When Startups Scrapped the Business Plan22 December, 2017 / Articles
Steve Blank, entrepreneurship lecturer at Stanford, UC Berkeley, and Columbia, talks about his experience of coming to Silicon Valley and building companies from the ground up. He shares how he learned to apply customer discovery methods to emerging high technology startups. And he explains why he believes most established companies are still failing to apply lean startup methodology in their corporate innovation programs. Blank is the author of the HBR article, “Why the Lean Start-Up Changes Everything.”
CURT NICKISCH: Welcome to the HBR IdeaCast from Harvard Business Review. I’m Curt Nickisch, in for Sarah Green Carmichael.
It wasn’t that long ago that writing a business plan was a core part of business school. You didn’t graduate without it, but that’s changed. Nowadays, you might be more likely to fill out a business model canvas than a business plan. At least, I did, in my design and innovation strategies class.
This new emphasis on searching for a product market fit reflects the growing impact of lean thinking in business, from start-ups to the biggest multinational corporation.
And today, we’re going to hear more about lean start-ups from Steve Blank, a Silicon Valley veteran who was influential in helping this idea get off the ground. He also teaches entrepreneurship at Stanford, UC Berkeley, and Columbia, and he wrote the article “Why The Lean Start-Up Changes Everything” in the May 2013 issue of Harvard Business Review.
Steve, thanks for talking with the HBR IdeaCast.
STEVE BLANK: Thanks for having me.
CURT NICKISCH: How did you, a New Yorker, son of Russian immigrants, end up in Silicon Valley in 1978?
STEVE BLANK: Somewhere around about then, somewhat the courtesy of the U.S. government, I spent four years in the Air Force, year and a half in Southeast Asia during Vietnam. I went back to school at University of Michigan then got sent out to install a computer system in a place called San Jose and we, pre-Google, actually bought me plane tickets for San Jose, Costa Rica, because no one had ever heard of this place.
CURT NICKISCH: Wait, you actually were being sent to the wrong city?
STEVE BLANK: Yeah, kind of funny. Now, we take for granted that we just pick up our phones or look at Google maps and know where any town or city is, anywhere in the world. And as I said, it just doesn’t feel right. And we actually had to go out and buy a road map.
They have to understand, Ann Arbor wasn’t some podunk town, it was a university town, but back then Silicon Valley was making silicon and making defense products. And there really wasn’t much consumer awareness of what was out there.
And I came out there and, to make a very long story short, I never left. I actually interviewed, got a job, flew back and quit, which was the last time that company ever sent anybody out without a manager with them.
CURT NICKISCH: So for all you knew, this was just some place out in the desert making, you know, rocket engines or something like that. How is it possible that you just, you know, you landed there and decided this was the place you wanted to stay and actually kind of bet your future on?
STEVE BLANK: Well you got to imagine in Ann Arbor, every week we’d look at how many ads there were for electronic engineers or technicians. And if we were lucky, it was a good week, there’d be two or three listings.
And so when I got to San Jose, we bought the Sunday newspaper and there were 43 pages. Forty-three pages! Forty years later I still remember exactly what it looked like. Forty-three full pages of ads for technicians and engineers and scientists and whatever. And we looked at each other and went: where the heck are we? How come no one is, like, shipping these newspapers around the country?
And I guess I’ve always been good at identifying opportunities. And I said, there’s no way I’m leaving this place.
CURT NICKISCH: That’s an amazing story. What a stroke of luck to get sent out there.
STEVE BLANK: You know, I would disagree. I think entrepreneurs make their own luck and not that that wasn’t lucky, but great entrepreneurs show up more often than most people.
Even when I was in the military, the number one rule in the military was: don’t volunteer for anything. I volunteered for everything, and half the time it was cleaning latrines or peeling potatoes. But the other half of the time actually made my career. I ended up doing some amazing things, because no one else wanted a volunteer or no one else would show up.
And I would say that is maybe the number one thing that differentiates entrepreneurs with, you know, normal people, is normal people expect to be recognized for what they do and entrepreneurs make their own recognition and create their own reality. It’s very different than what exists in a large company or what exists for most people.
CURT NICKISCH: I do have a friend who says that if you look at the most successful people they’re the ones who just do things, who don’t talk about doing things but just do things. It’s kind of like modern art. You know people are like I could have painted that, but you didn’t.
STEVE BLANK: Right. So everybody has an idea. So there’s, you know, number one is: do you have curiosity? Number two is: does it translate to imagination? But number three is: did it translate to action? That’s the difference between some with an idea and someone who is an entrepreneur.
Are you willing to actually take that action? And typically, at start-ups that involve risk, to go make something happen. Give up the old and start something new. Quit your old job. You know, I keep going back to — normal people don’t do that. Entrepreneurs are not normal people. They’re crazy.