LEAN START UP

Note to Readers: The following excerpt is taken from: It only took 20 years, but the Strategic Management Society now Believes the Lean Startup is a Strategy by Steve Blank. His publications and research have profoundly influenced developing social enterprises.

Steve Blank is an American entrepreneur, educator, author and speaker. He created the customer development method that launched the lean startup movement. His work has influenced modern entrepreneurship through the creation of tools and processes for new ventures which differ from those used in large companies. Wikipedia

“At the turn of the century after 21 years as a practitioner, and with a background working on cold war weapons systems, I retired from startups and had time to think.

The more I looked at the business I had been in, and the boards I was now sitting on, I realized a few things.

1. No business plan survived first contact with customers

2. On day one all startups have is a series of untested hypotheses

   • Yet startups were executing rather than learning

3. Our strategic language and tools—all designed for large firms—were useless in contexts of radical uncertainty.

4. Startups that succeeded were the ones that learned from their customers and iterated on the plan. Those that didn’t, ended up selling off their furniture.

5. Most importantly – as I started reading all the literature I found on innovation strategy, almost all of it was about corporate innovation.

   • We had almost a century of management tools and language to describe corporate strategy for both growth and innovation – yet there were no tools, language or methods for startups.

   • But it was worse. Because both practitioners and their investors weren’t strategists, we had been trapped in thinking that startups were smaller versions of large companies

   • When the reality was that at their core, large companies were executing known business models, but startups? Startups were searching for business models

   • This distinction between startup search and large company execution had never been clearly articulated.

6. There was a mismatch between the reality and practice.

   • We needed to reframe entrepreneurship as a strategic process, not a financial one

7. I realized that every startup believed their journey was unique, and thought they had to find their own path to profitability and scale.

8. That was because we had no shared methodology, language or common tools. So I decided to build them.

   • The first was Customer Development – at its heart a very simple idea - there are no facts inside the building – so get outside.

   • Here we were reinventing what the best practices from the wartime military organizations, and from Lead User Research and Discovery Driven Planning - this time for startups

   • The goal is to test all the business model hypotheses – including the two most important - customer and value proposition – which we call product/ market fit.

9. The next, Agile Engineering – a process to build products incrementally and iteratively – was a perfect match for customer development.

10. And then finally, repurposing Alexander Osterwalder’s Business Model Canvas to map the hypotheses needed in commercialization of a technology

The sum of these tools – Customer Development, Agile Engineering and the Business Model Canvas – is the Lean Methodology.”

TIP: Suggest reviewing Module 8 in the Practitioner Guide for more information on Customer Development and Product Market Fit.