Clayton Christensen

Say not in grief he is no more – but live in thankfulness that he was

If you’re reading my blog, odds are you know who Clayton Christensen was. He passed away this week and it was a loss to us all.

Everyone who writes about innovation stood on his shoulders.

His insights transformed the language and the practice of innovation.

Christensen changed the trajectory of my career and was the guide star for my work on innovation. I never got to say thank you.

Eye Opening
I remember the first time I read the Innovator’s Dilemma in 1997. Christensen, writing for a corporate audience, explained that there were two classes of products – sustaining and disruptive. His message was that existing companies are great at sustaining technologies and products but were ignoring the threat of disruption.

He explained that companies have a penchant for continually improving sustaining products by adding more features to solve existing customer problems, and while this maximized profit, it was a trap. Often, the sustaining product features exceed the needs of some segments and ignore the needs of others. The focus on sustaining products leaves an opening for new startups with “good enough” products (and willing to initially take lower profits) to enter underserved or unserved markets. These new entrants were the disruptors.

By targeting these overlooked segments, the new entrants could attract a broader base of customers, iterate rapidly, and adopt new improvements faster (because they have less invested infrastructure at risk). They eventually crossed a threshold where they were not only cheaper but also better or faster than the incumbent. And then they’d move upmarket into the incumbents’ markets. At that tipping point the legacy industry collapses. (See Kodak, Blockbuster, Nokia, etc.)

Christensen explained it wasn’t that existing companies didn’t see the new technologies/ products/ markets. They operated this way because their existing business models didn’t allow them to initially profit from those opportunities – so they ignored them – and continued to chase higher profitability in more-demanding segments.

Reading The Innovator’s Dilemma was a revelation. In essence, Christensen was explaining how disruptors with few resources could eat the lunch of incumbents. When I finished, I must have had 25 pages of notes. I had never read something so clear, and more importantly, so immediately applicable to what we were about to undertake.

We had just started an enterprise software company, Epiphany, and we were one of those disruptors. I remember looking at my notes and I realized I held a step-by-step playbook to run rings around incumbents. All I had to do is to exploit all the gaps and weaknesses that were inherent in incumbent companies.

We did.

Thank you, Clay for opening my eyes.

Inspiration
Christensen’s impact didn’t end there. For the last 20 years he inspired me to think differently about innovation and teaching.

Building better startups
After retiring I began to think about the nature of startup innovation and entrepreneurship. It dawned on me that the implicit assumption startups had operated under was that startups were simply smaller versions of large companies.  Over time, I realized that was wrong – large companies executed known business models, while startups searched for them.

I went back and reread the Innovator’s Dilemma and then a ton of the literature on corporate innovation. My goal was to figure out how to crack the code for startups like Christensen did for corporations. My first book The Four Steps to Epiphany was a pale shadow of his work, but it did the job. Customer Development became one of the three parts of the Lean Startup as Eric Ries and Alexander Osterwalder provided the other two components (Agile Engineering and the business model canvas.) Today, the pile of books on startup innovation and entrepreneurship likely equals the literature on corporate innovation.

Teaching a different kind of innovator
Unlike corporate executives, founders are closer to artists than executives – they see things others don’t, and they spend their careers passionately trying to bring that vision to life. That passion powers them through the inevitable ups and downs of success and failures. Therefore, for founders, entrepreneurship wasn’t a job, but a calling.

Understanding the students Clay was teaching gave me the confidence that we needed to do something different. The result was the Lean LaunchPad, I-Corps and Hacking for Defense — classes for a different type of student that emulated the startup experience.

Dropping the curtain on Innovation Theater
The next phase of my career was trying to understand why the tools we built for startups ended up as failing (i.e. Innovation Theater) in companies and government organizations, rather than creating actual innovation.

Here again I referred to Christensen’s work not only in the Innovators Dilemma, but the Innovators Solution. He had introduced the idea that customers don’t buy a product, rather than they hire it for a “job to be done.” And offered a set of heuristics for launching disruptive businesses.

I realized what he and other management thinkers had long figured out. That if you don’t engage the other parts of the organization in allowing innovation to occur, existing processes and procedures will strangle innovation in its crib. In the end companies and government agencies need an innovation doctrine – a shared body of beliefs of how innovation is practiced – and an innovation pipeline – an end to end process for delivery and deployment of innovation.

Thank you, Clay for all the inspiration to see further as an educator.

How to Measure your Life
For me, Clay’s most important lesson, one that put his life’s work in context, was his book How to Measure Your Life.

In it, Christensen reminded all of us to put the purpose of our lives front and center as we decide how to spend our time, talents, and energy. And in the end the measure of a life is not time. It’s the impact you make serving God, your family, community, and country. Your report-card is whether the world is a better place.

He touched all of us and made us better.

Thank you, Clay for reminding us what is important.

You left us way too early.

Getting Schooled – Lessons from an Adjunct

This post previously appeared in Poets and Quants

I’ve been an adjunct professor for nearly two decades. Here’s what I’ve learned.


Colleges and universities that offer entrepreneurs the opportunity to teach innovation and entrepreneurship classes may benefit from a more formal onboarding process.

The goal would be six-fold:

  1. Integrate adjuncts as partners with their entrepreneurship centers 
  2. Create repeatable and scalable processes for onboarding adjuncts
  3. Expose adjuncts to the breadth and depth of academic research in the field
  4. Expose faculty to current industry practices
  5. Create a stream of translational entrepreneurship literature for practitioners (founders and VC’s.) 
  6. Create fruitful and mutually beneficial relationships between traditional research faculty and adjunct faculty.

In my experience as both an adjunct and a guest speaker at a number of universities, I’ve observed the often-missed opportunity to build links between faculty research and practitioner experience. Entrepreneurial centers have recognized the benefits of both, but a more thoughtful effort to build stronger relationships between research and practice—and the faculty and adjuncts who are teaching – can result in better classes, strengthen connections between research and practice, build the Center’s knowledge base and enhance the reputation of the Center and its program.  (See here for what that would look like.)

An adjunct is a non-tenure track, part-time employee. Innovation and entrepreneurship programs in most schools use experienced business practitioners as lecturers or adjunct faculty to teach some or all of their classes. In research universities with entrepreneurship programs adjuncts are typically founders, VC’s or business executives. Tenure track faculty focus on research in innovation and entrepreneurship while the adjuncts teach the “practice” of entrepreneurship.

It’s Been A Trip
I’ve been an adjunct for almost 18 years, and I still remember the onboarding process at the Haas School of Business at the University of California, Berkeley. I started as a guest lecturer, essentially walk-on entertainment, where the minimal entry was proving that I could form complete sentences and tell engaging stories from my eight startups that illustrated key lessons in entrepreneurship.

Feeling like I had passed some test (which I later learned really was a test), I then graduated to co-teaching a class with Jerry Engel, the Founding Executive Director of the Lester Center for Entrepreneurship at Haas. Here I had to master someone else’s curriculum, hold the attention of the class and impart maximum knowledge with minimum damage to the students. While I didn’t realize it, I was passing another test.  

I knew I wanted to write a book about a (then) radically new entrepreneurship idea called Customer Development (later the foundation of the Lean Startup movement). Concurrently, Jerry needed an entrepreneurial marketing course, and suggested that if I first created my class, a book would emerge from it. He was right. The Four Steps to the Epiphany, the book that launched the Lean Startup movement, was based on the course material from my first class. I don’t know who was more surprised – Jerry hearing that an adjunct wanted to create a course or me hearing Jerry say, “Sure, go ahead. We’ll get it approved.”  

And here’s where the story gets interesting. John Freeman, the Faculty Director of the Lester Center for Entrepreneurship at Haas, began to mentor me as I started teaching my class. While I expected John to drop in to monitor how and what I was teaching, I was pleasantly surprised when he suggested we grab coffee once a week. Each week, over the course of the semester, John gently pointed (prodded) me to read specific papers from the academic literature that existed on customer discovery in the enterprise and adjacent topics. In exchange, I shared with him my feedback on whether the theory matched the practice and what theory was missing. And herein lies the tale.

I got a lot smarter discovering an entire universe of papers and people who had researched and thought long and hard about innovation and entrepreneurship. While no one had the exact insights about startups I was exploring, the breadth and depth of what I didn’t know was staggering. More importantly, my book, customer development, and the Lean methodology were greatly influenced by all the research that had preceded me. In hindsight, I consider it a work of translational entrepreneurship. 18 years later I’m still reading new papers and drawing new insights that allow me to further refine ideas in the classroom and outside it.

The Relationship of Faculty, Staff and Adjuncts
What I had accidentally stumbled into at U.C. Berkeley was a rare event. The director of the entrepreneurship center and the faculty research director were working as a team to build a department which explored both research and practice in depth. Together, in just a few years, they used the guest speaker > to co-teacher > to teacher methodology to build a professional faculty of over a dozen instructors.

A few lessons from that experience:
A successful adjunct program starts with the mindset of the faculty research director and the team building skills of the center director. If they recognize that the role of adjuncts is to both teach students practical lessons and to keep faculty abreast of real-world best practices, the relationship will flourish. 

However, in some schools, this faculty-adjunct relationship may become problematic. Faculty may see the role of adjuncts in their department as removing the drudgework of “teaching” from the research faculty so the faculty can pursue the higher calling of entrepreneurial research, publishing and advising PhD students. In this case, adjuncts at the entrepreneurial center are treated as a source of replaceable low-cost teaching assets (somewhere above TA’s and below PhD students.) The result is a huge missed opportunity for a collaborative relationship, one that can enhance the stature and ranking of the department.

When there is support from the faculty research director, the director of the entrepreneurship center can build a stronger program that enhances the reputation of the faculty, program and school.

At U.C. Berkeley this support eventually led the entire school to change its policy toward adjuncts, giving them formal recognition – designating them ‘professional faculty,’ creating a shared office space suite, inviting adjuncts to participate in some faculty meetings, etc.

A side effect of this type of collaboration is that the faculty-adjunct relationship offers the school an opportunity to co-create translational entrepreneurship.

Translational entrepreneurship is fancy term for linking entrepreneurial research with the work of entrepreneurs. As a process, adjuncts would read an academic paper, understand it, see if and how it can be relevant to practitioners (founders, VC’s, corporate exec or employees) and then sharing it with a wide audience.

While Jerry and John built a great process, they didn’t document it. When John Freeman passed away and Jerry Engel retired, the onboarding process went with them. Linked here is my attempt to capture some of these best practices in an “Onboarding Adjuncts Handbook” for directors of entrepreneurship centers and adjuncts.

It’s worth a look.

Lessons Learned

A small investment in building repeatable and scalable processes for onboarding adjuncts would:

  • Allow entrepreneurship centers to integrate adjuncts as partners 
  • Expose adjuncts to the breadth and depth of academic research in the field
  • Potentially create a stream of translational entrepreneurship literature for practitioners (founders and VC’s.) 
  • The result would be:
    • Better adjunct-led classes
    • Deeper connections between research and practice
    • Better and more relevant academic research
    • Enhanced reputation of the center and its program
  • See here for a suggested onboarding handbook
    • Comments, suggestions and additions welcomed

We Needed a Bigger Room – The Lean Educators Summit

It’s a bit bittersweet. We used to be able to fit all the Lean Educators in my living room and have space left over. No longer.

Turns out we needed a bigger room for the Dec 4th-5th Lean Educators Summit.

The good news is that if we’ve turned you away or you were on the waiting list we moved to a bigger venue.


It’s been almost a decade since we first started teaching the Lean Methodology. It’s remade entrepreneurship education, startup practice and innovation in companies and the government. But in all that time, we haven’t gotten a large group of educators together to talk about what it’s been like to teach Lean or the impact it’s had in their classrooms and beyond. It dawned on us that with 10 years of Lessons Learned to explore, now would be a good time.

This one class launched the National Science Foundation I-Corps program, (designed to help turn our country’s best academic research into companies), the I-Corps @ the National Institute of Health, I-Corps @ the Department of Energy, I-Corps @ NSA, Hacking for Defense and Hacking for Diplomacy, Hacking for Cities and Hacking for Non-profits. Hacking for Oceans is coming next.

Educators Sharing Best Practices
So, for the first time ever, Jerry Engel, Pete Newell and Steve Weinstein and I are getting all educators from all these groups together for a “share best practices” summit – December 4th – 5th.

We’re going to cover:

  • The effectiveness of our programs [including I-Corps and Hacking for Defense]: What we have learned so far and how to make it better
  • Customer Discovery and Lean Innovation in Academic Settings vs Non-Academic Settings such as incubators and accelerators
  • Tech Commercialization: innovators vs. entrepreneurs –  motivating scientists and engineers
  • Lean Innovation in the Enterprise, Not-for-Profit and Government – what’s different
  • International: Success and Challenges of Lean Innovation and Customer Discovery in  Europe and Asia [and South America? Australia?]
  • What’s next for Lean and entrepreneurial education
  • and much more…

Agenda is below.

Register here

See you there!

Who Ever Thought? The Lean Educators Summit

It’s been almost a decade since we first started teaching the Lean Methodology. It’s remade entrepreneurship education, startup practice and innovation in companies and the government. But in all that time, we haven’t gotten a large group of educators together to talk about what it’s been like to teach Lean or the impact it’s had in their classrooms and beyond. It dawned on us that with 10 years of Lessons Learned to explore, now would be a good time.

So, for the first time ever, we’re getting all educators from all these groups together for a “share best practices” summit at my ranch – December 4th – 5th.


100,000 students, one class at a time
A few months ago with the folks at VentureWell, the non-profit that puts on the Lean LaunchPad Educator classes  mentioned, “You know we’ve trained over 800 educators at hundreds of colleges and universities around the world to teach your class…” Say what???

It still seems like yesterday that Ann Miura-Ko and I were creating a new class – the Lean LaunchPad at Stanford to teach students an alternative to how to write a business plan.

If you can’t see the video click here

I quickly did the math. 800 educators – times 15 or so students per year – times almost ten years. Wow. It’s possible that 100,000 students have gone through some form of the class.

Add that to the 5,000 or more of our nation’s best science researchers who’ve gotten out the building (in this case their labs) who’ve gone through the National Science Foundation I-Corps program, (designed to help turn our country’s best academic research into companies), or the I-Corps @ the National Institute of Health or I-Corps @ the Department of Energy. And then add another 5,000 more who’ve gone through a version of I-Corps inside the Department of Defense.

It made me think about the variants of the class we’ve created. We started Hacking for Defense and Diplomacy almost four years ago. Hacking for Defense is now supported by the National Security Innovation Network and has put hundreds of students in 24 universities through the program. Hacking for Cities and Hacking for Non-profits have followed at U.C. Berkeley. Hacking for Oceans is coming next.

Yet none of these instructors across these disciplines have met. Or shared what they’ve learned.

So lets’ do it.

Educators Sharing Best Practices
On December 4th-5th, Jerry Engel, Pete Newell and I are hosting an event at the ranch for a select group of educators that have lead the Lean Innovation movement.

We’re going to cover:

  • The effectiveness of our programs [including I-Corps and Hacking for Defense]: What we have learned so far from the data and how to make it better
  • Customer Discovery and Lean Innovation in Academic Settings vs Non-Academic Settings such as incubators and accelerators
  • Tech Commercialization: innovators vs. entrepreneurs –  motivating scientists and engineers
  • Lean Innovation in the Enterprise, Not-for-Profit and Government – what’s different
  • International: Success and Challenges of Lean Innovation and Customer Discovery in  Europe and Asia [and South America? Australia?]
  • What’s next for Lean and entrepreneurial education
  • and much more…

Lessons Learned:

  • I’m hosting the Summit of Lean Innovation Educators at my ranch in December.
  • We’re bringing together a group to capture best practices and define a vision for what lies ahead.
  • Stay tuned for what we learn
  • And if you think you should be here, click here and let us know why

Mission Model Canvas – the Videos

In 2016 Pete Newell, Alexander Osterwalder and I developed the Mission Model Canvas for our Hacking for Defense Class.  We’ve now created a series of videos that explain how this variant of the Business Model Canvas works – 11 videos totaling 17 minutes.

Thanks to BMNT and the National Security Innovation Network for support of this project.

When Pete Newell, Joe Felter and I built the Hacking for Defense class we modeled the syllabus after my earlier Lean LaunchPad and NSF I-Corps classes. Both classes used Alexander Osterwalder’s Business Model Canvas to frame the hypotheses to be tested.

If you can’t see the business model canvas video click here

However, using the business model canvas inside the Dept of Defense was problematical. Teams there pointed out that the standard business model canvas didn’t fit their problem sets. For example, in the Dept of Defense you don’t measure progress by measuring revenue. Instead you mobilize resources and a budget to solve a particular problem and create value for a set of beneficiaries (customers, support organizations, warfighters, Congress, the country, etc.)

Therefore, the business model canvas box labeled Revenue Streams doesn’t make sense. The defense and intelligence community are mission-driven organizations so there is no revenue to measure. The first step in building a canvas that worked for these organizations was to change the Revenue Stream box to one that would provide a way to measure success.

We called this alternative- Mission Achievement/Success.

Now the Mission Model Canvas just needed four more tweaks.

  • Customer Segments was changed to Beneficiaries
  • Cost Structure was changed to Mission Cost/Budget
  • Channel was changed to Deployment
  • Customer Relationships was changed to Buy-in/Support

Read the full blog post on the development and use of the Mission Model Canvas here.

And watch the Mission Model Canvas videos below.

If you can’t see the Introduction to the Mission Model Canvas video click here

If you can’t see the Beneficiaries and Stakeholders video click here

If you can’t see the Value Proposition video click here

If you can’t see the Buy-In video click here

If you can’t see the Deployment video click here

If you can’t see the Mission Achievement video click here

If you can’t see the Key Activities video click here

If you can’t see the Key Resources video click here

If you can’t see the Key Partners video click here

If you can’t see the Mission Budget video click here

If you can’t see the Key Concepts video click here

You can find the entire video series collected here

Hacking for Defense @ Stanford 2019

We just finished our 4th annual Hacking for Defense class at Stanford. At the end of each class we have each team give a Lessons Learned presentation. Unlike traditional demo days or Shark Tanks which are “here’s how smart I am, please give me money,” a Lessons Learned presentation tells a story of a journey of hard-won learning and discovery. For all the teams it’s a roller coaster narrative of what happens when you discover that everything you thought you knew was wrong and how they eventually got it right.

Watching each of the teams present I was left with wonder and awe about what they accomplished in 10 weeks.

  • The eight teams spoke to over 820 beneficiaries, stakeholders, requirements writers, program managers, warfighters, legal, security, customers, etc.
  • By the end the class all of the teams realized that the problem as given by the sponsor had morphed into something bigger, deeper and much more interesting.

Our keynote speaker was Palmer Luckey, founder of Oculus and the designer of the Oculus Rift. He’s now the CEO/founder of the AI-focussed defense contractor Anduril Industries.

If you can’t see the video of Palmer Luckey click here

Presentation Format
Each of the eight teams presented a 2-minute video to provide context about their problem.

Followed by an 8-minute slide presentation follow their customer discovery journey over the 10-weeks. All the teams used the Mission Model Canvas, Customer Development and Agile Engineering to build Minimal Viable Products, but all of their journeys were unique.

All the presentations are worth a watch.

Team: Panacea

If you can’t see the Panacea 2-minute video click here

If you can’t see the video of the Panacea team presenting click here

If you can’t see the Panacea slides click here

Mission-Driven Entrepreneurship
This class is part of a bigger idea – Mission-Driven Entrepreneurship. Instead of students or faculty coming in with their own ideas — we now have them working on societal problems, whether they’re problems for the State Department or the Department of Defense, or non-profits/NGOs, or for the City of Oakland or for energy or the environment, or for anything they’re passionate about. And the trick is we use the same Lean LaunchPad / I-Corps curriculum — and kept the same class structure – experiential, hands-on, driven this time by a mission-model not a business model.

Mission-driven entrepreneurship is the answer to students who say, “I want to give back. I want to make my community, country or world a better place, while solving some of the toughest problems.”

Team: Learn2Win

If you can’t see the Learn2Win 2-minute video click here

If you can’t see the video of the Leanr2Win team presenting click here

If you can’t see the Leanr2Win slides click here

It Started with an Idea
Hacking for Defense has its origins in the Lean LaunchPad class I first taught at Stanford in 2011. I observed that teaching case studies and/or how to write a business plan as a capstone entrepreneurship class didn’t match the hands-on chaos of a startup. And that there was no entrepreneurship class that combined experiential learning with the Lean methodology. Our goal was to teach both theory and practice.

The same year we started the class, it was adopted by the National Science Foundation to train Principal Investigators who wanted to get a federal grant for commercializing their science (an SBIR grant.) The NSF observed, “The class is the scientific method for entrepreneurship. Scientists understand hypothesis testing” and relabeled the class as the NSF I-Corps (Innovation Corps). The class is now taught in 9 regional locations supporting 98 universities and has trained over 1500 science teams. It was adopted by the National Institutes of Health as I-Corps at NIH in 2014 and at the National Security Agency in 2015.

Team: Embargo NK

If you can’t see the EmbargoNK 2-minute video click here

If you can’t see the video of the EmbargoNK team presenting click here

If you can’t see the EmbargoNK slides click here

Origins of Hacking For Defense
In 2016, brainstorming with Pete Newell of BMNT and Joe Felter at Stanford we observed that students in our research universities had little connection to the problems their government as well as the larger issues civil society was grappling with. Wondering how we could get students engaged, we realized the same Lean LaunchPad/I-Corps class would provide a framework to do so. That year Hacking for Defense and Hacking for Diplomacy (with Professor Jeremy Weinstein) with the State Department were both launched at Stanford.

 

Team: Common Ground

If you can’t see the Common Ground 2-minute video click here

If you can’t see the video of the Common Ground team presenting click here

If you can’t see the Common Ground slides click here

Goals for the Hacking for Defense Class
Our primary goal was to teach students Lean Innovation while they engaged in a national public service. Today if college students want to give back to their country they think of Teach for America, the Peace Corps, or Americorps or perhaps the US Digital Service or the GSA’s 18F. Few consider opportunities to make the world safer with the Department of Defense, Intelligence Community or other government agencies.

Next, we wanted the students to learn about the nation’s threats and security challenges while working with innovators inside the DoD and Intelligence Community. While doing so, also teach our sponsors (the innovators inside the Department of Defense (DOD) and Intelligence Community (IC)) that there is a methodology that can help them understand and better respond to rapidly evolving asymmetric threats. That if we could get teams to rapidly discover the real problems in the field using Lean methods, and only then articulate the requirements to solve them, could defense acquisition programs operate at speed and urgency and deliver timely and needed solutions.

Finally, we wanted to familiarize students about the military as a profession, its expertise, and its proper role in society. And conversely show our sponsors in the Department of Defense and Intelligence community that civilian students can make a meaningful contribution to problem understanding and rapid prototyping of solutions to real-world problems.

Team: Deepfakes

If you can’t see the Deepfakes 2-minute video click here

If you can’t see the video of the Deepfakes team presenting click here

If you can’t see the Deepfakes slides click here

Mission-driven in 30 Universities
Hacking for Defense is offered in over 25 universities, but quickly following, Orin Herskowitz started Hacking for Energy at Columbia, Steve Weinstein started Hacking for Impact (Non-Profits) and Hacking for Local (Oakland) at Berkeley and will be starting Hacking for Oceans at Scripps. Hacking for Conservation and Development at Duke followed.

Team: IntelliSense

If you can’t see the Intellisense 2-minute video click here

If you can’t see the video of the Intellisense team presenting click here

If you can’t see the Intellisense slides click here

Team: Gutenberg

If you can’t see the Gutenberg 2-minute video click here

If you can’t see the video of the Gutenberg team presenting click here

If you can’t see the Gutenberg slides click here

Team: PredictiMx

If you can’t see the PredictiMx 2-minute video click here

If you can’t see the video of the PredictiMX team presenting click here

If you can’t see the PredictiMx slides click here

It Takes a Village
While I authored this blog post, this classes is a team project. The teaching team consisted of:

  • Pete Newell is a retired Army Colonel and CEO of BMNT.
  • Steve Weinstein a 30-year veteran of Silicon Valley technology companies and Hollywood media companies.  Steve was CEO of MovieLabs the joint R&D lab of all the major motion picture studios.
  • Tom Bedecarré was the founder and CEO of AKQA, the leading digital advertising agency. Four decades as part of the most successful advertising agencies in the world.
  • Jeff Decker is a social science researcher at Stanford. Jeff served in the U.S. Army as a special operations light infantry squad leader in Iraq and Afghanistan.

Our teaching assistants Nate Simon, Aidan Daniel McCarty, Mackenzie Burnett and Diego CervantesA special thanks to the National Security Innovation Network (NSIN) and Rich Carlin and the Office of Naval Research for supporting the program at Stanford and across the country. And our course advisor – Tom Byers, Professor of Engineering and Faculty Director, STVP.

We were lucky to get a team of mentors (VC’s and entrepreneurs) who selflessly volunteered their time to help coach the teams. Thanks to Kevin Ray, Lisa Wallace, Rafi Holtzman, Craig Seidel, Todd Basche, Don Peppers, Robert Locke, and Mark Clapper.

We were privileged to have the support of an extraordinary all volunteer team of professional senior military officers representing all branches of service attending fellowship programs at Stanford’s Hoover Institution, and Center for International Security and Cooperation (CISAC) and Asia Pacific Research Center (APARC) at the Freeman Spogli Institute (FSI) as well as from the Defense Innovation Unit. These included:Tim Mungie, Tim Murphy, Matt Kent, Todd Mahar, Donnie Hasseltine, Jay Garcia, Kevin Childs.

And of course a big shout-out to our sponsors. At United Nations Command Security Battalion – CPT Justin Bingham, Air Force Air Combat Command – Mr. Steven Niewiarowski, Office of the Secretary of Defense Asian & Pacific Security Affairs – Chief of Staff Julie Sheetz, U.S. Coast Guard – Security Specialist Asad Hussain, IQT – Vishal Sandesara, Veterans Adminstration – Kristopher “Kit” Teague, Chief Operating Officer, IARPA – John Beieler, DNI – Dean Souleles

Thanks!

The Evolution of Entrepreneurial Education and Corporate Innovation

I was interviewed by Philip Bouchard, Executive Director of TrustedPeer Entrepreneurship Advisory, about how entrepreneurship education has changed, mission-driven entrepreneurship, and what we’ve learned about corporate innovation.

Worth a read.

Interview highlights:

  • How is the way that universities teach entrepreneurship evolving?
  • Lean LaunchPad class developed for Stanford
  • Innovation and entrepreneurship will become the liberal arts of the 21st century
  • Teaching basic entrepreneurial appreciation
  • Mission-Driven Entrepreneurship
  • Hacking for X classes
  • Ethics in entrepreneurship
  • How has innovation in large corporations evolved over the last 10 years?
  • Innovation theater in large corporations
  • “I want to see what you look like in a prison suit.”
  • What are companies doing beyond innovation theater?
  • How innovation can succeed inside of a large company
  • The easy part is, “Let’s have an incubator.” The hard part is, “How do we deliver something?”
  • “Heroic innovation” within large corporations
  • End-to-end “Innovation Pipeline” process
  • Innovators are not entrepreneurs
  • Building an entrepreneurship ecosystem
  • How can corporations work more closely with universities?

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

Steve Blank: When I first starting teaching, the capstone entrepreneurship class was how to write a business plan. Other classes were on how to prep for VC pitches or develop the five year income statements, balance sheets and cash flows or read case studies. Today, people laugh if somebody says that’s a capstone entrepreneurship class. But years ago, we had no alternative – how to write a business plan was it.

My contribution has been, “Why don’t we design classes more closely modeled to what innovators and entrepreneurs actually do.” Today the capstone class is most often experiential, team-based, hands on, focused around the search for a repeatable and scalable business model. And the Lean LaunchPad class I developed at Stanford was the first such class. It was adopted by the National Science Foundation for commercializing 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 an entrepreneurial community. In addition to Stanford I also teach at Columbia, and at these research universities – Stanford, Columbia, Berkeley, and others – they all now have an internal incubator, they have maker spaces, they have their own venture funds, they connect to the community, they connect to venture capital. They’ve become outward-facing universities. It’s a big idea.

Years ago, entrepreneurship was taught like everything else, inward-facing, which was a mindset of, “I focus on what I know as an academic and I will teach you that,” which was mostly theory and/or consulting experience with large corporations. And the odds of learning from faculty who actually had experienced the chaos and uncertainty of building a startup was low. It wasn’t really part of the job as an educator. Today, if you’re building an entrepreneurship program, the teaching team most often includes adjuncts with entrepreneurial experience as complements to the tenured faculty, classes are experiential and the community you’re building is a set of additional components that never existed before.

PB: In addition to being more outward facing, how should universities be thinking about what to offer next? What do you see in the next 2-3 years?

SB: I think innovation and entrepreneurship will become the liberal arts of the 21st century. With the nature of work changing, the core skills entrepreneurs need to know to become practitioners are actually core skills that everybody 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 the Renassiance we realized that the best way to teach artists, painters and sculptors, was by via hands-on apprenticeships and long-term commitment. You learned a modicum of theory and got a ton practice. (Today, if you’ve decided the arts are your career, your goal might be to get into Juilliard or CalArts.)

But about 100 years ago, in the art world, somebody had a lightbulb moment and said, “Wait a minute, in addition to the capstone classes, why don’t we teach art appreciation at the earliest possible age to everyone?” For example, finger-painting, making clay ashtrays and writing. The reason for that is two-fold. One is to have people self-identify at an early age that, “Oh, my gosh. Painting can be a career? I knew I was interested.” And second, so that the rest of us who are not going to be artists can appreciate how hard it is, and learn how to look at art and how to look at sculpture and how to appreciate good writing.

I believe the analogy is identical for entrepreneurship. The capstone entrepreneurship classes like NSF I-Corps or a Lean LaunchPad class, are for those who have already decided they want to be entrepreneurs. The part of the entrepreneurship curriculum that’s missing is offering entrepreneurial appreciation classes to everyone. We ought to be creating a set of classes on creativity, agility and resilience and being able to tell facts from “fake news” — components of innovation and entrepreneurship that I think are going to be required 21st century skills.

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

SB: Teaching basic entrepreneurial appreciation in the 21st century is literally the equivalent to liberal arts of the 20th. Forward thinking schools will start offering a series of classes that are core curriculum like liberal arts were in schools in the ’50s through the ’80s that said “for a liberal arts education you need to understand literature and you need to understand art.” In the 21st century we’re going to add some additional core skills.

That said, entrepreneurship education needs to be a combination of theory and practice. It’s pretty easy to offer classroom entrepreneurship lectures and forget that it’s the hands-on application that makes the theory relevant. Think if medical schools just taught doctors the textbooks, but never had them touch a patient.

The other direction where teaching is going – and what we’ve been pioneering – is Mission-Driven Entrepreneurship. Instead of students or faculty coming in with their own ideas — we now have them working on societal problems, whether they’re problems for the State Department or the military or non-profits/NGOs, or for the City of Oakland or for energy or the environment, or for anything they’re passionate about. And the trick is we use the same Lean LaunchPad / I-Corps curriculum — and kept the same class structure – experiential, hands-on, driven this time by a mission-model not a business model.

Mission-driven entrepreneurship is the answer to students who say, “I want to give back. I want to make my community, country or world a better place, while solving some of the toughest problems.” These classes include Hacking for Defense, Hacking for Diplomacy, Hacking for Energy, Hacking for Impact, or Hacking for Oceans, etc., but the umbrella term is “mission-driven entrepreneurship.” The class syllabus 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’ve always believed that great classes continue to thrive after the original teachers have moved on. To be honest, as I watch other instructors now run these classes, I feel a proud “passing of the torch” though touched by moments of King Lear and Kurosawa’s Ran. Way past my ad hoc activities, the Stanford teaching team has thoroughly professionalized the class.

After eight years the class is still taught to students working on their own problems. It’s taught at Stanford, Berkeley, Columbia and probably another hundred universities and colleges because I open-sourced the class and trained educators on how to teach it. 98 universities teach it through the National Science Foundation.

As I mentioned, the Mission-Driven Entrepreneurship classes are a new variant that’s taught in ~30 universities. The nice part is that we have educators who are already trained on teaching Lean LaunchPad or I-Corps, so for the educators there’s nothing particularly new. The only hard part about it, is to get well-defined problems from sponsors in the local city or government agency that you offer to students.

PB: Everyone looks for a turnkey solution. “I want a low overhead, self-guided solution.” Can someone go through your Lean LaunchPad step-by-step course without a trainer? Can it be self-directed? How long does it take to train a trainer?

SB: All my class lectures are online at Udacity.com for free. Can you become a founder by watching videos? Perhaps, but founders are closer to artists than any other profession. So can you become an artist by reading about art? Can you learn entrepreneurship without taking an experiential hands-on class or better, actually be part of a startup? Well, you can read a lot about entrepreneurship and learn the theory, but it’s like reading about painting or sculpture or music. You need theory and practice – lots of practice.

PB: Is ethics in entrepreneurship going to be part of the broader entrepreneurship curriculum like a general liberal arts education? Is ethics something that you bring into your Lean LaunchPad course or your ENGR 245 course?

SB: I think ethics are a critical missing component of most business curriculums. At Stanford, Tom Byers, who runs the innovation and entrepreneurship program inside the engineering school, has made that a big deal and it’s now part of the curriculum. Tom has added a class on entrepreneurial ethics.

However, the problem with teaching entrepreneurial ethics is the same as with teaching corporate ethics: Everything is great in theory until the sxxt hits the fan. When you don’t have any checks and balances, that is, when the government isn’t really paying attention or there are no consequences, you tend to get people who game the system, whether they’re corporations or they’re entrepreneurs and innovators.

It’s exactly like if you’ve ever been driving on a highway and reach a merge and people are cutting into the line and you go, “What the heck am I’m doing waiting for the merge while people are cutting in?” Then everybody else starts doing it and you think “Why am I the only person who’s patiently waiting?” There’s a social component about what’s the norm for behavior.

It’s not like we need a nanny-state, but if there’s no enforcement at all, we can teach ethics all we want, but people tend to devolve to the least common denominator.

PB: How has innovation in large corporations evolved over the last 10 years? You talk about “innovation theater” in large corporations. What’s the trend in terms of corporations developing cultures of innovation and programs for intrapreneurs?

SB: If you’re a large corporation, the world has turned upside down. In hindsight the 20th century was the golden age for corporations. Today, companies face five challenges they never had to deal with:

Challenge one – As companies are discovering every day, the web has changed everything. Distribution channels, brand loyalty, etc.

Challenge two – Large companies are dealing with startups that are funded with unimaginable capital. In the past, the idea of a startup having more capital than an existing corporation was a fantasy. But today if I’m a startup and I’m raising a hundred million dollars or billions of dollars, like Uber, Airbnb or Tesla, I can take on an entire industry.

Challenge three – Today, investors willingly fund startups to do anything on day one. Anything. Including break the law. Tesla, Airbnb, Uber, all were predicated on, “Well, what if we said, ‘screw the law’. How big would that opportunity be?”

In the 20th century no venture capitalist would have funded that. In the 21st century they got out their little eyeshades and calculators and said, “Ha! If we actually succeed, there’s a $10 billion company here.”

In contrast, as much as a corporation wants to do that, the first thing that will happen is your general counsel’s in your office saying, “I want to see what you look like in a prison suit.” Because a company can’t do the things that a startup can.

Challenge four – In a startup, 100% of the company is focused on innovation and entrepreneurship. In a large corporation, 99% of the company is focused on execution of the current business model by building repeatable processes and procedures. And a very small percentage are focused on innovation. I could keep going on down the list.

Challenge five – In a startup, if you win, it’s a payout of billions of dollars. In a large company, for the individual, there is no such payout.

PB: However, there are some companies that do evolve, that do pivot and make the right changes. What you’re talking about, “A large corporation is not a startup,” doesn’t necessarily mean it’s going to go the way of the dodo. What are companies doing beyond innovation theater?

SB: I just wanted to give you the setup of why it’s harder for corporations. Not why they can’t do it. In spite of all the things that I just mentioned, there are large companies that have figured out how to build innovation ecosystems. My favorite is a private company called W.L.Gore & Associates. At their core they make products out of expanded PTFE like GORE-TEX fabrics. But they’ve taken that basic technology past fabrics into multiple markets – medical, filtration, fibers, cables, etc. They have a process of continual innovation – an innovation pipeline. But this type of innovation requires leadership who understands that is their goal. If you’re a large company’s CEO today, the problem is that you’re dealing with, well, lots of issues, not just innovation.

  • One – “How do I deal with activist investors who want to take my company apart and sell it for pieces?”
  • Two – “I’ve been hearing about this innovation stuff, but if I’m running a 10,000-person company, my skill-set is about execution, not innovation. I might give you some head nods about innovation, but I really don’t have that in my DNA.”
  • Three – Companies are driven by processes and procedure, those same processes and procedures strangle innovation in its crib. For innovation to succeed inside of a large company, you need a parallel set of processes, not to replace the existing ones, but to operate on a fast track.

Some companies have figured out how to do this, not just internally, but by just acquiring those that do. So, if you think about how a large company can innovate, they could build, they could buy, they could partner, they could license. All parts of their toolset where startups don’t have those opportunities. Basically, startups are just building.

PB: Large corporations have a number of tools they use for innovation. One area is innovation challenges and idea challenges to come up with a thousand new ideas. A second option is for corporations to provide accelerators where they invite startups to apply to be part of their accelerator program. A third is incubators and makers’ spaces. Do you see those as innovation programs that can work? They’re spending a lot of money on it.

SB: No. What you just described is innovation theater. These are innovation activities, not deliverables. The hard part in a company is not getting a demo or setting up an internal accelerator, it’s getting something delivered all the way through your existing sales channel. What does it take to get from that demo into your engineering group, to be delivered as a product into your existing sales channel? And that’s where the difficulties are. You run into, “Well, wait a minute, this isn’t on our budget or schedule.” “Wait a minute, this conflicts with our existing product line.” “This will put our most profitable product out of business,” or “We don’t even have a sales force that knows how to sell this thing.”

A good number of companies focus on the easy part, which is, “Let’s have an incubator/accelerator.” The hard part is, “How do we deliver something with speed and urgency?” For example, when I teach this for the government, our focus is on innovation that gets deployed and fielded, not demos. (Yes, you might need a demo to convince someone to fund your program, but the demo is not the goal – delivery is.) Companies have more demos than they’ll ever need. But really the goal of a successful innovation program is figuring out how do you deploy something by getting through the hard political wiring diagram of who owns what, and how does this differ from what we already have, and which budget is it going to come from, and “this is unscheduled” and “wait a minute, it doesn’t meet our quality standards” and “we’re going to screw up our brand”?

How do we solve those problems? And that doesn’t mean it’s not solvable. It just means the “Let’s throw a party” approach reminds me of the old Andy Hardy movies of “Let’s put on a show.” Ok, we’ve got a show, now what?

The “now what” is that we lack a corporate innovation doctrine.

PB: I’m going to read a quote from you, which is “We believe the next big step is to get teams of leaders to think about the innovation process from end to end. That is, to visualize the entire flow of how and from where an idea is generated – the source – all the way to deployment – how to get it into the user’s hands.” You also have talked about an innovation stack and operational innovation, which is absent and so difficult to implement. What prompted these insights?

SB: Here’s what I observed. Large companies and government agencies have always had innovation, but it’s what I call “heroic innovation.” That is, there was no process, no procedure, but you always hear stories about somebody who managed to get a new product or idea out the door. We tend to celebrate those without anybody ever thinking, “Well, wait a minute. Maybe the fact that there are no formal innovation processes is the problem, not that there was some heroic stuff happening.”

In the last couple years, my work, Eric Ries’s work, Alexander Osterwalder’s work, all were focused on building a body of professional knowledge – doctrine – around innovation. And as part of that we’ve developed a set of tools that could be used to search for business models. Companies have adopted this innovation doctrine and startup tools and have been running accelerators and whatever. The problem is that there still wasn’t an end-to-end innovation implementation process, inside a large company.

What we came up with last year is called the Innovation Pipeline, a process inside a company or a government agency that says, “Let’s start with innovation sourcing. And then build a process to take that all the way to delivery or deployment. What are the steps internally we need to take that are different than how engineering builds products today?”

This end-to-end pipeline has a couple of steps. The first step is where the ideas or technology come from. They can come from inside the company, outside as acquisitions, universities, etc. The second step is, “What problem are we solving?” which we call problem curation. “Is this a real problem or is this a neat piece of flashy technology? How do we prioritize all the things we’re now doing inside this pipeline. And then how do we test solutions and hypotheses?”

In the middle of this pipeline is the I-Corps Lean LaunchPad methodology for customer discovery and validation. Next, how do we incubate it, and then how do we transition and integrate it with our existing engineering and sales organizations to deliver this stuff That’s an end-to-end process.

By contrast, an incubator and accelerator is a point activity.

As we’ve been teaching organizations this end-to-end Innovation Pipeline process we realized that at each one of those steps the team evolves. At the beginning of that pipeline you might have an innovator, a technologist in R&D. That’s great, but we now know that either in startups or large companies innovators don’t make sxxt happen. They invent things.

Typically, to partner with the innovator on the first step, you need to find an entrepreneur. An entrepreneur inside of a company is somebody who knows how to get stuff across the finish line inside the bureaucracy. That’s very different than the innovator. The mistake that we tend to make is, “Oh, let’s teach the innovators how to do that.” But innovators are almost never entrepreneurs. You can make them appreciate entrepreneurs, but they’re not the same people.

PB: A trending challenge for directors of university entrepreneurship programs is to build an entrepreneurship ecosystem. These executive directors are struggling to decide, “What do I build out next? What program do I add next?” Is there some way to take your approach and to direct it to building university entrepreneurship ecosystems?

SB: An example of what you just talked about is the tech transfer and venture group at Columbia University, run by Orin Herskowitz. Orin has spun seven different programs out of the Lean LaunchPad and Hacking for Defense programs. In energy and biotech and devices and whatever. Basically, using this pedagogy and building an entire ecosystem around it. It’s really impressive. Columbia’s tech transfer organization is a model of how universities may want to think about entrepreneurship ecosystems.

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

Also to watch is Stephen Spinelli who just took over as Babson’s president. Between Spinelli, Orin, and Tom and Tina I think you’ll get an idea of the bleeding edge university entrepreneurship programs. If you want to talk to people who are inventing the future rather than talking about it, I would start with these three universities.

PB: How can corporations work more closely with universities? How can they tap into student entrepreneurship talent for developing the kind of disruptive initiatives that corporations want? Instead of waiting until something happens. How can you create a pipeline with universities that are local or even virtually with universities?

SB: For decades companies have been the primary acquirer of university research via tech transfer. And companies were the magnet for universities best and brightest students. No longer. In the 21st century companies are no longer competing for this tech and talent with their corporate peers, but with startups. To tap into university talent corporate innovation programs need to be more than an afterthought. Corporate leadership needs to make their internal commitment to innovation a beacon to the talent they desire.

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