“I refuse to join any club that would have me as a member.”
Groucho Marx
In my 21 years as an entrepreneur, I would come up for air once a month to religiously read the Harvard Business Review. It was not only my secret weapon in thinking about new startup strategies, it also gave me a view of the management issues my customers were dealing with. Through HBR I discovered the work of Peter Drucker and first read about management by objective. I learned about Michael Porters’s five forces. But the eye opener for me was reading Clayton Christensen HBR article on disruption in the mid 1990’s and then reading the Innovators Dilemma. Each of these authors (along with others too numerous to mention) profoundly changed my view of management and strategy. All of this in one magazine, with no hype, just a continual stream of great ideas.
For decades this revered business magazine described management techniques that were developed in and were for large corporations – offering more efficient and creative ways to execute existing business models. As much as I loved the magazine, there was little in it for startups (or new divisions in established companies) searching for a business model. (The articles about innovation and entrepreneurship, while insightful felt like they were variants of the existing processes and techniques developed for running existing businesses.) There was nothing suggesting that startups and new ventures needed their own tools and techniques, different from those written about in HBR or taught in business schools.
To fill this gap I wrote The Four Steps to the Epiphany, a book about the Customer Development process and how it changes the way startups are built. The Four Steps drew the distinction that “startups are not smaller versions of large companies.” It defined a startup as a “temporary organization designed to search for a repeatable and scalable business model.” Today its concepts of “minimum viable product,” “iterate and pivot”, “get out of the building,” and “no business plan survives first contact with customers,” have become part of the entrepreneurial lexicon. My new book, The Startup Owners Manual, outlined the steps of building a startup or new division inside a company in far greater detail.
In the last decade it’s become clear that companies are facing continuous disruption from globalization, technology shifts, rapidly changing consumer tastes, etc. Business-as-usual management techniques focused on efficiency and execution are no longer a credible response. The techniques invented in what has become the Lean Startup movement are now more than ever applicable to reinventing the modern corporation. Large companies like GE, Intuit, Merck, Panasonic, and Qualcomm are leading the charge to adopt the lean approach to drive corporate innovation. And the National Science Foundation and ARPA-E adopted it to accelerate commercialization of new science.
Today, we’ve come full circle as Lean goes mainstream. 250,0000 copies of the May issue of Harvard Business Review go in the mail to corporate and startup executives and investors worldwide. In this month’s issue, I was honored to write the cover story article, “Why the Lean Startup Changes Everything.” The article describes Lean as the search for a repeatable and scalable business model – and business model design, customer development and agile engineering – as the way you implement it.
I’m proud to be called the “father” of the Lean Startup Movement. But I hope at least two—if not fifty—other catalysts of the movement are every bit as proud today. Eric Ries, who took my first Customer Development class at Berkeley, had the insight that Customer Development should be paired with Agile Development. He called the combination “The Lean Startup” and wrote a great book with that name.
Alexander Osterwalder‘s inspired approach to defining the business model in his book Business Model Generation provide a framework for the Customer Development and the search for facts behind the hypotheses that make up a new venture. Osterwalder’s business model canvas is the starting point for Customer Development, and the “scorecard” that monitors startups’ progress as they turn their hypotheses about what customers want into actionable facts—all before a startup or new division has spent all or most of its capital.
The Harvard Business Review is providing free access to the cover story article, “Why the Lean Startup Changes Everything. Go read it.
Then go do it.
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Filed under: Business Model versus Business Plan, Corporate/Gov't Innovation, Customer Development, Customer Development Manifesto, Lean LaunchPad, Teaching, Venture Capital |
I too religiously read the HBR and often blog about insights I gain from it on my different blogs. A while back I realised that I was getting huge proportion of my blog and business inspiration from HBR and took it as a sign that I wasn’t reading widely enough. I redoubled my efforts to read a wide range of other magazines, journals, and books and found that it wasn’t me – it was HBR. It’s well worth the subscription and there’s always something in every edition that inspires me.
Steve, this is fantastic news! It’s about time HBR join the ranks of Hawken’s middle and high school students whose experiences with LLP and the BMC continue to teach them that failure is an essential component of success and that their ideas can become reality through a work ethic that embraces these methodologies. The mindset developed through LLP is responsible not only for student-run startups, but for kids ages 12-18, who view the world and their role in it in an entirely different manner. LLP is nothing short of life-changing. Glad HBR is on board!
Great to see Lean Startup and customer development get HBR exposure. I especially like the segments on applying the model to spark new approaches in existing businesses and government. Many opportunities for leaders in federal agencies and their business partners (for-profit and non-profit) to apply Lean Startup concepts to help them succeed amid the current U.S. budget disruption.
Congratulations! Your methods have inspired and improved our startup. “Lean is Mean” as in BAD ASS! 🙂
[…] Please see his post here: http://steveblank.com/2013/04/16/when-hell-froze-over-in-the-harvard-business-review/ […]
Congrats on the HBR article! 🙂
Congrats on the publishing! Apart from your amazing books I discovered Guenter Faltin as an inspiration. His book ‘Brains versus Capital’ thought me a new perspective on entrepreneurship.
[…] Review article about the Lean Startup model to be included in HBR’s May 2013 edition. Author Steve Blank outlines the Lean Startup methodology that has proven successful in the highly unpredictable world […]
Steve,
fascinating piece in HBR.
Would we be able to re-run in Global Corporate Venturing, our magazine, crediting HBR?
Speak soon,
Toby
Great article! I am in the process of following your plan and am grateful for your detailed advice. I am also in the process of writing an alphabet book for our future entrepreneurs. I taught kindergarten for 12 years and I am combining my knowledge of children’s literature with current trends. The book is actually very simple(Aa is for app, Bb is for blog, Cc is for coding, Dd is for domain, Ee is for entrepreneur…) I was happy to see progress being made in how we teach our older children but why wait to start? These little ones are like sponges and will absorb everything! They are the next generation of entrepreneurs. Best regards, Maren Browne
Congrats again, Steve. And thanks for your commitment to change the perception when change is so necessary. As difficult it has been to tread the uncertain waters as an entrepreneur over these 20 years , your insights along with Eric, Alexander, Ash, Chen and others continue to inform my lifelong work building great companies and products.
Hi Steve, very good post and article, I have been forwarding it around to the Raleigh/Durham startup community today. Well done.
This is dangerous Steve. You’re becoming mainstream. What’s next? Appear on “Good Morning America”?
Great insights, Steve, and I’m looking forward to reading your article in HBR. The idea of the “lean start-up” for present-day entrepreneurs strikes me as exactly right, and extremely helpful in guiding small business owners to take their business in the right direction. Hope to read your book.
[…] gives a much better introduction to the piece on his blog than I will attempt. Read “When Hell Froze Over – in the Harvard Business Review.” Then, plan to spend your lunch hour where you can read for a little while, go to HBR and […]
Rather odd talking about ‘Lean’ as if it just – started with start-ups.
Steve, maybe you should read ‘The Machine that Changed the World,’ and catch up on Lean manufacturing, Lean Aerospace etc – actually talking about lean and start-ups is several decades late to the table. Hopefully the article itself includes a tip of the cap to everyone in and around lean before – you caught up with that trend.
Wonderful work again! Hopefully with this publication in the most prominent “mainstream” business journal it will be easier converting old-schoolers to the ideas of customer development and lean but mean MVPs.
Congratulations Steve!
I stopped reading the HBR after many years as an avid subscriber because I came to feel it was too focused on “big company stuff”.
It is a real testament to the veracity of your ideas that Lean Startup is now becoming part of the mainstream orthodoxy.
Exciting times 🙂
Karl Jeffery.
Hi Steve,
You seem to use the terms “Lean” and “Lean Startup” interchangeably in this post. Is that intentional?
Should we assume that “Lean” refers to “Lean Startup” and not “Lean Manufacturing” in the context of this blog? It is getting harder to keep track of the intended meaning as more people reference “Lean Startup” in a business context.
Thanks!
-Bryan
Correct. In this blog post Lean = Lean Startup.