How to build companies that matter

http://radar.oreilly.com/2009/03/lean-startup.html

by teej • 17 years ago

58 16 17 years ago

radar.oreilly.com

jwilliams• 17 years ago

I think this is one area where the economic crisis can work for startups.

Previously, the market was so hot it was difficult to grow organically. There was so much competition and so much heat that you felt compelled to "go big" as quickly as possible. You had to launch bigger, quicker and with more features or somebody else was going to come along with millions in technology/marketing/etc and stomp on you.

Right now we have a market that favours growly organically and slowly... Perhaps towards something that is a more refined end result. You can grow your customer base slowly, and listen more to what your customers want and need.

All just my conjecture really - But I hope this will turn up some really interesting results over the next 12-24 months.

akeefer• 17 years ago

The company I'm with was founded literally right after September 11th, then funded in early 2002; basically at the nadir of the original tech bubble. But it had exactly the effect that you've described; there was no hurry to make a land grab, and far less pressure to try to get big quick to score a fast exit for the VCs. Starting in a down market gave us time to actually build something real and valuable and to build the company for the long haul instead of having to worry about the short term. It also let us hire an all-star team that would have been hard to assemble in boom years (and, incidentally, the most recent downturn has again made hiring easier for us).

The downside is that you'll get a comparatively lower valuation for the same amount of funding, meaning the founders will retain less of the company, but that company will probably have a higher probability of being worth something significant. So as a founder, it's still a net win.

rokhayakebe• 17 years ago

How come all this has to lead to "at IMVU....". I keep seeing this pattern from the company.

tonystubblebine• 17 years ago

In order to sell, offer value first. There's nothing wrong with that. He's doing a good job too, because I went from never having heard of him to having heard about him from four trusted sources in the matter of a month. All the sources were passing on the material he was providing rather than his company.

TimothyFitz• 17 years ago

Three big reasons:

One, we're the oldest company (5yrs) practicing Lean Startup ideals, an off-shoot of Steve Blank's Customer Development strategy.

Two, the company chose to be extremely public about their practices and explicit about the financial results, up through 2007. As a Board of Advisors member and Venture Advisor, Eric sees a lot of privileged information. I don't have any specifics, but there are definitely other companies getting it and moving with it.

Three, and I apologize for how vague this will sound: things just look different when you're at IMVU. The culture is so hard to describe to an outsider, and so fundamental to the way we do business. I hope Eric writes more about it, because it was an explicit decision on day 0 to have a strong culture. It worked.

dpnewman• 17 years ago

very succinct ... brings together a lot of current thinking in tight read. i think it's well said - must've been a great experience also to see adaptations finally work to bring vision to life.

euroclydon• 17 years ago

"And here's where working on something that matters to you more than money is critical. When you're committed to something larger than yourself, every minute counts."

"our business plan: that we could get people to pay real money for virtual clothes"

Virtual clothes??? THAT really matters? THAT is larger than yourself?

gcheong• 17 years ago

Apparently it matters to those willing to pay for them and those wanting to provide them. In the grand scheme of things I would say this matters just as much as anything else.

eries2• 17 years ago

If your question is sincere, read http://bit.ly/q2Sp

idontgetit2• 17 years ago

By selling "virtual clothes", you're going to reverse "America's declining social capital" and revive democracy?

martythemaniak• 17 years ago

Maybe I'm in an extra-cynical mood today, but its hard to take advice about building companies that matter from someone that makes a cut-down version of Second Life.

snitko• 17 years ago

I agree. I'd also say, that all these advices about building companies that matter apply to you only if you care about it. We all know businesses that sell crap successfully. It's just that they can't proudly say "We love what we've built". But, well, at least they've got rich. Maybe they are working on what they really love now, having all those money.

rohitkhare• 17 years ago

The scariest/most exhilirating challenge is one he plucked right from the running monologue in my head: "is our company vision really the path to a brave new world, or just a delusion?" http://bit.ly/bdS0

ericlavigne• 17 years ago

"In fact, it wasn't the risky part of our original vision that had to change. It turns out that people really will pay good money for virtual goods. By discovering the other problems with our concept early, we were able to preserve our larger long-term vision. And, most importantly, we were then able to prove that it could work."

This was a big cliffhanger. I was very disappointed that the article ended without discussing "the other problems" and how they were discovered.

How to build companies that matter

Related Stories