Customer Development for Startups: Recent Episodes
Marcos Polanco
Steve Blank, eight-time entrepreneur and now a business school professor at Stanford, Columbia and Berkeley, shares his hard-won wisdom as he pioneers entrepreneurship as a management science, combining Customer Development, Business Model Design and Agile Development. The conclusion? Startups are simply not small versions of large companies!
This is the fourth in a series about corporate innovation co-authored with Evangelos Simoudis. Evangelos and I are working on what we hope will become a book about the new model for corporate entrepreneurship. In our last post, we addressed the six key questions that senior management should address to determine if an Innovation Outpost makes sense for a company. If the answer is yes, here’s a step-by-step guide to help set one up.
This is the second in a series about the changing models of corporate innovation co-authored with Evangelos Simoudis. Evangelos and I are working on what we hope will become a book about the new model for corporate entrepreneurship.
I first met Evangelos Simoudis when he ran IBM’s Business Intelligence Solutions Division and then as CEO of his first startup Customer Analytics. Evangelos has spent the last 15 years as a Venture Capitalist, first at Apax Partners and later at Trident Capital. During the last three years he’s worked with over 100 companies, many of which established Innovation Outposts in Silicon Valley. He’s now helping companies get the most out of their relationships with Silicon Valley.
In a recent workshop with a large company focused on the Innovation@50x process, I mentioned that founders and intraprenuers operate more like artists than accountants – on day one they see something no one else does. One of the innovators in the room said, “It sounds like you’re describing exactly what Ed Catmull the CEO of Pixar wrote in Creativity, Inc.”
I’ve spent this year working with corporations and government agencies that are adopting and adapting Lean Methodologies. The biggest surprise for me was getting schooled on how extremely difficult it is to be an innovator inside a company of executors.
Todd Dunn is the Director of Innovation and runs the Intermountain Healthcare Transformation Lab, which is working to foster innovation in the healthcare industry. He’s now run several Lean LaunchPad classes and has seen a ton of healthcare startups. Here’s his advice for startups in this space.
I’ve been working with large companies and the U.S. government to help them innovate faster– not just kind of fast, but 10x the number of initiatives in 1/5 the time. A 50x speedup kind of fast. Here’s how.
Startups focus on speed since they are burning cash every day as they search for product/market fit. But over time code/hardware written/built to validate hypotheses and find early customers can become unwieldy, difficult to maintain and incapable of scaling. These shortcuts add up and become what is called technical debt. And the size of the problem increases with the success of the company.
I’ve known Edmund Pendleton from the University of Maryland as the Director of theD.C. National Science Foundation (NSF) I-Corps Node (a collaboration among the University of Maryland, Virginia Tech, George Washington, and Johns Hopkins). But it wasn’t until seeing him lead the first I-Corps class at the National Institutes of Health that I realized Edmund could teach my class better than I can.
I am always surprised when critics complain that the Lean Startup’s Build, Measure, Learn approach is nothing more than “throwing incomplete products out of the building to see if they work.” Unfortunately the Build, Measure, Learn diagram is the cause of that confusion. At first glance it seems like a fire-ready-aim process.It’s time to update Build, Measure, Learn to what we now know is the best way to build Lean startups. Here’s how.
Thibault Duchemin and his team applied for our Lean LaunchPad class at UC Berkeley in 2014. We accepted them because it was clear Thibault was driven to solve a very personal problem – he grew up in a Deaf family, the only one who could hear. His team project was to provide automated aids for the hearing impaired. Here’s his story.
In peacetime the U.S. military is an immovable and inflexible bureaucracy. In wartime it can adapt and adopt organizational change with startling speed. BMNT, a new Silicon Valley company, is combining the Lean Methods it learned in combat with the technology expertise and speed of startups.
I’ve been working with Roberto, the Chief Innovation Officer of a diversified company I’ll call Sprocket Industries.I hadn’t heard from Roberto in awhile and when we caught up, it was clear his initial optimism had faded. I listened as Roberto listed the obstacles to the new innovation program at Sprocket...
I just spent a day working with Bob, the Chief Innovation Officer of a very smart large company I’ll call Acme Widgets. Bob summarized Acme’s impediments to innovation. “At our company we have a culture that fears failure. A failed project is considered a negative to a corporate career. As a result, few people want to start a project that might not succeed. And worse, even if someone does manage to start something new, our management structure has so many financial, legal and HR hurdles that every initiative needs to match our existing business financial metrics, processes and procedures.
During the Cold War with the Soviet Union, science and engineering at both Stanford and U.C. Berkeley were heavily funded to develop Cold War weapon systems. Stanford’s focus was Electronic Intelligence and those advanced microwave components and systems were useful in a variety of weapons systems. Starting in the 1950’s, Stanford’s engineering department became “outward facing” and developed a culture of spinouts and active faculty support and participation in the first wave of Silicon Valley startups.
Stephen Chambers spent 22 years in some of the most innovative companies in life science as the director of gene expression and then as a co-founder of his own company. Today he runs SynbiCITE, the UK’s synthetic biology consortium of 56 industrial partners and 19 Academic institutions located at Imperial College in London. Stephen and SynbiCITE, just launched the world’s first Lean LaunchPad for Synthetic Biology program. Here’s his story.
Last week I got a call from Patrick an ex-student I hadn’t heard from for 8 years. He was now the CEO of a company and wanted to talk about what he admitted was a “first world” problem. Over breakfast he got me up to date on his life since school (two non-CEO roles in startups,) but he wanted to talk about his third startup – the one he and two co-founders had started.
I remind my students that I’m teaching them a methodology they can use the rest of their careers, not running an incubator. Every once in awhile a team ignores my advice and builds a company worth hundreds of millions of dollars.
The landscape for how to turn life science and health care technologies into viable companies has changed more in the last 3 years than in the last 30. New approaches to translational medicine have emerged. Our Lean Launchpad® for Life Sciences is one of them. But a new class of life science/healthcare co-working and collaboration space is another.
Over the last three years the National Science Foundation I-Corps has taught over 700 teams of scientists how to commercialize their technology and how to fail less, increasing their odds for commercial success.
The University of Maryland is now integrating the Lean LaunchPad®into standard innovation and entrepreneurship courses across all 12 colleges within the University. Over 44 classes have embedded the business model canvas and/or Customer Discovery including a year-long course taken by every single one of its bioengineering majors. It’s made a big bang.
NYU has adopted the Lean LaunchPad® class as a standard entrepreneurship course across twelve different schools/colleges within the University. Over 1,000 students a year are learning lean startup concepts. Impact!
In the 20th century corporate skunk works were used to develop disruptive innovation separate from the rest of the company. They were the hallmark of innovative corporations. By the middle of the 21st century the only companies with skunk works will be the ones that have failed to master continuous innovation. Skunk works will be the signposts of companies that will be left behind.
Entrepreneurship is everywhere, but everywhere isn’t a level playing field. What’s the playbook for your region or country to make it so? Scalable startups are on a trajectory for a billion dollar market cap. They grow into companies that define an industry and create jobs. Not all start ups want to go in that direction – some will opt instead to become a small business. There’s nothing wrong with a business that supports you and perhaps an extended family. But if you want to build a scalable startup you need to be asking how you can you get enough customers/users/payers to build a business that can grow revenues past several $100M/year.
One of the great things about teaching is that while some students pass by like mist in the night others remain connected forever. I get to watch them grow into their careers and cheer them on. Its been three and a half years since I first designed and taught the Lean LaunchPad class and lots of water has gone under the bridge since then. I’ve taught hundreds of teams, the National Science Foundation Innovation Corps has taught close to 400 teams led by our nations top scientists, and the class is being taught around the world.
In Oracle’s early days Kathryn Gould was the founding VP of Marketing, working there from 1982 to 1984. When I heard that Larry Ellison was stepping down as Oracle’s CEO I asked Kathryn to think about the skills she saw in a young Larry Ellison that might make today’s founders winners.
Describing something as the “Woodstock of…” has taken to mean a one-of-a-kind historic gathering. It happened recently when a group of educators came to the ranch to learn how to teach Lean entrepreneurship to K-12 students.
How do you figure out what’s the right mix of skills for the co-founders of your startup Surprisingly if you’ve filled out the business model canvas you already know who you need. I was having breakfast with Radhika, an ex-grad student of mine who wanted to share her Customer Discovery progress for her consumer hardware startup. She started by sketching her business model canvas on a napkin, but somehow the conversation quickly shifted to what was really on her mind.
For the past three years the National Science Foundation Innovation Corps has been teaching our nations best scientists how to build a Lean Startup. Close to 400 teams in robotics, computer science, materials science, geoscience, etc. have learned how to use business models, get out of the building to test their hypotheses and minimum viable product.
The Lean Startup is a process for turning ideas into commercial ventures. Its premise is that startups begin with a series of untested hypotheses. They succeed by getting out of the building, testing those hypotheses and learning by iterating and refining minimal viable products in front of potential customers.
“By knowing things that exist, you can know that which does not exist.” - Book of Five Rings. A startup is not just about the idea, it’s about testing and then implementing the idea. A founding team without these skills is likely dead on arrival.
This week the National Science Foundation goes Lean on education by providing $1.2 million to educators who want to bring their classroom innovations to a wider audience.
Investors sitting through Incubator or Accelerator demo days have three metrics to judge fledgling startups – 1) great looking product demos, 2) compelling PowerPoint slides, and 3) a world-class team. Other than “I’ll know it when I see it”, there’s no formal way for an investor to assess project maturity or quantify risks. Other than measuring engineering progress, there’s no standard language to communicate progress.
We’ve pivoted our Lean LaunchPad / I-Corps curriculum. We’re changing the order in which we teach the business model canvas and customer development to better-fit therapeutics, diagnostics and medical devices.
Today the National Institutes of Health announced they are offering my Lean LaunchPad class (I-Corps @ NIH ) to commercialize Life Science.There may come a day that one of these teams makes a drug, diagnostic or medical device that saves your life.
For six and a half years I served as a public official on the California Coastal Commission.Commissoner Badge Since it’s been a year since I resigned, it’s time to tell a few stories about what I learned as a Coastal Commissioner. Each and every month I learned something new about human nature, deception and greed.
Last week I got an email last week from a New York VC asking for advice about building a house in the California Coastal Zone. For six and a half years I served as a public official on the California Coastal Commission. The call reminded me that it’s been a year since I resigned, and it’s time to tell a few stories of what I learned as a Coastal Commissioner. Each and every month I learned that not everything was how it seemed.
In the last five years I’ve been at Commencement Day at universities around the world – a few times to receive awards and three times as the commencement speaker. But attending both my daughters’ college graduations this year helped me to see how things look from the other side of the podium.
D.R. Widder is the Vice President of Innovation and holds the Steve Blank Innovation Chair at Philadelphia University. He’s helping city government in Philadelphia become more innovative by applying Lean startup methods and Philadelphia University’s innovation curriculum. I asked him to share an update on his work on teaching lean techniques to local governments.
For decades large companies have gone shopping in Silicon Valley for startups. Lately the pressure of continuous disruption has forced them to step up the pace. More often than not the results of these acquisitions are disappointing. What can companies learn from others’ failed efforts to integrate startups into large companies? The answer - there are two types of integration strategies, and they depend on where the startup is in its lifecycle.
Our Stanford and Berkeley Lean LaunchPad classes are over for this year, and as usual we learned as much from teaching the teams as the teams did from us. Here are a few of the Lessons Learned from these two classes.
President Bieto, Dean Sauquet, members of the faculty, distinguished guests, and ladies and gentlemen….Thank you for the kind introduction. I’m honored to be at a university noted for knowledge, and in a city with 2000 years of history – home of Gaudí one of the 20th century’s greatest innovators...
Henry Chesbrough is known as the father of Open Innovation and wrote the book that defined the practice. Henry is the Faculty Director of the Garwood Center for Corporate Innovation, at U.C. Berkeley in the Haas Business School. Henry and I teach a corporate innovation class together.
With a ~$2 billion endowment the Kauffman Foundation is the largest non-profit focused on entrepreneurship in the world. Giving away $80 million to every year (~$25 million to entrepreneurial causes) makes Kauffman the dominant player in the entrepreneurship space.
While the Lean LaunchPad class has been adopted by Universities and the National Science Foundation, the question we get is, “Can students in K-12 handle an experiential entrepreneurship class?” Hawken School has now given us an answer. Their seniors just completed the school’s first-ever 3-credit semester program in evidence-based entrepreneurship. Students are fully immersed in real-world learning during the 12-weekEntrepreneurial Studies course.
In the last few years we’ve recognized that a startup is not a smaller version of a large company. We’re now learning that companies are not larger versions of startups. There’s been lots written about how companies need to be more innovative, but very little on what stops them from doing so.
Since 2005 startup accelerators have provided cohorts of startups with mentoring, pitch practice and product focus. However, accelerator Demo Days are a combination of graduation ceremony and pitch contest, with the uncomfortable feel of a swimsuit competition. Other than “I’ll know it when I see it”, there’s no formal way for an investor attending Demo Day to assess project maturity or quantify risks.
Teams that build continuous customer discovery into their DNA will become smarter than their investors, and build more successful companies.
Two of the hot topics in education in the last few years have been Massive Open Online Courses (MOOC’s) and the flipped classroom. I’ve been experimenting with both of them.
The concepts in my Lean LaunchPad curriculum can be taught in a variety of classes–as an introduction to entrepreneurship all the way to a graduate level “capstone class.” I recently learned being tough when you select teams for a capstone class pays off for all involved. Here’s why.
Having a film crew in your living room for two days is something you want to put on your bucket list. With a ~$2 billion endowment the Kauffman Foundation is the largest non-profit focused on entrepreneurship in the world. Giving away $80 million to every year (~$25 million to entrepreneurial causes) makes Kauffman the dominant player in the entrepreneurship space. Kauffman just launched Founders School - a new education series to help entrepreneurs develop their businesses during the startup stage by highlighting how startups are different from big companies.
Dino Vendetti a VC at Bay Partners, moved up to Bend, Oregon on a mission to engineer Bend into a regional technology cluster. Over the years Dino and I brainstormed about how Lean entrepreneurship would affect regional development.
Dino Vendetti a VC at Bay Partners, moved up to Bend, Oregon on a mission to engineer Bend into a regional technology cluster. Over the years Dino and I brainstormed about how Lean entrepreneurship would affect regional development. I visited Bend last year and caught up with his progress...
When Customer Development and the Lean Startup were just a sketch on the napkin, Dino Vendetti, a VC at Bay Partners, was one of the first venture capitalists I shared my ideas with. Dino and I kept in touch as he moved up to Bend, Oregon on a mission to engineer Bend into a regional technology cluster. Over the years we brainstormed about how Lean entrepreneurship would affect regional development.
In late 2013 Cowboy Ventures did an analysis of U.S.-based tech companies started in the last 10 years, now valued at $1 billion. They found39 of these companies. They called them the “Unicorn Club.”
For the last 75 years products (both durable goods and software) were built via Waterfall development. This process forced companies to release and launch products by model years, and market new and “improved” versions.
This post is part of our series on the National Science Foundation I-Corps Lean LaunchPad class in Life Science and Health Care at UCSF. Doctors, researchers and Principal Investigators in this class got out of the lab and hospital talked to 2,355 customers, tested 947 hypotheses and invalidated 423 of them. The class had 1,145 engagements with instructors and mentors.
This post is part of our series on the National Science Foundation I-Corps Lean LaunchPad class in Life Science and Health Care at UCSF. Doctors, researchers and Principal Investigators in this class got out of the lab and hospital talked to 2,355 customers, tested 947 hypotheses and invalidated 423 of them. The class had 1,145 engagements with instructors and mentors. (We kept track of all this data by instrumenting the teams with LaunchPad Central software.)
Eric Ries was kind enough to invite me to speak at his Lean Startup Conference.
In the talk I reviewed the basic components of the Lean Startup and described how we teach it. I observed that now that we’ve built software to instrument and monitor the progress of new ventures (using LaunchPad Central), that we are entering the world of evidence-based entrepreneurship and the Investment Readiness Level.
This video is a companion to the blog post here. Read it for context.
This post is part of our series on the National Science Foundation I-Corps Lean LaunchPad class in Life Science and Health Care at UCSF. Doctors, researchers and Principal Investigators in this class got out of the lab and hospital talked to 2,355 customers, tested 947 hypotheses and invalidated 423 of them. The class had 1,145 engagements with instructors and mentors. (We kept track of all this data by instrumenting the teams with LaunchPad Central software.)
This post is part of our series on the National Science Foundation I-Corps Lean LaunchPad class in Life Science and Health Care at UCSF.
- Part 1: issues in the therapeutics drug discovery pipeline
- Part 2: medical devices and digital health
- Part 3: described what we’re going to do about it.
- Part 4: This Will Save us Years – Customer Discovery in Medical Devices
- Part 5: Value proposition and customer segments in Life Sciences
- Part 6: Distribution channels in Life Sciences
- Part 7: Revenue Streams in Life Sciences
- Part 8: When Customers Make You Smarter –Customer Discovery in Digital Health
- Part 9: We’ve seen the Future of Translational Medicine and it’s Disruptive
A team of 110 researchers and clinicians, in therapeutics, diagnostics, devices and digital health in 25 teams at UCSF, has just shown us the future of translational medicine. It’s Lean, it’s fast, it works and it’s unlike anything else ever done.
It’s going to get research from the lab to the bedside cheaper and faster.
Welcome to the Lean LaunchPad for Life Sciences and Healthcare (part of theNational Science Foundation I-Corps).
This post is part of our series on the Lean Startup in Life Science and Health Care.
- Part 1: issues in the therapeutics drug discovery pipeline
- Part 2: medical devices and digital health
- Part 3: described what we’re going to do about it.
- Part 4: This Will Save us Years – Customer Discovery in Medical Devices
- Part 5: Value proposition and customer segments in Life Sciences
- Part 6: Distribution channels in Life Sciences
- Part 7: Revenue Streams in Life Sciences
- Part 8: When Customers Make You Smarter – Customer Discovery in Digital Health
As our Lean LaunchPad for Life Sciences class winds down, a good number of the 26 teams are trying to figure out whether they should go forward to turn their class project into a business.
Given that we’ve been emphasizing Evidence-based entrepreneurship and theInvestment Readiness Level, I guess I shouldn’t have been surprised when someone asked, “After we figure all this data out, should we pursue our idea based on the numbers?”
Ouch.
I pointed out that the “data” you gather in 10 weeks (talking to 100+ customers, partners, payers, etc.,) are not the first thing you should look at. There are three more important things you should worry about.
We talk a lot about Customer Development, but there’s nothing like seeing it in action to understand its power. Here’s what happened when an extraordinary Digital Health team gained several critical insights about their business model. The first was reducing what they thought was a five-sided market to a simpler two-sided one.
But the big payoff came when their discussions with medical device customers revealed an entirely new way to think about pricing —potentially tripling their revenue.
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Investors sitting through Incubator or Accelerator demo days have three metrics to judge fledgling startups – 1) great looking product demos, 2) compelling PowerPoint slides, and 3) a world-class team.
We think we can do better.
We now have the tools, technology and data to take incubators and accelerators to the next level. Teams can prove their competence and validate their ideas by showing investors evidence that there’s a repeatable and scalable business model. And we can offer investors metrics to play Moneyball – with the Investment Readiness Level.
One of the great innovations of the 21st century are products that are cloud-connected and update and improve automatically. For software, gone are the days of having to buy a new version of physical media (disks or CD’s.) For hardware it’s the magical ability to have a product get better over time as new features are automatically added.
The downside is when companies unilaterally remove features from their products without asking their customers permission and/or remove consumers’ ability to use the previous versions. Products can just as easily be downgraded as upgraded.
We’re teaching a Lean LaunchPad class for Life Sciences and Health Care (therapeutics, diagnostics, devices and digital health) at UCSF with a team of veteran venture capitalists. The class has talked to 2,056 customers to date.
- Part 1: issues in the therapeutics drug discovery pipeline
- Part 2: medical devices and digital health
- Part 3: described what we’re going to do about it.
- Part 4: a snapshot of what our teams found outside the building.
- Part 5: Value proposition and customer segments in Life Sciences
- Part 6: Distribution channels in Life Sciences
When scientists and engineers who’ve been working in the lab for years try to commercialize their technology they often get trapped by their own beliefs - including who the customers are, what features are important, pricing etc.
We’re teaching a Lean LaunchPad class for Life Sciences and Health Care (therapeutics, diagnostics, devices and digital health) at UCSF with a team of veteran venture capitalists. The class has talked to 1,780 customers to date.
- Part 1: issues in the therapeutics drug discovery pipeline
- Part 2: medical devices and digital health
- Part 3: described what we’re going to do about it.
- Part 4: a snapshot of what our teams found outside the building.
- Part 5: value proposition and customer segments in Life Sciences
Every startup I see invariably puts up a competitive analysis slide that plots performance on a X/Y graph with their company in the top right.
In 2012 I got together with Alexander Osterwalder, Henry Chesbrough and Andre Marquis to think about the Lean and the future of corporate innovation. We had some radical thoughts how companies were going to have change to remain competitive in the 21st century in a blog post. What we didn’t envision was that one creative corporate VP would take that post and build a world-class corporate innovation program around it.
David Butler is the VP of Innovation and Entrepreneurship of at The Coca-Cola Company – responsible for finding breakthrough innovation and building an entrepreneurial culture. Here’s how he’s shaping the future of corporate innovation.
We’re deep into teaching a Lean LaunchPad class for Life Sciences and Health Care (therapeutics, diagnostics, devices and digital health) at UCSF with a team of veteran venture capitalists. (The class has talked to 1,440 customers to date.)
One of the objectives of the class was to become a Life Science Center of Excellence for the National Science Foundation Innovation Corps. This meant capturing domain specific commercialization expertise for therapeutics, diagnostics, devices and digital health so others can teach this.
This is the start of the third year teaching teams of scientists (professors and their graduate students) in the National Science Foundation Innovation Corps (I-Corps). This month we’ve crossed ~300 teams in the first two years through the program.
I-Corps is the accelerator that helps scientists bridge the commercialization gap between their research in their labs and wide-scale commercial adoption and use.
I-Corps bridges the gap between public support of basic science and private capital funding of new commercial ventures. It’s a model for a government program that’s gotten the balance between public/private partnerships just right.
We’re deep into week 2 of teaching a Lean LaunchPad class for Life Sciences and Health Care (therapeutics, diagnostics, devices and digital health) this October at UCSF with a team of veteran venture capitalists.
Part 1 of this post described the issues in the drug discovery. Part 2 covered medical devices and digital health. Part 3 described what we’re going to do about it.
This is post is a brief snapshot of our progress.
I can always tell when one of my students has been in the military. They’re focused, they’re world-wise past their years, and they don’t break a sweat in the fast pace and chaotic nature of the class and entrepreneurship. Todd Branchflower took my Lean LaunchPad class having been entrepreneurial enough to convince the Air Force send him to Stanford to get his graduate engineering degree.
Over the last three years our Lean LaunchPad / NSF Innovation Corps classes have been teaching hundreds of entrepreneurial teams a year how to build their startups bygetting out of the building and testing their hypotheses behind their business model. While our teams have mentors, socialize a lot and give great demos, the goal of our class final presentations is “Lessons Learned” – about product/market fit, pricing, acquisition/activation costs, pricing, partners, etc. We think teaching teams a formal methodology around the Lean Framework (Business Model design, Customer Development and Agile Engineering) is a natural evolution of how successful incubators/accelerators will build startups.
Here’s the story of one such team; Jonathan Wylie, Lakshmi Shivalingaiah and theEvoke team.
What if we could increase productivity and stave the capital flight by helping Life Sciences startups build their companies more efficiently?
We’re going to test this hypothesis by teaching a Lean LaunchPad class for Life Sciences and Health Care (therapeutics, diagnostics, devices and digital health) this October at UCSF with a team of veteran venture capitalists.
Part 1 of this post described the issues in the drug discovery. Part 2 covered medical devices and digital health. This post describes what we’re going to do about it. And why you ought to take this class.
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What if we could increase productivity and stave the capital flight by helping Life Sciences startups build their companies more efficiently?
We’re going to test this hypothesis by teaching a Lean LaunchPad class for Life Sciences and Healthcare (therapeutics, diagnostics, devices and digital health) this October at UCSF with a team of veteran venture capitalists.
In this three post series, Part 1 described the challenges Life Science companies face in Therapeutics and Diagnostics. This post describes the issues in Medical Devices and Digital Health. Part 3 will offer our hypothesis about how to change the dynamics of the Life Sciences industry with a different approach to commercialization of research and innovation. And why you ought to take this class.
It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way.
Charles Dickens
Life Science (therapeutics- drugs to cure or manage diseases, diagnostics- tests and devices to find diseases, devices to cure and monitor diseases; and digital health –health care hardware, software and mobile devices and applications streamline and democratize the healthcare delivery system) is in the midst of a perfect storm of decreasing productivity, increasing regulation and the flight of venture capital.
Asking, “Can I have coffee with you to pick your brain?” is probably the worst possible way to get a meeting with someone with a busy schedule. Here’s a better approach.
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Jason, an entrepreneur I’ve known for over a decade, came out to the ranch today. He was celebrating selling his company and just beginning to think through his next moves. Since he wasn’t from Silicon Valley, he decided to use his time up here networking with other meetings with VC’s and company executives.
When we started E.piphany there was an equally scrappy startup calledDoubleClick (later acquired by Google for $3.1 billon). Over the years Kevin O’Connor, former CEO and founder of DoubleClick and I got to know each other. It’s been fun watching a 20th Century entrepreneur learn new tricks as he builds his next startup, FindTheBest using Lean Methodology. Here’s Kevin’s story to date.
That he which hath no stomach to this fight, let him depart…We few, we happy few, we band of brothers.
William Shakespeare, Henry Vth
There’s been a lot written about the individual characteristics of what makes a greatfounder, but a lot less about what makes a great founding team and how that’s different from a great founding CEO
A minimum viable product (MVP) is not always a smaller/cheaper version of your final product. Defining the goal for a MVP can save you tons of time, money and grief.
Drones over the HeartlandI ran into a small startup at Stanford who wants to fly Unmanned Aerial Vehicles (drones) with a Hyper-spectral camera over farm fields to collect hyper-spectral images. These images would be able to tell farmers how healthy their plants were, whether there were diseases or bugs, whether there was enough fertilizer, and enough water. (The camera has enough resolution to see individual plants.) Knowing this means farms can make better forecasts of how much their fields will produce, whether they should treat specific areas for pests, and put fertilizer and water only where it was needed.
In a time of universal deceit – telling the truth is a revolutionary act.
George Orwell
In Russia, President Putin’s office just stopped using PC’s and switched to typewriters. What do they know that we don’t?
Perhaps it’s ~~Intel~~ NSA inside.
I had a group of ex-students out to the ranch who were puzzling over a dilemma – they’ve been working hard on their startup, were close at finding product/market fit and had been approached by Oren, a potential angel investor. Oren had been investing since he left Google four years ago and was insisting on not only a board seat, but he wanted to be chairman of the board. The team wasn’t sure what to do.
I listened for a while as they went back and forth about whether he should be chairman. Then I asked, “Why should he even be on your board at all?” I got looks of confusion and then they said, “We thought all investors get a board seat. At least that’s what Oren told us.”
Uh oh. Red flags just appeared in front of my eyes. I realized it was time for the board of directors versus advisors talk.
The greatest number of jobs is created when startups create a new market – one where the product or service never existed before or is radically more convenient. Yet this is where startups will run into anti-innovation opponents they may not expect. These opponents have their own name – “rent seekers” – the landlords of the status-quo.
Smart startups prepare to face off against rent seekers and map out creative strategies for doing so…. First, however, they need to understand what a rent seeker is and how they operate…
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There is nothing more powerful than an idea whose time has come
Victor Hugo
The Lean LaunchPad entrepreneurship curriculum has caught fire. This week 100 educators from around the world will come to Stanford to learn how to teach it.
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Life is full of unintended consequences.
Ten years ago I started thinking about why startups are different from existing companies. I wondered if business plans and 5-year forecasts were the right way to plan a startup. I asked, “Is execution all there is to starting a company?”
It dawned on me that the plans were a symptom of a larger problem: we wereexecuting business plans when we should first be searching for business models. We were putting the plan before the planning.
So what would a search process for a business model look like? I read a ton of existing literature and came up with a formal methodology for search I calledCustomer Development. I wrote a book about this called the Four Steps to the Epiphany.
For many entrepreneurs “raising money” has replaced “building a sustainable business” as their goal. That’s a big mistake. When you take money from investors their business model becomes yours.
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One of my ex students came out to the ranch to give me an update on his startup. When I asked, “What are you working on?” the first words out of his mouth was his fund raising progress. Sigh… What I should have been hearing is the search for the business model, specifically the progress on product/market fit, but I hear the fund raising story first at least 90% of the time. It never makes me happy.
In a startup instead of paying consultants to tell you what they learned you want to pay them to teach you how to learn.
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Roominate, one of my favorite Lean LaunchPad teams came out to the ranch last week for a strategy session. Alice and Bettina had taken an idea they had tested in the class – building toys for young girls to have fun with Science, Technology, Engineering, and Math, and started a company. The Roominate dollhouse building kits are being sold via their own website and soon, retail channels. They’ve shipped over 5,000 to enthusiastic parents and their daughters.
The online world can be a dangerous place for the unprepared. And it’s just going to get worse. It’s time to teach Cyber Security as integral part of the high school and college curriculum and to all corporate employees.
I grew up in New York City and for a few years heaven on earth for me was going toBoy Scout camp in the summer near the Delaware River. The camp had all the summer adventures a city kid could imagine, hiking, fishing, canoeing, etc. But for me the best part was the rifle range. For a 12-year old kid from the city shooting target practice and skeet with a 22 rifle meant being entrusted by adults with something you knew was dangerous – because they were beating gun safety into our brains every step of the way.
From the minute we walked onto the shooting range to even before we got to touch a gun, we learned basic rules of handling weapons I still haven’t forgotten. You screwed up and you got yelled at and if you did it again you got escorted out of the rifle range.
Todd Branchflower was one of my Lean LaunchPad students entrepreneurial enough to convince the Air Force send him to Stanford to get his graduate engineering degree. After watching my Secret History of Silicon Valley talk, he became fascinated by how serendipity created both weapon systems and entrepreneurship in World War II – and brought us federal support of science and Silicon Valley.
I am honored to be with you as we gather to celebrate your graduation.
This school has a distinguished roster of graduates… Earl Bakken, the founder ofMedtronic, was an Electrical Engineering grad, and Bob Gore of Gortex, and your current president are both alums of your Chemical Engineering program.
In fact, I feel very connected to another one your grads. I’m sure you’ve heard ofSeymour Cray, he built a supercomputer company in Chippewa Falls that made the fastest computers in the world. These were very expensive supercomputers. They cost 10’s of millions of dollars and filled two tractor-trailers worth of space.
In my 21 years as an entrepreneur, I would come up for air once a month to religiously read the Harvard Business Review. It was not only my secret weapon in thinking about new startup strategies, it also gave me a view of the management issues my customers were dealing with. Through HBR I discovered the work of Peter Druckerand first read about management by objective. I learned about Michael Porters’s five forces. But the eye opener for me was reading Clayton Christensen HBR article on disruption in the mid 1990’s and then reading the Innovators Dilemma. Each of these authors (along with others too numerous to mention) profoundly changed my view of management and strategy. All of this in one magazine, with no hype, just a continual stream of great ideas.
I just spent a few weeks in Japan and China on a book tour for the Japanese andChinese versions of the Startup Owners Manual. In these series of 5 posts, I thought I’d share what I learned in China. All the usual caveats apply. I was only in China for a week so this a cursory view. Thanks to Kai-Fu Lee of Innovation Works, David Lin of Microsoft Accelerator, Kevin Dewalt and Frank Hawke of the Stanford Center in Beijing, and my publisher China Machine Press.
The previous post, part 4, was about Beijing’s entrepreneurial ecosystem these are my final observations.
I just spent a few weeks in Japan and China on a book tour for the Japanese andChinese versions of the Startup Owners Manual. In these series of 5 posts, I thought I’d share what I learned in China. All the usual caveats apply. I was only in China for a week so this a cursory view. Thanks to Kai-Fu Lee of Innovation Works, David Lin of Microsoft Accelerator, Frank Hawke of the Stanford Center in Beijing, and my publisher China Machine Press.
The previous post described the evolution of the Chinese Venture Capital system. The next two posts are about what I saw and learned in my short stay exploring Beijing’s entrepreneurial ecosystem.
I just spent a few weeks in Japan and China on a book tour for the Japanese andChinese versions of the Startup Owners Manual. In these series of 5 posts, I thought I’d share what I learned in China. All the usual caveats apply. I was only in China for a week so this a cursory view. Thanks to Kai-Fu Lee of Innovation Works, David Lin of Microsoft Accelerator, Frank Hawke of the Stanford Center in Beijing, and my publisher China Machine Press.
The first post described how China built a science and technology infrastructure to support advanced weapons systems development. The previous post described how the Torch program built China’s innovation clusters. This post is about the rise of Chinese venture capital and how it helped build the countries entrepreneurial ecosystem.
I just spent a few weeks in Japan and China on a book tour for the Japanese andChinese versions of the Startup Owners Manual. In these series of 5 posts, I thought I’d share what I learned in China. All the usual caveats apply. I was only in China for a week so this a cursory view.Thanks to Kai-Fu Lee of Innovation Works, David Lin of Microsoft Accelerator, Frank Hawke of the Stanford Center in Beijing, and my publisher China Machine Press.
The previous post described how China built its science and technology infrastructure. This post is about the how the Chinese government engineered technology clusters.
I just spent a few weeks in Japan and China on a book tour for the Japanese andChinese versions of the Startup Owners Manual. In these series of 5 posts, I thought I’d share what I learned in China. My post about Japan will follow. All the usual caveats apply. I was only in China for a week so this a cursory view. Thanks to Kai-Fu Lee of Innovation Works, David Lin of Microsoft Accelerator, Frank Hawke of the Stanford Center in Beijing, and my publisher China Machine Press.
Summary: I’ve lived in Silicon Valley for 35 years, I’ve taught in entrepreneurial clusters in New York, Boston, Helsinki, Santiago Chile, St. Petersburg, Moscow, Prague, and Tokyo, but the visit to the heart of the Beijing startup world Zhongguancun has truly blown me away.
Each of these clusters has wondered how to become the next Silicon Valley. Beijing is already there.
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