Think Fast Talk Smart: Communication Techniques

Why the best leaders treat uncertainty as a chance to learn, not a failure to avoid.
Most companies are built to grow. Far fewer are built to stay true to their purpose as they do.
Eric Ries is an entrepreneur, creator of the Lean Startup movement, and author of Incorruptible: Why Good Companies Go Bad and How Great Companies Stay Great. For Ries, innovation starts with a simple reality: nobody can predict the future. “If you're going to do something fundamentally new,” he says, “how are we supposed to forecast” what success will look like? Instead of relying on certainty, leaders should focus on learning. “If you cannot fail, you cannot learn.”
In this episode of Think Fast, Talk Smart, Ries and host Matt Abrahams explore how leaders can communicate through uncertainty, turn setbacks into valuable insights, and build cultures rooted in trust. From the power of the build-measure-learn feedback loop to the importance of making “deposits” in a company’s culture bank, Ries shares practical strategies for creating organizations that innovate, adapt, and stay true to their values as they grow.

To listen to the extended Deep Thinks version of this episode, please visit FasterSmarter.io/premium.

Episode Reference Links:
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 Chapters:

  • (00:00) - Introduction
  • (02:21) - Lean Startup Fundamentals
  • (04:03) - Business Plans vs. Reality
  • (06:31) - Learning from Failure
  • (08:11) - Why Companies Go Bad
  • (10:49) - The Culture Bank
  • (13:51) - The Final Three Questions
  • (21:17) - Conclusion

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Creators and Guests

Host
Matt Abrahams
Lecturer Stanford University Graduate School of Business | Think Fast Talk Smart podcast host
Guest
Eric Ries
Entrepreneur | Author | Founder of The Lean Startup Methodology

What is Think Fast Talk Smart: Communication Techniques?

One of the most essential ingredients to success in business and life is effective communication.

Join Matt Abrahams, best-selling author and Strategic Communication lecturer at Stanford Graduate School of Business, as he interviews experts to provide actionable insights that help you communicate with clarity, confidence, and impact. From handling impromptu questions to crafting compelling messages, Matt explores practical strategies for real-world communication challenges.

Whether you’re navigating a high-stakes presentation, perfecting your email tone, or speaking off the cuff, Think Fast, Talk Smart equips you with the tools, techniques, and best practices to express yourself effectively in any situation. Enhance your communication skills to elevate your career and build stronger professional relationships.

Tune in every Tuesday for new episodes. Subscribe now to unlock your potential as a thoughtful, impactful communicator. Learn more and sign up for our eNewsletter at fastersmarter.io.

Matt Abrahams: We are all
entrepreneurs, and we rely on three

essential tools to be successful:
communication, creativity, and trust.

My name is Matt Abrahams, and I
teach Strategic Communication at

Stanford Graduate School of Business.

Welcome to Think Fast
Talk Smart, the podcast.

Today I look forward to
speaking with Eric Ries.

Eric is an entrepreneur and the creator
of The Lean Startup methodology, a

global movement that has fundamentally
transformed how businesses approach

innovation and product development.

He's the author of the New York
Times bestseller, The Lean Startup:

The Startup Way, and his new book is
Incorruptible: Why Good Companies Go

Bad and Great Companies Stay Great.

Well, welcome, Eric.

I am excited to chat with you.

Thanks for being here.

Eric Ries: I am delighted.

Matt Abrahams: Shall we get started?

Eric Ries: Let's do it.

Matt Abrahams: Before we get to your
more recent area of focus, I'd like

to discuss some of the core concepts
your Lean methodology advocates for,

especially around communication.

Can you provide us with an overview of
Lean and the minimally viable approach

and where communication fits into it?

Eric Ries: Sure.

Okay, so just real quick to back up, I'm
a tech entrepreneur from way back when,

and I wrote this book called Lean Startup
in 2011 that kinda changed my life.

Like, at its root, most people who are
trying to do something new, whether they

call themselves an entrepreneur or not,
have this fundamental problem, which is

like, how do I communicate progress when
I'm in a condition of extreme uncertainty?

And if you're gonna do something
fundamentally new, how are we

supposed to forecast how many
you're supposed to have made?

Like, it's actually a huge problem that
we don't think about very often because

conventional management systems are all
based on this twentieth-century idea of

extrapolating from a stable operating
history to produce an accurate forecast.

So Lean Startup at its heart is to take
the business plan, the fiction writing

part of entrepreneurship or of any kind
of business enterprise, and extract

from it the hypotheses, the leap of
faith assumptions that have to be true

for the business to be a good idea.

And then instead of just pretending like
we know those are true, we try to test

them using scientific methods to create
what we call validated learning using

a structured experimental approach we
call the minimum viable product or MVP.

And the most critical concept is that
if we discover that some element of

the plan is not working, it's not
correct, then we execute a pivot.

Sorry, that's probably our most
overused bit of business jargon that

Lean Startup has contributed to the
world, but we invented that term.

The pivot is a change in strategy
without a change in vision.

Matt Abrahams: I really
appreciate you distilling it down.

I wanna break down just a couple pieces
of that, and I'd love as part of this

for you to talk about the whole build,
measure, learn loop that you talk about.

You said something that
might have caused some of our

listeners and viewers to pause.

You talked about a business
plan as fiction writing.

Can you break that down for us and
then talk a little bit more about

the build, measure, learn loop?

Eric Ries: This is something that in our
normal lives, we understand this concept

perfectly fine, and then for some reason
in business, we are trained to forget it.

So I just want you to imagine if
you start telling random people you

meet on the street, "I know what
is going to happen in the future,"

they will look at you very strange.

But in business, for some reason, we're
supposed to pretend that we can predict

the future when obviously we can't.

So the plan is not a problem.

It's not a problem to imagine
what the future might be.

If something's going wrong, you assume
it's because of one of the things on

your plan that you haven't done, and
this is a good assumption to make if

your plan is one hundred percent correct.

But if you acknowledge that you
can't predict the future, how do you

know that you're picking the right
thing to do for an entrepreneur.

And to me, I conceived of
entrepreneurship like an idea factory.

We don't ship physical objects.

We are actually trying to maximize our
own learning, our own understanding

of the business because it's from that
understanding that business models

and other business outcomes can flow.

That's the one thing that
general managers in an existing

business have that we don't have.

They actually know what their
supply chain looks like.

They know who their customer is.

They know that they have all this history.

We don't have it.

We have to manufacture that history.

So I called it the
build-measure-learn feedback loop.

How much time elapses between when
we have an idea about what we think

customers want, what we think is
going to work, and when we have

validated, we have data that shows
that that idea is correct or incorrect.

And you were talking about
the communication side of it.

The thing I found the most difficult
as an entrepreneur is how do I explain

to people how they should prioritize?

I had the vision.

I have this grand idea, so you know,
I can make stuff up no problem.

But a company is defined not just by
what the leader decides but the thousands

upon thousands of micro-decisions that
people have to make left and right.

And unlike in a traditional
business, in a startup, you're

building new process all the time.

Confronting problems for the first time.

Well, build, measure, learn
gives us a concrete, easy to

explain, easy to evaluate answer.

Whatever the thing is, if it
optimizes our speed through this

loop, then we do that version.

Otherwise, we don't do it.

Matt Abrahams: Having some kind
of heuristic framework can be

really, really helpful, and I
appreciate you sharing that.

And seeing entrepreneurship as idea
generation, I think is really a novel

way and really helps people understand
the value that entrepreneurship brings.

To be an entrepreneur, an idea generator,
requires a healthy relationship

with failure and negative feedback.

How do you advise leaders to communicate
their setbacks and to deal with the

negativity that comes from those things?

Eric Ries: This is a major
communication error I see in leaders

actually of all size companies,
but especially of entrepreneurs.

If you say that if something unexpected
happens, that's a failure, you have

literally created the preconditions
for no learning to take place.

Because the oldest lesson of the
scientific method is that if you

cannot fail, you cannot learn.

So instead of conceiving of an
unexpected result as a failure, we need

to see it the way a scientist would.

Understanding that learning is not a
failure is a huge problem, especially

in big companies where we preach the
say:do ratio so religiously that we

assume that anytime something unexpected
happens, it must be because of incompetent

planning or incompetent execution.

Forgetting a third possibility,
which is that the situation itself

is too uncertain to forecast.

And all of these Lean Startup techniques
are not about celebrating failure.

I actually don't like some people
call it an embrace failure or

celebrate failure philosophy.

I don't accept that.

I actually don't think that's right.

That's not the issue.

The issue is how do we
define success and failure?

And to me, if we learn what is necessary,
we did it in an efficient way, in a

way that was humane and scientific,
that actually is a success, and it

is a necessary step on our journey
to building a breakthrough product.

Matt Abrahams: So it really comes
down to reframing what is a failure.

And a failure, if you learn from
it and you do it quickly and make

adjustments, it is in fact a success.

And that's critical for us to
understand, but also for leaders

to communicate that expectation.

I'd like now to switch to
your new book, Incorruptible.

Can you share the central
thesis and why you think it's so

important at this particular time?

Eric Ries: The Lean Startup
movement, the startup movement

more broadly, I'm incredibly
proud of what we've accomplished.

I'm incredibly proud of my role in it.

But I've also seen the dark
underbelly of this thing.

And as I tell in the book, it really came
home to me one day when I was talking

to two different entrepreneurs on the
same day, one of whom was just beginning

his entrepreneurial journey, and one
of whom was completing it, in a way.

And the new entrepreneur, who I call
the professor in the book to protect his

privacy, he was really confused 'cause
he was trying to create this breakthrough

new technology, and his investors
were, like, very amoral about it.

He's actually trying to recruit,
like, senior researchers.

They have really tough questions.

They're asking him, "Okay, how do
we know you're only gonna use this

technology the way we intend?" He's
like, "Well, I promise." "Oh, yeah?

What if they fire you?" And he's like,
"What am I supposed to say to that?"

Meanwhile, I'm going to this event where
we are commemorating a founder who had

left his company, but not voluntarily.

He had built billions of dollars of
shareholder value, and yet his investors

wanted more, and they pushed him out.

Despite doing everything right, the
way we teach entrepreneurs today,

that success will make them strong.

Success will give them
power and therefore freedom.

We forget to mention that the more
successful your organization, the

more valuable it is as a target
for someone to steal from you.

We take over a company, we betray its
promises, we extract value from it.

Ironically, the most trustworthy companies
are the most valuable to do that with.

Our grandparents would have
called this corruption.

And so I think we should bring that word
back, expand its definition once again

to involve any kind of economic activity
that makes money without creating value.

Anyway, I shared all this with
the professor, and he asked me

the question that launched this
whole book: Is it possible to

build an incorruptible company?

And I was like, "Well,
good news, bad news.

The good news is, yes, I
do believe it is possible.

There are these outlier companies
that have been architected with the

strength to resist this corruption.

But the bad news is, since you've
been following all the best practices

we teach entrepreneurs about how
to build, structure, and govern

companies, you are not on track
to accomplish this incorruptible

outcome." And we, in fact, did put
his company on a new and better path.

But I don't want to just
do that for one company.

I wanna do it for every
company going forward.

Matt Abrahams: Very powerful
mission, very important mission.

So you talk about several
really intriguing ideas.

One that I really liked was
this notion of a culture bank.

Tell us about it and, and tell
us how communication plays out.

Eric Ries: It's super cool because
it's an idea that's very easy

to explain and very hard to do.

And everyone who I teach it to, the
first time they always react the same way

and they tell me that it's impossible.

But I learned the technique from
people who had built like high

integrity, high culture companies.

Strong culture companies is what I mean.

And it's actually really simple.

The problem with communicating about
trustworthiness is that trustworthy

actions, right actions always
score as ROI negative almost by

definition, because the benefit is
intangible, but the costs are tangible.

So what we need to do is we need
to give employees a way to think

about, to reason about the value
of the trustworthiness asset.

In order to do that, we need to
think about it like an asset, like

a thing you put in a bank account.

Now, the culture bank idea is this.

Whenever an employee makes a sacrifice
on behalf of a customer or employer

or any other stakeholder, they do a
right action that comes with a cost.

That is a deposit in the culture bank.

You created an asset.

When you tell a story about that, you're
helping educate everyone in your company

that this is the way we do things.

This is what we reward.

This is what we're really about.

And of course, when you do the
reverse action, that's a withdrawal.

The great leaders, the mission-driven
leaders that I really admire, they have

this ethos I call harder is easier.

They have these principles that
they're really committed to.

People who are acting with integrity,
they recognize that because they have

these principles, every plan, everything
they do is gonna have extra difficulty

that it wouldn't have otherwise had.

But instead of shying away from
this, as a lot of leaders do,

they learn to love it because it
gives them a teaching opportunity.

Every time they stop and say,
"Sorry, it's not good enough.

Sorry, we have to do it right.

Sorry, we have to do this," it gives
them an opportunity to communicate a

cultural value and make an extra deposit
in the culture bank that turns these

ideas from best, they make life harder
in the short term, but in the long

run they make everything else easier.

So the rule I learned from Todd
Park, the rule is as a leader,

only make deposits, never make
withdrawals from the culture bank.

It sounds like an impossible standard,
but actually it's not that hard.

The great Clay Christensen once said
that it is much harder to do the right

thing a hundred percent of the time
than ninety-eight percent of the time.

So when in real life, it's much more
valuable to have decision heuristics

that you can communicate that just says,
"Look, when a customer calls into the

hotline and they have a problem, and we
have the power to solve that problem,

we don't need to do an ROI calculation.

We don't need to check the fine print
of the policy to see if there's some

way we can get out of paying the claim.

Let's just solve the problem.

Let's just trust that if we
always do that, in the long run,

it will be beneficial to us."

Matt Abrahams: The focus, the intense
focus on what the most precious asset is,

and that is the trust and relationship
that the companies have, is critical.

I don't know if you set out
to write a communication

book, but you absolutely did.

And everything we're talking
about, I mean communication, trust,

empathy, demonstration, I mean all
of it, alignment, these are all

communication topics, and I really
appreciate how you've illuminated them.

I'd like to end the way we
end every one of our episodes

where I ask three questions.

One I'm gonna make up just for
you, and two, I've been asking

everybody across all these episodes.

Are you up for that?

Eric Ries: I'm up for it.

Sounds good.

Matt Abrahams: Excellent.

In what you're doing now and what you
did with Lean Startup, you were having

to be a, in some cases, a singular
voice advocating for things that,

that at least the current environment
wasn't listening to or looking for.

Do you rely on certain strategies
to help get your point across and at

least get people to listen to you?

It doesn't mean they have to agree
with you, but what's your approach

when you are the sole person advocating
for something that's really important?

Eric Ries: By far, the hardest
part is the inner part of it.

Human beings are hardwired for
a mimetic desire, meaning to fit

in and to be part of the crowd.

So when you're communicating something
that is outside the Overton window

of what is seen as acceptable,
it is very lonely and difficult.

And I can still remember very
vividly when people would

yell at me about Lean Startup.

It was seen as, like, really outlandish
and impossible, so I must be lying.

But I remember, because before I was
a public advocate for these ideas,

I advocated for them privately.

Like, I was just a person in a job, and
people would ask me, "How do you think

we should get a certain thing done?"
And I would tell them, and they would

be like, "That doesn't make sense.

That's not the best practice."

The key to this is to really
meet people where they are while

still telling them the truth.

Very difficult to do, of course.

So what we have to do is we have
to find a point of human connection

between their ideas and my ideas.

What are we trying to do in common
that can be a point of departure for

us to go on the journey together?

And then the other thing that is
really important about that is you try

to figure out how far on the journey
are they willing to go with you.

They may not be ready for everything,
but can we make some progress?

And we treat their morale.

The most vital resource is
the willingness to keep going.

So it's like, how do we cultivate
our sense of cohesion and morale

and our desire to keep going?

We see that as a resource, and
then we try to go bit by bit.

Matt Abrahams: I really
appreciate you sharing that.

This idea that you really have to
connect to your audience and really

understand them, and then take
it one step further and say, how

far are they willing to go today?

Doesn't mean that's where
they're gonna end up, but how

far are they willing to go today?

Really important.

So second question, who is a
communicator you admire and why?

Eric Ries: I already mentioned Todd
Park, but there was a time when he had

left, he's a healthcare entrepreneur.

He's done multiple very successful
healthcare startups, but he also

spent a stint in government service.

He was one of those people called
by the Obama administration to come

out of the private sector and help
make government more efficient.

He served as the chief technology
officer of the Department of

Health and Human Services.

I remember once inviting him to speak
at an entrepreneurship conference, and

he got up on stage, and he just started
spinning this tale of the patriotic

feeling that he had about serving his
country in this way and the need for

people of goodwill to come together
to be of service and to revitalize

this new generation of the government.

It was just, it was utterly spellbinding.

And he spoke for like
forty-five minutes or an hour.

He just like blew right past his time.

Not a single person complained.

Everyone in the audience
was absolutely rapt.

But what I admired about it was it was,
first of all, very authentic to him.

It wasn't grandiose.

It was very personal, very humble,
and he connected with the audience.

He was speaking to them as entrepreneurs,
as a fellow entrepreneur, but

inviting them to imagine this
other side of entrepreneurship that

they would never have thought of.

You know, and really that's
why we wanted him to be there.

So yeah, I've always admired
him as a communicator.

Matt Abrahams: I like that he was able
to really connect in the story he told.

He's able to connect and set a vision
for people that people can really see.

And given your history of being somebody
out there early in some of these ideas,

I can see why you would be drawn to him.

Our final question, Eric, what are the
first three ingredients that go into

a successful communication recipe?

Eric Ries: You have to give the
communication the care that it deserves.

So the truth is definitely the first
thing and most important thing.

And I think entrepreneurship especially,
you know, but all forms of leadership,

it is a truth-seeking profession at
the end of the day because we can't

do anything if we're out of alignment
with what reality makes possible.

But the second thing I was talking
about is this idea of quality or craft.

Like I was talking to Yvon Chouinard,
the absolutist, about quality.

He used to say that quality was
an objective function, which

everyone thought was so crazy.

You're like, every product has
a quality that it deserves.

It's not in the eye of the beholder.

It's absolute.

I don't know if that's true
for every product, but it's

definitely true in communication.

If you're communicating something that
is precious to you, then it deserves a

certain level of craft and attention.

And the third thing is
certainly authenticity.

That is every communication is
actually very personal, whether

you pretend it isn't or not.

And I feel like the way we teach
writing, especially because we consume

so much journalism and journalism is
obsessed with the view from nowhere

where we're creating like a faux
objectivity, it's just so fake.

It's just so hard to believe anybody who's
trying to present themselves as objective.

It's so much better to root
yourself in your actual experience.

And even if you're trying to be
objective, to say so, this is my bias

that I'm worried about, and this is
how I correct it, to actually give

people transparency into the process
by which the communication was made.

I think that's an essential part.

Those would be my top ingredients.

Matt Abrahams: Truth,
quality, and authenticity.

Certainly demonstrated in the work
you've done and clearly beneficial

to all of us to think about.

Eric, it has been a true pleasure to
talk to you about both of the really

important concepts that you have written
about and you've dedicated your life to.

Thank you so much for
spending time with us today.

Eric Ries: Thank you very much.

Thank you for taking the time.

Matt Abrahams: Thank you for joining
us for another episode of Think

Fast, Talk Smart, the podcast.

To learn more about lean development
and communication, please listen

to episode 56 with Steve Blank.

To learn more about ethics,
check out episode 54 as well.

This episode was produced by Katherine
Reed, Ryan Campos, and me, Matt Abrahams.

Our music is from Floyd Wonder.

With special thanks to
Podium Podcast Company.

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