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The Lean LaunchPad Online

You may have read my previous posts about the Lean LaunchPad class taught at Stanford, Berkeley, Columbia, Caltech and for the National Science Foundation.

Now you too can take this course.

I’ve worked with the Udacity, the best online digital university on a mission to democratize education, to produce the course. They’ve done an awesome job.

The course includes lecture videos, quizzes and homework assignments. Multiple short video modules make up each 20-30 minute Lecture. Each module is roughly three minutes or less, giving you the chance to learn piece by piece and re-watch short lesson portions with ease. Quizzes are embedded within the lectures and are meant to let you check-in with how completely you are digesting the course information. Once you take a quiz, which could be a multiple-choice quiz or a fill in the blank quiz, you will receive immediate feedback.

Sign up here

——–

Why This Class?

Ten years ago I started thinking about why startups are different from existing companies.  I wondered if business plans and 5-year forecasts were the right way to plan a startup.  I asked, “Is execution all there is to starting a company?”

Experienced entrepreneurs kept finding that no business plan survived first contact with customers. It dawned on me that the plans were a symptom of a larger problem: we were executing business plans when we should first be searching for business models. We were putting the plan before the planning.

So what would a search process for a business model look like? I read a ton of existing literature and came up with a formal methodology for search I called Customer Development.

That resulted in a new process for Search: Customer Development + traditional product management/Waterfall Engineering. It looked like this:

This meant that the Search for a business model as a process now could come before execution. So I wrote a book about this called the Four Steps to the Epiphany.

And in 2003 the Haas Business School at U.C. Berkeley asked me to teach a class in Customer Development.  With Rob Majteles as a co-instructor, I started a tradition of teaching all my classes with venture capitalists as co-instructors.

In 2004 I funded IMVU, a startup by Will Harvey and Eric Ries. As a condition of my investment I insisted Will and Eric take my Customer Development class at Berkeley. Having Eric in the class was the best investment I ever made. Eric’s insight was that traditional product management and Waterfall development should be replaced by Agile Development.  He called it the “Lean Startup.”

Meanwhile, I had said startups were “Searching” for a business model, I had been purposefully a bit vague about what exactly a business model looked like. For the last two decades there was no standard definition.  That is until Alexander Osterwalder wrote Business Model Generation.

This book was a real breakthrough. Now we understood that the strategy for startups was to first search for a business model and then after you found it, put together an operating plan.

Now we had a definition of what it was startups were searching for. So business model design + customer and agile development is the process that startups use to search for a business model.

And the organization to implement all this was not through traditional sales, marketing and business development groups on day one. Instead the founders need to lead a customer development team.

And then to get things organized Bob Dorf and I wrote a book, The Startup Owners Manual that put all these pieces together.

But then I realized rather than just writing about it, or lecturing on Customer Development, we should have a hands-on experiential class. So my book and Berkeley class turned into the Lean LaunchPad class in the Stanford Engineering school, co-taught with two VC’s – Jon Feiber and Ann Miura-Ko. And we provided dedicated mentors for each team.

Then 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 career out of hypotheses testing, and the Lean LaunchPad was simply a scientific method for entrepreneurship. They asked if I could adapt the class to teach scientists who want to commercialize their basic research. I modified the class and recruited another great group of VC’s and entrepreneurs – Jim Hornthal, John Burke, Jerry Engel,Bhavik Joshi and Oren Jacob – to teach with me.

We taught the first two classes of 25 teams each, and then in March of 2012 trained faculty from Georgia Tech and the University of Michigan how to teach the class at their universities. Georgia Tech and the University of Michigan faculty then taught 54 teams each in July of this year and will teach another 54 teams in October.

We then added four more schools – Columbia, Caltech, Princeton and Hosei – where our team taught the Lean LaunchPad. We also developed a 5-day version of the class to complement the full semester and quarter versions.

Then last month we partnered with NCIIA and taught 62 college and university educators in our first Lean LaunchPad Educators Program.

And now we’ve spent weeks in the Udacity studio putting the lecture portion of the Lean LaunchPad class online.

Sign up and find out how to start a company!

Listen to the post here: Download the Podcast here

The Lean LaunchPad Class Online

Making a Dent in the Universe – Results from the NSF I-Corps

Our goal teaching for the National Science Foundation was to make a dent in the universe.

Could we actually teach tenured faculty how to turn an idea into a company?  And if we did, could it change their lives?

We can now answer these questions.

Hell yes.

———–

The Lean LaunchPad class for the National Science Foundation (NSF)
Over the last 6 months, we’ve been teaching a version of the Lean LaunchPad class for the National Science Foundation Innovation Corps.  We’ve taught two cohorts: 21 teams ending in December 2011, and 24 teams ending in May 2012. In July 2012 we’ll teach 50 more teams, and another 50 in October. Each 3-person team consists of a Principal Investigator, an Entrepreneurial Lead and a Mentor.

The Principal Investigator (average age of ~45) is a tenured faculty running their own research lab who has had an active NSF grant within the last 5 years. The Principal Investigator forms the team by selecting one of his graduate students to be the Entrepreneurial Lead.

The Entrepreneurial Lead is a graduate student or post doc (average age ~ 28) who works within the Principal Investigator’s lab. If a commercial venture comes out of the I-Corps, it’s more than likely that the Entrepreneurial Lead will take an active role in the new company. (Typically Principal Investigators stay in their academic role and continue as an advisor to the new venture.)

Mentors (average age ~50) are an experienced entrepreneur located near the academic institution and has experience in transiting technology out of academic labs. Mentors are recommended by the Principal Investigator (who has worked with them in the past) or they may be a member of the NSF I-Corps Mentor network. Some mentors may become an active participant in a startup that comes out of the class.

The NSF I-Corps: Class Goals
The NSF I-Corps Lean LaunchPad class has different goals then the same class taught in a university or incubator. In a university, the Lean LaunchPad class teaches a methodology the students can use for the rest of their careers. In an incubator, the Lean LaunchPad develops angel or venture-funded startups.

Unlike an incubator or university class, the goal of the NSF I-Corps is to teach researchers how to move their technology from an academic lab into the commercial world. A successful outcome is a startup or a patent or technology license to a U.S. company.

(While many government agencies use Technology Readiness Levels to measure a projects technical maturity, there are no standards around Business Maturity Levels. The output of the NSF I-Corps class provides a proxy.)

The NSF I-Corps doesn’t pick winners or losers. It doesn’t replace private capital with government funds. Its goal is to get research the country has already paid for educated to the point where they can attract private capital. (It’s why we teach the class with experienced Venture Capitalists.)

Teaching Objectives
Few of the Principal Investigators or Entrepreneurial Leads had startup experience, and few of the mentors were familiar with Business Model design or Customer Development.

Therefore, the teaching objectives of the I-Corps class are:

1) Help each team understand that a successful company was more than just their technology/invention by introducing all the parts of a business model (customers, channel, get/keep/grow, revenue models, partners, resources, activities and costs.)

2) Get the teams out of the building to test their hypotheses with prospective customers. The teams in the first cohort averaged 80 customer meetings per team; the second cohort spoke to an average of 100.

3) Motivate the teams to pursue  commercialization of their idea. The best indicators of their future success were whether they a) found a scalable business model, b) had an interest in starting a company, and c) would pursue additional funding.

Methodology
The National Science Foundation worked with NCIIA to establish a baseline of what the students knew before the class and followed it up with a questionaire after the class.

While my experience in teaching students at Stanford, Berkeley and Columbia told me that this class was an effective way to teach all the parts that make up a startup, would the same approach work with academic researchers?

Here’s what they found.

Results
Teams came into the class knowing little about what parts made up a company business model (customers, channel, get/keep/grow, revenue models, partners, resources, activities and costs.) They left with very deep knowledge.

I-Corps teams spent the class refining their business model and minimum viable product. By the end of the class:

  • Over 95% believed that they found a scalable business model.
  • 98% felt that they had found “product/market fit”.

The class increased everyones interest in starting a company. 92% said they were going to go out and raise money – either from the NSF or with private capital. (This was a bit astonishing. Given that most of them didn’t know what a startup was coming in. These are new jobs being created.)

One of the unexpected consequences of the class was its effect on the Principal Investigators, (almost all tenured professors.)  A surprising number said the ideas for the class will impact their research, and 98% of all of the attendees said it was going to be used in their careers.

Another unexpected result was the impact the class had on the professors own thinking about how they would teach their science and engineering students. We got numerous comments about “I’m going to get my department to teach this.”

What’s Next
The NSF and NCIIA understand that the analysis doesn’t end by just studying the results of each cohort. We need to measure what happens to the teams and each of the team members (Principal Investigator, Entrepreneurial Lead and Mentor) over time. It’s only after a longitudinal study that will take years, can we see how deep of a dent we made in the universe.

But I think we’ve made a start.

Acknowledgements
Thanks to the team at NCIIA that provided the questionaire and analytical data (Angela Shartrand) and the logistical support (Anne Hendrixson) to run these NSF classes.

The National Science Foundation (Errol Arkilic, Babu DasGupta) took a chance at changing the status quo.

Members of Congress on both sides of the aisle who’ve realized cracking the code on how to teach starting companies means a brighter day for the future of  all jobs in the United States – not just tech startups.

And thanks to the venture capitalists and entrepreneurs who volunteer their time for their country; Jon Feiber from MDV, John Burke from True Ventures, Jim Hornthal from CMEA, Jerry Engel from Monitor Ventures (and the U.C. Berkeley Haas Business School,) Oren Jacob from ToyTalk and Lisa Forssell of Pixar.

And to our new teaching teams at University of Michigan and Georgia Tech – It’s your turn.

Lessons Learned

  • The Lean LaunchPad class (Business Model design+Customer Development+ extreme hands-on) works
  • They leave knowing:
    • how to search for a business model (customers, channel, get/keep/grow, revenue models, partners, resources, activities and costs,)
    • how to find product/market fit, and a scalable business model
  • It has the potential to change careers, lives and our country

Listen to the post here: Download the Podcast here

Entrepreneurship for the 99%

This is a guest post from Jerry Engel, the Faculty Director of the National Science Foundation Innovation Corps (and the Founding Faculty Director of the Lester Center for Entrepreneurship at UC Berkeley.)

———–

The 99%
As the morning fog burns off the California coast, I am working with Steve Blank, preparing for the Lean LaunchPad Faculty Development Program we are running this August at U.C. Berkeley. This is a 3-day program for entrepreneurship faculty from around the world how to teach entrepreneurship via the Lean LaunchPad approach (business model canvas + customer development) and bring their entrepreneurship curriculums into the 21st century. Over the past couple of years this Lean LaunchPad model has proven immensely effective at Berkeley, Stanford, Columbia and, of course, the National Science Foundations Innovation-Corps program. The data from the classes seem to indicate that we’ve found have a method how to make scalable startups fail less.

While we’re excited by the results, we’ve realized that we’ve been solving the problem for the 1% of new ventures that are technology startups. The reality is that the United States is still a nation of small businesses. 99.7% of the ~6 million companies in the U.S. have less than 500 people and they employ 50% of the 121 million workers getting a paycheck. They accounted for 65 percent (or 9.8 million) of the 15 million net new jobs created between 1993 and 2009. And while they increasingly use technology as a platform and/or a way of reaching and managing customers, most are in non-tech businesses (construction, retail, health care, lodging, food services, etc.)

While we were figuring out how to be incredibly more efficient in building new technology startups, three out out of 10 new small businesses will fail in 2 years, half fail within 5 years.  The tools and techniques available to small businesses on Main Street are the same ones that were being used for the last 75 years.

Therefore, our remaining challenges are how to make them fail less – and how can we make the Lean LaunchPad approach relevant to the rest of the 99% of startups.

Serendipity
A serendipitous answer came to us around noon. His name is Alex Lawrence. Alex, vice provost for Innovation & Economic Development at Weber State University in Utah and completing his first year of teaching entrepreneurship. Alex is a successful serial entrepreneur –with the same drive and energy of many we have known here in Silicon Valley, but different. His nine startups have ranged from franchised fruit juice shops to Lendio a financial services company for small businesses. Alex had been recruited back by his Alma Matter to create an entrepreneurship program. In fact he had just been charged with creating an entrepreneurship minor – five or six courses for students of any major at the University that would help prepare them for the challenge of starting their own businesses.

Alex’s first insight was that the traditional “how to write a business plan” was as obsolete for Main Street as it is for Silicon Valley. So he had adopted Steve’s Lean LaunchPad class and was using The Startup Owner’s Manual as his core text. He had contacted us seeking advice on developing his curriculum, and it just seemed natural to invite him out to the ranch for a deeper dive.

As we dug into learning about Alex’s teaching experience we naturally asked him about the ventures his own students were creating. It was clear Alex was a bit apologetic; photo studios, online retail subscriptions to commodity household and personal hygiene products, etc. Alex explained that in his community building a successful venture that generated nice cash flows – not IPO’s – were the big win. To his students these were not “small businesses”, but ‘their businesses’, their livelihoods and their opportunities to create wealth and independence for themselves and their families.

Mismatch for Main Street
As we walked out to the pond, Alex explained that while he found the teachings of the Lean LaunchPad directly applicable and effective, there was a mismatch for his students in the size of the end goal (a great living versus a billion dollar IPO) and the details of the implementation of the business model (franchise and multilevel marketing versus direct sales, profit sharing versus equity for all, family and SBA loans versus venture capital, etc.)

Sitting by the pond we had a second epiphany: we could easily adjust the Lean LaunchPad class to bring 21st century entrepreneurship techniques to ‘Main Street’. To do this we needed to do is change the end goals and implementation details to match the aspirations and realities that these new small businesses face.

We called this Mainstream Entrepreneurship.

Mainstream Entrepreneurship
Mainstream Entrepreneurship recognizes that with the Lean LaunchPad class we now have a methodology of making small businesses fail less.  That accelerating business model search and discovery and using guided customer engagement as a learning process, we could help founders of mainstream businesses just like those starting technology ventures.

For the rest of the afternoon, Steve and I brainstormed with Alex about how he could take his 20 years of entrepreneurial small business experience and use the Business Model Canvas and Customer Development to create a university entrepreneurship curriculum and vocabulary for the mainstream of American Business.

We think we got it figured out.

Alex Lawrence will be one of the presenters at the Lean LaunchPad Educators Program August 22-24th in Berkeley.

Lessons Learned

  • Small businesses make up 99.7% of U.S. companies
  • “How to write a business plan” is as obsolete for Main Street as it is for Silicon Valley
  • Using the Lean LaunchPad (the business model canvas and Customer Development) are the right tools
  • Small businesses have different end goals and implementation details
  • We can adapt/modify the Lean LaunchPad approach to embrace these goals/details

Listen to the post here: or download the podcasts here

Five Days to Change the World – The Columbia Lean LaunchPad Class

We’ve taught our Lean LaunchPad entrepreneurship class at Stanford, Berkeley, Columbia and the National Science Foundation in 8 week, 10 week and 12 week versions.  We decided to find out what was the Minimum Viable Product for our Lean LaunchPad class.

Could students get value out of a 5-day version of the class?

The Setup
At the invitation of Murray Low at the Entrepreneurship Center in the Columbia Business School, we went to New York to find out.  We were going to teach the Lean LaunchPad class in 5-days.   I was joined by my Startup Owners Manual co-author Bob Dorf, Alexander Osterwalder (author of Business Model Generation) and Fred Wilson of Union Square Ventures.

As we’ve done in previous classes, the students form teams and come up with an idea before the class.

Potential students watched an on-line video of Osterwalder explaining the Business Model Canvas and then applied for admission to the class with a fully completed business model canvas. Here are two examples:

If you can’t see the presentation above, click here.

If you can’t see the presentation above, click here.

The Class
We had 69 students in 13 teams. Instead of going around the room introducing themselves, each group hit the ground running by presenting their canvas.

The class organization was pretty simple:

  • textbooks were The Startup Owners Manual and Business Model Generation
  • team presentations 9-12:30 (with continual instructor critiques)
  • working lunch 12:30-1:30 (with office hours)
  • lecture 1:30-3:00
  • get out of the building 3:00-on
  • repeat for 5-days

Resources
The 5-day syllabus is here.

All 13 teams Day 1 presentations are here.
Day 2 presentations here.
Day 3 presentations here.
Day 4 presentations here.
Day 5 presentations here.

The Outcome
After 5 days the teams collectively had ~1,200 face-to-face customer interviews, with another 1,000+ potential customers surveyed on-line.

Take a look at the same two teams presentations (compare it to their slides above):

If you can’t see the presentation above, click here.

If you can’t see the presentation above, click here.

Lessons Learned:

  • A five day Lean Launchpad Class is definitely worth doing.
  • The Business Model Canvas + Customer Development works even in this short amount of time
    • However we were in NYC where customer density was high.
  • As we’ve already found, this class needs to be taught as a joint engineering/mba class
  • Next time we teach we will complete the transition to a flipped classroom:
    • Have no lectures during class. We’ll offer video lectures, and use the time for class labs built around detailed analysis of 2 or 3 canvas pivots
    • Make teams use Salesforce, or some similar package, to track all contacts/customer calls

Listen to the post here: Download the Podcast here

The National Science Foundation Innovation Corps – What America Does Best

We ran the first National Science Foundation Innovation Corps class October to December 2011.

63 scientists and engineers in 21 teams made ~2,000 customer calls in 10 weeks, turning laboratory ideas into formidable startups. 19 of the 21 teams are moving forward in commercializing their technology.

Watching the final presentations it was clear that  the results were way past our initial expectations (comments from mentors as well as pre- and post-class survey data suggested that most of the teams learned more in two months than others had in two years.) So much so that the NSF decided to scale the Innovation Corps program.

In 2012 the NSF will put 150 teams of the best scientists in the U.S. through the Lean Launchpad class.  And to help teach these many teams, the NSF will recruit other universities that have engineering entrepreneurship programs to become part of the Innovation Corps network.

Congress Gets It
In-between the 2011 pilot class and the first NSF class of 2012, I got a call from Congressman Dan Lipinski. He sits on the House committee that oversees the NSF – the Science, Space and Technology committee (a place where his engineering degree and PhD comes in handy.) He had read my blog posts about the NSF Innovation Corps and was interested in how the first class went. He wanted to fly out to Stanford and sit in the Lean LaunchPad class about to start in the engineering school.

While I’ve had visitors in my classes before, having a congressman was a first. He showed up with no press in-tow, no entourage, just a genuine search for understanding of whether this program was a waste of taxpayer money or good for the country.

He asked tough questions about why the government not private capital should be doing this. I explained that the goal of the Innovation Corps was to bridge what the NSF calls the “ditch of death” – the gap between when NSF research funding runs out and when a team is credible enough (with enough customer and market knowledge) to raise private capital or license/partner with existing companies. The goal was not to replace private capital but to help attract it. The amount of money spent on the Innovation Corps would be about 1/4 of one percent of the $7.373 billion NSF budget, but it would leverage the tens of billions basic research dollars already invested. It’s payoff would be disproportionately large for the country. It’s one of the best investments this country can make for keeping the U.S. competitive and creating jobs.

After class the Congressman joined the teaching team at our favorite pizza place for our weekly post-class debrief.

If you like science, technology or entrepreneurship, this guy is the real deal. He gets it.

“Innovation, jobs and entrepreneurship” have become popular buzzwords in an election year. But it was pretty amazing to see a congressman jump on a plane to actually find out if he can help the country do so.  He issued this press release asking Congress to fully fund the Innovation Corps when he came back to Washington.

The National Science Foundation Innovation Corps combines the best of what the U.S. government, American researchers in academia and risk capital can do together. If we’re correct, we can compress the time for commercializing scientific breakthroughs and reduce the early stage risks of these new ventures. This means more jobs, new industries and a permanent edge for innovation in the United States.

———

The 3-person teams consisted of Principal Investigators (PI’s), mostly tenured professors (average age of 45,) whose NSF research the project was based on. The PI’s in turn selected one of their graduate students (average age of 30,) as the entrepreneurial lead. The PI and Entrepreneurial Lead were supported by a mentor (average age of 50,) with industry/startup experience.

This was most definitely not the hoodie and flip-flop crowd.

Part one of the posts on the NSF Innovation Corps is here, part two here. Syllabus for the class is here.  Textbook is here.

Here are some of the final Lessons Learned presentations and team videos:

Akara Solutions: Flexible, Low Cost Cooling Technology for LED Lighting
Principal Investigator: Satish Kandlikar Rochester Institute of Technology

If you can’t see the video above, click here.

If you can’t see the presentation above, click here.

Semiconductor-Based Hydrogen and Hydrocarbon Sensors
Principal Investigator: Lisa Porter Carnegie-Mellon University

If you can’t see the video above, click here.

If you can’t see the presentation above, click here.

Pilot Production Of Large Area Uniform Single-Crystal Graphene Films
Principal Investigator: Alan Johnson University of Pennsylvania

If you can’t see the video above, click here.

If you can’t see the presentation above, click here.

Radiotracer Synthesis Commercialization
Principal Investigator: Stephen DiMagno University of Nebraska-Lincoln

If you can’t see the video above click here.

If you can’t see the presentation above, click here.

Commercialization of an Engineered Pyrolysis Blanket for the Conversion of Forestry Residues to Soil Amendments and Energy Products
Principal Investigator: Daniel Schwartz University of Washington

If you can’t see the video above, click here

If you can’t see the presentation above, click here.

Photocatalysts for water remediation
Principal Investigator: Pelagia Gouma SUNY at Stony Brook

If you can’t see the video above, click here.

If you can’t see the presentation above, click here.

The other teams were equally interesting. Here are links to their Lessons Learned presentations.

IDecideFast – A web-based application for effective decision making for the layperson
Principal Investigator: Ali Abbas University of Illinois at Urbana-Champaign

Silicon Terahertz Electronics
Principal Investigator: Michael Shur  Rensselaer Polytechnic Institute

Standoff detection of explosives using novel signal-amplifying nanocomposite and hand-held UV light
Principal Investigator: Yu Lei University of Connecticut

MEMS-based drug infusion pumps
Principal Investigator: Ellis Meng University of Southern California

TexCone – Laser-Generated Surface Textures for Anti-Icing and Sun-Light-Trapping Applications
Principal Investigator: Mool Gupta University of Virginia

Concentric Technology
Principal Investigator: Walter Besio University of Rhode Island

Hand-Held Tonometer for Transpalpebral Intraocular Pressure Measurement
Principal Investigator:  Eniko Enikov University of Arizona

Artificial Membrane-based Ion Channel Screening
Principal Investigator: Jacob Schmidt University of California-Los Angeles

Privacy-Preserving Location Based Services
Principal Investigator: Nan Zhang   George Washington University

MySkinTone: A breakthrough technology and product for skin melanin evaluation
Principal Investigator: Michael Silevitch Northeastern University

Mobidemics: Using Mobile Gaming for Healthcare
Principal Investigator: Nilanjan Banerjee University of Arkansas

SmartMenu
Principal Investigator: Elizabeth Mynatt (mynatt@cc.gatech.edu); Georgia Tech Research Corporation

Sweet Sensors – Portable sensors using widely available personal glucose monitor
Principal Investigator: Yi Lu University of Illinois at Urbana-Champaign

SwiftVax – A Green Manufacturing Platform for Faster, Cheaper, and Scalable Vaccine Manufacturing
Principal Investigator: Karen McDonald University of California-Davis

Lessons Learned

  • Yes, entrepreneurship can be taught
  • No, there’s no age limit
  • We now know how to reduce customer and market risk for new ventures
  • The combination of government, researchers in academia and risk capital make a powerful accelerator for technology commercialization
  • There’s at least one congressman who understands it

Listen to the post here: Download the Podcast here

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