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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10 Surprising Things You Didn’t Know About President Trump

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Eric & Jessie Recap: Eric Decker Surprises Jessie James Decker With a Romantic Anniversary Dinner After Mother's Day Fail


Eric Decker, Jessie James DeckerOnly a professional athlete would know how to bounce back this fast!
After being called out and then pranked by Jessie James Decker for his epic Mother’s Day fail, Eric Decker…


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This Week’s Hot Click : TVXQ’s U-Know, Eric, Na Hyemi [Entertainment Weekly / 2017.04.24]

This Week’s Hot Click : TVXQ’s U-Know has been discharged from the army, Eric and Na Hyemi announces that they will be getting married …


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Eric Decker and Jessie James Decker Reveal How Their Children Are Following in Their Footsteps (Eric Jr.’s the Singer!)


Do Eric Decker Jr. and Vivianne Rose Decker take after mommy or daddy? 

Eric Decker and Jessie James Decker revealed to E! News’ Carissa Culiner that their children just might be equal parts athlete and musician. “I think Eric might be the singer. He’s an athlete too,” Eric shares. “Vivi is like so into gymnastics right now.”

In fact, the doting parents revealed that she just might have a career in the big leagues. “They pulled us aside and they’re like, ‘You need to take this seriously. She’s incredible.’ So that’s been really cool,” Jessie shared. Luckily for Vivi, her mom already has an in with one of the best gymnasts in the world. 

Aly Raisman is a good girlfriend of mine who’s an Olympic champion and she has been so sweet. She sends us all this gear all the time,” Jessie explained. “I’m like, you need to like give Vivi some one on one lessons. She’s really serious about it and she’s only three.” 

See the sweet moment in the clip above! 

Watch the season three premiere of Eric & Jessie Wednesday, Sept. 6 at 10 p.m., only on E!


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Eric Dickerson Plans to Golf with O.J. Simpson When He Gets Out of Jail


Eric Dickerson

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Eric Dickerson has high hopes for his old pal O.J. Simpson when he gets out of jail later this fall … but his highest is hittin’ the green with him.

We got the NFL Hall of Famer Sunday at LAX and asked what he thought of O.J.’s imminent release after being granted parole in July … which could see him out as early as October.

Eric makes no bones about it — he wants O.J. to stay out of trouble this time around … something he says he warned him about before his 2008 conviction.

On a lighter note, watch how Eric responds when we ask if he’d golf again with the Juice. Can you say … duh?


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Jessie James Decker on marriage to Eric Decker: ‘We’re not doing anything not to have more kids’


Jessie James Decker isn’t ruling out the idea of having baby number three with her husband, Tennessee Titans wide receiver Erick Decker.

The couple married in 2013 and are parents to 2-year-old Eric Thomas II and 3-year-old Vivianne Rose.

“I do see more kids in the future,” the country crooner told People Magazine Friday. “I don’t know if it is necessarily right now, but we’re not doing anything not to have more kids. We’re just leaving it up in the air and leaving it in God’s hands.”

The 29-year-old admitted she’s eager to expand her family.

“I think we’ve always felt like we wanted three children,” she explained. “I came from a family of three kids. [For Eric], it was just him and his sister, and he said he always felt like they were missing a sibling and he wishes [his parents] would have had three. So I didn’t want Vivi or Bubby to feel like they wish they had another sibling.”

For now, Decker is focusing on another pregnancy — that of her younger sister Sydney, who is currently expecting.

“I gave Sydney everything,” said Decker on sharing her collection of maternity wear. “I have boxes of maternity stuff and I went through everything and I just kept going, ‘Oh my God, these are the best… no, these are the best. You’re gonna love this, no this is the most comfortable, [these are] the best panties.’ So I just kept giving her everything, and it’s been fun to see her rocking all the new stuff.”

Still, that has kept Decker’s attention away from her beau. Back in 2016, she told Fox News date night has been key for keeping the passion alive in their marriage.

“I will always say this for any couple: Date night at least once a week is essential,” she said. “It allows you to connect one on one. You don’t have to worry about work, or busy schedules, or the babies crying. It’s just all about you and your partner.

“And I think that really just ignites the sparks. It can be going to a restaurant or even watching TV in bed. Just being together alone, one on one, is so intimate.”


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