He turned down a job with Google pre-IPO: 'I don't want to work there'; he said no when Mark Zuckerberg wanted him to run Facebook's engineering team: 'Do you really think it's going to catch on?', Twitter? Didn't like it. Zynga? Wasn't interested.
"I have the worst track record of anybody in picking the hot new things," Ries, author of The Lean Startup, told a packed room at the Hauser Forum in a Cambridge Network lecture last week. "I have personally turned down opportunities to work at or invest in every company of significance in the past 10 years."
Even with massive amounts of market research and focus groups, over $40m of funding, five years to prepare and 200 staff, the company he was at couldn't foresee it was to be "a colossal failure".
That was 2001. Four years later and six months of furious coding into the first iteration of IMVU and it became clear that the brilliant idea had no takers.
So why's he here? Well, that's the point, that with entrepreneurs – and here he also means the innovative teams within large organisations – nobody can really predict what people want until it's out there. Products can be doomed to failure, but we won't know until it's many months too late, says Ries, a colossal waste of time.
Instead you start lean, get early market validation by putting an early product out there and if nobody wants what you have, you 'pivot' - make a change based on the original idea until you find something people do want. If there's nothing, then you get out as fast as you can with minimum expense.
The Ries Lean Startup system followed some serious soul-searching after an initially dismal failure with IMVU, an idea for 3D avatars tied to instant messaging that nobody wanted.
Six months of intense coding to cover numerous networks was ultimately entirely wasted and had to be thrown away, leading Ries to consider what he had actually contributed. His conclusion was nothing; the company may as well have built a single landing page which didn't even click through to a download of the product as nobody had ever downloaded it.
But this wasn't just a glib remark, it was the beginning of a realisation that was to become the Lean Startup, that you build on your experience and the lessons learnt.
It means discarding much of more traditional ways of thinking about management and accounting. Telling your boss that nobody wanted your product but you learned a lot is a sure fire way to get the sack, says Ries, but learning is key, that's what informs your next move, the pivot because there's no reason to accept the conventional wisdom that most startups fail, "we can do better than that."
So the idea is to create a new accounting paradigm to measure the progress being made by entrepreneurs, something that doesn't rely on "vanity metrics", the traditional measure of accounting such as profitability, ROI, number of customers.
"General management is a system that depends on accurate planning and forecasting and in order to make accurate forecasts you need a long and stable operating history from which to extrapolate," says Ries.
"But if you look at the real stories of entrepreneurs you will notice a very funny pattern, that successful entrepreneurs did not have better ideas than the unsuccessful entrepreneurs at the beginning. There's a whole industry of publicists and journalists who get paid to rewrite a story after the fact, but the truth is quite often the original idea is deeply flawed.
"What differentiates the successful startup founders from the unsuccessful ones is that when they ran into difficulty they didn't just give up and go home, but neither did they persevere the plan. They did a thing where they kept one foot firmly rooted in what they had learnt and changed one other thing about the business at the time.
"The premise of a lean startup is that the way to think about runwaying a startup is not how much money do we have left, how much time do we have left, but rather how many opportunities to pivot do we have left? If we can find we can get to the moment of pivoting sooner, then we can magically extend the runway without having to raise more money. That's what makes lean startup more capital efficient."
"If you look at Twitter, Facebook, they had in fact only a few hundred or thousand customers, but the evidence was there to suggest that they were on to something, so why are we holding on to vanity metrics if there are better metrics available?"
It is a philosophy that is generating a massive following. His book reached number two in the New York Times bestsellers list, there's dozens of Lean Startup Meetups across the globe and locally, a lesson on tools to implement the Lean Startup principles formed the basis one of last year's Cambridge Startup Masterclasses.
Here in the UK, Ries has visited Downing Street and spoke in London and Cambridge, both talks the brainchild of BLN founder, Mark Littlewood, and Red Gate co-CEO, Neil Davidson, who bought 100 copies of the Lean Startup book for Red Gate staff.
"I've been reading Eric's blog for a while," said Davidson, also chair of Cambridge Network, which hosted Ries. "I read his book when it first came out, and thought it was enormously important. I think he's the first person to *successfully* apply some of the principles of lean manufacturing to software.
"Other people have focused on efficiencies, but Eric's insight is that it's not about being efficient, but about building the right product and finding out, quickly, if you're on the wrong track."
It's not just startups that want to know more. The Cambridge talk was full of established technology 'grey hairs', students and investors, who aren't necessarily turned off by a system that shuns vanity metrics and business plans built on the back of forecasts.
"I take lean startup philosophy (where there is external investment) to be a tactic rather than a strategy, which may not even need to go to board level," says Peter Cowley, an angel investor and investment director at Martlet.
"Investors invest in a team with a skill set and an idea within a market sector. The lean startup cycle allows more rapid customer-driven and technology iterations, which are in general much smaller than a pivot."
And that's where the 'magic' is, that it makes a real difference not just in finding the right product, but in being able to finance that idea. Ries: "If we can find we can get to the moment of pivoting sooner, then we can magically extend the runway without having to raise more money. That's what makes lean startup more capital efficient."
Image: Eric Ries spells out the Lean Startup basics at Cambridge Network. Credit: Mark Littlewood
Author: Lautaro Vargas, Cabume
Kindly reproduced with permission from Cabume