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On The Art Of Startups, With Entrepreneur Steve Blank

Via Forbes : Columbia Senior Fellow for Entrepreneurship Steve Blank is a serial entrepreneur-turned-bestselling author and educator who has changed the way startups are built, how entrepreneurship is taught, and how big companies and the U.S. government innovate.

A defining voice in modern entrepreneurship, Steve will be honored in January with an award for entrepreneurial achievement by the U.S. Association for Small Business and Entrepreneurship (USASBE). We caught up with Steve to congratulate him and dig in to how the startup landscape has changed over the years, how to judge a piece of advice, and the role that education can play in the future of entrepreneurship.

Yvette Miller: Congratulations on your award from the USASBE!

Steve Blank: Thank you, I stand on the shoulders of everybody who has come before me and those writing about corporate literature: Alex Osterwalder, Eric Ries, Clayton Christensen and Columbia Professor Rita McGrath’s work on the discovery driven process as an inspiration for a good chunk of the Lean Startup Method.

Miller: Nowadays, there’s a certain cultural cache that comes along with startup life—people admire, or at least are fascinated by, entrepreneurs. How did people look at startups and entrepreneurs when you first started building businesses? Have you seen any shifting attitudes over the years?

Blank: Attitudes have shifted dramatically. Entrepreneurship used to be for crazy people. Now it’s not only the cool thing to do, it’s mainstream. And now, for the first time, companies and government agencies are looking to startups for inspiration because they’re being disrupted so quickly.

When I started as an entrepreneur in the ’70s, people thought of startups as smaller versions of big companies. People approached creating a startup like you would approach creating the next product in a big company.

In a large company, you have a series of “knowns.” You had known customers, channels, partners. You knew what features those customers wanted. And you could create a new product with a credible five-year forecast. Most of the time you simply had to execute.

In a startup, you assumed all of that. And you stuck to the plan, and thought there was nothing other than your skill and your ability to execute on the plan that could get in the way of your success.

No one understood that in reality, on Day One of a startup, you’re just working off of a set of hypotheses—guesses—and are actually searching for an idea for a plan.

The worst part is that the investors also assumed that if something in a startup didn’t work, it was a problem in execution. So, startups would fire the person in sales, fire the person in marketing, fire the CEO, and things only got fixed when someone new came in to the group with a new idea.

In the 20th century in a startup, getting out of the building and testing your hypotheses was really just used to validate engineering corrections. Today, we have a much different idea. That is that startups need to articulate the components of their business model, get of the building and test them in front of customers as early as possible.

Miller: There are now a lot of resources and programming dedicated to entrepreneurship—like your Lean Startup methodology and Lean LaunchPad class that teaches entrepreneurs to get out of the building and test their assumptions. Do you think that has made it easier to start a business now than when you started out? Or are the challenges just different?

Blank: Here are four big reasons it’s easier to start a business now:

1. Available methodologies: There’s now a series of methodologies that build off of the understanding that startups are not just small versions of large companies—that’s a big idea.

2. Access to information: Before, the only way you could get information to help with your startup is through the individuals you could meet for coffee, and much information was limited to clusters in Silicon Valley. Now, access to information and to the culture of entrepreneurship is available to everyone, all over the world.

3. Commoditization of components: Before, entrepreneurs had to spend time building core capabilities, but now, why should you build core capabilities? They already exist! There are all of these off-the-shelf resources available now, such as Github and Amazon Web Services.

4. A greater abundance of capital: In the 20th Century, the amount of cash that startups had made them ankle-biters at best. Now, some startups have more cash than some large companies.

Miller: With such an abundance of entrepreneurship and startup information online, is there any worry about misinformation?

Blank: Yes. To avoid being a source of misinformation, startup advice has to be currently relevant.

The Lean Startup Method, for example, was created for a moment in time. It was created based on observations made after the Dotcom crash, when entrepreneurs were recovering from the idea of “if you build it, they will come” and venture capital money was scarce. It was built to increase the odds you had at succeeding on Day One when you couldn’t throw cash at the problems you encountered.

Today—for a certain category of startups—capital is readily available, and those startups can spend their way through ignoring customer development. I’m not suggesting that they should or shouldn’t, I’m just suggesting that there’s a new way of thinking in the startup space that’s focused on getting the company to scale and if you have a ton of money, it’s not always worth going lean. It’s a choice that some startups have.

Miller: Do you need a big idea to dive into entrepreneurship, or are there other good reasons to learn about startup methodologies?

Blank: Founders are closer to artists than any other profession: they see things people don’t, they hear things people don’t, and are driven by the passion of bringing something to life. They hear something in their head that won’t let them give up.

Now, think about how we teach artists. The best way to teach artists is with theory—how to draw perspective, how to use color—with practice, and with apprenticeship.

We also teach art appreciation at an early stage in students’ lives, and what this does is open them up to the possibility of being an artist. It encourages some people and discourages others.

An entrepreneurship curriculum should mirror how we teach artists. We need entrepreneurship theory classes, experiential entrepreneurship classes and entrepreneurship appreciation classes.

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