Steve Blank Podcast
Summary: 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! Startups are actually temporary organizations designed to search for a scalable and repeatable business model.
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.
Why Internal Ventures are Different from External Startups
After leaving Ardent (a supercomputer company I’ll blog about later) in 1988, I consulted for Pixar when they were still in San Rafael and were a hardware company trying to make software and commercials. While I was consulting for them, I got a call from a recruiter for a company called SuperMac, which made add-on products for the Macintosh.
After my eighth and likely final startup, E.piphany, sitting in a ski cabin, it became clear that there is a better a way to manage startups. Joseph Campbell’s insight of the repeatable patterns in mythology is equally applicable to building a successful startup.
“Customer Development” was born four years earlier and 200 miles away on Sandhill Road. I was between my 7th and 8th and final startup; licking my wounds from Rocket Science, the company I had cratered as my first and last attempt as a startup CEO. I was consulting for the two venture capital firms who between them put $12 million into my last failed startup.
I realized that traditional ways to think about startups – have an idea, raise some money, do product development, go through an alpha test, beta test and first customer ship was the canonical model of how entrepreneurs thought about early stage ventures.
In 1999 I retired and began to reflect about my career and what had happened in the previous 21 years and eight startups in Silicon Valley. Alone in a ski cabin with the snow coming down outside, and my wife and daughters out on the slopes all day, I started collecting my thoughts by writing a series of “lessons learned” stories that I had hoped would become my memoirs.
At times VC’s forget who their business is built on. Last week in a car showroom of all places I ran into a VC who I hadn’t seen in ten years. He had sat on the board of my last company and we chatted and made small talk as he was admiring a new car. It was clear that he had no memory of a phone conversation my partner and I have never forgotten.
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.
I’m sitting next to the fireplace in my favorite chair listening to holiday music, looking at the ocean and making occasional attempts to “help” get ready for Christmas dinner. We went for a hike checking out our new trail signs and playing “spot the bobcat.” Our kids are home for the school break, some friends are visiting from the east coast and we have everything for the holidays but snow on the California coast.
Get the Heck Out of the Building in Founder’s School: Part 2
I love TechCrunch. If you’re a startup raising money or just want to see your name online, there’s not a better blog on the web. Reading this TechCrunch post made me remember the first time I saw someone confront a worldview they didn’t expect.
The most important early customers for your startup usually turn out to be quite different from who you think they’re going to be. When I was at Zilog, the Z8000 peripheral chips included the new “Serial Communications Controller” (SCC). As the (very junior) product marketing manager I got a call from our local salesman that someone at Apple wanted more technical information than just the spec sheets about our new (not yet shipping) chip.
Raising our kids and being an entrepreneur wasn’t easy. Being in a startup and having a successful relationship and family was very hard work. But entrepreneurs can be great spouses and parents. This post is not advice, nor is it recommendation of what you should do, it’s simply what my wife and I did to raise our kids in the middle of starting multiple companies. Our circumstances were unique and your mileage will vary.
In 1994 Rocket Science Games was the only video game company with a rock in its lobby. We had moved our game development facilities from Berkeley and Palo Alto and consolidated into one building on Townsend Street in the “South of Market” neighborhood in San Francisco. (We’re were just around the corner from the future home of SF Giants AT&T Baseball Park, which then was just a rubble-strewn parking lot in a sketchy neighborhood.)