Eric Ries on How Taiichi Ohno’s Ideas Shaped the Evolution of Lean Startup *

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Episode #142 brings us a returning guest (#115), Eric Ries, author of the best-selling book The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses.

In the book, Eric cites the work of Taiichi Ohno, including the “5 Whys” problem-solving approach. In this podcast, Eric shares his story about finding Ohno's work (including the Lean classic Toyota Production System: Beyond Large-Scale Production) and how it has influenced his work with startups.

For a link to this episode, refer people to www.leanblog.org/142.

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Eric: It's been incredibly influential. I think I would go so far as to say it has changed my life. It's actually just a coincidence. It's a funny thing how these things work. To set the stage a little bit, I had founded a company called IMVU in 2004.

I was really into a lot of the ideas that are called Agile software development, which have their origins in Lean, but a lot of the works I had read about them, Toyota was not specifically mentioned. Lean principles were not mentioned. I didn't know the theory of Lean or anything like that. I knew nothing about manufacturing.

I've actually, to be totally honest, never set foot in a manufacturing plant in my whole life. I have no idea any of that would be relevant to me. I had this intuition that we should be going a lot faster in a startup and doing practices that even in the Agile world were considered a little bit extreme.

We've had the chance to talk about them on other occasions, things like continuous deployment or putting software in customers' hands much faster than was previously considered possible. I had this problem which was I had no way to explain to anybody why that was going to work. People would look at me like I was completely crazy.

I could see that it was working, so I was very stubborn. I had this intuition. I said, “We're going to do it no matter what.” It was working, but we're always hiring new employees. The company's growing. We're bringing on investors.

We had investors that when they were doing their due diligence for the company, pulled out because they didn't like the answers I was giving them about how we built the technology.

They would bring their experts in, experts trained in more traditional software development methodologies, and they'd be like, “This kid is crazy. Doesn't know what he's talking about. This is not the way it's done.” This is a continuous point of stress for me and my co-founder. [laughs]

You got to remember, at the time, I was by far the youngest person on the team. I was often younger than the employees I was hiring and training them in this method. It's not like it was an easy situation to be in, but I really believed it was right.

I was reading everything I could get my hands on for ideas about, first of all, was I actually right or was it a fluke? If it was right, how could I possibly explain it? I read some cases about Toyota, the business school cases, so I was a little bit familiar with it. There was this thing called Toyota Production System. That's all I knew. I figured I should be educated about it.