Why I Back Eric Ries Over Peter Thiel
In my interview with Eric Ries, Eric called out Peter Thiel on his criticism of the book, The Lean Startup. “His criticism is of Lean Startup as agnostic experimentation that is pretty much about doing surveys and asking customers what they want, and not really having a vision of your own,” Eric said. “If you go to any modern scientific lab and you see people doing a bunch of experiments, you wouldn’t be like, ‘Oh! A bunch of agnostic experimentation!’ People in the lab would laugh in your face.”
I'm not an Internet billionaire, and I don't pretend to know more than someone who obviously has proven his ability to create value and invest in HUGE winners. In the proverbial success meter, I am a tick on Peter Thiel's elephant.
But I'm going to side with Eric Ries in this fight. Here's why:
My Own Experience.
Peter Thiel may call me a loser for embracing competition (from his Wall Street Journal article Competition Is For Losers), and say that I lack the right skillset. But I tried to build something that nobody built before. I hired the best team and the best PR company to market it because I thought I had the best idea for the times we were in. After losing a million dollars, it crushed me. If I used the Lean Startup methodology, I would have created a landing page, created a Google adwords account, and figured out in one day that my idea was a piece of crap.
I've been battling in the trenches of the NYC startup world for years. I've housed over a thousand startup companies at AlleyNYC. And every time I see someone trying to build something that has never been done before, I see them fail. I wonder how many Facebooks it took to get to Facebook. All that wasted time and energy on building something that never got used. Imagine what it would look like if we had an online junkyard of code from all the startups that tried something never done -- and failed. I wonder how much server space that would take up.
I know entrepreneurship is different for everyone. Some people are trying to change the world, and others are just trying to create something that will make them a ton of money. I will tell you this: In years of being self-employed and part of a community of entrepreneurs, the wins that I see around me frequently aren't sexy ideas that have never been done. Instead, they are ideas that cater to crowded markets, like real estate, marketing, and food services. I know it’s not sexy, but for those who want to win big, the crowded markets are crowded for a reason. The most highly competitive markets have already proven the opportunity. Mind you, I'm not saying to give up innovating. I'm just a big fan of doing it better than the rest. The odds are better when you innovate in a proven market. (And remember: that kind of competition is good.)
The Lottery Ticket.
I have to say this: Creating a successful startup is hard enough, even in a competitive market. Statistically speaking, more than 95% of all startups fail. This is mostly because entrepreneurs are building things that people just don't want. In a market that's proven itself, you aren't banking on a lottery ticket. At the risk of sounding negative, I call it a lottery ticket because the odds are so stacked against you. Creating something that hasn't been done before reminds me of the Mega Millions Jackpot, in a way: Only one huge winner, and everyone else just trying to get a piece.
Making an Omelette Out of a Million Eggs.
For an investor like Peter Thiel, looking at a million deals a day, it’s easy to see why he would tell you to invent something, and do something amazing that has never been done before. It's pretty smart to tell a million people to create something amazing. Investors like Peter are the light at the end of the tunnel. But what about the folks in the trenches trying to break through? I wonder: How many startups and crushed dreams do you have to go though to get to that ONE huge idea that breaks the mold? How many eggs had to break to make that omelette? Truth is, I am a damn egg and, statistically speaking, you are, too!
So, will doing market research and testing ideas against a market limit your vision? Or is the vision just a place you want to get to and validating your assumptions is the most practical way of getting there? Whichever way you lean, you have to agree that it is an interesting philosophical conversation. I would love to hear your point of view on the subject.
I look forward to the discussion and, until then fellow eggheads, HUSTLE ON.
Related: 6 Ways to Avoid Getting Screwed