Building the right product requires systematically and relentlessly testing that vision to discover which elements of it are brilliant, and which are crazy.
Eric RiesRead
There's nothing wrong with raising venture capital. Many lean startups are ambitious and are able to deploy large amounts of capital. What differentiates them is their disciplined approach to determining when to spend money: after the fundamental elements of the business model have been empirically validated.
Interpretation
What this quote means
Raising venture capital is viable, but success depends on disciplined spending based on validated business models.
In this quote, Eric Ries emphasizes that while seeking venture capital is a common and acceptable practice for startups, true success lies in the disciplined approach of only spending that capital after validating the essential components of their business model. This focus on empirical validation ensures that resources are used effectively to build a sustainable and profitable enterprise.
Themes
Venture CapitalStartupsBusiness ModelSpendingValidation
In practice
Example use cases
This quote can be used in a startup pitch to highlight the importance of disciplined spending.
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The grim reality is that most start-ups fail. Most new products are not successful. Yet the story of perseverance, creative genius, and hard work persists.
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You get a culture of entrepreneurship after you have successfully changed the accountability system so that people can use a better process. Process drives culture, not the other way around, so you can't just change the culture, you have to change the system.
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Learning to see waste and systematically eliminate it has allowed lean companies such as Toyota to dominate entire industries. Lean thinking defines value as 'providing benefit to the customer'; anything else is waste.
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