Is ‘Lean’ the Secret to Startup Success?


Today, the cool factor of entrepreneurship has spread around the world as technology startups have grown from fledgling ventures into global forces that can redefine our times. The founders of Facebook, Google, Tesla and Uber are practically celebrities.

For better or worse, all this entrepreneur worship has given rise to the “wantrapreneur,” someone who seeks to launch a startup just for the money and acclaim. Never mind that they don’t have a great product idea — or more importantly, the business skills to spend capital wisely or responsibly lead a team of hardworking early employees.

So, if there were a step-by-step process that any aspiring entrepreneur could follow, would that be a good or bad thing? In the tech sector, some say such a formula is being taught: the lean-startup methodology, an approach to entrepreneurship that consists of clearly defined steps for discovering customers and developing a product or service.

Over the past five years, the lean movement has spread beyond the traditional tech sector to being taught within the government to publicly funded scientists so they can better translate their research into commercial innovations. At the National Science Foundation and the National Institutes of Health, this entrepreneurship-training program is called I-Corps (Innovation Corps).

Now the Lean LaunchPad is being used to address national-security and foreign-policy concerns. After a successful pilot class at Stanford University last spring, the course “Hacking for Defense” will be taught to college students around the country as a way to develop solutions to critical national security problems for the national-defense and intelligence communities. And this fall, another lean-startup course at Stanford debuts, called “Hacking for Diplomacy,” where students will work on challenges faced by the U.S. State Department.

From tech startups to government-funded research and now national defense and international diplomacy – are there no limits to the lean approach? Devotees say its widespread adoption and track record of success are proof that it works. Others say the methodology doesn’t make sense for certain sectors. So, who’s right?

A ‘lean’ history lesson
In 2005, retired Silicon Valley entrepreneur Steve Blank came out with The Four Steps to the Epiphany, which first stated that startups are not smaller versions of large companies, but nascent ventures in search of a business model. Four years later, a Swiss business theorist, Alexander Osterwalder, introduced the world to a new tool to help startups design their business model, called the “business model canvas.”

By then, Blank had become an educator, teaching entrepreneurship at Stanford. He combined Osterwalder’s business-model canvas with the customer-development process he defined in Four Steps and began teaching what he called the “Lean LaunchPad” methodology in 2011.

Today, countless students and entrepreneurs who have come across his books, including the 2012 bestseller The Startup Owner’s Manual, credit their success to Blank’s insights. The movement was also advanced by the 2011 book The Lean Startup, by Eric Ries, and continues to grow as the federal government now teaches the lean-startup methodology to scientists at its national labs using the curriculum Blank developed.

An eight-time serial entrepreneur, Blank is the first to admit there is no rule book in Silicon Valley. What his Lean LaunchPad approach does is help entrepreneurs avoid some of the most egregious failures, which he explains are often caused by hubris.

“It’s all the attributes of a world-class founder — passion, resilience, velocity, urgency — that make most of them fail because they end up confusing a faith-based enterprise with a fact-based enterprise,” Blank said. “You need faith to start, against all odds. But what you rapidly need to do is replace the faith with facts.”

By Mike Pena, Stanford Technology Ventures