Site icon Steve Blank

The Lean LaunchPad – Teaching Entrepreneurship as a Management Science

steve blank

I’ve introduced a new class at Stanford to teach engineers, scientists and other professionals how startups really get built.

They are going to get out of the building, build a company and get orders in ten weeks.

Jon Feiber of Mohr Davidow Ventures and Ann Miura-Ko of Floodgate are co-teaching the class with me (and Alexander Osterwalder is a guest lecturer.) We have two great teaching assistants, plus we’ve rounded up a team of 25 mentors (VC’s and entrepreneurs) to help coach the teams.

Why Teach This Class?
Business schools teach aspiring executives a variety of courses around the execution of known business models, (accounting, organizational behavior, managerial skills, marketing, operations, etc.)

In contrast, startups search for a business model. (Or more accurately, startups are a temporary organization designed to search for a scalable and repeatable businessmodel.)  There are few courses which teach aspiring entrepreneurs the skills (business models, customer and agile development, design thinking, etc.) to optimize this search.

Many entrepreneurship courses focus on teaching students “how to write a business plan.” Others emphasize how to build a product. If you’ve read any of my previous posts, you know I believe that:  1) a product is just a part of a startup, but understanding customers, channel, pricing, etc. are what make it a business,
2) business plans are fine for large companies where there is an existing market, existing product and existing customers. In a startup none of these are known.

Therefore we developed a class to teach students how to think about all the parts of building a business, not just the product.

What’s Different About the Class?
This Stanford class will introduce management tools for entrepreneurs.  We’ll build the class around the business model / customer development / agile development solution stack.

Students will start by mapping their assumptions (their business model) and then each week test these hypotheses with customers and partners outside in the field (customer development) and use an iterative and incremental development methodology (agile development) to build the product.

The goal is to get students out of the building to test each of the 9 parts of their business model, understand which of their assumptions were wrong, and figure out what they need to do fix it. Their objective is to get users, orders, customers, etc. (and if a web-based product, a minimum feature set,) all delivered in 10 weeks.  Our objective is to get them using the tools that help startups to test their hypotheses and make adjustments when they learn that their original assumptions about their business are wrong.  We want them to experience faulty assumptions not as a crisis, but as a learning event called a pivot —an opportunity to change the business model.

How’s the Class Organized?
During the first week of class, students form teams (optimally 4 people in a team but we’re flexible.) Their company can focus in any area– software, hardware, medical device or a service of any kind.

The class meets ten times, once a week for three hours. In those three hours we’ll do two things.  First, we’’ll lecture on one of the 9 building blocks of a business model (see diagram below, taken from Business Model Generation).  Secondly, each student team will present “lessons learned” from their team’s experience getting out of the building learning, testing, iterating and/or pivoting their business model.

They’ll share with the class answers to these questions:

  1. What did you initially think?
  2. So what did you do?
  3. Then what did you learn?
  4. What are you going to do next?

At the course’s end, each team will present their entire business model and highlight what they learned, their most important pivots and conclusions.

We’re going to be teaching it for the first time in January.  Below is the class syllabus.

——————–

Class 1  is here.  Follow along!

Engineering 245
This course provides real world, hands-on learning on what it’s like to actually start a high-tech company. This class is not about how to write a business plan. It’s not an exercise on how smart you are in a classroom, or how well you use the research library. The end result is not a PowerPoint slide deck for a VC presentation. Instead you will be getting your hands dirty talking to customers, partners, competitors, as you encounter the chaos and uncertainty of how a startup actually works.  You’ll work in teams learning how to turn a great idea into a great company. You’ll learn how to use a business model to brainstorm each part of a company and customer development to get out of the classroom to see whether anyone other than you would want/use your product. Finally, you’ll see how agile development can help you rapidly iterate your product to build something customers will use and buy.  Each week will be new adventure as you test each part of your business model and then share the hard earned knowledge with the rest of the class. Working with your team you will encounter issues on how to build and work with a team and we will help you understand how to build and manage the startup team.

Besides the instructors and TA’s, each team will be assigned two mentors (an experienced entrepreneur and/or VC) to provide assistance and support.

Suggested Projects: While your first instinct may be a web-based startup we suggest that you consider a subject in which you are a domain expert, such as your graduate research. In all cases, you should choose something for which you have passion, enthusiasm, and hopefully some expertise.  Teams that select a web-based product will have to build the site for the class.

——————–

Pre-reading For 1st Class:  Read pages 1-51 of Osterwalder’s Business Model Generation.

Class 1    Jan 4th Intro/Business Model/Customer Development
Class Lecture/Out of the Building Assignment:
What’s a business model? What are the 9 parts of a business model?  What are hypotheses? What is the Minimum Feature Set? What experiments are needed to run to test business model hypotheses?   What is market size? How to determine whether a business model is worth doing?

Deliverable: Set up teams by Thursday, Jan 6 (a mixer will be hosted on Wednesday to help finalize teams).  Submit your project for approval to the teaching team.

Read:

Deliverable for January 11th:

——————–
Jan 6th 5-7pm Speed Dating  (Meet in Thornton 110)

Get quick feedback on your initial team business concept from the teaching team.

——————–
Class 2            Jan 11th Testing Value Proposition
Class Lecture/Out of the Building Assignment:
What is your product or service? How does it differ from an idea? Why will people want it? Who’s the competition and how does your customer view these competitive offerings? Where’s the market? What’s the minimum feature set?  What’s the Market Type?  What was your inspiration or impetus?  What assumptions drove you to this?  What unique insight do you have into the market dynamics or into a technological shift that makes this a fresh opportunity?

Action:

Read:

Deliverable for Jan 18th:

——————–
Class 3            Jan 18th Testing Customers/users
Class Lecture/Out of the Building Assignment:
Who’s the customer? User? Payer?  How are they different? How can you reach them? How is a business customer different from a consumer?

Action:

Read:

Deliverable for Jan 25th:

——————–
Class 4            Jan 25th Testing Demand Creation
Class Lecture/Out of the Building Assignment:
How do you create end user demand? How does it differ on the web versus other channels?   Evangelism vs. existing need or category? General Marketing, Sales Funnel, etc

Action:

Read:

Watch: Mark Pincus, “Quick and Frequent Product Testing and Assessment”, http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2313

Deliverable for Feb 1st :

——————–
Class 5            Feb 1st Testing Channel
Class Lecture/Out of the Building Assignment:
What’s a channel?  Direct channels, indirect channels, OEM. Multi-sided markets.  B-to-B versus B-to-C channels and sales (business to business versus business to consumer)

Action: If you’re building a web site, get the site up and running, including minimal feature.

Read: Four Steps to the Epiphany, pp. 50-51, 91-94, 226-227, 256, 267

Deliverable for Feb 8th:

——————–
Class 6            Feb 8th Testing Revenue Model
Class Lecture/Out of the Building Assignment:
What’s a revenue model? What types of revenue streams are there? How does it differ on the web versus other channels?

Action: What’s your revenue model?

Read: John Mullins & Randy Komisar, Getting to Plan B (2009) pages 133-156

Deliverable for Feb 15th :

——————–
Class 7            Feb 15th Testing Partners
Class Lecture/Out of the Building Assignment:
Who are partners?  Strategic alliances, competition, joint ventures, buyer supplier, licensees.

Action: What partners will you need?

Deliverable for Feb 22nd

——————–
Class 8            Feb 22nd Testing Key Resources & Cost Structure
Class Lecture/Out of the Building Assignment:
What resources do you need to build this business?  How many people? What kind? Any hardware or software you need to buy? Any IP you need to license?  How much money do you need to raise?  When?  Why? Importance of cash flows? When do you get paid vs. when do you pay others?

Action: What’s your expense model?

Deliverable for March 1st

Guest: Alexander Osterwalder

For March 1st or 8th

——————–
Class 9            March 1st Team Presentations of Lessons Learned (1st half of the class)

Deliverable: Each team will present a 30 minute “Lessons Learned” presentation about their business.

——————–
Class 10            March 8th Team Presentations of Lessons Learned (2nd half of the class)

Deliverable: Each team will present a 30 minute “Lessons Learned” presentation about their business.

——————–
March 11th 1-4pm Demo Day at VC Firm (Location TBD)

Show off your product to the public and real VC’s.  Set up a booth, put up posters, run demos, etc.  Food and refreshments provided.

Class 1  is here.  Follow along!

——————–
Mentor List (as of Dec 3rd 2010)

Class 1  is here.  Follow along!
Listen to the post here: Download the Podcast here

Exit mobile version