Are Startups Really…Businesses?
The video above is shows an excellent debate between the lean startup vs. getting real methodology to build businesses: Daniel Heinemeier Hansson (co-founder of 37 Signals and co-author of Getting Real and Rework) and Eric Ries (founder of IMVU and father of the lean startup movement). Hansson is very much of the mindset that today’s early-stage companies aren’t focused on the only metric that matters in business: profit. If today’s so-called successful startups like Facebook or Twitter charged their customers from day one, they wouldn’t require the hundreds of millions of dollars of venture capital that were required to build these companies. Eric Ries, on the other hand, argues that it is difficult, if not impossible, to charge a customer before you understand what it is she wants.
Both make very interesting points, and both in their own respect are right. I found myself agreeing for the most part with the other person each time a counterpoint was made. What I realized was that both need to coexist and both need to be discovered as soon as possible. Once a startup finds product/market fit, they should immediately find the most appropriate way to charge someone for it.