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  • The Big Bang. The Lean LaunchPad explodes at University of Maryland

    The is now integrating the Lean LaunchPad® into standard and 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.big bang 2

    It’s made a big bang.

    Here’s the story from Dean Chang, UMD’s Associate Vice President for Innovation and Entrepreneurship.

    ———————————————–

    Two decades ago, Steve Blank completely changed the course and fortunes of a Stanford spinout startup called Immersion. I was lucky to be one of the very early people at Immersion and met Steve when he came on as one of our first board members. It was Steve who first brought Will Harvey to visit Immersion, which led to a strategic investment in There.com, Will’s stealth-mode but sure-fire, can’t-miss startup.

    Present at the Creation
    We didn’t know it at the time, but with that investment we had paid for front-row VIP seats to witness the origins of and the . There.com is where Will first met and hired Eric Ries and had the painful and formative experiences that directly led to them starting over and co-founding IMVU while auditing Steve’s Lean LaunchPad course. With Eric Ries as the first practioner of Customer Development, Steve wrote Four Steps to the Epiphany, Eric wrote Lean Startup, and – BANG – Customer Development and Lean Startup were born!

    Twenty years and 100,000’s of copies of those books later, my life has fortuitously intersected with Steve Blank once again now that we’ve both become educators. In my second go-around with Steve Blank, he’s still changing the course and fortunes of startups everywhere, but perhaps more profoundly, he’s now also changing the course of universities and students everywhere as a result of a program he developed with the (NSF).

    It’s a Capitol Idea
    The DC, Maryland, and Virginia (DMV) region represents the most fertile science and region in the country with about $30 billion in federally-funded R&D. However, the region has historically underperformed in translating its enormous R&D output into impact.

    When Steve and NSF created the ™ program in 2011, I approached Edmund Pendleton from University of Maryland, Jim Chung from George Washington University and Jack Lesko from Virginia Tech with the idea that together we could leverage the respective strengths of our institutions, and catalyze the region through . In 2012, we applied for and then were awarded a grant from NSF to do just that. We created the DC I-Corps Regional Node to teach the Lean LaunchPad curriculum to top scientists, innovators, and students from around the country and from our region. Since 2013, DC I-Corps has trained over 150 teams with the kind of impact NSF and Steve envisioned when they launched the program. That impact is now accelerating with the DC I-Corps node’s addition of the #1 research university in the country (Johns Hopkins) in 2014.

    UMD LLP Ecosystem

    Teaching the Big Bang to Undergraduates
    University of Maryland’s President Wallace Loh’s commitment to engage every student in all 12 colleges in innovation and entrepreneurship resulted in UMD aggressively leveraging its I-Corps and Lean LaunchPad experience inside undergraduate classrooms.

    Our FedTech class pairs students with some of the most promising technologies from NASA, DOD and several other of the 87 federal labs located in the DMV region. Federal labs like DOE literally have tens of thousands of inventions that they’d like to have vetted for commercial potential, so FedTech students search for a repeatable and scalable business model for those fed lab technologies using the Lean LaunchPad framework. Students get course credit, a fantastic learning experience, and in some cases, even a job offer or career opportunity with the federal lab or with an industry contact made during interviews.

    Elements of the business model canvas and/or discovery-based interviews of stakeholders have already been incorporated into 44 other classes at UMD. But the biggest impact of 2014 has been from incorporating the Lean LaunchPad curriculum into our signature, year-long senior capstone course in bioengineering. This means that every single University of Maryland student in the Fischell Department of Bioengineering is now required to not only design a real biomedical device but also take that design through rigorous, evidence-based Customer Development in order to graduate. 

    Truth be told, we took a page out of Frank Rimalovski’s playbook at NYU and paid for Yang Tao to attend the Lean LaunchPad Educators Program.  He’s the professor who teaches the bioengineering capstone course, and he returned from Steve’s ranch inspired and determined to weave the Lean LaunchPad into the fabric of the capstone course. So what’s happened so far?

    Impact of the Big Bang on University of Maryland Bioengineering
    In this capstone course students visit the University of Maryland medical school and shadow doctors, nurses, and other hospital workers to learn about problems and needs, which is an ideal set up for customer interviews and discovery. They spend the year working with the doctors and the life sciences venture community to design devices and other solutions to those problems and needs.

    Before Lean LaunchPad was added to the bioengineering capstone class, some beautiful devices were designed and manufactured with many students never knowing whether the value proposition for what they made was beneficial enough to all the right people to warrant adoption or if the customer segment they targeted was the right one and made financial sense.

    Now the students spend time in customer discovery and learn why validating the business model for their device is so important. As they target the different parts of the canvas, they begin to understand how things like improved healthcare, purchasing, reimbursement, and regulatory must fit into a successful business model.

    Some students will find that their device is an engineering marvel but would never fly in the market for reasons they weren’t even aware of until they did their “outside of the classroom” customer interviews. Co-instructor Martha Connolly thinks that’s a perfectly good outcome because they’ve still learned the process of designing and making a biomedical device but they’ve also learned equally valuable lessons from the Lean LaunchPad process that will be applicable in any future endeavors, whatever they may be.

    The real proof of Lean LaunchPad’s impact is that the students are clamoring for it.

    Can I Have More?
    In fact, two UMD bioengineering students, Shawn Greenspan and Stephanie Cohen, went through the capstone course last year before Lean LaunchPad was integrated. They were so upset that they missed out on the Lean LaunchPad version of the course that they teamed up with Dr. Ron Samet, a very entrepreneurial professor of anesthesiology from the medical school, to take the class through this fall’s National Science Foundation I-Corps regional program taught in the D.C. area.

    UMDAccording to Shawn and Stephanie, I-Corps taught them what they didn’t get from the traditional capstone course without Lean LaunchPad:

    “I-Corps finally put us on the road to real customer discovery. Our initial business plan started with an incorrectly identified buyer, value propositions that were wrong, and guesses everywhere else. Fortunately after 67 interviews we now have a fully developed customer segment identifying each customer type, the key value propositions, and a developing revenue model.

    We still have lots of work to do. The left side of our canvas has more questions than answers. Five weeks ago, that was scary to admit, but now we know where our answers lie: outside the building.”

    This kind of feedback from students is particularly gratifying. Not only did the experience have the kind of impact we had hoped for, but it’s also turned into a potential career opportunity for Shawn and Stephanie as they’re completing their master’s programs.

    What’s Next?
    Four more Lean LaunchPad initiatives are either on tap or about to be scaled up:

    Being a node instructor in the I-Corps @ NIH program has allowed me to work with some terrific experts in life sciences and healthcare ventures and spread that expertise to DC I-Corps and UMD programs. Next month, I’ll be a node instructor in NSF’s upcoming I-Corps for Learning program where we aim to teach STEM educators how to scale their teaching innovations to a wider audience. That experience should again result in great learnings to bring back and apply at UMD.

    When I witnessed the Big Bang origins of Customer Development and Lean Startup 20 years ago during my first encounter with Steve Blank, I could not have guessed how fast it would impact the startup world, and now universities and students. If the past is prologue, the future is going to be fantastic!

    Lessons Learned

    • University of Maryland has gone “all in” with the National Science Foundation and discovery-based learning from stakeholders
    • I-Corps has been a great investment for the country. Regardless if they take startup path, students gain invaluable skills
    • Elective courses are great, but the big win comes from embedding Lean LaunchPad in existing required courses
    • Students can create job and career opportunities through their customer discovery interactions
    • The impact on life sciences and healthcare is evident in the UMD bioengineering program and in the NIH program
    • The Lean LaunchPad process is equally well-suited to areas like STEM education and government (e.g., fed labs, HHS)
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  • Impact! NYU Scales the Lean LaunchPad

    Steve BlankOriginally posted at www.steveblank.com

    By Steve Blank

    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 concepts.

    Impact!shutterstock_132023192

    —–

    In August 2011 I received an email from someone at NYU I never heard of. Frank Rimalovski, the Executive Director of the NYU Entrepreneurial Institute, had just read about the  Innovation Corps (I-Corps) in my blog, and he absolutely had to meet me. To Frank’s credit he wouldn’t take no for an answer. When I said, “I’m too busy,” Frank said he’d fly out to fit into my schedule. When I said, “I’m at my ranch on the coast,” Frank promised to drive to Santa Cruz as soon as he get off the plane.

    I figured any academic who was as persistent as an entrepreneur had earned my time.

    So we met, and I learned a lot. First, I learned that Frank was not your typical academic. He was a career VC, now at NYU and charged with building an entrepreneurial ecosystem across the university. Frank’s goal in the meeting was to figure out how to ensure that NYU would be one of the new universities selected when the National Science Foundation scaled the Innovation Corps nationally. (The Corps, or I-Corps for short, is my Stanford Lean LaunchPad class offered by the National Science Foundation to our leading scientists. The Lean LaunchPad class teaches students how to build a Lean Startup using business model design, customer development and agile engineering. Teams have to get out of the building and talk to 10-15 customers a week.) I gave Frank the same advice I offered all the other universities who asked. But the difference was that Frank took it and made it part of the NYU proposal.

    In 2012 NYU partnered with the City University of NY (CUNY) and Columbia University, and in early 2013 they won a grant from the National Science Foundation to build the in New York City and jointly create the the NYC Regional Innovation Node (NYCRIN).

    Spend it Wisely
    As part of the National Science Foundation I-Corps program, NYU was responsible for training our country’s top scientists – and they’ve taught 170 of them so far.

    But what NYU did with the rest of their grant dollars was simply brilliant. Over the last two years they used part of the National Science Foundation funds to send eight NYU faculty to California attend the Lean LaunchPad Educators program. (The Educators Program is a 2½ day class that teaches faculty how to create and teach their own Lean LaunchPad class.) In exchange the faculty had to agree to teach a Lean LaunchPad class at NYU within the next year. Unbelievably, they’ve delivered – and more. By this spring there will be 9 different Lean LaunchPad classes with 12 NYU instructors (and several more gearing up) Lean at 12 of the schools/colleges within NYU. Some of these were brand new classes while others adapted existing business, design and engineering curricula to utilize the Lean approach.

    NYU Lean 2

    Spread it Widely
    In two short years, the Lean LaunchPad has had a major impact on at NYU. Starting this year all 750 incoming freshman at the NYU Polytechnic School of Engineering take the required Innovation and Forumclass. The class has been updated to cover the key elements of the Lean Startup (customer development, customer segments & value propositions, product/market fit, and minimal viable products)!

    In addition, 165 students from twelve different schools/colleges within the University took the full Lean LaunchPad class this year. And in each of the past two summers 10 teams with 30 students participated in the NYU Summer Launchpad accelerator program. Frank even convinced me to come to New York and teach a five-day 10-hour-a-day Lean LaunchPad class with him and his team each August.

    Student Impact
    While classes offered and curriculums built are impressive, what really matters is whether we had any impact on the students. Did we open new eyes? Encourage new ? Change lives? To my surprise the impact has been clear and immediate. A few of the students wrote blogs about their experience in the classes.  Here are a a few quotes that stand out:

    Tlacael Esparza recently received his masters in music tech from NYU Steinhardt and is the co-founder of Sensory Percussion.  “…I found the idea of doing 10-15 customer interviews a week daunting and distracting. How can I commit to “getting out of the building” when I have so much more work to do building and improving our first product? … However, going through the customer development process showed me the danger in that kind of thinking. In talking to musicians and music producers…there was a lot to be learned about how our competitors’ products are perceived and used and how Sensory Percussion would fit into the current eco-system.” Read Tlacael’s blog post about his Summer Launchpad experience here.

    Fang-Ke Huang is a postdoctoral fellow in NYU Langone Medical Center, applying the proteomic approach to understand the brain’s functionalities such as learning and memory.  “(The) class taught me not only the importance of customers, but also the application of the scientific method to the business model...I also learned that an entrepreneur should have a productive attitude towards setbacks. …, I started to view setbacks as a chance for feedback and as opportunities to redirect my efforts.”  Fang-Ke’s blog about the class is here.

    Make it Better
    Last but not least, Frank thought that neither the Four Steps to the Epiphany nor the Startup Owners Manual had enough specific advice on Customer Development. (Ouch.) I told him that if he thought he could do better he should write his own book. So Frank did. He collaborated with Giff Constable and wrote Talking to Humans: Success Starts with Understanding Your Customers to guide aspiring entrepreneurs through the process of securing, conducting and synthesizing early customer discovery interviews. And you know what? It is a great book. I used it in the I-Corps @ NIH program, and it’s now one of my class texts.

    What’s Next?
    From my time at NYU last summer, it was clear there is already a growing demand and interest from faculty and administrators alike to apply Lean in life science and healthcare at NYU. Now that the National Institute of Health has run an I-Corps class specifically targeted for Life Science and Healthcare (, , and digital health), there’s now a Lean LaunchPad curriculum for Frank’s next target –  bringing the Lean LaunchPad class into the NYU Medical Center in 2015

    Lessons Learned

    • The National Science Foundation Innovation Corps has been a great investment for the country
    • It’s spurred a renaissance in entrepreneurial education
    • NYU has grabbed the opportunity with both hands
    • They’ve made one heck of an impact in just two years
    • I can’t wait to see what they do next
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  • Why Corporate Skunk Works Need to Die

     

    Steve BlankOriginally posted at www.steveblank.com

    By Steve Blank

    In the 20th century corporate skunk works® were used to develop disruptive 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.

    ——–

    In the 20th century companies could be leaders in a market for decades by just focusing on their core product(s). Most companies incrementally improved their products withprocess innovation (better materials, cheaper, product line extensions) and/or through acquisitions. Building disruptive products were thought of as “risky” and a distraction since it was not “core” to the company and did not fit existing corporate structures. Why make big bets if no one was asking for them and competitors weren’t doing so.

    a-12

    A few innovative companies did push the envelope. The way they did so was to set up “skunk works” to develop their most advanced, disruptive products. (IBM used the process to develop the IBM PC.) But it was Lockheed, then an aircraft manufacturer that coined the term and perfected the art. The Lockheed Skunk Works led by Kelly Johnson was responsible for its Advanced Development Projects – everything from the P-80, the first U.S. jet fighter plane, to the U-2 and A-12 spy planes.

    Skunk works differed from advanced research groups in that they were more than just product development groups. They had direct interaction with customers and controlled a sales channel which allowed them to negotiate their own deals with customers.

    Decades before we were able to articulate the value of “getting out of the building” and the , the value in having skunk works controlling their own distribution was starkly evident. Other companies with world-class R&D groups built radical innovations only to see their company fumble the future and others reap the rewards (think of Xerox and the personal computer, Fairchild and integrated circuits, Kodak and digital photography, etc.) Common themes in these failures were, 1) without a direct connection to the customer advanced R&D groups built products without understanding user needs, and 2) the core of the company was so focused on execution of current products that it couldn’t see that the future didn’t look like the past.

    Kelly Johnson’s 14 rules about how to manage a disruptive project described how to remove a small innovative team from the politics, policies, procedures and processes a large company had built to support execution of its core business (and its military customers had developed to procure large numbers of standard aircraft.)

    With the vantage point of the 21st century, we can now see that a successful skunk works – separated from its corporate parent, with its own culture, in control of its own R&D and distribution channel – looked much like a startup.

    But as successful as skunks works were to the companies that executed them well, innovation and execution couldn’t co-exist in the same corporate structure. Skunk works were emblematic of corporate structures that focused on execution and devalued innovation.

    Until now.

    Continuous Disruption Requires Continuous Innovation
    In the 21st century market share is ephemeral – ask General Motors, Blackberry, Nokia, Microsoft, Blockbuster, etc. –disruption is continual.

    Therefore companies need to master continuous innovation – the art of executing on core products while continually inventing new products and new businesses. That means that somehow we need to take the innovation that a skunk works removed from the core of the company and integrate the two.

    Here’s how.

    We need to realize that skunk works epitomize innovation by exception. But to survive companies need innovation by design.

    We now know how to do just that. We can get innovation and execution to work side-by-side.

    To start it requires board support and CEO and executive staff agreement. And recognition that cultural, process and procedure changes are needed to embrace learning and experimentation alongside the existing culture of execution.

    I’ll provide details on how companies can organize this way in a follow-on post.

    Lessons Learned

    • Skunk were advanced/disruptive product groups organizational isolated from the rest of their company
    • Skunk works had control over their sales channel and had direct customer feedback
    • World-class R&D groups that didn’t control the channel often saw their innovation die internally
    • Skunk works looked much like a startup
    • Skunk works epitomized innovation by exception
    • Companies now need innovation by design – innovation and execution that work side-by-side
    • We now know how to do this
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  •  
  • Born Global or Die Local – Building a Regional Startup Playbook

    Originally posted at www.steveblank.com

    By Steve Blank

    is everywhere, but everywhere isn’t a level playing field. What’s the playbook for your region or country to make it so?

    playbook

    ———-

    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.

    With 317 million people the U.S. has a large enough market that most U.S. ignore the rest of the world until they scale in their own country. Outside the U.S. a rough rule of thumb for scale is a local population greater than 100 million (and language, cultural and/or regulatory barriers to delay or keep out U.S. entrants.) China, Russia, Brazil, India, Indonesia all meet those criteria. (Obviously this depends on industry and application.) However, most countries don’t have sufficient population to support scale with just their local market and ultimately need to be global players – from day one.

    Regional Ecosystems
    I’m in Australia and just spent time with some great in Melbourne.

    Bay of Fires Tasmania

    One of the groups I spoke to was the Australian Sports Technology Network. This group realized that Australia has a great reputation as one of the world’s best sporting nations. They realized if they could develop and promote a well-coordinated sports technologies industry, they could capture their unfair share of the $300 billon sports consumer market. So they put together a sports ecosystem – gathering sports startups in apparel and footwear, protective wear, equipment, nutrition, wearable devices, data and video analytics, and web and mobile solutions and brought them together with investors, retailers and distributors, universities, research centers and national sporting organizations.

    Creating a vertically oriented regional ecosystem is a pretty amazing accomplishment for any country or industry.

    However, in meeting some of the sports startups one of the things that struck me is that most of the founders who said they wanted to grow big hadn’t given much thought about how they would go about building size and scale.

    The trap most of them fell into (common almost everywhere): they were reading the blog posts and advice of Silicon Valley-based companies and believing that it uniformly applied to them.

    It doesn’t.

    Born Global or Die Local
    The biggest mistake for most of these startups was not understanding that optimizing their business model for the 24 million people in the Australian market would not prepare them for the size and scale they needed to get to big.

    Instead of beginning with just a focus on Australia, these startups needed to use the and articulate which of their hypotheses should be tested locally and what would require getting on an airplane to test by watching someone’s pupils dilate face-to-face.

    For example, one of the critical business model hypotheses they could test locally is Product/Market fit – the connection between their Value Proposition (what product or service they were building) and the Customer Segment (who they were building it for.)

    business model globals

    Further refinement of Product/Market fit could be done locally by using Value Proposition Design.

    bus model and value prop map

    value prop map

    But other critical hypotheses such as activities, resources, partners, channels needed testing offshore. For example, many of the Australian sports tech business models shared common elements. They intended to get scale for their business by growing in the U.S. while building their products in China. And their branding and demand creation activities were going to occur primarily outside of Australia. This meant they would need U.S. channel partners and Chinese manufacturers and customer acquisition and activation programs outside their home country. And as good as the Australian angel investors have been, there still is dearth of serious follow-on funding in Australia. This means that most follow-on rounds of tens of millions of dollars, if needed will likely come from outside the country.

    Step 2 figure out what needs to be tested globallys

    While the network was very helpful getting these startups together and introduced to investors, it wasn’t clear how and when these startups tested their “going global” hypotheses.

    No one had written the playbook.

    Building a Regional Startup Playbook
    What’s been missing from regions outside of Silicon Valley is a “playbook.” In American football a playbook contains a sports team’s strategies and plays. It struck me that every region needs its own industry playbook on how to compete globally. For Australian sports startups, a playbook might lay out in detail the following steps:

    • Build minimal viable products and test product/market fit in Australia
    • Identify activities/resources/partners locally and then globally
    • Get seed funding in Australia
    • Trip 1 to China to understand manufacturing landscape, potential partners and rough cost of goods
    • Trip 2 to the U.S. to understand distribution channel landscape, potential partners and rough cost of customer acquisition
    • Test product/market fit in the U.S.
    • Trip 3 to China, pick manufacturing partner, start low volume production
    • Test channel and demand creation activities in the U.S.
    • Trip 4 to the U.S. Establish U.S. sales office
    • Trip 5 to the U.S. to get Series A funding in the U.S.

    Each industry in a region should develop a playbook that expands and details the strategy and tactics of how to build a scalable startup. When a playbook is shared through regional collaborations (like the Australian Sports Tech Network) entrepreneurs can jumpstart their efforts by sharing experience instead of inventing the wheel each time a new startup is launched. Now all they need is a playbook. As markets mature, and investors and the ecosystem become collectively smarter, the playbook will change over time.

    Lessons Learned

    • A scalable startup typically requires a local population >100 million people
    • If your country doesn’t have that you need to be born global
    • Your country/industry needs a “go global” playbook
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  • The Business Model Canvas Gets Even Better – Value Proposition Design

    Originally posted at www.steveblank.com

    By Steve Blank

    Steve BlankProduct/Market fit now has its own book. Alexander Osterwalder wrote it. Buy it.

    ——

    The Lean Startup process builds new ventures more efficiently. It has three parts: a to frame hypotheses, to get out of the building to test those hypotheses and agile engineering to build minimum viable products.

    This week the author of the business model canvas, my friend Alexander Osterwalder, launched his new book Value Proposition Design, the sequel to his million copy best seller, Business Model Generation.

    His new book does three things:
    1. Introduces the Value Proposition Canvas
    2. Tells you how to design new ventures with it
    3. Teaches you how to use Customer Development to test it.

    Value Proposition Design is a “must have” for anyone creating a new venture. It captures the core issues around understanding and finding  customer problems and designing and validating potential solutions.

    Value prop design

    Product/Market Fit
    If you’re familiar with the you know that the Business Model Canvas is the tool to frame all the hypotheses of your startup. Of all the 9 boxes of the canvas, the two most important parts of the business model are the relationship between the Value Proposition (what you’re building) and the Customer Segment. These two components of the business model are so important we give them their own name, “Product/Market Fit.”

    The Value Proposition Canvas functions like a plug-in to the Business Model Canvas and zooms into the value proposition and customer segment to describe the interactions between customers and product more explicitly and in more detail. This keeps things simple by giving you the big picture at the business model level and the detailed picture at the “product/market fit” level.

    bus model and value prop mapvalue prop map

    Integration with Customer Development and Lean Startup
    Alexander and I met after he published Business Model Generation. We both realized that we had each invented one of the two parts that define the Lean Startup. In his new book he’s integrated Customer Development with the Business Model and Value Proposition Canvas and added some new tools to the mix.

    Now an integral part of Value Proposition Design, several of his new tools help with testing and validation of hypotheses. These testing tools match the first two of the four steps of Customer Development. The diagram below is one of my favorites of the book and provides a simple overview of how to conduct customer discovery and customer validation in combination with the Business Model and Value Proposition Canvas. You start by extracting and prioritizing your hypotheses, then design your tests with Test Cards and finally, you conduct your tests and capture your learning. To make this all actionable Osterwalder added an Experiment Library to the book that equips you with ideas on how to test your assumptions.

    3_Value_Proposition_Design_Testing_Process

    Tracking Customer Development with the Value Proposition Canvas
    With Customer Development you’re constantly talking to customers and partners and conducting a ton of experiments to validate and invalidate your hypotheses. All these activities, the evidence of what works and what doesn’t, and your progress towards finding a successful value proposition and business model need to be tracked. In Value Proposition Design Osterwalder shows how to do this with the Progress Board, a tool that includes a version of my investment readiness level thermometer to track progress.

    5_Value_Proposition_Design_Progress_Board

    Online Tools
    Doing all the above together with your team is not easy when you “just” use poster-sized Canvases, sticky notes, and PowerPoint. There are simply too many Canvases you will design and trash (after rejecting and pivoting from your early tested ones), too many experiments you will conduct, and too much evidence you will produce. Keeping track of all this requires software support.

    So the Value Proposition Design comes with a series of exercises that you can complete online with assessment tools that show you how you are using the Value Proposition Canvas. And last, but not least, you get access to a whole series of checklists, templates, and incredibly awesome posters that you can immediately use in your work.

    Lessons Learned

    • The Value Proposition Canvas describes the details of how the value proposition and customer segments interact
    • It integrates the Customer Development process in the book
    • Product/Market fit now has its own book. Buy it
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  • Watching My Students Grow

    Originally published at www.steveblank.com
    By Steve Blank
    “You cannot teach a man anything, you can only help him find it within himself.”
    Galileo Galilei

    Steve BlankOne of the great things about 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.

    It’s 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 has taught close to 400 teams led by our nations top scientists, and the class is being taught around the world.

    But I still remember a team from the first class, one which wanted to build a robotic lawnmower. It’s now been over 3 years since the team has left my classroom and I thought I’d share with you what the two founders, Jorge Heraud and Lee Redden, learned then and what they’re doing now.

    The Autonomous Lawnmower
    They called their company Autonomow. And they were absolutely convinced what the world needed was an auto-driving lawn mover for institutions with large green spaces.

    You can see their first slide deck in class here.

    Like in all our classes we teach a combination of theory coupled with intense and immersive experiential learning outside the classroom. Students need to get out of the building and talk to 10-15 customers a week.

    The next week they came back in class and presented this.

    Each week we’d teach them about one more part of what makes up a business model. All teams struggle with finding product/market fit.

    By week four their presentation looked like this.

    Notice something different about the cover slide? Massive pivot. Like all great Silicon Valley companies they started with a and guessed who the customers will be. They’re almost always wrong. They could have never figured this out sitting inside a classroom writing a business plan.

    At week five (see here) they were actually getting into farm fields wearing hip boots and overalls. Now they were figuring out how to create demand.

    The process, this relentless drive to turn hypotheses into facts is what makes this learning so rapid.

    At week six they were trying to figure out their distribution channel (here) after another pivot. They got their minimal viable product (a machine vision platform) up and running in the lab.

    At week seven (here) another pivot happened when farmers taught them about how to price their product. Instead of an of selling hardware they were selling a service.

    BTW, notice that they were now dragging their machine vision platform through the farm fields!  If there was ever any question of whether a minimal viable product can work for hardware, see what they say in their video below.

    By week eight they were learning who they needed to partner with (see here). Most importantly they found a customer who taught them while weeding carrots was nice, thinning lettuce was where the money was.

    After 9 weeks their final presentation looked like this.

    When I teach in universities I’m not running an incubator. What I’m trying to do is to get students to learn a way of thinking about new ventures that will stick with them for life. And I try to do by having them teach themselves, rather than us teaching at them. Whether they start a company or not, I don’t keep score.

    But some teams remain connected forever. I get to watch them grow into their careers and cheer them on. This was one of those teams. After class they took this idea and formed a company – Blue River Technology.

    Over the last three years they turned their vision and PowerPoint slides into real hardware that solves real customer problems. And with 3 rounds of funding, including a grant from the National Science Foundation, they’ve raised $13 million.

    Take a look and see what they’ve done.

    If you can’t see the video click here

    “The customers had way more insights then we had. They had been thinking about their own problems for so long…If you just go out and try to sell maybe you’ll find some buyers, but you won’t be learning about what you should be doing.”

    Lee Redden – Blue River Technology

    ——

    I’m off next week on the next great adventure. We’re going to launch the I-Corps @ NIH and change how our country commercializes life sciences.

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  • The Woodstock of K-12 Education

    Steve BlankOriginally posted on www.steveblank.com

    By Steve Blank

    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 to K-12 students.

    Hawken1

    We Can Do Better than  Students How to Run a Lemonade Stand
    Over the last few years it’s become clear that the days of teaching “how to write a business plan” as the cornerstone of university entrepreneurship are over. We now understand the distinction between – who search for a business model – versus existing companies – that execute a business plan. Learning how to keep track of inventory and cash flow and creating an income statement and a balance sheet are great skills to learn for managing existing businesses.

    But to teach startup entrepreneurship we need to teach students new skills. They need to learn to find answers to questions like: who are my customers, what product features match customer needs, how do I create demand and what metrics matter? Learning these skills requires a very different type of entrepreneurship class, best taught through a hands-on, team-based, experiential approach. (The Lean LaunchPad/I-Corps class is the canonical model of such a class, with versions now taught in hundreds of colleges and universities.)

    In addition, most programs fail to teach students the distinction between a lifestyle business, small business and scalable startup. While the core principles of lean work the same for building a small business versus a scalable startup, there is a big difference between size, scaling, risk, financing, decision-making, uncertainty, teams, etc.

    in grades K-12, if it exists at all still focuses on teaching potential entrepreneurs small business entrepreneurship – the equivalent of “how to run a lemonade stand.” This is fine if what we want to do is prepare our 21st-century students to run small businesses (a valid option), but it does real damage when students leave entrepreneurship classes thinking they’ve learned something about how entrepreneurs who build scalable startups think and operate.

    On Fire With A Vision
    In 2013, after taking the 2½-day “Lean LaunchPad for Educators” seminar, a few brave educators from Hawken School, a K-12 school in Cleveland, Ohio, decided to change the status quo. They returned to Hawken on fire with a vision of building a completely different sort of entrepreneurship course in their school. They saw the future was a course where students would learn by working on actual problems in the real world instead of sitting in a lecture hall. They adopted the methodology because, as they said, it provides a framework for the chaos of a startup, where nothing is predictable. They found that they could approach like the scientific method. They ask their students to develop hypotheses and then get out of the classroom to conduct interviews to test them. They learn techniques for , analytical approaches to research, and evidence-based systems for decision-making and problem-solving.

    Teaching Other K-12 Educators
    I had blogged about what Hawken learned implementing something this radical in High School here, and in middle school here. (Take a minute to look at the posts for context.) Honestly, I had never expected the Lean LaunchPad class to work so well in high school. But an even bigger surprise was when Doris Korda, Hawken’s program director, told me she was getting calls and emails from K-12 teachers across the country asking her to hold a “Hawken Lean LaunchPad for K-12 Educators” workshop.

    So the Hawken teaching team took a deep breath and they offered this class – here at the K&S Ranch – so other educators could learn what Hawken is doing and how they’re doing it. Here’s what they were trying to accomplish.

    To see the video click here

    Thirty educators from 19 public and private schools throughout the U.S. attended their inaugural workshop.

    Hawken2

    These educators arrived at the ranch with a palpable sense of urgency, eager for the tools needed to build their own classes. There are no established Lean K-12 curricula, textbooks or handbooks for entrepreneurship programs. The class offered the first set of Lean educators’ materials anywhere. It took the attendees through the basics of Lean and how to build the class at their own schools.

    The Hawken folks knew that in the back of the minds of other educators there was going to be the question, “Will this really work with my students? Can I really get them out of the classroom and expect real learning?” In what I thought was a stroke of genius, the Hawken team brought seven Hawken students who had taken the lean entrepreneurship class to help teach this educators course. These students told the attendees real world stories of how the class changed their lives and offered input and advice about what worked and didn’t for them.

    The energy at the ranch was off the charts. Every minute was filled with talk about how to build this new model of learning and how to use LLP to encourage students to think creatively and analytically.

    The attendees went back to their schools armed with a methodology and sample curriculum to develop their own entrepreneurship courses and put what they learned into practice. Some will take what they learned and apply Lean entrepreneurial principles to create innovate STEM programs and/or to encourage the growth of entrepreneurial ecosystems beyond school walls.

    Here’s what some of them had to say about the experience:

    Watch the video click here

    Jeremy Wickenheiser, a high school teacher with the Denver School of Science and , a STEM public school serving 6,500 students, summed up the remarks we heard again and again: “This is the beginning of a movement to change how students learn.”

    What’s Next
    Encouraged by the attendees, Hawken is developing a comprehensive educational program for educators, with workshops on the East and West coasts, an educator’s handbook, and codified systems to help educators build their own experiential, LLP-based K-12 programs.

    To learn about the workshops and sign up, click here.

    Lessons Learned

    • The old ways of teaching entrepreneurship prepared students for small businesses
    • We needed a new educational approach to prepare them for scalable startups
    • Using the Lean LaunchPad, the developed a successful entrepreneurship program for middle and high school students to do just that
    • Now they are teaching other educators how to do the same
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  • Why Translational Medicine Will Never Be the Same

    Originally posted at www.steveblank.com

    By Steve Blank

    There have been 2 or 3 courses in my entire education that have changed
    the way I think.  This is one of those
    .
    Hobart Harris Professor and Chief, Division of General Surgery at UCSF

    Steve BlankFor the past three years the National Science Foundation Innovation Corps has been our nations best scientists how to build a .  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.

    However, business models in the Life Sciences are a bit more complicated than those in software, web/mobile or hardware. in the Life Sciences (therapeutics,diagnosticsdevicesdigital health, etc.) also have to understand the complexities of reimbursement, regulation, intellectual property and clinical trials.

    Last fall we prototyped an I-Corps class for life sciences at UCSF with 25 teams. Hobart Harris led one of the teams.

    What Hobart learned and how he learned it is why we’re about to launch the I-Corps @ NIH on Oct 6th.

    If you can’t see the video click here

    will never be the same.

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  • How To Think Like an Entrepreneur: The Inventure Cycle

    Originally posted at www.steveblank.com

    By Steve Blank

    Steve BlankThe  is a process for turning ideas into commercial ventures. Its premise is that 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.

    That’s all well and good if you already have an idea. But where do come from? Where do inspiration, imagination and creativity come to bear? How does that all relate to and ?

    Quite honestly I never gave this much thought. As an my problem was that I had too many ideas. My imagination ran 24/7 and to me every problem was a challenge to solve and new product to create. It wasn’t until I started that I realized that not everyone’s head worked the same way. While the Lean Startup gave us a process for turning ideas into businesses – what’s left unanswered was, “Where do the ideas come from?  How do you get them?”

    It troubled me that the practice of entrepreneurship (including the Lean Startup) was missing a set of tools to unleash my students’ imaginations and lacked a process to apply their creativity. I realized the innovation/entrepreneurship process needed a “foundation” – the skills and processes that kick-start an  imagination and creative juices. We needed to define the language and pieces that make up an “entrepreneurial mindset.”

    As luck would have it, at Stanford I found myself teaching in the same department with Tina Seelig. Tina is Professor of the Practice at Stanford University School of Engineering, and Executive Director of the Stanford Technology Ventures Program. Reading her book inGenius: A Crash Course on Creativity was the first time I realized someone had cracked the code on how to turn imagination and creativity into innovation.

    Here’s Tina’s latest thinking on the foundational skills necessary to build a new venture.

    —-

    There is an insatiable demand for innovation and entrepreneurship. These skills are required to help individuals and ventures thrive in a competitive and dynamic marketplace. However, many people don’t know where to start. There isn’t a well-charted course from inspiration to implementation.

    Other fields — such as physics, biology, math, and music — have a huge advantage when it comes to teaching those topics. They have clearly defined terms and a taxonomy of relationships that provide a structured approach for mastering these skills. That’s exactly what we need in entrepreneurship. Without it, there’s dogged belief that these skills can’t be taught or learned.

    Below is a proposal for definitions and relationships for the process of bringing ideas to life, which I call the Inventure Cycle. This model provides a scaffolding of skills, beginning with imagination, leading to a collective increase in entrepreneurial activity.

    Inventure Cycle

    • Imagination is envisioning things that do not exist
    • Creativity is applying imagination to address a challenge
    • Innovation is applying creativity to generate unique solutions
    • Entrepreneurship is applying innovation, bringing ideas to fruition, by inspiring others’ imagination

    Inventure CycleThis is a virtuous cycle: Entrepreneurs manifest their ideas by inspiring others’ imagination, including those who join the effort, fund the venture, and purchase the products. This model is relevant to startups and established firms, as well as innovators of all types where the realization of a new idea — whether a product, service, or work of art — results in a collective increase in imagination, creativity, and entrepreneurship.

    This framework allows us to parse the pathway, describing the actions and attitudes required at each step along the way.

    • Imagination requires engagement and the ability to envision alternatives
    • Creativity requires motivation and experimentation to address challenges
    • Innovation requires focusing and reframing to generate unique solutions
    • Entrepreneurship requires persistence and the ability to inspire others

    Not every person in an entrepreneurial venture needs to have every skill in the cycle. However, every venture needs to cover every base. Without imaginers who engage and envision, there aren’t compelling opportunities to address. Without creators who are motivated to experiment, routine problems don’t get solved. Without innovators who focus on challenging assumptions, there are no fresh ideas. And, without entrepreneurs who persistently inspire others, innovations sit on the shelf.

    Let’s look at an example to see these principles at work:

    As a Biodesign Innovation Fellow at Stanford University, Kate Rosenbluth spent months in the hospital shadowing neurologists and neurosurgeons in order to understand the biggest unmet needs of physicians and their patients.

    In the imagination stage, Kate worked with a team of engineers and physicians to make lists of hundreds of problems that needed solving, from outpatient issues to surgical challenges. By being immersed in the hospital with a watchful eye, she was able to see opportunities for improvement that had been overlooked. This stage required engagement and envisioning.

    In the creativity stage, the team was struck by how many people struggle with debilitating hand tremors that keep them from holding a coffee cup or buttoning a shirt. They learned that as many as six million people in the United States are stricken with Parkinson’s disease, and other conditions that cause tremors. The most effective treatment is deep brain stimulation, an onerous and expensive intervention that requires permanently implanting wires in the brain and a battery pack in the chest wall. Alternatively, patients can take drugs that often have disabling side effects. The team was driven to help these patients and began meeting with experts, combing the literature, and testing alternative treatments. This stage required motivation and experimentation.

    In the innovation stage, Kate had an insight that changed the way that she thought about treating tremors. She challenged the assumption that the treatment had to focus on the root cause in the brain and instead focused on the peripheral nervous system in the hand, where the symptoms occur. She partnered with Stanford professor Scott Delp to develop and test a relatively inexpensive, noninvasive, and effective treatment. This stage required focus and reframing.

    In the entrepreneurship stage, Kate recently launched a company, Cala Health, to develop and deliver new treatments for tremors. There will be innumerable challenges along the way to bringing the products to market, including hiring a team, getting FDA approval, raising subsequent rounds of funding, and manufacturing and marketing the device. These tasks require persistence inspiring others.

    While developing the first product, Kate has had additional insights, which have stimulated new ideas for treating other diseases with a similar approach, coming full circle to imagination!

    The Inventure Cycle is the foundation of frameworks for innovation and entrepreneurship, such as design thinking and the lean startup methodology. Both of these focus on defining problems, generating solutions, building prototypes, and iterating on the ideas based on feedback. The Inventure Cycle describes foundational skills that are mandatory for those methods to work. Just as we must master arithmetic before we dive into algebra or calculus, it behooves us to develop an entrepreneurial mindset and methodology before we design products and launch ventures. By understanding the Inventure Cycle and honing the necessary skills, we identify more opportunities, challenge more assumptions, generate unique solutions, and bring more ideas to fruition.

    With clear definitions and a taxonomy that illustrates their relationships, the Inventure Cycle defines the pathway from inspiration to implementation. This framework captures the skills, attitudes, and actions that are necessary to foster innovation and to bring breakthrough ideas to the world.

    Lessons Learned

    • The Inventure Cycle defines entrepreneurship as applied innovation, innovation as applied creativity, and creativity as applied imagination
    • Entrepreneurship requires inspiring others’ imagination, resulting in a collective increase in creativity, innovation, and entrepreneurship
    • This framework allows us to parse the skills, attitudes, and actions needed at each step in the entrepreneurial process.
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