story of the lean launch pad jan 2013
TRANSCRIPT
8 Startups in 21 Years
21 Years Executing the Plan
Actual Photo of What Happened When My Plan Had
First Contact With Customers
All I Need is the 5-Year Forecast
VC’s and the Soviet Unionare the onlypeople to require5-Year Plans
Is this all there is?
Business Schools
Students as Management
ProfessorsConsulting
Existing Companies
© 2012 Steve Blank
Business Schools
Students as Management
ProfessorsConsulting
Existing Companies
© 2012 Steve Blank
Business School Curriculum
• Finance Gov’t & Law• Leadership Supply Chain• Org Behavior Ethics• Operations Global Business• Marketing Accounting• Strategy Global Mgmt
Business Schools
Students as Management
ProfessorsConsulting
© 2012 Steve Blank
Existing Companies
Entrepreneurship
small business, family
business, high-tech
business, new product
development
Execute Execute
Business Schools
Students as Management
ProfessorsConsulting
© 2012 Steve Blank Source: Katz, table 1 http://ideas.repec.org/a/eee/jbvent/v18y2003i2p283-300.html
Existing Companies
1923: Knight: Risk, Uncertainty and Profit
Myles Mace - 1st entrepreneurship course at Harvard1947
1968 4 schools teaching entrepreneurship
1934 Schumpeter: The Theory of Economic Development in english 1945 Weissman: Small Business and Venture Capital
1953 Small Business Administration formed
1954 Small Business Management, first MBA small business course at Stanford
1915: Taussig: Principles of Economics
1952 Kelley & Lawyer: Case Problems in Small Business Management
1953 C. Roland Christensen: Management Succession in Small and Growing Enterprises
1986 First national business plan competition, University of Miami.
1983 First entrepreneurship course in an engineering school, Univ of New Mexico.1979 Livesay: American Made
1988 von Hippel: The Sources of Innovation
2000 McGrath & MacMilian: The Entrepreneurial Mindset1997 Christensen: The Innovator's Dilemma
Entrepreneurship
small business, family
business, high-tech
business, new product
development
Execute
1911: Taylor The Principles of Scientific Management
1993 Karl Vesper New Venture Mechanics
Execute
Business Schools
Students as Management
ProfessorsConsulting
© 2012 Steve Blank Sources: Katz, table 1 http://ideas.repec.org/a/eee/jbvent/v18y2003i2p283-300.html
Existing Companies
Entrepreneurship
small business, family
business, high-tech
business, new product
development
Execute
Business School Curriculum
• Finance Gov’t & Law• Leadership Supply Chain• Org Behavior Ethics• Operations Global Business• Marketing Accounting• Strategy Global Mgmt•Entrepreneurship Small Business
?
It Resulted in a Few Hypotheses
• Startups were not smaller versions of large companies• Startups were about search, not execution• Entrepreneurs and their VC’s were executing on guesses• But the facts were outside the building• Planning needed to come before the plan
Startups Are Not Smaller Versions of Large Companies
Startups Are Not Smaller Versions of Large Companies
Large Companies Execute Known Business Models
Startups Are Not Smaller Versions of Large Companies
Startups Search for Unknown Business Models
What’s A Startup?
A temporary organization designed to search
for a repeatable and scalable business model
A temporary organization designed to search
for a repeatable and scalable business model
A temporary organization designed to search
for a repeatable and scalable business model
A temporary organization designed to search
for a repeatable and scalable business model
Startups Fail Because They Confuse Search with Execute
Startups need their own tools, different from those used
in existing companies
Startups need their own tools, different from those used
in existing companies
And a Question
Can We Build a Process to Search?
Before we Execute
Yes
• Lead User Research - Von Hippel• Crossing the Chasm - Moore• Entrepreneurial Mindset - McGrath/MacMillan• Innovators Dilemma - Christensen• Profitable Value - Lanning• Lanchester Strategy - Yano• High Tech Marketing - Davidow
• OODA Loop - Boyd• Question-based Selling - Freese• Solution Selling - Bosworth• Conceptual/Strategic Selling - Heiman• Spin Selling - Rackham• US Marine Corps Warfighting Manual• Tipping Point - Gladwell
Customer Development Process
+
+ +
So I Wrote A “Book”
And Then A Class
MBA 295: Customer DevelopmentCo-taught with: Rob Majteles @ Treehouse Ventures
Eric Ries Extends the Model
• Took my class at U.C. Berkeley • Co-founded IMVU, I sat on his board
– 1st implementation of Customer Development– Paired it with an Agile Development Model
• Called it the Lean Startup
Which Turned Into A Better Model
+Agile Development
Alex Osterwalder - Business Model
• Business Model Generation• Defines what the “search” is about
Which Turned Into an Even Better Model
+
+
+
And that Turned into Another Book
What I Used to Believe
Education
Entrepreneurial Education was about execution
Entrepreneurial Education was about execution
What We Now Know
Education
Entrepreneurial Education begins with the Search for a
business model
Business Model Hypotheses
Strategy
Organization Customer DevelopmentTeam, Founder-driven
Process Customer Development,Agile Development
Education Creativity/Innovation, Business Model Design, Customer Development, Startup team building,
Entrepreneurial Finance, Agile Development, Customer Funnel:
Get/Keep/Grow Market
Operating Plan +Financial Model
Product ManagementAgile or Waterfall Development
Functional Organization by Department
Organizational Behavior, HR Mgmt, Accounting,
Modeling, Strategy, Operations, Leadership,
Marketing, Manufacturing
Search Execution
Putting Search first is a radical change
It’s not just one more methodology
What We Used to Believe
Instructional Strategies
Cases and a Business Plans were good entrepreneurial teaching tools
Cases and a Business Plan were good teaching tools
What We Now Know
Instructional Strategies
~100 GOOTB connections
Experiential Immersion
Business Model Patterns Replace Cases
56
Nespresso machines
retail mailorder
Nespresso.com
callcenter
Nespresso
stores
households
business
1 x machinesales
repetitive pod sales
distribution channels
coffeeproduction
facilites
production B2C distribution brand
marketing
brandpatents
machine
manufacturer
production
B2C
distributionbrand
marketing
Nespresso club
brandbrand
Nespresso pods
Business Model Competitions Replace Business Plan Competitions
Business Model Competitions Replace Business Plan Competitions
http://www.businessmodelcompetition.com/
Business Model Hypotheses
Strategy
OrganizationCustomer DevelopmentTeam, Founder-driven
Process Customer Development,Agile Development
Education Business Model Design, Customer Development, Startup team building,
Entrepreneurial Finance, Agile Development,
Marketing
Instructional Strategies
Experiential, constructivist, learner-centered,
inquiry-based
Search
Operating Plan +Financial Model
Product ManagementAgile or Waterfall Development
Functional Organization by Department
Organizational Behavior, HR Mgmt, Accounting,
Modeling, Strategy, Operations, Leadership,
Marketing, Manufacturing
Case, Lecture, Small Group, Mentorship
Execution
Classes on Entrepreneurial Execution Follows Search
Entrepreneurship is Experiential
Let’s Teach it That Way
Entrepreneurship is Experiential
And Then Into Another Class
Engr 245: The Lean LaunchPadCo-taught with: Jon Feiber @ MDV
Ann Miura-Ko @ Floodgate
Admission By Application and Team(business model canvas)
Engr 245: The Lean LaunchPadCo-taught with: Jon Feiber @ MDV
Ann Miura-Ko @ Floodgate
VC’s As Part of the Teaching Team
Engr 245: The Lean LaunchPadCo-taught with: Jon Feiber @ MDV
Ann Miura-Ko @ Floodgate
Venture Capitalists
One Mentor Per Team
Engr 245: The Lean LaunchPadCo-taught with: Jon Feiber @ MDV
Ann Miura-Ko @ Floodgate
Venture CapitalistsMentors
Joint Engineering & MBA Class
Engr 245: The Lean LaunchPadCo-taught with: Jon Feiber @ MDV
Ann Miura-Ko @ Floodgate
Venture CapitalistsMentors
Add LaunchPad Central Software to to improve the outcomes
Then It Turned Into Another Class
Co-taught with: Jon Feiber @ MDV Jim Hornthal @ CMEA John Burke @ True Ventures Jerry Engel @ Haas/Monitor Ventures Bhavik Joshi @ Better Place Oren Jacob @ Pixar
Admission By Application and Team
Co-taught with: Jon Feiber @ MDV Jim Hornthal @ CMEA John Burke @ True Ventures Jerry Engel @ Haas/Monitor Ventures Bhavik Joshi @ Better Place Oren Jacob @ Pixar
VC’s As Part of the Teaching Team
Co-taught with: Jon Feiber @ MDV Jim Hornthal @ CMEA John Burke @ True Ventures Jerry Engel @ Haas/Monitor Ventures Bhavik Joshi @ Better Place Oren Jacob @ Pixar
Venture Capitalists
Mentors are Part of the Team
Co-taught with: Jon Feiber @ MDV Jim Hornthal @ CMEA John Burke @ True Ventures Jerry Engel @ Haas/Monitor Ventures Bhavik Joshi @ Better Place Oren Jacob @ Pixar
Venture Capitalists
Mentors
Then It Turned Into Another Class
Managed by
Trained the Trainers
Added two More Schools
Train 9 More Universities
Train 9 More Universities
Taught by Takashi Tsutsumi @ Hosei
Co-taught with Murray Low @ Columbia Bob Dorf Co-taught with: Jon Feiber @ MDV
Taught by Jim Hornthal
And Four More Schools
Taught by Takashi Tsutsumi @ Hosei
Co-taught with Murray Low @ Columbia Bob Dorf Co-taught with: Jon Feiber @ MDV
Taught by Jim Hornthal
And Four More SchoolsAdd 5-day version of the class
5-day Version
79
Put the class online75,000 students
And Then Add an Online Classenables a “flipped classroom”
Lean LaunchPad Educators Class
• Train 65 educators/quarter• Run by NCIIA• Taught with Jerry Engel @ Haas
1,000+ events 100+ countries100,000+ entrepreneurs
Add hundreds of Facilitators and Coaches
5-week hands-on courseCurriculum = Stanford, Berkeley, Columbia100’s of locations in 2013
We now know how to make startups fail less
How?
Teach Them the Entrepreneurial API
Entrepreneurial API = 3 parts
Business Model Canvas
Part 1
Entrepreneurial API
Part 1
Part 2
Customer Development
+
Entrepreneurial API
Part 1
Agile Engineering
+
+
Part 2
Agile Engineering
Part 3
Business Model Hypotheses
Strategy
OrganizationCustomer DevelopmentTeam, Founder-driven
Process Customer Development,Agile Development
Education Business Model Design, Customer Development, Startup team building,
Entrepreneurial Finance, Agile Development,
Marketing
Instructional Strategies
Experiential, constructivist, learner-centered, inquiry-
based
Search
Business Model Hypotheses
StrategyOperating Plan +Financial Model
OrganizationCustomer DevelopmentTeam, Founder-driven
Process Customer Development,Agile Development
Product ManagementAgile or Waterfall Development
Functional Organization by Department
Education Business Model Design, Customer Development, Startup team building,
Entrepreneurial Finance, Agile Development,
Marketing
Organizational Behavior, HR Mgmt, Accounting,
Modeling, Strategy, Operations, Leadership,
Marketing, Manufacturing
Instructional Strategies
Experiential, constructivist, learner-centered, inquiry-
based
Case, Lecture, Small Group, Mentorship
Search Execution