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  1.9. There.com and IMVU on the Process Trap - Part II (3 min.)

Frustrated with his experience, Eric Ries moved on and founded IMVU with Will Harvey, There.com’s original founder. The founders determined that if they did everything "right" the last time and failed, they needed to try a new approach. Rather than follow the traditional product development model, they would instead try to test their assumptions about what customers wanted by quickly releasing the bare bones of the product (what Ries later called a minimum viable product).

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In a few months, Ries and Harvey released IMVU (IMVU hosts virtual interactions between people by combining instant messaging with avatars), but it was so bad that it frequently crashed users’ computers. Many of the board members were skeptical and even warned against the approach—developers wouldn’t be able to attract users with such a terrible product that might even offend them. In some ways they were right: almost no one paid attention with the exception of a handful of early adopters who picked up the product and began providing feedback. With this information in hand, the team rapidly cycled through countless rapid iterations of the product. In a fraction of the time it took There.com to launch and fail, IMVU was generating revenues in excess of $40 million.

After the experience, Eric asked himself why There.com failed when they did everything "right," whereas IMVU succeeded when they did everything "wrong?" The answer lay not in the quality of the original idea but in the startup process itself.