as how those results were achieved, during the performance period,” a Tesla spokesperson said. “This includes both constructive feedback and recognition of top performers with additional compensation and equity awards, as well as promotions in many cases. As with any company, especially one of over 33,000 employees, performance reviews also occasionally result in employee departures. Tesla is continuing to grow and hire new employees around the world.”

The company is not disclosing how many employees were let go as part of the process, though The Mercury News suggests that the number is between 400 and 700 employees.

Tesla will be reporting its earnings in the next few weeks along with a whole suite of other companies. But on the year, Tesla’s stock has continued to see an incredible run, especially following up on its most recent quarterly earnings report. The company said there was a further increase in Model S orders following the Model 3 handover event, prompting an additional amount of enthusiasm for the company.

During that report, Tesla also said it saw 1,800 Model 3 reservations per day following the handover event. But since then there’s been quite a bit of news, including a voluntary recall yesterday of 11,000 Model X vehicles. Earlier this month Tesla said it produced 260 Model 3 vehicles in Q3. CEO Elon Musk has said before that the company is entering “production hell,” a phrase that has been thrown around quite since then.

There’s going to still be a huge ramp-up period for the company for the Model 3. Tesla clearly has an enormous waiting list for the Model 3 and has said it wants to hit a run rate of 5,000 Model 3 vehicles per week by end of year, and achieve a 10,000 Model 3 per week clip at some point next year. This quarter, including the Model 3, Tesla produced 25,336 vehicles, the vast majority of which were Model S and X vehicles. The company also hopes to hit a run rate of producing 500,000 vehicles per year by the end of 2018


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BMW recalls 85,000 X3 SUVs for potential airbag problems


Have you ever encountered the situation where a heavy-enough item on the passenger seat causes the seat belt warning to go off? That’s the component behind BMW‘s latest recall.

BMW has issued a recall for 85,302 examples of the 2006-2010 X3 SUV. It applies to the 2.5i, 3.0i and xDrive30i variants, with build dates between Nov. 20, 2005, and Aug. 31, 2010. BMW estimates that only 9 percent of recalled vehicles will have the defect in question.

In the meantime, just don’t get into any collisions. Easy peasy, right?


The defect occurs in the front passenger seat occupant detection mat. This is used to determine whether or not a human is occupying the passenger seat. It will disable the airbag if there’s nobody riding shotgun, as well as the annoying seat belt chime. In this case, the X3’s mat may grow defective over time, eventually failing to register humans in the seat.

If that happens, the airbag might not deploy in a crash, which could greatly increase the risk of injury. Thankfully, occupants will know this ahead of time, as the airbag warning light will illuminate, as well as the light that lets the driver know whether the passenger airbag is active or inactive.

Fixing the problem is pretty straightforward. Dealers will replace the seat mats on affected vehicles for no charge. Those who have already paid for this remedy can file for reimbursement with the automaker. Owners will be notified by first-class mail starting on Nov. 20.


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Smart cities are boring. Give us responsive cities.


As an urban technologist, I’m often asked to give an example of a compelling smart city application that real people are using. But to be honest, there really isn’t too much to point to – yet. Cities may be getting smarter, but they haven’t noticeably changed from a user perspective.

It seems like most of the digital advances in cities have been invisible and focused on city operations, rather than on the parts of the city that people can see, touch, and use. Sure, it’s important that city managers can better identify water leaks, or more accurately predict the likelihood of a building failing an inspection, but there isn’t a direct, personal, benefit to city dwellers. So it’s understandable that some people feel like there hasn’t been much progress.

The reason that we, as city dwellers, haven’t been wowed by transformative Smart City applications is that Smart Cities are boring. It’s the same reason people’s faces don’t light up at the thought of a data warehouse (ok, settle down, nerds). Smart Cities are just a means to an end; a step along the road to truly digital cities.

In order to evolve into a city that fully realizes the potential of the internet, delivering real, tangible benefits to its inhabitants, cities will go through three phases: 1) They first need to collect data about their environment, 2) They need to process that data, and finally, 3) They need to take corresponding real-time action. My shorthand is: See, Think, Do.

See – The Instrumented City

For the last couple decades, we’ve been living in an Instrumented City. Sensors upon sensors upon sensors – everything’s got a sensor, from the front door to your office to the bikeshare dock, to the traffic light on the corner. Everything is being quantified, and this is the foundation of any future city developments. In order to change something, you need to first be able to measure it.<

Think – The Smart City

So what do we do with this data? This is where companies like IBM, GE, and AT&T have been focusing their efforts over the past few years. In the Smart City, insights are derived from the data generated in the Instrumented City. This is done using data platforms, algorithms, and data science, and allows us to not only understand what we measured, but also why it matters.

We can start building correlations and causations, creating models to predict and test human behavior, and gaining insights into why things happened and how change might be affected. AI will start to play a larger role in analyzing massive amount of data and developing understanding of what’s happening in the city. But it’s all fairly “back-office” at this point. Think of it as the internet before everyone had email, or web 1.0 sites. Yeah, it’s important and it’s changing how the world works, but why should I care? What can I do?

Do – The Responsive City

Now, this is where things get interesting, when things start to actually happen, and where people will notice and feel the difference. It’s the stage with the most opportunity for development and new products. The Responsive City is one that, as the name suggests, responds to the needs, wants, and desires of its citizens; whether they’re workers, residents, or visitors. All this is done in real time, and it’s active and rich with applications.

Building upon the data generated in the Instrumented City and the insights developed in the Smart City, The Responsive City is like an app layer on top of hardware, data, and base services.

In cities, these apps will be focused on manipulating infrastructure or influencing behavior to dynamically optimize the city for any number of outcomes; safety, convenience, efficiency – but also discovery, joy, community. All of this helps support what makes cities great in the first place – engaged citizens of diverse backgrounds sharing a common space in time.

This all relies on digital, controllable, infrastructure, and that’s coming quickly. Uber and Lyft are examples of connected cars that preposition themselves based on anticipated transportation needs.

Digital screens and dynamic street furniture are early examples of responsive infrastructure as well – with the potential to act like an Augmented Reality layer for the city, these products superimpose real-time information over the streetscape to inform or influence the population, and to help them in any number of ways; citizens can better move through the city, explore all that the city has to offer, and be alerted to emergencies in real time, to take just a few examples.

Cities are ready for this transformation. With digital infrastructure, automation, and machine learning comes the ability to predictively respond to demands and optimize outcomes for millions of people at once.

Today, we have a massive opportunity for city managers, social activists, and entrepreneurs to create new economic opportunities, reshape behaviors, and repurpose our resources to truly redefine the modern city. The infrastructure needed for this revolution is beginning to fall into place, but how do cities ultimately arrive at this final stage of responsiveness?

To pave the way for effective responsive cities, cities need to:

Partner on Resources, Access, and Outcomes

We need to toss out our preconceived notions of what’s possible in cities and start with the desired outcomes. City managers need to identify untapped resources or infrastructure in need of reinvention and then make it easy to partner and collaborate with the private sector. Public-private partnerships ought to be aligned on mutually beneficial outcomes, like universal access to resources for people of all abilities, and not fixate on a particular solution, or prescribed procurements.

Understand Groups of People and Influencing Their Behaviors

A responsive city is reflective of the humans in it. The internet has shown us a glimpse of what’s possible with personalization – recommending videos or products or friends to you. A single person. But city experiences are inherently one-to-many. 50 people look up at a sign, and they experience it together, with 50 different backgrounds and maybe as many individual objectives. This opens up an interesting field of study: understanding groups of people and how they respond to real-time changes in their environment.

Whether it’s something like dynamic road closures for on-demand pedestrian plazas, or directing people with different mobility needs to the fastest route for an event, or helping them discover a new business that just opened; balancing people’s needs with the city’s -in real time- will be an exciting new area for exploration, blending Urban Planning with User Experience Design and Behavioral Science.

Make it Real-Time

Becoming a responsive city isn’t a static objective, it’s a constantly moving target. We need to think past fixed, single-purpose infrastructure and focus on dynamic, real-time digital infrastructure that can change as people and cities change. The focus should be not only staying relevant over years as cities change on the macro scale, but staying relevant from moment to moment, from the morning commute to lunch.

Cloud network servers concepts


The internet has changed everything we do – how we live, work, and play, all through access to information, and communication with each other. But it hasn’t always lived up to its transformative potential. We’ve seen it create isolation and siloed groups that breed intolerance.

And cities can be stale and inflexible – designed by people who died long before today’s inhabitants were even born, and where change is measured in decade planning exercises. Cities are rarely representative of the actual people using, working, and living in them.

But now, as the internet makes its way into cities, we have an opportunity to make the internet more human, and cities more dynamic.

We can build true community experiences where people of different cultures and backgrounds and abilities share digital interactions with one another as well as their city. We have the ability to shape our environment and share information in real time to better connect people with each other, and with resources. We have an opportunity to build an inclusive digital urban experience, and that starts with a responsive city.

Featured Image: Prasit photo/Getty Images


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Bringing influencer marketing to small businesses, Unity Influence raises $1 million


Influencer marketing is the “in” thing right now that all the hip brands are using to stay relevant with their even hipper young audiences.

While it used to be the province of big brands cutting big deals with big influencers, there’s a second or third tier to the influencer market — one that’s more targeted to specific niches — and one that’s been hard for small and medium-sized businesses to crack.

Well, Unity Influence believes it has a low-cost, machine-learning-enabled solution to connect these micro-influencers with the small businesses who want to use their targeted reach for marketing purposes … and open up a new category to the benefits of influencer pitches. And the company just launched from its private beta to take on new customers.

The company, currently working out of offices in South San Francisco and Los Angeles, was founded by Jacobo Lumbreras, who previously worked for the employee assessment service Yoi Corp., and Patrick Ip, who previously ran small and medium-sized business retention for Google’s AdWords business.

The two men are members of the Kairos Society, and first met at StartingBloc, a fellowship and training program for social entrepreneurs.

Both had been mulling how to build an influencer marketing engine that would be more accessible to small businesses… and arguably more successful than the standard AdWords campaigns and Facebook ads that are the typical ways that small businesses drive traffic online.

Despite the lack of transparency or data on the efficacy of influencer marketing, Ip and Lumbreras see an opportunity to expand the existing market and bring some technological efficiency to the process.

That’s not to say there aren’t already companies trying to carve out space. Companies like Nuvi, SocialToaster, Izea, Scrunch, and Babblebox all tout influencer marketing solutions.

Brands spent around $570 million on influencer marketing, according to an eMarketer survey cited by Digiday. The same article broke down some other numbers and found the price range per post for influencers with between 500,000 and 1 million followers falls between $5,000 and $10,000.

What Lumbreras and Ip say they offer is a system that is more automated than their competitors, which the two said act more like traditional advertising agency shops.

Most startups in the influencer advertising world require manual searches for influencers and manual approval of contracts. That creates additional costs and friction in the buying process, that Ip argues Unity alleviates.

“At Google I worked on advertiser retention. And one of the things we wrestled with was high churn with small business customers,” Ip said.

The lesson was to make the process as simple as possible. So the company has users fill out a single form for the business they’re in and the types of audience they want to reach. Unity dos the rest and charges only $200 for a campaign.

“For us, our focus is on what we call micro-influencers,” said Ip. “If you get a big influencer their engagement rate is 2% to 3%. With micro-influencers it’s 6% and for our power users it’s 10% to 12%.”

The influencer marketing world will only gain ground, according to Ip, because organic reach is “getting killed”.

For the company, the categories that are most active right now are food and fitness. Brands in each category are always looking to find new ways to reach an audience and gain that critical first foothold in their market. Often, an influencer endorsement can help.

The argument was strong enough to attract 9 angel investors to back the company, including

“We’re trying to build this third way,” between native advertising and traditional targeting, says Ip. “We’re trying to do human advertising and human content, but do it at internet scale.”

Featured Image: Sonia Martinez / EyeEm/Getty Images


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Dubai Police owns a hoverbike because the world makes no sense


The Dubai Police has a world-renowned fleet of supercars for promotional use, and now, the internet-reknowned force is dipping into the realm of science fiction with a hoverbike.

At the Gitex Technology Week conference, the Dubai Police showed off its latest acquisition, a Hoversurf Scorpion hoverbike. While there’s no real definition of a hoverbike, this one is pretty close, with a series of small rotors providing lift while the operator rides it like a motorcycle.

Personally, I think it’s less of a hoverbike and more of an incredibly dangerous helicopter, but that’s a matter of semantics more than anything. Whatever you call it, this… thing can handle a 600-pound load and fly at speeds up to 43 mph for about a half an hour at a time. It can also fly itself, because of course it can.

It’s unclear how the Dubai Police plan to use the craft, but it appears that it will be put to actual use, rather than just being shown off for marketing purposes.

Dubai in general is taking a very forward approach to burgeoning tech. The company welcomed its first robotic police officer in May, and earlier this year, it was reported that the EHang 184-person capacity drone would start making regular flights in the city.

I’d like to know what the marketing budget is for the Dubai Police.

Giuseppe Cacace/AFP/Getty Images


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