A New Way to Teach Entrepreneurship – The Lean LaunchPad at Stanford: Class 1

For the past three months, we’ve run an experiment in teaching entrepreneurship.

In January, we introduced a new graduate course at Stanford called the Lean LaunchPad. It was designed to bring together many of the new approaches to building a successful startup – customer development, agile development, business model generation and pivots.

We thought it would be interesting to share the week-by-week progress of how the class actually turned out. This post is part one.

A New Way to Teach Entrepreneurship
As the students filed into the classroom, my entrepreneurial reality distortion field began to weaken. What if I was wrong? Could we even could find 40 Stanford graduate students interested in being guinea pigs for this new class? Would anyone even show up?  Even if they did, what if the assumption – that we had developed a better approach to teaching entrepreneurship – was simply mistaken?

We were positing that 20 years of teaching “how to write a business plan” might be obsolete. Startups, are not about executing a plan where the product, customers, channel are known. Startups are in fact only temporary organizations, organized to search–not execute–for a scalable and repeatable business model.

We were going to toss teaching the business plan aside and try to teach engineering students a completely new approach to start companies – one which combines customer development, agile development, business models and pivots. (The slides below and the syllabus here describe the details of the class.)

Get Out of the Building and test the Business Model
While we were going to teach theory and frameworks, these students were going to get a hands-on experience in how to start a new company. Over the quarter, teams of students would put the theory to work, using these tools to get out of the building and talk to customer/partners, etc. to get hard-earned information. (The purpose of getting out of the building is not to verify a financial model but to hypothesize and verify the entire business model. It’s a subtle shift but a big idea with tremendous changes in the end result.)

Team Autonomow: Weeding Robot Prototype on a Farm

We were going to teach entrepreneurship like you teach artists – combining theory – with intensive hands-on practice. And we were assuming that this approach would work for any type of startup – hardware, medical devices, etc. – not just web-based startups.

If we were right, we’d see the results in their final presentations – after 8 weeks of class the information/learning density in the those presentations should be really high. In fact they would be dramatically different than any other teaching method.

But we could be wrong.

While I had managed to persuade two great VC’s to teach the class with me (Jon Feiber and Ann Miura-ko), what if I was wasting their time? And worse, what if I was going to squander the time of my students?

I put on my best game face and watched the seats fill up in the classroom.

Mentors
A few weeks before the Stanford class began, the teaching team went through their Rolodexes and invited entrepreneurs and VCs to volunteer as coaches/mentors for the class’s teams. (Privately I feared we might have more mentors than students.) An hour before this first class, we gathered these 30 impressive mentors to brief them and answer questions they might have after reading the mentor guide which outlined the course goals and mentor responsibilities.

As the official start time of the first class drew near, I began to wonder if we had the wrong classroom. The room had filled up with close to a 100 students who wanted to get in. When I realized they were all for our class, I could start to relax. OK, somehow we got them interested. Lets see if we can keep them. And better, lets see if we can teach them something new.

The First Class
The Lean LaunchPad class was scheduled to meet for three hours once a week. Given Stanford’s 10 week quarters, we planned for eight weeks of lecture and the last two weeks for team final presentations. Our time in class would be relatively straightforward. Every week, each team would give a 10-minute presentation summarizing the “lessons learned” from getting out of the building. When all the teams were finished the teaching team lectured on one of the 9 parts of the business model diagram. The first class was an introduction to the concepts of business model design and customer development.

http://www.slideshare.net/sblank/stanford-e245-lean-launchpad-winter-10-session-01-course-overview-rev-4

The most interesting part of the class would happen outside the classroom when each team spent 50-80 hours a week testing their business model hypotheses by talking to customers and partners and (in the case of web-based businesses) building their product.

Selection, Mixer and Speed Dating
After the first class, our  teaching team met over pizza and read each of the 100 or so student applications. Two-thirds of the interested students were from the engineering school; the other third were from the business school. And the engineers were not just computer science majors, but in electrical, mechanical, aerospace, environmental, civil and chemical engineering. Some came to the class with an idea for a startup burning brightly in their heads.  Some of those applied as teams. Others came as individuals, most with no specific idea at all.

We wanted to make sure that every student who took the class had at a minimum declared a passion and commitment to startups. (We’ll see later that saying it isn’t the same as doing it.) We tried to weed out those that were unsure why they were there as well as those trying to build yet another fad of the week web site. We made clear that this class wasn’t an incubator. Our goal was to provide students with a methodology and set of tools that would last a lifetime – not to fund their first round. That night we posted the list of the students who were accepted into the class.

The next day, the teaching team held a mandatory “speed-dating” event with the newly formed teams. Each team gave each professor a three-minute elevator pitch for their idea, and we let them know if it was good enough for the class. A few we thought were non-starters were sold by teams passionate enough to convince us to let them go forward with their ideas. (The irony is that one of the key tenets of this class is that startups end up as profitable companies only after they learn, discover, iterate and Pivot past their initial idea.) I enjoyed hearing the religious zeal of some of these early pitches.

The Teams
By the beginning of second session the students had become nine teams with an amazing array of business ideas. Here is a brief summary of each.

Agora isan affordable “one-stop shop” for cloud computing needs. Intended for cloud infrastructure service providers, enterprises with spare capacity in their private clouds, startups, companies doing image and video processing, and others. Agora’s selling points are its ability to reduce users’ IT infrastructure cost and enhance revenue for service providers.

Autonomow is an autonomous large-scale mowing intended to be a money-saving tool for use on athletic fields, golf courses, municipal parks, and along highways and waterways. The product would leverage GPS and laser-based technologies and could be used on existing mower or farm equipment or built into new units.

BlinkTraffic will empower mobile users in developing markets (Jakarta, Sao Paolo, Delhi, etc.) to make informed travel decisions by providing them with real-time traffic conditions. By aggregating user-generated speed and location data, Blink will provide instantaneously generated traffic-enabled maps, optimal routing, estimated time-to-arrival and predictive itinerary services to personal and corporate users.

D.C. Veritas is making a low cost, residential wind turbine. The goal is to sell a renewable source of energy at an affordable price for backyard installation. The key assumptions are: offering not just a product, but a complete service (installation, rebates, and financing when necessary,) reduce the manufacturing cost of current wind turbines, provide home owners with a cool and sustainable symbol (achieving “Prius” status.)

JointBuy is an online platform that allows buyers to purchase products or services at a cheaper price by giving sellers opportunities to sell them in bulk. Unlike Groupon which offers one product deal per day chosen based on the customer’s location. JointBuy allows buyers to start a new deal on any available product and share the idea with others through existing social networking sites. It also allows sellers to place bids according to the size of the deal.  

MammOptics is developing an instrument that can be used for noninvasive breast cancer screening. It uses optical spectroscopy to analyze the physiological content of cells and report back abnormalities. It will be an improvement over mammography by detecting abnormal cells in an early stage, is radiation-free, and is 2-5 times less expensive than mammographs. We will sell the product directly to hospitals and private doctors.

Personal Libraries is a personal reference management system streamlinig the processes for discovering, organizing and citing researchers’ industry readings. The idea came from seeing the difficulty biomed researchers have had in citing the materials used in experiments. The Personal Libraries business model is built on the belief that researchers are overloaded with wasted energy and inefficiency and would welcome a product that eliminates the tedious tasks associated with their work.

PowerBlocks makes a line of modular lighting. Imagine a floor lamp split into a few components (the base, a mid-section, the top light piece). What would you do if wanted to make that lamp taller or shorter? Or change the top light from a torch-style to an LED-lamp? Or add a power plug in the middle? Or a USB port? Or a speaker? “PowerBlocks” modular lighting is “floor-lamp meets Legos” but much more high-end. Customers can choose components to create the exact product that fit their needs.

Voci.us is an ad-supported, web-based comment platform for daily news content. Real-time conversations and dynamic curation of news stories empowers people to expand their social networks and personal expertise about topics important to them. This addresses three problems vexing the news industry: inadequate online community engagement, poor topical search capacity on news sites, and scarcity of targeted online advertising niches.

While I was happy with how the class began, the million dollar question was still on the table – is teaching entrepreneurship with business model design and customer development better than having the students write business plans? Would we have to wait 8 more weeks until their final presentation to tell? Would we signs of success early?  Or was the business model/customer development framework just smoke, mirror and B.S.?

The Adventure Begins
We’re going to follow the adventures of a few of the teams week by week as they progressed through the class, (and we’ll share the teams weekly “lessons learned,” as well as our class lecture slides.

The goal for the teams for next week were:

  • Write down their hypotheses for each of the 9 parts of the business model.
  • Come up with ways to test:
    • what are each of the 9 business model hypotheses?
    • is their business worth pursuing (market size)
  • Come up with what constitutes a pass/fail signal for the test (e.g. at what point would you say that your hypotheses wasn’t even close to correct)?
  • Start their blog/wiki/journal for the class

Next Post: The Business Model and Customer Discovery Hypotheses – Class 2
Listen to this post here: Download the Podcast here

43 Responses

  1. Met you at the Utah event. This class sounds awesome, wish I was there to take it. Good luck, and looking forward to the next post.

  2. First, thanks for sharing your perspective and expertise on a wide range of topics. I am a picky blog reader but I don’t miss your posts. I teach entrepreneurship to grad design students and I’m convinced the hand’s on approach works far better than the alternatives. By semester’s end, I and my co-teachers will have 6-10 new companies to review, and from past experience, I know at least half will be highly viable. We have a full semester so our teams have time to cover branding, marketing, pricing, IP protection and hiring – each conveyed in the leanest, most applicable way possible. If a student wants greater depth, we point them to online resources (including your writings). It’s great to know others are exploring the same territory with similar success.

  3. Steve,
    What a gift you are giving students. I experienced this approach to lean startup business development with Women 2.0 Founders Lab, this year and found the process very good for getting tangible results fast.
    Sally

  4. Steve –
    Really fascinating and planning to keep up with your blog and see how this turns out. Wish I could be a student in the class – but excited about taking your class in a few months in the BCEMBA program.

    -Ranjit

  5. Interesting, architecture schools teach design in very much the same practical fashion. I taught for 2 years and I am very curious to see the outcome. I think this is a brilliant experiment and I would foresee amazing results not at the end of the class but as these student’s lives develop. Also interesting will be to see how many end up dropping out when the bug bites them…are you conscious that you might be doing that? :) basically teaching them to do what people like Jobs and Gates knew to do naturally…and we know the end result ;)

  6. Wow, although you describe Lean Launchpad as NOT an incubator, it has offerings as desirable as TechStars or perhaps YC. Excited to see what the students and mentors cook up during this incredible hands on entrepreneurial project.

  7. As a teacher of entrepreneurship in Brazil and I’m anxious for the results to come this way different (and perhaps revolutionary) that will come from its new undergraduate course at Stanford called Lean LaunchPad!

    Since I’m your fan for a long time and try to spend his rich teaching to my students.

    I’m rooting for a great and wonderful result, via the Internet to transform your classroom into endless followers / students and with that quickly transform the teaching of entrepreneurship in the world!

    Congratulations for the great work and awaiting the next class

  8. No involvement from Stanford’s D-School? Seems like there should be a fit there….

  9. Thanks for sharing – I am working with a university research foundation trying to put together a more relevant science commercialization/entrepreneurship program and have been trying to integrate the lean start-up mode into life sciences — these ideas are very helpful and i’m looking forward to the ongoing posts.

    • Monica…interesting to see your response. I was meeting with a team that is trying to create a CED-like program here again in winston-salem. Are you available to come and share some of your wisdom with us. Currently we are open with respect to timing of this meeting…depends on your schedule.

      Best…Stan

  10. Steven,

    Thought you’d be interested that I am trying almost the exact same approach, but in a very different “lab,” an undergraduate senior entrepreneurship class at Cal Poly. If you think that the practice of teaching through business plans is flawed at the graduate level, you should see it at the undergraduate level. It’s here that students often have the least technologically appropriate ideas, so the challenge of having them take on something significant is even greater. My preliminary findings are that the canvas/customer development mix is having its intended effect of forcing the students to think more broadly and ask more questions. The visual nature is what seems to make the difference at this level. I’ll have more reflections on this after the end of the quarter, particularly since students are also taking part in an intense self-exploration program called “My Entrepreneurial Journey,” developed by the folks at Acton, in Austin.

    BTW, how we develop the business concepts the undergrad students are working on is another challenge/subject altogether, but it has to start well in advance of the class.

    Jon York

  11. Steve,
    I have followed your work on startups, along with similar comments by Randy Komisar, with great interest. Having worked with many entrepreneurs as part of the Ben Franklin Partnership in Pennsylvania for almost two decades, my experience on how to build successful new growth businesses fits perfectly with yours. (Unfortunately, I learned most of this by looking back at what we did at Ben Franklin after my time there. We could have had much greater success helping companies if I had known this 20 years ago, even though we were considered one of the most successful of public programs.)

    Anyway, I have been using a similar approach with high school students in a one-week summer program called eVenture. We cannot be as formal or complete as your Stanford course because of the age and the limited time we have. However, we guide the students to first come up with ideas from their experience, form a basic business concept, then test that concept as best they can with calls, visits, etc. All have been surprised when they discover that their wonderful concept won’t work, but we guide them through the valley to pivot, as you would say, and use their feedback to develop a better model. This experience is transformational for students who are taught in school there is one right answer, and have never even imagined they could do something original, much less tried. So, even high school students can get the basic approach. I wonder how they will use this valuable skill in the future.
    Unfortunately, as I have tried to get more of my friends in colleges and universities to go this route, I have had pleasant conversations but no real takers. All the standard textbooks teach writing business plans, as do the most successful business consultants, and professors seem very reluctant to go against what their peers are doing and what is accepted in the academic community. I am confident you will have great success with this class, and I look forward to reading more. I just hope your very visible experiment will help get the message out and make it easier for more professors to move their teaching in this direction. Our country needs it because we are not entrepreneurial enough outside of a few regions like Silicon Valley.

  12. Perhaps the most important aspect of what you’re doing here is to get the students out of the building – which is a huge obstacle for many entrepreneurs. Once they have the confidence of having generating an idea, pitching to potential investors, developing a product, iterating, and hitting to street to sell it – your students will be well primed to build their own businesses.

  13. Awesome material. Thanks a lot for sharing.
    One question: ¿How would you manage to deliver this content in a University that doesn’t have Stanford’s entrepreneurial background or context?
    Best regards from Chile.

  14. [...] to retain small businesses. A few big achievers share their greatest risks. Steve Blank tries a new way to teach entrepreneurship. Kevin Aubrey, a successful entrepreneur, thinks that successful [...]

  15. [...] to retain small businesses. A few big achievers share their greatest risks. Steve Blank tries a new way to teach entrepreneurship. Kevin Aubrey, a successful entrepreneur, thinks that successful [...]

  16. Steve, thanks for highlighting this new model for teaching entrepreneurship at Stanford that focuses on execution and mentorship. It was great to see that the course is offering hands-on experience in how to start a new business. I work with the Campaign for Free Enterprise, a project of the U.S. Chamber of Commerce. Our goal is to provide information and tips for small businesses so they have every chance to succeed.

    Recently, we launched the Center for Entrepreneurship to learn from and advocate for entrepreneurs. I hope you’ll check out the center at http://www.freeenterprise.com/center/ and join the conversation on our Facebook page at http://www.facebook.com/AmericanFreeEnterprise.

    What a great gift you are giving to these students. We will keep an eye out for your next progress updates!

    -Hilary, freeenterprise@uschamber.com

  17. How does one teach entrepreneurship?…

    In the words of Steve Blank, it is similar to how artists are taught, “with a combination of deep theory and immersive, hands-on experience.” At Stanford, we are constantly trying to improve the ways we teach entrepreneurship. Our course offerings ca…

  18. [...] better, Steve Blank recently mapped his customer discovery processes into the framework to help bridge the connection between those two [...]

  19. [...] in a new model of teaching startup entrepreneurship. This post is part two. Part one is here. Syllabus here. By now the nine teams in our Stanford Lean LaunchPad Class were formed, In the [...]

  20. [...] in a new model of teaching startup entrepreneurship. This post is part three. Part one is here, two is here. Syllabus is here. Week 3 of the class and our teams in our Stanford Lean LaunchPad [...]

  21. [...] in a new model of teaching startup entrepreneurship. This post is part three. Part one is here, two is here. Syllabus [...]

  22. Just heard you on NPR! We need more guys like you teaching Entreprenuership, keep it up. I wanna take your class someday, whether I have a successful startup all ready going or not.

  23. [...] startups fail from a lack of customers than lack of product development (Steve Blank, 2011).” This is an important point to think about when discussing the meaning of “lean [...]

  24. Great to hear of more like minded people, as an artist and designer who now runs the UK educator enterprise network for universtities this has a very good fit with what we are advocating here (and are supporting in UN enterprise policy).

    It does sound like a D School approach… Might be worth checking out the last Stanford round table event in Europe (REE in Edinburgh) as this was pretty much the topic of this strategy… Becoming known as ‘design thinking’ after (I think) Roger Martin in Toronto coined the phrase.

    No it isn’t new at all to us art and design educators, apparently this has been the approach for over 100 years but sounds like the strategy has real merit in this context. Excellent stuff.

    To Felipe from Chile and others, later this year the UK University Quality Assurance Agency will be publishing new guidance – could be worth checking out as this is what a good deal of it will advocate (I am Chair of this too).

    Exciting times and real progress at last!

    Andy Penaluna – Chair, Enterprise Educators UK

    • Andy,
      Teaching at Stanford It’s hard to ignore the D-School and design thinking.
      But I’ve found that design thinking has had a hard time getting adopted in startups.
      It’s surprising as it has a lot in common with the Customer Development process I teach.

      The best I can figure is that:
      – the design thinking process seems to miss connecting with startup founders (who are typically engineers)
      – talking to customers is the hardest thing engineers have to do. Without a formal methodology to do so, they’re at a loss to where/how to begin.
      – design thinking doesn’t encompass the entire business model (product, customers, demand creation, channel, revenue and expense model, etc.). When you’re a founder with limited time, if you have to adopt any methodology you’re going to pick one.

      steve

  25. Just a couple extra points, and it may be in here somewhere and I haven’t yet spotted it. Do you allow hiring and firing / new teams? Change topic and tasks with limited notice to simulate reality? (i.e. don’t forecast everything to the class as that is unreal / Shift and change to simulate reality etc.).

    Just wondering, thats how we’ve been doing design thinking based enterprise with undergrads at my Uni in Swansea, Wales. Students hate it at first, but love you once they’ve left!

    • Andy,
      No to both. Great ideas but for a different class.
      Think of what we were trying to teach was a methodology that they would have found in an incubator. (though we never told them that.)
      We built the class to answer the question: “how could we maximize the greatest amount of learning around all the components of a business model in a quarter.”
      (The product built and working, several iterations of the U/I tested by customers, 10’s or 100’s customer interviews, actual users and orders, revenue model and pricing tested, etc.)

      Take a look at the final presentations here. http://steveblank.com/2011/05/10/the-lean-launchpad-at-stanford-–-the-final-presentations/ and then read our summary after the presentations.

      steve

  26. That makes absolute sense Steve, especially the several iterations element – I’ll be mentioning your initiative at my keynote on lean thinking at the UK Higher Education Entrepreneurship Group annual conference on Thursday – fits the bill exactly!!

    http://www.heeg.org.uk/event.php?event_id=41

    Out of interest, with weaker students, getting fired by their peers has proven to be extremely motivational and some of our best projects have come out of it… not the result we were expecting if I’m honest!!!

    • Andy, I’m doing something similar in the UK to this. We take passionate graduates, give them a 6 week intensive course in business design and then send them to Kenya and team them up with groups of unemployed kenyan men and women. They work in Kenya for 3 months to co-design profitable businesses to create jobs and tackle poverty. The graduates then come back to the UK with amazing skills and experience etc and we either support them to start businesses or join businesses. I’m 24 and I’ve started this because I’m so frustrated with the lack of opportunities for graduates to do meaningful things. I think it would be great if we could discuss our work soon and see if there is a way to work together. My email is joshua.bicknell@kenyaworks.org.uk and the website is http://www.kenyaworks.org.uk

  27. [...] Blank explains the concept on his personal blog, We were positing that 20 years of teaching “how to write a business plan” might be [...]

  28. [...] should read Steve Blank’s blog about teaching Lean LaunchPad to Stanford students.  He uses the “Business Model Generation” book for the 8-week class.  It’s fun [...]

  29. [...] should read Steve Blank’s blog about teaching Lean LaunchPad to Stanford students. He uses the “Business Model Generation” book for the 8-week class. It’s fun to read the [...]

  30. [...] the awe-inspiring Ahmed Siddiqui (founder of Go Go Mongo) then handed out a conceptual map, namely Steve Blank’s Business Model Canvas. I joined a team of eight led by two women, Chandini Ammineni and Shilpa Dalmia, who wanted to [...]

  31. [...] years we’ve come to see that we had been building scalable startups inefficiently. Investors (and educators) treated startups as smaller versions of large companies. We now understand that’s just not [...]

  32. [...] Steve Blank, lecturer, Haas School of Business | 9/22/11 | Leave a comment As part of our Lean LaunchPad classes at Stanford, Berkeley, Columbia and for theNational Science Foundation, students build a [...]

  33. [...] enrollment in Seattle’s Stanford Lean Startup class meetings this spring. This will include the book it’s based on: Startup Owner’s [...]

  34. [...] Feels Like 20 Years Ago Today It’s hard to believe it’s only been a year since we taught the first 10 teams in the Stanford Lean LaunchPad class. To share what we learned, we blogged each of those class sessions, (all the slides can be [...]

  35. [...] Launchpad Index Posted on abril 18, 2012 by acjardim A New Way to Teach Entrepreneurship – The Lean LaunchPad at Stanford: Class 1 The LeanLaunch Pad at Stanford – Class 2: Business Model Hypotheses The LeanLaunch Pad at [...]

  36. [...] in the fall of 2011, the National Science Foundation read my blog posts on the Stanford version of the Lean LaunchPad class. They said scientists had already made a [...]

  37. [...] in the fall of 2011, the National Science Foundation read my blog posts on the Stanford version of the Lean LaunchPad class. They said scientists had already made a [...]

  38. […] in July 2011, the National Science Foundation read my blog posts on the Lean LaunchPad class.  They said scientists had already made a career out of hypotheses […]

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