Steve Blank The evolution of entrepreneurial education and business innovation

Philip Bouchard, executive director of TrustedPeer Entrepreneurship Advisory, asked me about the evolution of entrepreneurship education, about the entrepreneurial spirit, and about this. that we learned about innovation in business.

It's worth reading.

Interview highlights:

  • How does the way universities teach entrepreneurship evolve?
  • Lean LaunchPad developed for Stanford
  • Innovation and the spirit of enterprise will become the liberal arts of the 21st century
  • Teach the basic entrepreneurial appreciation
  • Mission-based entrepreneurship
  • Hacking for X classes
  • Ethics in entrepreneurship
  • How has innovation in large companies evolved over the last 10 years?
  • Theater of innovation in large companies
  • "I want to see what you look like in prison costume."
  • What are companies doing beyond the theater of innovation?
  • How can innovation succeed inside a large company?
  • The easy part is: "Let's have an incubator." The difficult part is: "How can we deliver something?"
  • "Heroic innovation" within large companies
  • End-to-end innovation pipeline process
  • Innovators are not entrepreneurs
  • Build an entrepreneurial ecosystem
  • How can companies work more closely with universities?

Philip Bouchard: You started teaching at Berkeley since 2002, at Columbia in 2003 and at Stanford since 2011. How is the way universities are teaching entrepreneurship? What changes have you seen in the last 15 years?

Steve Blank: When I started teaching, the Capstone course on entrepreneurship consisted of writing a business plan. Other classes have been devoted to preparing VC pitches, drawing up income statements, balance sheets and cash flow over five years, or reading case studies. Today, people laugh if we say it's an entrepreneurial class. But years ago we had no other choice. How to write a business plan?

My contribution was "Why not design classes that are more like what innovators and entrepreneurs really do". Today, the summary class is most often based on experience, on teamwork, on search for a reproducible and evolutionary economic model. And the Lean LaunchPad class that I developed at Stanford was the first in this class. It has been adopted by the National Science Foundation for the commercialization of science in the United States. It's called NSF I-Corps.

The other change is that universities, instead of being passive, have become active in building a community of entrepreneurs. In addition to Stanford, I also teach at Columbia and in these research universities – Stanford, Columbia, Berkeley and others – they all have an internal incubator, they have production spaces, they have their own own venture capital funds, they connect to the community, they connect to venture capital. They have become outward-looking universities. It's a great idea.

Years ago, the entrepreneurial spirit was taught like everything else, turned inward, with the aim of thinking, "I focus on what I know as & # 039; And I will teach you, "which consisted mainly of theoretical experience and / or consultation with large companies. . And the chances of learning from a faculty member who had really experienced the chaos and uncertainty of starting a startup were low. It was not really part of the job of educator. Today, if you create an entrepreneurship program, the teaching staff most often includes assistants with entrepreneurial experience in addition to permanent professors, courses are focused on the experience and the community you build is a whole. additional elements that did not exist.

PB: In addition to being more outward-looking, how should universities think about what they might offer afterwards? What do you see in the next 2-3 years?

SB: I think that innovation and the spirit of enterprise will become the liberal arts of the 21st century. As the nature of work evolves, the basic skills that entrepreneurs need to know to become practitioners are in fact basic skills that everyone will need to know to get a job: creativity, agility, resilience, tenacity, curiosity.

The analogy I like to use is that 500 years ago, in Renassiance, we realized that the best way to teach artists, painters and sculptors was through hands-on learning and long-term commitment. You have learned a minimum of theory and acquired a lot of practice. (Today, if you have decided that your artistic career would be your job, your goal might be to get into Juilliard or CalArts.)

But about 100 years ago, in the art world, someone had a light bulb moment and said, "Wait a minute, in addition to the synthesis courses, why do not you? Do we not teach art? appreciation at the earliest possible age everyone? "For example, painting with your fingers, making clay ashtrays and writing. The reason is twofold. One is to make sure that people identify themselves from a very young age: "Oh, my God. Can painting be a career? I knew that it interested me. Second, artists who will not be artists will understand how difficult it is to learn to look at art, to look at sculpture and to appreciate good writing.

I think the analogy is the same for entrepreneurship. Key entrepreneurial classes like NSF I-Corps or Lean LaunchPad are aimed at those who have already decided to become entrepreneurs. The missing part of the entrepreneurship program proposes entrepreneurial appreciation course at everyone. We should create a set of courses on creativity, agility and resilience and be able to tell facts from "false news" – elements of innovation and entrepreneurship that, according to me, will require twenty-first century skills.

PB: The trend is to add majors, minors and certificates in entrepreneurship. Not only in business schools. For example, you may be a minor in entrepreneurship at the College of Music at the University of Colorado. In terms of a basic appreciation of entrepreneurship, how much should entrepreneurship become saturated? Is it one or two courses? Where do you see this trend?

SB: Teaching basic entrepreneurial appreciation in the 21st century is literally the equivalent of the liberal arts of the 20th century. Forward-thinking schools will begin offering a series of core courses, such as the liberal arts in schools from the 1950s to the 1980s that said, "For a liberal arts education, you must understand literature and you must understand the arts. ;art". In the 21st century we will add some additional basic skills.

That said, entrepreneurship training must be a combination of theory and practice. It is quite easy to give lectures on entrepreneurship in the classroom and forget that it is the practical application that makes the theory relevant. Think about whether medical schools had just taught doctors textbooks, but never made them touch a patient.

The other direction in which we will be teaching – and what we have been pioneering – is mission-driven entrepreneurship. Instead that students or faculty present their own ideas – we now have them on societal issues, that it's all about problems for the state department or the army, for non-profit organizations / NGOs, for the city of Oakland, for energy or for energy. the environment, or for anything that fascinates them. And the thing is, we use the same Lean LaunchPad / I-Corps curriculum – while maintaining the same class structure – experiential, practical, driven this time by a mission-model not a business model.

Mission-focused entrepreneurship is the answer to students who say, "I want to give back. I want to make my community, my country or my world a better place, while solving some of the most difficult problems. These courses include piracy for defense, hacking for diplomacy, hacking for energy, hacking for impact or piracy for the oceans, and so on. but the generic term is "mission-oriented entrepreneurship". The class program uses exactly the same pedagogy as the Lean LaunchPad and I-Corps classes.

PB: How has your Lean LaunchPad course, ENGR 245, evolved?

SB: I have always thought that good classes continue to flourish after teachers leave. To be honest, as I watch other instructors conducting these classes, I feel proud to "pass the torch" even though I am touched by the moments of King Lear and Ran of Kurosawa. Well beyond my punctual activities, the Stanford pedagogical team has professionalized the class in depth.

After eight years, the course is always taught to students who are working on their own problems. It is taught in Stanford, Berkeley, BC and probably in about 100 universities and colleges because I opened the class to the class and trained educators to teach it. 98 universities teach it through the National Science Foundation.

As I mentioned before, mission-oriented entrepreneurship courses are a new variation taught in some 30 universities. What is good is that we have educators already trained to teach Lean LaunchPad or I-Corps. Thus, for educators, nothing is particularly new. The only difficulty is getting well-defined problems from the sponsors of the city or local government agency that you offer to students.

PB: Everyone is looking for a turnkey solution. "I want an inexpensive self-guided resource solution." Can anyone follow your Lean LaunchPad course without a trainer step by step? Can he be autonomous? How long does it take to train a coach?

SB: All my lectures are online at for free. Can you become a founder by watching videos? Perhaps, but the founders are closer to artists than to any other profession. So can you become an artist by reading about art? Can you learn the entrepreneurial spirit without following an experimental course or better, be part of a start-up? You can learn a lot about entrepreneurship and learn the theory, but it's like reading about painting, sculpture or music. You need theory and practice – a lot of practice.

PB: Will the ethic of entrepreneurship be part of the more general curriculum of entrepreneurship, as is a general arts education? Liberals? Is ethics something that you integrate into your Lean LaunchPad course or your ENGR 245 course?

SB: I think that ethics is an essential missing part of most business studies programs. At Stanford, Tom Byers, who leads the Innovation and Entrepreneurship Program at the School of Engineering, has made it an important business and is now part of the curriculum. Tom has added a course on entrepreneurial ethics.

However, the problem of teaching entrepreneurial ethics is the same as that of teaching business ethics: in theory, everything is great until you reach the end of the day. the sxxt hits the fan. When you do not have checks and balances, that is, when the government is not really paying attention or there are no consequences, you tend to have people who play the system, whether it is innovative companies or entrepreneurs.

It's exactly as if you had already driven on a highway and you were reaching a merger and people were cutting in the queue and you were answering, "What am I waiting for the merger while people cut? "otherwise, you start doing it and you say to yourself," Why am I the only person to wait patiently? "There is a social element that defines standard of behavior.

It's not like we need a nanny state, but if there is no application, we can teach ethics everything we want, but people tend to accept the smallest common denominator.

PB: How has innovation in large companies evolved over the last 10 years? You talk about "theater of innovation" in large companies. What is the trend among companies that develop innovation cultures and programs for intrapreneurs?

SB: If you are a big company, the world has turned around. In hindsight, the 20th century was the golden age of business. Today, businesses face five challenges they have never faced:

Challenge 1 – As businesses discover each day, the Web has changed everything. Channels of distribution, loyalty to the brand, etc.

Challenge # 2 – Large companies are dealing with startups funded with unimaginable capital. In the past, the idea of ​​a start-up having more capital than an existing company was a fantasy. But today, if I am a startup and I raise a hundred million dollars or billions of dollars, like Uber, Airbnb or Tesla, I can face an entire industry.

Challenge # 3 – Today, investors are happy to fund start – ups so that they do anything from the first day. No matter what. Including breaking the law. Tesla, Airbnb, Uber, all were based on "Well, if we said," break the law. "What would be the magnitude of this opportunity?

In the 20th century, no venture capitalist would have financed this. In the 21st century, they took out their little eye mask and calculators and said, "Ha! If we really succeed, there is a $ 10 billion company here. "

On the other hand, although a company wants to do that, the first thing that will happen is that your general counsel in your office will tell you, "I want to see what you look like in a prison lawsuit." Because a company can not do the things that a startup can do.

Fourth Challenge – In a start-up, 100% of the business is focused on innovation and the entrepreneurial spirit. In a large company, 99% of the company focuses on executioncurrent economic model by building repeatable processes and procedures. And a very small percentage is focused on innovation. I could continue to follow the list.

Challenge Five – In a startup, if you win, you will earn billions of dollars. In a large company, for the individual, there are no such payments.

PB: However, some companies evolve, rotate and make the right changes. What you're talking about, "A big business is not a start-up," does not necessarily mean it's going to be dodo. What are companies doing beyond the theater of innovation?

SB: I just wanted to explain why it's harder for businesses. Not why they can not do it. In spite of all that I have just mentioned, big companies have figured out how to create innovation ecosystems. My favorite is a private company called W.L.Gore & Associates. Basically they manufacture expanded PTFE products like Gore-Tex. But they brought this basic technology of the previous tissues to multiple markets – medical, filtration, fibers, cables, etc. They have a continuous innovation process – an innovation pipeline. But this type of innovation requires leadership that understands that it is their goal. If you are the CEO of a large company today, the problem is that you have to face many problems, not just innovation.

  • One – "How can I deal with activist investors who want to tear my business up and sell it piece by piece?"
  • Two: "I've heard about this innovation, but if I run a company with 10,000 people, my skills are about execution, not innovation. I can give you a nod about innovation, but I really do not have that in my DNA. "
  • Third, companies are guided by processes and procedures, but these same processes and procedures stifle innovation in its cradle. In order for innovation to succeed in a large company, you need a set of parallel processes, not to replace those that exist, but to work quickly.

Some companies have figured out how to do this, not just internally, but by acquiring those who do it. So, if you think about how a big company can innovate, it could build, buy, create a partnership, get a license. All parts of their tools where startups do not have these opportunities. Basically, startups are just building.

PB: Large companies have a number of tools to innovate. One area is the challenges of innovation and challenges of ideas to propose a thousand new ideas. A second option is for companies to provide accelerators in which they invite new businesses to apply to be part of their accelerator program. Third, incubators and production spaces. Do you see these innovation programs that can work? They spend a lot of money on it.

SB: No. What you have just described is the innovation. theater. These are innovations activities, no deliverables. The hardest thing in a business is not getting a demonstration or setting up an internal accelerator, but getting something complete throughout your sales network. What does it take for this demo to succeed in your engineering group and be delivered as a product in your existing sales network? And that's where the difficulties lie. You hear, "Well, wait a minute, it's not part of our budget or your schedule." "Wait a minute, it conflicts with our existing product line." "That will put our product the most profitable in bankruptcy "or" We do not even have a sales force that knows how to sell that thing. "

Many companies focus on the easiest part, "Let's have an incubator / accelerator". The difficult part is "How can we deliver something quickly and urgently?" For example, when I teach it for government, we focus on deployed and commissioned innovation, not demonstrations. . (Yes, you may need a demo to convince someone to fund your program, but the goal is not the demo, but its realization.) Businesses have more demos than they'll ever need. But, to succeed in an innovation agenda, the goal is to figure out how to deploy something through the political wiring diagram that defines who owns what, and how does it differ from what we already have? What budget does it come from? and "this is unexpected" and "wait a minute, it does not meet our quality standards" and "we are going to screw up our brand"?

How can we solve these problems? And that does not mean that it is not soluble. It simply means that the "let's organize a party" approach reminds me of Andy Hardy's old movies from the movie "Let's put on a show". Ok, we have a show, what now?

The "now what" is that we are lacking a doctrine of business innovation.

PB: I'm going to read a quote from you: "We believe that the next important step is to get management teams to think through the innovation process from start to finish. That is, you can visualize the entire process of how and from where an idea is generated – from the source – to the deployment – how to put it in the hands of the user. You also talked about a pile of innovations and operational innovations, which is missing and so difficult to implement. What motivated these ideas?

SB: This is what I observed. Large corporations and government agencies have always innovated, but that's what I call "heroic innovation." In other words, there was no process, no procedure, but you still hear stories that someone would have managed to get a new product or a new idea. . We tend to celebrate those without anyone ever saying, "Well, wait a minute. Perhaps the fact that there is no formal innovation process is the problem, but not that heroic things were happening. "

Over the last two years, my work, that of Eric Ries and Alexander Osterwalder, was all about building a body of professional knowledge – doctrine – around innovation. And in this context, we have developed a set of tools that can be used to search business models. Companies have adopted this doctrine of innovation and these startup tools and have used accelerators and so on. The problem is that there was still no end-to-end innovation implementation process in a large company.

What we proposed last year is called the Innovation Pipeline, a process within a company or government agency that says, "Let's start with innovation sourcing. And then create a process to lead to delivery or deployment. What are the internal steps we need to follow that are different from the way engineering builds products today?

This end-to-end pipeline has two steps. The first step is the origin of ideas or technology. They can come from the company, from acquisitions, from universities, and so on. The second step is: "What problem are we solving?", Which we call problem solving. "Is this a real problem or is it a good piece of flashy technology? How do we prioritize everything we do now in this pipeline? And then, how do we test solutions and assumptions?

In the middle of this pipeline is the I-Corps Lean LaunchPad methodology for client discovery and validation. Then, how do we incubate it, then how do we make the transition and integrate it with our existing engineering and sales organizations to provide that material? It's an end-to-end process.

On the other hand, an incubator and an accelerator is a point activity.

By teaching businesses this end-to-end innovation pipeline process, we realized that the team was evolving at each of these stages. At the beginning of this pipeline, you could have an innovator, an R & D technologist. That's great, but we now know that in startups and large companies, innovators do not make sxxt a reality. They invent things.

Generally, to establish a partnership with the innovator right from the first step, you need to find a contractor. An entrepreneur in a company is someone who knows how to get things through the bureaucracy. It's very different from the innovator. The mistake we tend to make is, "Oh, let's educate innovators to do it." But innovators are almost never entrepreneurs. You can make them appreciate entrepreneurs, but they are not the same people.

PB: One of the current challenges for university entrepreneurship program managers is to create an entrepreneurship ecosystem. These executive directors have trouble deciding, "What do I build next?" Which program can I add next? Is there a way to follow your approach and direct it towards creating ecosystems for entrepreneurship in universities?

SB: An example of what you just talked about is Columbia University's technology transfer and venture capital group, led by Orin Herskowitz. Orin has created seven different programs from the Lean LaunchPad and Hacking for Defense programs. In energy and biotechnology and appliances and so on. Basically, using this pedagogy and building an entire ecosystem around it. That's truly impressive. The Columbia Technology Transfer Organization is an example of how universities might think of entrepreneurship ecosystems.

The other thinkers you should talk to are Tom Byers and Tina Seelig at Stanford. Stanford, Tom and Tina and their STVP program are still at zero for entrepreneurship programs around the world.

Also to watch is Stephen Spinelli, who has just taken over Babson's presidency. Between Spinelli, Orin and Tom and Tina, I think you'll get an idea of ​​the state-of-the-art university entrepreneurship programs. If you want to talk to people who are inventing the future rather than talking about it, I will start with these three universities.

PB: How can companies work more closely with universities? How can they tap into the talent of student entrepreneurship to develop the kind of disruptive initiatives desired by companies? Instead of waiting for something to happen. How to create a pipeline with local universities or even virtually?

SB: For decades, companies have been the main purchaser of university research through technology transfer. And companies have attracted the best and brightest university students. Not anymore. In the 21st century, companies are no longer competing for this technology and talent with their peers, but with startups. To harness the talents of universities, business innovation programs must be more than just an afterthought. Business leaders must make their internal commitment to innovation a beacon for the talent they desire.

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