There’s a lot of same in Eric Ries’ and Arthur Schopenhauer’s thinking. The first one has become rich by creating a virtual reality chat service (IMVU) and has written a bestseller on running successful startups (Ries, 2011, The Lean Startup). The second one was a classical philosopher lived 19th century, who abandoned merchant carrier in his father successful company and became famous of his pessimism. At first sight, they appear very different kind of thinkers. However, there is surprisingly much common between them – and a crucial difference.
Ries is puzzled by question, why so many startups fails even if they have marvelous strategy and clever people running them – and even if the customers have said that this is exactly what they want?
Schopenhauer struggles with more general question. Why is the world filled with frustration and pain, even if we were able get what we want? Essentially they seem to reflect the very same phenomenon, satisfaction as the distance between desire and actualization.
The clever and capable people fail to get what they really want, because they are deluded to think wrong thing worthy. So to say, once they realize that the red and big apple is rotten inside it’s often too late. Schopenhauer talks of self-satisfaction. Ries focus on customer satisfaction. Yes, different domains but still the same mechanisms.
Impurity of goals/Will
For Schopenhauer the foundation of frustration and pain is impurity of our Will. There is a way to achieve a more tranquil state of consciousness, aesthetic perception. In this form of perception we lose ourselves in the object, forget about our individuality, and become the clear mirror of the object. (By the way, if you narrow the definition by replacing “object” by “task”, there is obvious resemblance to flow experiences.)
For Ries the foundation of the customer dissatisfaction is impurity of the goals. There is a way to achieve a more profound and clear conception of goals and needs, the minimal viable product combined with quick feedback loop allowed by short cycle time. The minimal viable product consists of only the absolutely necessary features needed to achieve the “pure” goal.
Schopenhauer studies how to make ourselves more apt to the joyful and tranquil flow by delimiting disturbing, unnecessary desires. Ries tries to develop principles to make the object-in-itself (product or service as something purely useful or otherwise delightful) more desirable because of the correct reasons and for the correct consequences.
Schopenhauer praises artistic geniuses and sees their work as salvation – musician geniuses especially. Ries praises entrepreneur geniuses and sees their insight the best possible way to make world better, not only in business but in every area of life where people “create new products and services under extreme uncertainty”. In short, for them both the most worthy job is to create new clarity and conceptual unity out of the chaotic world. They both have similar existentialist stance even if there is a differences in emphases: Ries focus on materialized forms of clarity and unity while Schopenhauer look after more transcendental ones.
Analysis paralysis and distrust in rationalism
They both struggle with the analysis paralysis and the overly sound trust in rationalism. For Schopenhauer the world is primarily product of will and secondary saw as more rational manners. Ries expresses his arationalistic approach as follows:
“There are two ever-present dangers when entrepreneurs conduct marker research and talk to customer. Followers of just-do-it school of entrepreneurship are impatient to get started and don’t spent time analyzing their strategy. They’d rather start building immediately, often after just a few cursory customer conversations. Unfortunately, because customers don’t really know what they want, it’s easy for these entrepreneurs to delude themselves that they are on the right path.
Other entrepreneurs can fall victim to analysis paralysis endlessly refining their plans. In this case talking to customers, reading research reports, and whiteboard strategizing are all equally unhelpful. The problem with most entrepreneurs’ plans is generally not that they don’t follow sound strategic principles but that the facts upon which they are based on are wrong. […H]ow do entrepreneur know when to stop analyzing, and start building. The answer is a concept called minimum viable product.” (Ries, 2011, pp. 90-91.)
In Ries thinking, the facts that are wrong seem to have a similar root cause than the frustration and pain have in Schopenhauer’s philosophy: they are rather consequences of our individual whims and biases than the Platonic object-in-itself. Schopenhauer and Ries are both (transcendental) idealists in this: they both seem to think that somewhere out there is the pure essence of things (the idea of a thing) even if the essence never fully apparent to us.
Scientific method vs. asceticism
The crucial difference is how they but their insight into practices. Schopenhauer chooses esoteric asceticism and the denial of will-of-life. Ries chooses scientific method:
“Despite the volumes written on business strategy, the key attributes of business leaders, and ways to identify the next big thing, innovators still struggle to bring their ides to life. This was the frustration that led us to try a radical new approach at IMVU [Ries’ first truly successful startup], one characterized by an extremely fast cycle time, a focus on what customer want (without asking them), and a scientific approach to decision making.” (Ries 2011, pp. 4-5.)
I’d like to underline here “what customer want (without asking them)”. An assumption behind this is similar to an insight beyond Schopenhauer’s pessimism: What customers say desirable is unlikely the exactly same thing than the one what makes them happy and willing to use the product. The second assumption is that the scientific method is the most workable (known) way to get over this obfuscation of introspection.
Don’t understand this wrong! Ries never suggest that we shouldn’t listen customers! Quite the opposite, rather we should observe how they really behave, think and feel in more general terms. We should listen more than theirs words – and not only listen but also extrapolate. Talking is just one form of behavior and it conveys some information. There are others that works sometimes better. E.g. are customers, in fact, willing to pay for your service or product and how they actually use it? Are they more wiling we do the change A rather than B?
Actionable metrics vs. vanity metrics
[Be aware: that I will next slightly strengthen the Ries’ argument! Even if I truly like Ries’ The lean startup, it does not follow its arguments to the end. I will emphasis here strongly the value of falsifiability, while for Ries’ emphasises more the value of quick validation of hypothesis.]
No matter what indicator and metrics you use, the main objective should be the proof of your hypotheses by attempting restlessly falsify them.
Attempt to falsify hypotheses is a crucial difference to the ordinary (product/service) design and strategic planning (and other similar domains of knowledge). Usually, neither the design nor the strategic planning is done by truly attempting to falsify the vision as a part of the process. They are rather done in order to find a vision and a solid strategy to proceed toward success in marketplace.
By underlining the importance of the quick validation of hypotheses, Ries ends up a rather new way to define metrics for progress. Metrics should not be defined against goals but against hypotheses. That is, you should not define a growth target but rather a metrics that indicates if your hypotheses of the (used) growth mechanisms are correct. If you define the all metrics against a set of goals, you cannot deduce if the goals were correct or if they should be adjusted. In addition if the metrics looks bad, you don’t know how to react. If an indicator shows that one of your hypotheses was wrong, you know immediately what to do: Adjust the hypothesis – and the strategy accordingly.
Thus, purpose of metrics is not to validate if we are going toward the goal but to alert if we need to change something. This is what Ries’ means by saying that metrics should be actionable. An opposite for actionable metric is vanity metric. Vanity metrics are dangerous as they may affirm false assumption and create feeling of false security.
Consider following example (that could be from my work): A new intranet was launched in the beginning of year. Management believes that the launch was a big success, employees finds the intranet annoying and feel that they need to waste a lot of their time to get things done in the intranet. There were two key metrics management followed closely: Ratio between active and passive users and visits to the front page. On Q1 ratio between active and passive users was 0.5 and on Q2 and Q3 it is 0.4 and 0.7. In Q1 there was 10 000 unique visits to intranet front page followed by 9 000 and 14 000 in Q2 and Q3. Was there a problem?
In Q2 things looked bad, something need to be done in order to overcome the resistance. Thus, between Q2 and Q3 IT closed file shares and now there’s no other way to get things done but to use the intranet. As a consequence the change eventually happened and in Q3 the number looked great, didn’t it? Uh, not quite. Obviously, there is no good reason to think that after people learned to use intranet they eventually adopted it, and now find it highly useful. But the numbers looks good. The initial exuberance was followed by a chaos and disillusionment and then, eventually, the adaptation. Wasn’t this just like in any change, was it?
In this case, however,the people probably use intranet just because they have no alternative anymore; they use it more just because they cannot use it less. This was not quite the goal, but according the metrics everything looks good. The management didn’t truly attempt to falsify their assumption that this is a beneficial change for workers. Actually, they didn’t explicitly postulate that assumption – perhaps it was too obvious. Thus, the need for the change of direction is not apparent and now there is a waste generator in the middle of communication and work. It would have be more relevant be to measure if workers actually get things done faster/better.
Sometimes listening carefully what customers say is enough. That is rarely the situation when developing new products and services. Observing how they, in fact, behave, feel and think is far more important. In order to do that properly you need a good hypothesis and serious attempts to falsify your theory. If you hypothesis was false (which is rather common) it’s time to pivot and take another direction with different hypothesis of success. That is the beef of Ries’ “The Lean Startup” – at least for me. Overall estimate: 4/5.
And what comes to Schopenhauer, I’d like to add the scientific method into his pessimism. Without the scientific method Schopenhauer pessimism is far too naïve and distressing for my taste. This is it in nutshell: (1) Create hypothesis of your desires. (2) Experiment. (3) Spy your behavior, feelings and thinking in order to falsify the original theory. Finally, (4) correct the original hypothesis accordingly if needed. Repeat. It’s not that important what you originally thought desirable. Rather, you should keep on experimenting your desires so that they match better with your behavior, feelings and thoughts.