I understand that success comes through a lot of failure and a lot of very embarrassing failure. I can't say I'm not grateful to have journalists writing about me as a genius. I've been the beneficiary of this phenomenon as much as anyone. People watch the movie* The Social Network* and it can lead to bad things. _.uk: _ Do budding entrepreneurs get dazzled by the success of Facebook and Twitter? _Eric Ries: _Yes, especially the way it's been portrayed in media. Instead of producing success theatre, take that energy and put it into actually delivering something good for your customers. Not only do people not like each other, they do not agree on the facts. When the numbers go down, then it's somebody else's fault. That's very dangerous because the vanity metrics go up and everyone thinks it's because of what they were working on at the time. Your employees read the same press as your competitors and they start to believe the same spin that you put out. Why the press prints these lies is for another day… But they can become very dangerous. _.uk: _ You talk a lot about vanity metrics or the 'stuff companies put into their press release to make their competitors look bad.' How harmful can that be? _Eric Ries: _Companies love to put them out, because it makes them look good and doesn't reveal anything true about their business. We are holding entrepreneurs accountable to the wrong milestones. We can't tell if you are the next Facebook or a complete failure. That's to me is an accounting paradigm breakdown. The vanity metrics, the gross numbers are the same in success and failure with startups. If you were goofing off and doing nothing, you've still got zero customers. We like to make fun of those CFOs, accountants and VCs who aren't creative and don't understand, but if you look at it form their point of view, they literally cannot tell if you spent the last year on the brink of success or goofing off. That's when most entrepreneurs get fired or the VCs pull the plug. The entrepreneur at this point would say that they learned so much and that they just need another $5 million and another year. Fast-forward a year and you can tell that the money is gone and that everyone was busy, but if we are honest we probably didn't achieve the massive results they promised. But if you imagine an internal startup in a big corporation, there's always an outside stakeholder from whom the entrepreneur has to ask for funds, resources and time from.

Entrepreneurship is supposed to be so cool and exciting. _.uk: _ Accounting? There wasn't much of that in The Social Network? _Eric Ries: _It's such a boring topic, I feel bad.

The lean startup ries