The technique has been used by companies like Dropbox, AirBnB, and IMVU to help build remarkable products. Steve now speaks often about the Lean Startup ethos and entrepreneurialism as inspired by decades of being a serial entrepreneur. He’s crashed and burned some, but he’s also credited with four IPOs.
Most people don’t typically associate entrepreneurs as creatives, do you agree?
Entrepreneurs are artists and I mean “artists” in the true sense of the word: they see something no one else does. Think about two types of artists: composers and performers. Founders fit the definition of a composer. It’s not about programming code. It’s not even about customers. Founders see a vision but then they manage to attract of a set of world-class employees to help them create that vision.
What would you say to the creative that struggles to remain hands-off after a project begins to grow?
Successful founders are passionate, driven visionaries, whether they are the “hacker” (developer) or the “hustler” (customer developer). Most entrepreneurs find their excitement in founding/leading something truly great, whether they are driving the company from the front or building the product in the back. The most important success driver for an entrepreneur is his or her excitement about “building something,” whether that is a product or the company that delivers that product.
You served for four years during the Vietnam War and elected not to finish college. How did that change your career path?
I actually dropped out twice. I hated school and here I am now teaching it. [Laughs] But I felt like people were just lecturing crap and it wasn’t particularly interesting to me.
My career has always been about volunteering for something and showing up. When I first went into the Air Force I had this cushy assignment at an air base in Miami and I volunteered to go to Southeast Asia thinking “that sounds exciting.” And boy was I right.
You don’t have to be the smartest person, but showing up is 80% of the game. My career has been all about just showing up and people saying, “Who’s here? Blank is here. Let’s pick him.” Volunteering and showing up has been a great thing for me. But all along the way, I’ve always been very good at pattern recognition. Picking signal out of noise. Not smarter than everyone else, but more competent perhaps at seeing patterns.
How did a talent for pattern recognition help found the Lean Startup movement?
My career choice had me believing that entrepreneurs were fearless so I decided to call bullshit on the orthodoxy. Startups are not smaller versions of larger companies. There are something very different. So, I asked “Why are you teaching us to write business plans?” Business plans are operating plans. and we don’t even know what it is we are supposed to be operating.
Could you tell me a little bit about “Getting out of the building?”
So, let’s just agree for a second that you are the smartest person in your building. Do you think you’re smarter than the collective intelligence of all your potential customers? If you do, then don’t bother talking to anybody.
Many entrepreneurs – especially in tech – think there is no benefit in talking to potential customers. That just misses the problem. You’re trying to understand how something you see (and they don’t) will change their life. You want to understand the before and after. For example, what does the world look like before the computer and what does it look like after the computer? And that takes even more customer development expertise.
So, customer development applies even to disruptive products?
Steve Jobs made a dent in the universe this way. There is this kinda PR bullshit story of him sitting in a white room at the top of Apple’s headquarters with lightning bolts coming out of his head. That myth does a real disservice to entrepreneurship. Jobs actually talked to a lot of people from a variety of fields. This was truly a renaissance man. There are no facts inside the building so get the hell outside.
Did you ever cross paths with Steve Jobs?
I think I actually hold the record for the shortest job interview with Steve Jobs. He used to love to take candidates on walks and when he was at NeXT my friend got me an interview for a marketing position. So Jobs and I went for a walk and I don’t think we got a hundred yards and I’m hating the interview.
Jobs then goes, “What do you say we turn around?”
And so I go back in the building and my friend comes up and says, “Wow, that’s the shortest interview I’ve ever seen.” Needless to say, I didn’t get an offer. [Laughs]
From the back of the napkin to the IPO, what was the most fun?
I loved everything until it got big. My job was great from search to the beginning of build. When it started to feel like I became the HR department, then it was time to go. My second to last company I first lost $35 million dollars, then raised $12 million and eventually returned over a billion to each investor.
Only in entrepreneurial clusters is there a special word for failure like this: It’s called “experienced”.