Growing The Next Big IdeaWhat We’ve Learned About Startups
What Have We Learned?
What Have We Learned?Lesson 1: Types of StartupsLesson 2: EcosystemLesson 3: How to Fail LessLesson 4: Can we Teach Entrep...
Lesson 1:Types of Startups
Lifestyle StartupsWork to Live their Passion
Lifestyle Startups               Work to Live their Passion     Startup• Serve known customer with  known product• Work fo...
Social Entrepreneurship Startups
Social Entrepreneurship Startups      Social                            Large     Startup                          Non-Pro...
Small Business Startups  Work to Feed the Family
Small Business Startups               Work to Feed the Family                                          Small     Startup  ...
Small Business Startups                    Work to Feed the Family                                                 Small  ...
Small Business Startups                                            Small    Startup                                       ...
Scalable Startup
Scalable Startup      Search                                    Execute     Scalable                                     L...
Scalable Startup    Search    Scalable                        Large    Startup                       CompanyGoal is to sol...
Scalable Startup                Born to Be BigSearch                                    ExecuteScalable                   ...
Buyable Startup   Born to Sell
Buyable Startup                      Born to Sell     Search                             Sell     Scalable                ...
Buyable Startup      Search                              Sell     Scalable                          $5 to 50M     Startup ...
Large Company Sustaining Innovation            Innovate or Evaporate                             Sustaining Innovation Sca...
Large Company Disruptive Innovation     New                                   Large                       Transition    Di...
Large Company Disruptive Innovation    New                                  Large                     Transition   Divisio...
Large Company Disruptive Innovation     New                                           Large                          Trans...
Summary Lesson 1:  Multiple Types of Startups  Policies, Funding and Tactics DifferTechniques to build them are the same
Lesson 2:History of a Startup Ecosystem
Silicon Valley Was a Series of Unintended Consequences
Outward-Facing Research University    Building Weapons System     1946 – 1968   WWII/Cold War
Massive Government R&DInvestment in Weapons Systems     1956 – 1980’s Cold War
One Professor Changes The System1925 – 1965   University/Military/Industry
Sputnik LaunchesVenture Investing1958 – SBIC Program
Regulatory Change Accelerates       Venture Capital    1979 – Change in Employee   Retirement Income Security Act        P...
Culture Embraced      Technology Risk         1958 – TodayRecognized that 90% of startups fail
Culture Embraced Financial Risk      1968 – Today   Experienced Advice   Tolerance For RiskLong Term Interest Aligned
So What Lessons Can We Learn    To Build Innovation?   Without Cold War Funding
Technology Ecosystem: Infrastructure                                                         Venture                      ...
Technology Ecosystem: Culture                                                        Venture                           Ent...
Technology Ecosystem: Tools                            Entrepreneurs                Risk CapitalMotivation                ...
Technology Ecosystem: Motivation                           Entrepreneurs                Risk CapitalMotivation            ...
Technology Ecosystem                               Entrepreneurs              Risk CapitalMotivation                      ...
Lesson 3:Making Startups Fail LessLessons From Silicon Valley and the National Science       Foundation
After 50 years of Silicon ValleyWe Now Know How To Build Startups
More startups fail froma lack of customers than from afailure of product development
What We Used to Believe
Startups are Smaller Versions of       Large Companies
What We Now Know
Startups are Not Smaller Versions       of Large Companies
Startups SearchLarge Companies Execute
What We Used to Believe
All I Need to Do is Execute the Plan
Actual Photo of What Happens When            Plan Meets   First Contact With Customers
All I Need is the 5- Year Forecast
Previous5-Year Plans
What We Now Know
No Business Plan Survives      First Contact    With Customers
Searching comes before the plan
What’s A Startup?
A temporary organization      designed to searchfor a repeatable and scalable       business model
A temporary organization      designed to searchfor a repeatable and scalable       business model
A temporary organization      designed to searchfor a repeatable and scalable       business model
A temporary organization      designed to searchfor a repeatable and scalable       business model
© 2012 Steve Blank
But,Realize They’re Hypotheses
Customer Development ishow you search for the model
Summary Lesson 3:Making Startups Fail Less1. Startups Are Not Smaller Versions   Of Large Companies2. Customer Development...
Lesson 4:Can We Teach This?
Can We Teach This? Lean LaunchPad Class8 Weeks, 100 Customer Calls
Can We Teach This?         Lean LaunchPad ClassNational Science Foundation
The Data Says Yes You Can
Knowledge about Startups?    Coming Into the Class
Knowledge About Startups?       After the Class
The Data SaysIt Will Create New Companies
Knowledge About Building a Company       Coming Into the Class
Knowledge About Building a Company          After the Class
What About the Other 99%Will this Work on Main Street?
Small businesses are being built with  business tools from the 1950’s
These Techniques Now Can Help   Small Business Fail Less
In Closing:So What Can States Do?
Recommendation 1EncourageFail Fast and  Move Fast Culture
Recommendation 2Encourage Incubators / Accelerators
Recommendation 3   Incent Risk Capital to LocateNext to Your Entrepreneurial Centers
Recommendation 4Encourage Your Universities to build           21st Century   Entrepreneurship Curriculum             +
Recommendation 5           Encourage    Small Business Initiativesto Adopt these Same Techniques
I’ve open-sourced all this material               Happy to share it               www.steveblank.com               sblank@...
National governors association july 2012
National governors association july 2012
National governors association july 2012
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  • Very good presentation. I know several Governors have been proactive in creating entrepreneurial environment in their states. However, I see a great need for creating Intrapreneurial Environment in state Govt itself. Recently I have seen some improvement in this issue in some of the state Govts. Hope we can spread this to all state govts. We need to focus more on value-added activities for the federal grants management.
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  • National Governors Association Annual Meeting Day 3 Closing Session July 15, 2012 Governor Dave Heineman, Nebraska, Chair Governor Jack Markell, Delaware, Vice Chair Growing the Next Big Idea - Guest: Steve Blank, Author of the Startup Owner s Manual , Consulting Professor Stanford and U.C. Berkeley Remarks by the 2012-2013 NGA Chair http://www.c-spanvideo.org/program/306971-1
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  • Steve, this is a wonderful presentation. I feel like coining the name start-down for many start-ups rapidly go on the downhill. A lovely classification of start-ups. I liked the slides on disruptive innovation in particular.
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  • Great presentation. This type of research and information sharing is what our government leaders across America need in order to help rebuild the global economy.
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National governors association july 2012

  1. Growing The Next Big IdeaWhat We’ve Learned About Startups
  2. What Have We Learned?
  3. What Have We Learned?Lesson 1: Types of StartupsLesson 2: EcosystemLesson 3: How to Fail LessLesson 4: Can we Teach Entrepreneurship?
  4. Lesson 1:Types of Startups
  5. Lifestyle StartupsWork to Live their Passion
  6. Lifestyle Startups Work to Live their Passion Startup• Serve known customer with known product• Work for their passion
  7. Social Entrepreneurship Startups
  8. Social Entrepreneurship Startups Social Large Startup Non-Profit• Solve pressing social problems• Social Enterprise: Profitable• Social Innovation: New Strategies
  9. Small Business Startups Work to Feed the Family
  10. Small Business Startups Work to Feed the Family Small Startup Business• Serve known customer with known product• Feed the family
  11. Small Business Startups Work to Feed the Family Small Startup Business Exit Criteria• known customer - Business Model found known product - Profitable business• Feed the family - Existing team < $500K in revenue
  12. Small Business Startups Small Startup Business• 5.7 million small businesses in the U.S. <500 employees• 99.7% of all companies• ~ 50% of total U.S. workers http://www.sba.gov/advo/stats/sbfaq.pdf
  13. Scalable Startup
  14. Scalable Startup Search Execute Scalable Large Startup Company• In contrast a scalable startup is designed to grow big• Typically needs risk capital• What Silicon Valley means when they say “Startup”
  15. Scalable Startup Search Scalable Large Startup CompanyGoal is to solve for: unknown customer and unknown features
  16. Scalable Startup Born to Be BigSearch ExecuteScalable LargeStartup Company Exit Criteria - Business model found - Total Available Market > $500M - Can grow to $100M/year
  17. Buyable Startup Born to Sell
  18. Buyable Startup Born to Sell Search Sell Scalable $5 to 50M Startup AcquisitionTypically: Internet, Mobile, Gaming Apps
  19. Buyable Startup Search Sell Scalable $5 to 50M Startup AcquisitionGoal is to solve for: Sell to larger company Internet and Mobile Apps
  20. Large Company Sustaining Innovation Innovate or Evaporate Sustaining Innovation Scalable Large Transition Startup Company • Existing Market / Known customer •Known product feature needs
  21. Large Company Disruptive Innovation New Large Transition Division Company Disruptive Innovation•New Market•New tech, customers, channels
  22. Large Company Disruptive Innovation New Large Transition Division Company Disruptive Innovation •Build •Partner •Acquire - IP - Talent - Product - Customers - Business
  23. Large Company Disruptive Innovation New Large Transition Division Company Disruptive Innovation • Build • Partner •Acquire = an internal corporate startup
  24. Summary Lesson 1: Multiple Types of Startups Policies, Funding and Tactics DifferTechniques to build them are the same
  25. Lesson 2:History of a Startup Ecosystem
  26. Silicon Valley Was a Series of Unintended Consequences
  27. Outward-Facing Research University Building Weapons System 1946 – 1968 WWII/Cold War
  28. Massive Government R&DInvestment in Weapons Systems 1956 – 1980’s Cold War
  29. One Professor Changes The System1925 – 1965 University/Military/Industry
  30. Sputnik LaunchesVenture Investing1958 – SBIC Program
  31. Regulatory Change Accelerates Venture Capital 1979 – Change in Employee Retirement Income Security Act Pension Funds Pile In
  32. Culture Embraced Technology Risk 1958 – TodayRecognized that 90% of startups fail
  33. Culture Embraced Financial Risk 1968 – Today Experienced Advice Tolerance For RiskLong Term Interest Aligned
  34. So What Lessons Can We Learn To Build Innovation? Without Cold War Funding
  35. Technology Ecosystem: Infrastructure Venture Entrepreneurs Finance Motivation Crisis Profit Management Customer Agile Business Model Tools Development Development Design Culture Risk Taking Entrepreneurial Outward-Facing Free flow of Tech Universities People/InfoInfrastructure Research Predictable Stable 24/7 Utilities Universities Economic System Legal System
  36. Technology Ecosystem: Culture Venture Entrepreneurs Finance Motivation Crisis Profit Management Customer Agile Business Model Tools Development Development DesignCulture Accelerators, Outward-Facing Free flow of Risk Taking Incubators Tech Universities People/InfoInfrastructure Research Predictable Stable 24/7 Utilities Universities Economic System Legal System
  37. Technology Ecosystem: Tools Entrepreneurs Risk CapitalMotivation Crisis ProfitManagement Customer Agile Business Model Tools Development Development Design Culture Accelerators, Outward-Facing Free flow of Risk Taking Incubators Tech Universities People/Info Infrastructure Research Predictable Stable 24/7 Utilities Universities Economic System Legal System
  38. Technology Ecosystem: Motivation Entrepreneurs Risk CapitalMotivation Crisis ProfitManagement Customer Agile Business Model Tools Development Development DesignCulture Accelerators, Outward-Facing Free flow of Risk Taking Incubators Tech Universities People/InfoInfrastructure Research Predictable Stable 24/7 Utilities Universities Economic System Legal System
  39. Technology Ecosystem Entrepreneurs Risk CapitalMotivation Crisis ProfitManagement Customer Agile Business Model Tools Development Development DesignCulture Risk Taking Accelerators, Outward-Facing Free flow of Incubators Tech Universities People/InfoInfrastructure Research Predictable Stable 24/7 Utilities Universities Economic System Legal System
  40. Lesson 3:Making Startups Fail LessLessons From Silicon Valley and the National Science Foundation
  41. After 50 years of Silicon ValleyWe Now Know How To Build Startups
  42. More startups fail froma lack of customers than from afailure of product development
  43. What We Used to Believe
  44. Startups are Smaller Versions of Large Companies
  45. What We Now Know
  46. Startups are Not Smaller Versions of Large Companies
  47. Startups SearchLarge Companies Execute
  48. What We Used to Believe
  49. All I Need to Do is Execute the Plan
  50. Actual Photo of What Happens When Plan Meets First Contact With Customers
  51. All I Need is the 5- Year Forecast
  52. Previous5-Year Plans
  53. What We Now Know
  54. No Business Plan Survives First Contact With Customers
  55. Searching comes before the plan
  56. What’s A Startup?
  57. A temporary organization designed to searchfor a repeatable and scalable business model
  58. A temporary organization designed to searchfor a repeatable and scalable business model
  59. A temporary organization designed to searchfor a repeatable and scalable business model
  60. A temporary organization designed to searchfor a repeatable and scalable business model
  61. © 2012 Steve Blank
  62. But,Realize They’re Hypotheses
  63. Customer Development ishow you search for the model
  64. Summary Lesson 3:Making Startups Fail Less1. Startups Are Not Smaller Versions Of Large Companies2. Customer Development & Business Models – Replace Business Plans
  65. Lesson 4:Can We Teach This?
  66. Can We Teach This? Lean LaunchPad Class8 Weeks, 100 Customer Calls
  67. Can We Teach This? Lean LaunchPad ClassNational Science Foundation
  68. The Data Says Yes You Can
  69. Knowledge about Startups? Coming Into the Class
  70. Knowledge About Startups? After the Class
  71. The Data SaysIt Will Create New Companies
  72. Knowledge About Building a Company Coming Into the Class
  73. Knowledge About Building a Company After the Class
  74. What About the Other 99%Will this Work on Main Street?
  75. Small businesses are being built with business tools from the 1950’s
  76. These Techniques Now Can Help Small Business Fail Less
  77. In Closing:So What Can States Do?
  78. Recommendation 1EncourageFail Fast and Move Fast Culture
  79. Recommendation 2Encourage Incubators / Accelerators
  80. Recommendation 3 Incent Risk Capital to LocateNext to Your Entrepreneurial Centers
  81. Recommendation 4Encourage Your Universities to build 21st Century Entrepreneurship Curriculum +
  82. Recommendation 5 Encourage Small Business Initiativesto Adopt these Same Techniques
  83. I’ve open-sourced all this material Happy to share it www.steveblank.com sblank@kandsranch.com Curriculum, Syllabus, Slides, Teaching Guide and On-line Courses all available for free www.steveblank.com
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