Fed up with toiling away in corporate cube farms, several Busted Cubicle readers recently asked us questions like these:
Fortunately, an outstanding course syllabus already exists that first-time entrepreneurs can adapt for their purposes. That syllabus exists primarily because of the pioneering efforts of a major Silicon Valley figure with whom all new entrepreneurs need to be acquainted.
In 2017, Worth Magazine named Steve Blank to the publication’s list of “The 25 Most Important Entrepreneurs of the Past 25 Years.” After dropping out of the University of Michigan and serving in the U.S. Air Force during Vietnam, Blank went on to manage eight successful Silicon Valley startups as a senior executive or founder.
Some of these startups maintained low profiles, like the supercomputer firm Ardent, or the defense intelligence contractor where Blank got his start in 1978, ESL. But others transformed into everyday “household names” in Silicon Valley. These include the Apple Macintosh peripheral supplier SuperMac Technologies, the semiconductor manufacturers MIPS Computers and Zilog, and the workstation manufacturer Convergent Technologies.
Blank’s eighth startup was E.piphany, a CRM software vendor. E.piphany, which went public for $66 million in 1999, was the fourth startup Blank took public. All these initial public offerings fueled Blank’s personal fortune, recently estimated not in the millions of dollars—but at roughly $2.5 billion.
Instead of retiring after such a stellar run as an entrepreneur, Blank switched to a career teaching entrepreneurship. But while teaching at the University of California Berkeley’s Haas School of Business, Blank recognized a curious pattern common to all his startups.
Each firm launched an expensively developed, fully-functional new product, but experienced poor initial sales when the product didn’t fit customers’ needs. Every firm then worked backward by engaging in a frantic dash to fix mistakes before burning through all their venture funding.
For decades, that may have been a generally accepted procedure in Silicon Valley through the dot-com boom of the late 1990s. But when the dot-com crash hit and funding dried up, venture capital firms stopped bankrolling extensive damage control operations with abundant budgets. Blank reasoned that there had to be a better way.
So while teaching at Stanford and UC Berkeley in the early 2000s, Blank teamed up with Swiss startup strategy expert Alexander Osterwalder to create a radical new entrepreneurship methodology. Borrowing heavily on agile software development methods, Blank called it the “Lean LaunchPad.” This approach develops and tests business models based on extensive interviewing of potential customers. Almost immediately, it set off a paradigm shift in the way that entrepreneurs, investors, and academics thought about building new ventures.
Blank characterizes a business plan as a document that “investors make you write that they don’t read.” Moreover, one of his core teachings is that no business plan ever survives its first contact with customers. Instead, Blank teaches entrepreneurs not to start with a business plan, but with a set of business theories. The startup then becomes a temporary organization intended solely for hypothesis testing.
He then teaches students to document these hypotheses with the flexible and constantly evolving single-sheet Lean Canvas described in the guide on our partner site BSchools.org, Can a Lean Canvas Replace a Traditional Business Plan? As we explained in that trend report, the nine sections of the Lean Canvas cover topics like customers and partners, unique selling (value) propositions, significant activities and assets, and revenue and costs.
Moreover, Blank teaches entrepreneurs not to waste time building expensive fully functional prototypes. Instead, he teaches them to test their hypotheses by building a series of MVPs, or minimum viable products. He instructs the founders to talk directly with likely customers about whether MVPs meet their needs, instead of “shooting the messenger” by delegating interviews like these to a sales manager whom the founders then typically fire for relaying discouraging reports.
Based on what the founders learn from these interviews, they iterate their product design and “pivot” (change focus or direction) until they find a viable product-market fit likely to generate sufficient revenue.
After increasing numbers of entrepreneurs and investors rallied around the Lean LaunchPad methodology, it started to sweep through the United States government. In 2011, the National Science Foundation commissioned Blank to teach them his methodology. The result, a program called I-Corps, had proven so effective that the success rate of commercialization grants tripled. As a result, Congress subsequently ordered its expansion to federal agencies like NASA, the National Institutes of Health, the Department of Agriculture, the Department of Defense, and the Department of Energy.
After government, the Lean LaunchPad finally began to sweep through business schools. Quoting entrepreneurship faculty from the Harvard Business School, New York University, and MIT, Poets & Quants contributor Ethan Baron wrote in 2015 that the Lean LaunchPad approach is “rushing through B-school curricula at the pace of a revolution—and sweeping aside old formulas for entrepreneurship education.”
But many other business schools had been struggling to adopt the Lean LaunchPad approach, especially those with strictly academic, non-practitioner entrepreneurship professors. Blank told Poets & Quants that,
Some entrepreneurship departments are staffed with people who have never practiced. It’s kind of like getting sex education advice from your priest. Even after we had this theory and this theory was being adopted quite rapidly, [schools] were still teaching how to write business plans. We needed a radical break, not just a better version of how to write a business plan. We needed a class that actually taught this method.
So starting in 2010, Blank started teaching his Lean LaunchPad course at the Stanford Graduate School of Business. What’s remarkable is that ever since, he’s provided most of the class materials—including the syllabus—as open source files available online. And never in history have so many prospective entrepreneurs benefited from opportunities costing little or nothing to learn so many techniques that can help them organize new ventures.
Blank organized topics so that students spend each week learning about one of the nine sections in the canvas. What’s interesting in this Stanford syllabus is that Blank has “flipped” the classroom, such that lectures take place not in class but on video, offered for free online through the education platform Udacity. More than 300,000 downloads of Blank’s lectures have been reported during the past decade.
He supplements his lectures primarily with readings from his self-published 573-page treatise, The Startup Owner’s Manual, which only costs about $9.00 as an Amazon Kindle download. Blank also recommends readings from two other books, including one by Osterwalder, along with YouTube videos, slide decks, and blog posts.
What one can’t get from the lectures and readings, of course, are the hands-on experiences the Stanford version of the course requires. Each week, founders are required to spend about ten hours on a central tenet of the lean startup approach: customer development. This facet involves “getting out of the building” to meet with potential customers, investors, suppliers, and distributors at the brisk pace of two interviews per day (although Blank accepts online video interviews in some circumstances, especially where the product is a web or mobile software application).
Blank typically likes to see founders complete about a hundred of these interviews. The goal of these conversations is to answer questions like “What’s our revenue model?” or “What’s our unique selling proposition?” The founders add, test, and modify their hypotheses based on responses from their interviewees.
Without enrollment in Blank’s Stanford class, one also loses the experience of delivering presentations to a packed lecture hall, or the benefit of the feedback from classmates and Blank’s team of instructors and teaching assistants. Also omitted are mentorship sessions included in the course from experienced entrepreneurs and venture capitalists.
Nonetheless, any prospective entrepreneur would find it well worth their time to study Blank’s current course syllabus.
Although the original 2010 Lean LaunchPad course syllabus still appears on Blank’s website, his current Stanford course has expanded to fill a website of its own. Stanford designates it as Engineering 245, The Lean LaunchPad: Getting Your Lean Startup Off the Ground.
The syllabus alone fills a whopping 15 pages. What’s more, Blank’s vast collection of open-source entrepreneurship resources occupies what may comprise one of the longest and richest Web pages in existence.
Meanwhile, Blank continues to teach his Lean LaunchPad course not only at Stanford but also at the Columbia Business School in New York City, where he’s a senior fellow. And adding to his business accomplishments, he’s won a string of awards in academia. He won the Haas School’s Earl F. Cheit Outstanding Teaching Award along with Stanford’s Undergraduate Teaching Award in the Department of Management Science and Engineering. He’s also delivered commencement addresses at the University of Minnesota, New York University, and the University of California at Santa Cruz.