company. here to share tips on how to accelerate your business in a atlanta scape filled with risk is eric ries. he s an entrepreneur and blogger in silicon valley who advises other entrepreneurs on business and product strategy. he is also the entrepreneur in residence at the harvard business school and author of the book the lean start-up. great to see you, eric. thanks for having me. congratulations on all the success. your book is quite a hit. thank you very much. we re happy to have you. okay. so we want to get quickly your tips for axle rating your start-up business. you know, to our point you ve got all the pieces to the puzzle there. how do you make it grow now? the first thing you say is, identify activities that create value. do you find a lot of people are spending a lot of time on activities that don t create value? yeah, that is really the curse of entrepreneurship. because most of us who have been trained in any kind of functional specialty, we learned how to
over and over again, or through what we call paid growth meaning we reinvest the revenue from past customers into advertising, or retail store fronts or whatever is needed to get the new customers. and so that is the mechanics of sustainable growth. it has that feedback loop quality where customers themselves are providing the resources that allow us to get more customers. and it s great, because a lot of people spend a lot of time getting new customers when really they re growing because of their current customers. exactly. and so they re wasting money on these new people in some way. all right, eric ries, i wish we could talk for a half an hour more, but unfortunately, it s the end. but everybody should go read your book the lean start up because it s very helpful. really appreciate it. thanks for having me on. still to come, small business owners tell us what they think about the president s plan to create jobs in this country. and we ll answer a question on pricing from
building things, building this now when we re a $50 million company this is the way it s going to work. and really we should be building it for now? oh, yeah. in the software business we have this problem all the time. we have this imagination that once we put the product out there millions of people are going to flock to it, the servers are going to crash so we ve got to be ready to handle that. the truth is most of the time nobody wants the product so nothing crashes. so what we want to do is figure out when the problem happens, how will we know that it happened, how can we detect that we have a problem, and then how can we respond really quickly? got it. because you could end up wasting a lot of money building something for 20 million people when 500 people are going to come. exactly. then identify your pattern of growth. how do you do that? we had this concept in the book we call engines of growth, which is that sustainable growth, not like a ponzi scheme, not like a one-