Famed ‘Pivot’ Strategy of Startups May Not Work For GE
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While I was out last week Fortune published my feature on Eric Ries, author of the wildly popular book for entrepreneurs , The Lean Startup. Ries is a whirling dervish of the startup and innovation world. He’s an author, speaker, coach, consultant, and even CEO of an ambitious if quixotic startup of his own, the Long-Term Stock Exchange, which aims to combat short-termism on Wall Street.
Ries is a prophet in Silicon Valley, and his first book is its Bible. The thrust of my feature is the 39-year-old’s pivot to helping big companies find their inner startup and the book he has published as their field manual, The Startup Way. Ries and his teachings have been valuable to numerous companies—P&G and ING have had promising successes—and his work is an inspiration to a veritable cottage industry of innovation consultants.
That said, it might not be clear for some time if concepts like “pivoting” and “minimum viable product” can ever move the needle for big companies. (Buzzwordery meets cliché in a Ries-inspired firm that’s actually called Moves The Needle, which boasts: “We are innovation architects.”) Ries’s primary example in his new book is GE, where he was deeply embedded and coached at the highest levels.
Ries says he is “cautiously optimistic” about GE. He might be the only one. When I read The Wall Street Journal’s impressive reporting on GE’s yes-man culture, I couldn’t help but wonder if the tens of thousands of workers trained in lean-startup methods and hundreds of projects that followed its techniques were part of the “success theater” the paper describes.
Incidentally, The Startup Way is making less of a dent in the world than its predecessor. According to Nielsen Bookscan, which measures only U.S. physical book sales, seven-year-old The Lean Startup sold three times as many books last week than The Startup Way, which came out in October. The Lean Startup is ranked No. 1,832 of all books on Amazon, a phenomenal ranking for such an old book; its heavily promoted successor is at No. 10,028.
My vacation reading: Anyone who writes should read this lovely and erudite essay by Amy Chozick of The New York Times … The Economist competently sums up a thesis we at Fortune have been hammering for a year, that Chinese tech companies no longer are copycats—and that Silicon Valley has been arrogantly slow to figure this out … Onetime Time writer Joshua Cooper Ramo, supposedly an expert on Asian affairs, ought to pick up the haunting novel Pachinko, by Min Jin Lee. It’d be impossible to read it and not understand how Koreans feel about Japan … This stunning narrative in New York magazine about a young ex-Air Force linguist accused of disclosing top-secret information is all the more powerful for not having pointed out the central irony of the crime for which its subject will soon stand trial.