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Eric Ries vs David Heinemeir Hansson

by on May 11, 2010
Watched this interesting video from LeanCamp in London yesterday.  This video features a debate between Eric Ries (Lean Startup model advocate) and David Heinemeir Hansson (Rails creator and advocate of Profit from day one model).  Basically, David Heinemeir Hansson advocates charging from day one and focusing on profit when starting a business.  He is strongly against the Facebook/Twitter model of finding a business model later.  Eric Ries defends that there is a place for the venture backed business and the Facebook/Twitter model.
I think both speakers have their arguments and are articulate.  It seems that David Heinemeir Hansson speaks deeply from personal experience and observations over the years.  In terms of the AppStore, he advocates the paid app ecosystem.  Eric Ries, though he agrees with David Heinemeir Hansson that their model is a legitimate model, he argues that profit from the beginning is not the only model, nor in every case the best one.  It’s helpful to understand Steve Blank because Eric Ries seems to expand on some of his thoughts and more.
Another way to look at this debate is David Heinemeir Hansson is arguing common sense from his experience and observations, while Eric Ries is advocating a model (the Lean Startup Model) that tries to minimize the failure rate of businesses as they try to find a scalable business model.
My summary in my own words…
David Heinemeir Hansson – “Use common sense.  A business makes profit.  Start a business that makes money by charging people.  This is the way most every business makes money.  Forget the lofty dreams of not charging and trying to find a way to make money later.  It only works for the one in a million business, like Google.  It’s not the norm, and it’s not something you should be trying to attain.”
Eric Ries – “Be open.  The important thing is to not burn through too much money as you’re trying to find your business model.  So, be lean and put out a minimum viable product to see if you’ve got something that can scale.  Build into your startup systems and processes that help you to engage in customer feedback early.”
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