CINXE.COM

<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd">   <html xmlns="http://www.w3.org/1999/xhtml" lang="en-US">  <head profile="http://gmpg.org/xfn/11"> <meta http-equiv="Content-Type" content="text/html; charset=UTF-8" /> <title>Steve Blank Innovation and Entrepreneurship April 2013</title> <link rel="pingback" href="https://steveblank.com/xmlrpc.php" /> <meta name='robots' content='max-image-preview:large' />  <meta name="google-site-verification" content="NzQX03n5c3BUqAOH2ZZeaOzmFxIKopb99y0xo7ymJ7w" /> <meta name="msvalidate.01" content="77BB8773D8C1446AC1C1A19B8355A369" /> <link rel='dns-prefetch' href='//secure.gravatar.com' /> <link rel='dns-prefetch' href='//stats.wp.com' /> <link rel='dns-prefetch' href='//widgets.wp.com' /> <link rel='dns-prefetch' href='//jetpack.wordpress.com' /> <link rel='dns-prefetch' href='//s0.wp.com' /> <link rel='dns-prefetch' href='//public-api.wordpress.com' /> <link rel='dns-prefetch' href='//0.gravatar.com' /> <link rel='dns-prefetch' href='//1.gravatar.com' /> <link rel='dns-prefetch' href='//2.gravatar.com' /> <link rel='preconnect' href='//i0.wp.com' /> <link rel='preconnect' href='//c0.wp.com' /> <link rel="alternate" type="application/rss+xml" title="Steve Blank » Feed" href="https://steveblank.com/feed/" /> <link rel="alternate" type="application/rss+xml" title="Steve Blank » Comments Feed" href="https://steveblank.com/comments/feed/" /> <script type="text/javascript"> /* <![CDATA[ */ window._wpemojiSettings = {"baseUrl":"https:\/\/s.w.org\/images\/core\/emoji\/15.0.3\/72x72\/","ext":".png","svgUrl":"https:\/\/s.w.org\/images\/core\/emoji\/15.0.3\/svg\/","svgExt":".svg","source":{"concatemoji":"https:\/\/steveblank.com\/wp-includes\/js\/wp-emoji-release.min.js?ver=6.7"}}; /*! This file is auto-generated */ !function(i,n){var o,s,e;function c(e){try{var t={supportTests:e,timestamp:(new Date).valueOf()};sessionStorage.setItem(o,JSON.stringify(t))}catch(e){}}function p(e,t,n){e.clearRect(0,0,e.canvas.width,e.canvas.height),e.fillText(t,0,0);var t=new Uint32Array(e.getImageData(0,0,e.canvas.width,e.canvas.height).data),r=(e.clearRect(0,0,e.canvas.width,e.canvas.height),e.fillText(n,0,0),new Uint32Array(e.getImageData(0,0,e.canvas.width,e.canvas.height).data));return t.every(function(e,t){return e===r[t]})}function u(e,t,n){switch(t){case"flag":return n(e,"\ud83c\udff3\ufe0f\u200d\u26a7\ufe0f","\ud83c\udff3\ufe0f\u200b\u26a7\ufe0f")?!1:!n(e,"\ud83c\uddfa\ud83c\uddf3","\ud83c\uddfa\u200b\ud83c\uddf3")&&!n(e,"\ud83c\udff4\udb40\udc67\udb40\udc62\udb40\udc65\udb40\udc6e\udb40\udc67\udb40\udc7f","\ud83c\udff4\u200b\udb40\udc67\u200b\udb40\udc62\u200b\udb40\udc65\u200b\udb40\udc6e\u200b\udb40\udc67\u200b\udb40\udc7f");case"emoji":return!n(e,"\ud83d\udc26\u200d\u2b1b","\ud83d\udc26\u200b\u2b1b")}return!1}function f(e,t,n){var r="undefined"!=typeof WorkerGlobalScope&&self instanceof WorkerGlobalScope?new OffscreenCanvas(300,150):i.createElement("canvas"),a=r.getContext("2d",{willReadFrequently:!0}),o=(a.textBaseline="top",a.font="600 32px Arial",{});return e.forEach(function(e){o[e]=t(a,e,n)}),o}function t(e){var t=i.createElement("script");t.src=e,t.defer=!0,i.head.appendChild(t)}"undefined"!=typeof Promise&&(o="wpEmojiSettingsSupports",s=["flag","emoji"],n.supports={everything:!0,everythingExceptFlag:!0},e=new Promise(function(e){i.addEventListener("DOMContentLoaded",e,{once:!0})}),new Promise(function(t){var n=function(){try{var e=JSON.parse(sessionStorage.getItem(o));if("object"==typeof e&&"number"==typeof e.timestamp&&(new Date).valueOf()<e.timestamp+604800&&"object"==typeof e.supportTests)return e.supportTests}catch(e){}return null}();if(!n){if("undefined"!=typeof Worker&&"undefined"!=typeof OffscreenCanvas&&"undefined"!=typeof URL&&URL.createObjectURL&&"undefined"!=typeof Blob)try{var e="postMessage("+f.toString()+"("+[JSON.stringify(s),u.toString(),p.toString()].join(",")+"));",r=new Blob([e],{type:"text/javascript"}),a=new Worker(URL.createObjectURL(r),{name:"wpTestEmojiSupports"});return void(a.onmessage=function(e){c(n=e.data),a.terminate(),t(n)})}catch(e){}c(n=f(s,u,p))}t(n)}).then(function(e){for(var t in e)n.supports[t]=e[t],n.supports.everything=n.supports.everything&&n.supports[t],"flag"!==t&&(n.supports.everythingExceptFlag=n.supports.everythingExceptFlag&&n.supports[t]);n.supports.everythingExceptFlag=n.supports.everythingExceptFlag&&!n.supports.flag,n.DOMReady=!1,n.readyCallback=function(){n.DOMReady=!0}}).then(function(){return e}).then(function(){var e;n.supports.everything||(n.readyCallback(),(e=n.source||{}).concatemoji?t(e.concatemoji):e.wpemoji&&e.twemoji&&(t(e.twemoji),t(e.wpemoji)))}))}((window,document),window._wpemojiSettings); /* ]]> */ </script> <link rel='stylesheet' id='all-css-cb7ade03dc0ef7ebc2e1117796e7d27c' href='https://steveblank.com/_static/??-eJydUdtuwyAM/aFRtkVV1YdqnzI5YFEv5iIMivj7kqqV0j5sWV8Qh3PRwZ6TomC4WhRtRLQlKXrkaCbFNGbITUtpjDtPYdcFb/PK8CPaoyVARo+hPIDE0DArRgembXJ3bo3XHhNDWSTl3KmlpHPDrdeTInF1FHo4lgRm0j7aysvfIMcqyFpmSr3XWIN9wX0j1P1ha0AhRqscMGOf6C9oayDT1M9/jUDqKCZTKhTDE9occYaMFqxt1ysF95fzu69bSzQErDi6KA/gvuMvf/o4DO/H437/OVwAUzb8iA==' type='text/css' media='all' /> <style id='wp-block-library-inline-css'> .has-text-align-justify{text-align:justify;} </style> <style id='wp-emoji-styles-inline-css'> img.wp-smiley, img.emoji { display: inline !important; border: none !important; box-shadow: none !important; height: 1em !important; width: 1em !important; margin: 0 0.07em !important; vertical-align: -0.1em !important; background: none !important; padding: 0 !important; } </style> <style id='jetpack-sharing-buttons-style-inline-css'> .jetpack-sharing-buttons__services-list{display:flex;flex-direction:row;flex-wrap:wrap;gap:0;list-style-type:none;margin:5px;padding:0}.jetpack-sharing-buttons__services-list.has-small-icon-size{font-size:12px}.jetpack-sharing-buttons__services-list.has-normal-icon-size{font-size:16px}.jetpack-sharing-buttons__services-list.has-large-icon-size{font-size:24px}.jetpack-sharing-buttons__services-list.has-huge-icon-size{font-size:36px}@media print{.jetpack-sharing-buttons__services-list{display:none!important}}.editor-styles-wrapper .wp-block-jetpack-sharing-buttons{gap:0;padding-inline-start:0}ul.jetpack-sharing-buttons__services-list.has-background{padding:1.25em 2.375em} </style> <style id='classic-theme-styles-inline-css'> /*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} </style> <style id='global-styles-inline-css'> :root{--wp--preset--aspect-ratio--square: 1;--wp--preset--aspect-ratio--4-3: 4/3;--wp--preset--aspect-ratio--3-4: 3/4;--wp--preset--aspect-ratio--3-2: 3/2;--wp--preset--aspect-ratio--2-3: 2/3;--wp--preset--aspect-ratio--16-9: 16/9;--wp--preset--aspect-ratio--9-16: 9/16;--wp--preset--color--black: #000000;--wp--preset--color--cyan-bluish-gray: #abb8c3;--wp--preset--color--white: #ffffff;--wp--preset--color--pale-pink: #f78da7;--wp--preset--color--vivid-red: #cf2e2e;--wp--preset--color--luminous-vivid-orange: #ff6900;--wp--preset--color--luminous-vivid-amber: #fcb900;--wp--preset--color--light-green-cyan: #7bdcb5;--wp--preset--color--vivid-green-cyan: #00d084;--wp--preset--color--pale-cyan-blue: #8ed1fc;--wp--preset--color--vivid-cyan-blue: #0693e3;--wp--preset--color--vivid-purple: #9b51e0;--wp--preset--gradient--vivid-cyan-blue-to-vivid-purple: linear-gradient(135deg,rgba(6,147,227,1) 0%,rgb(155,81,224) 100%);--wp--preset--gradient--light-green-cyan-to-vivid-green-cyan: linear-gradient(135deg,rgb(122,220,180) 0%,rgb(0,208,130) 100%);--wp--preset--gradient--luminous-vivid-amber-to-luminous-vivid-orange: linear-gradient(135deg,rgba(252,185,0,1) 0%,rgba(255,105,0,1) 100%);--wp--preset--gradient--luminous-vivid-orange-to-vivid-red: linear-gradient(135deg,rgba(255,105,0,1) 0%,rgb(207,46,46) 100%);--wp--preset--gradient--very-light-gray-to-cyan-bluish-gray: linear-gradient(135deg,rgb(238,238,238) 0%,rgb(169,184,195) 100%);--wp--preset--gradient--cool-to-warm-spectrum: linear-gradient(135deg,rgb(74,234,220) 0%,rgb(151,120,209) 20%,rgb(207,42,186) 40%,rgb(238,44,130) 60%,rgb(251,105,98) 80%,rgb(254,248,76) 100%);--wp--preset--gradient--blush-light-purple: linear-gradient(135deg,rgb(255,206,236) 0%,rgb(152,150,240) 100%);--wp--preset--gradient--blush-bordeaux: linear-gradient(135deg,rgb(254,205,165) 0%,rgb(254,45,45) 50%,rgb(107,0,62) 100%);--wp--preset--gradient--luminous-dusk: linear-gradient(135deg,rgb(255,203,112) 0%,rgb(199,81,192) 50%,rgb(65,88,208) 100%);--wp--preset--gradient--pale-ocean: linear-gradient(135deg,rgb(255,245,203) 0%,rgb(182,227,212) 50%,rgb(51,167,181) 100%);--wp--preset--gradient--electric-grass: linear-gradient(135deg,rgb(202,248,128) 0%,rgb(113,206,126) 100%);--wp--preset--gradient--midnight: linear-gradient(135deg,rgb(2,3,129) 0%,rgb(40,116,252) 100%);--wp--preset--font-size--small: 13px;--wp--preset--font-size--medium: 20px;--wp--preset--font-size--large: 36px;--wp--preset--font-size--x-large: 42px;--wp--preset--font-family--albert-sans: 'Albert Sans', sans-serif;--wp--preset--font-family--alegreya: Alegreya, serif;--wp--preset--font-family--arvo: Arvo, serif;--wp--preset--font-family--bodoni-moda: 'Bodoni Moda', serif;--wp--preset--font-family--bricolage-grotesque: 'Bricolage Grotesque', sans-serif;--wp--preset--font-family--cabin: Cabin, sans-serif;--wp--preset--font-family--chivo: Chivo, sans-serif;--wp--preset--font-family--commissioner: Commissioner, sans-serif;--wp--preset--font-family--cormorant: Cormorant, serif;--wp--preset--font-family--courier-prime: 'Courier Prime', monospace;--wp--preset--font-family--crimson-pro: 'Crimson Pro', serif;--wp--preset--font-family--dm-mono: 'DM Mono', monospace;--wp--preset--font-family--dm-sans: 'DM Sans', sans-serif;--wp--preset--font-family--dm-serif-display: 'DM Serif Display', serif;--wp--preset--font-family--domine: Domine, serif;--wp--preset--font-family--eb-garamond: 'EB Garamond', serif;--wp--preset--font-family--epilogue: Epilogue, sans-serif;--wp--preset--font-family--fahkwang: Fahkwang, sans-serif;--wp--preset--font-family--figtree: Figtree, sans-serif;--wp--preset--font-family--fira-sans: 'Fira Sans', sans-serif;--wp--preset--font-family--fjalla-one: 'Fjalla One', sans-serif;--wp--preset--font-family--fraunces: Fraunces, serif;--wp--preset--font-family--gabarito: Gabarito, system-ui;--wp--preset--font-family--ibm-plex-mono: 'IBM Plex Mono', monospace;--wp--preset--font-family--ibm-plex-sans: 'IBM Plex Sans', sans-serif;--wp--preset--font-family--ibarra-real-nova: 'Ibarra Real Nova', serif;--wp--preset--font-family--instrument-serif: 'Instrument Serif', serif;--wp--preset--font-family--inter: Inter, sans-serif;--wp--preset--font-family--josefin-sans: 'Josefin Sans', sans-serif;--wp--preset--font-family--jost: Jost, sans-serif;--wp--preset--font-family--libre-baskerville: 'Libre Baskerville', serif;--wp--preset--font-family--libre-franklin: 'Libre Franklin', sans-serif;--wp--preset--font-family--literata: Literata, serif;--wp--preset--font-family--lora: Lora, serif;--wp--preset--font-family--merriweather: Merriweather, serif;--wp--preset--font-family--montserrat: Montserrat, sans-serif;--wp--preset--font-family--newsreader: Newsreader, serif;--wp--preset--font-family--noto-sans-mono: 'Noto Sans Mono', sans-serif;--wp--preset--font-family--nunito: Nunito, sans-serif;--wp--preset--font-family--open-sans: 'Open Sans', sans-serif;--wp--preset--font-family--overpass: Overpass, sans-serif;--wp--preset--font-family--pt-serif: 'PT Serif', serif;--wp--preset--font-family--petrona: Petrona, serif;--wp--preset--font-family--piazzolla: Piazzolla, serif;--wp--preset--font-family--playfair-display: 'Playfair Display', serif;--wp--preset--font-family--plus-jakarta-sans: 'Plus Jakarta Sans', sans-serif;--wp--preset--font-family--poppins: Poppins, sans-serif;--wp--preset--font-family--raleway: Raleway, sans-serif;--wp--preset--font-family--roboto: Roboto, sans-serif;--wp--preset--font-family--roboto-slab: 'Roboto Slab', serif;--wp--preset--font-family--rubik: Rubik, sans-serif;--wp--preset--font-family--rufina: Rufina, serif;--wp--preset--font-family--sora: Sora, sans-serif;--wp--preset--font-family--source-sans-3: 'Source Sans 3', sans-serif;--wp--preset--font-family--source-serif-4: 'Source Serif 4', serif;--wp--preset--font-family--space-mono: 'Space Mono', monospace;--wp--preset--font-family--syne: Syne, sans-serif;--wp--preset--font-family--texturina: Texturina, serif;--wp--preset--font-family--urbanist: Urbanist, sans-serif;--wp--preset--font-family--work-sans: 'Work Sans', sans-serif;--wp--preset--spacing--20: 0.44rem;--wp--preset--spacing--30: 0.67rem;--wp--preset--spacing--40: 1rem;--wp--preset--spacing--50: 1.5rem;--wp--preset--spacing--60: 2.25rem;--wp--preset--spacing--70: 3.38rem;--wp--preset--spacing--80: 5.06rem;--wp--preset--shadow--natural: 6px 6px 9px rgba(0, 0, 0, 0.2);--wp--preset--shadow--deep: 12px 12px 50px rgba(0, 0, 0, 0.4);--wp--preset--shadow--sharp: 6px 6px 0px rgba(0, 0, 0, 0.2);--wp--preset--shadow--outlined: 6px 6px 0px -3px rgba(255, 255, 255, 1), 6px 6px rgba(0, 0, 0, 1);--wp--preset--shadow--crisp: 6px 6px 0px rgba(0, 0, 0, 1);}:where(.is-layout-flex){gap: 0.5em;}:where(.is-layout-grid){gap: 0.5em;}body .is-layout-flex{display: flex;}.is-layout-flex{flex-wrap: wrap;align-items: center;}.is-layout-flex > :is(*, div){margin: 0;}body .is-layout-grid{display: grid;}.is-layout-grid > :is(*, div){margin: 0;}:where(.wp-block-columns.is-layout-flex){gap: 2em;}:where(.wp-block-columns.is-layout-grid){gap: 2em;}:where(.wp-block-post-template.is-layout-flex){gap: 1.25em;}:where(.wp-block-post-template.is-layout-grid){gap: 1.25em;}.has-black-color{color: var(--wp--preset--color--black) !important;}.has-cyan-bluish-gray-color{color: var(--wp--preset--color--cyan-bluish-gray) !important;}.has-white-color{color: var(--wp--preset--color--white) !important;}.has-pale-pink-color{color: var(--wp--preset--color--pale-pink) !important;}.has-vivid-red-color{color: var(--wp--preset--color--vivid-red) !important;}.has-luminous-vivid-orange-color{color: var(--wp--preset--color--luminous-vivid-orange) !important;}.has-luminous-vivid-amber-color{color: var(--wp--preset--color--luminous-vivid-amber) !important;}.has-light-green-cyan-color{color: var(--wp--preset--color--light-green-cyan) !important;}.has-vivid-green-cyan-color{color: var(--wp--preset--color--vivid-green-cyan) !important;}.has-pale-cyan-blue-color{color: var(--wp--preset--color--pale-cyan-blue) !important;}.has-vivid-cyan-blue-color{color: var(--wp--preset--color--vivid-cyan-blue) !important;}.has-vivid-purple-color{color: var(--wp--preset--color--vivid-purple) !important;}.has-black-background-color{background-color: var(--wp--preset--color--black) !important;}.has-cyan-bluish-gray-background-color{background-color: var(--wp--preset--color--cyan-bluish-gray) !important;}.has-white-background-color{background-color: var(--wp--preset--color--white) !important;}.has-pale-pink-background-color{background-color: var(--wp--preset--color--pale-pink) !important;}.has-vivid-red-background-color{background-color: var(--wp--preset--color--vivid-red) !important;}.has-luminous-vivid-orange-background-color{background-color: var(--wp--preset--color--luminous-vivid-orange) !important;}.has-luminous-vivid-amber-background-color{background-color: var(--wp--preset--color--luminous-vivid-amber) !important;}.has-light-green-cyan-background-color{background-color: var(--wp--preset--color--light-green-cyan) !important;}.has-vivid-green-cyan-background-color{background-color: var(--wp--preset--color--vivid-green-cyan) !important;}.has-pale-cyan-blue-background-color{background-color: var(--wp--preset--color--pale-cyan-blue) !important;}.has-vivid-cyan-blue-background-color{background-color: var(--wp--preset--color--vivid-cyan-blue) !important;}.has-vivid-purple-background-color{background-color: var(--wp--preset--color--vivid-purple) !important;}.has-black-border-color{border-color: var(--wp--preset--color--black) !important;}.has-cyan-bluish-gray-border-color{border-color: var(--wp--preset--color--cyan-bluish-gray) !important;}.has-white-border-color{border-color: var(--wp--preset--color--white) !important;}.has-pale-pink-border-color{border-color: var(--wp--preset--color--pale-pink) !important;}.has-vivid-red-border-color{border-color: var(--wp--preset--color--vivid-red) !important;}.has-luminous-vivid-orange-border-color{border-color: var(--wp--preset--color--luminous-vivid-orange) !important;}.has-luminous-vivid-amber-border-color{border-color: var(--wp--preset--color--luminous-vivid-amber) !important;}.has-light-green-cyan-border-color{border-color: var(--wp--preset--color--light-green-cyan) !important;}.has-vivid-green-cyan-border-color{border-color: var(--wp--preset--color--vivid-green-cyan) !important;}.has-pale-cyan-blue-border-color{border-color: var(--wp--preset--color--pale-cyan-blue) !important;}.has-vivid-cyan-blue-border-color{border-color: var(--wp--preset--color--vivid-cyan-blue) !important;}.has-vivid-purple-border-color{border-color: var(--wp--preset--color--vivid-purple) !important;}.has-vivid-cyan-blue-to-vivid-purple-gradient-background{background: var(--wp--preset--gradient--vivid-cyan-blue-to-vivid-purple) !important;}.has-light-green-cyan-to-vivid-green-cyan-gradient-background{background: var(--wp--preset--gradient--light-green-cyan-to-vivid-green-cyan) !important;}.has-luminous-vivid-amber-to-luminous-vivid-orange-gradient-background{background: var(--wp--preset--gradient--luminous-vivid-amber-to-luminous-vivid-orange) !important;}.has-luminous-vivid-orange-to-vivid-red-gradient-background{background: var(--wp--preset--gradient--luminous-vivid-orange-to-vivid-red) !important;}.has-very-light-gray-to-cyan-bluish-gray-gradient-background{background: var(--wp--preset--gradient--very-light-gray-to-cyan-bluish-gray) !important;}.has-cool-to-warm-spectrum-gradient-background{background: var(--wp--preset--gradient--cool-to-warm-spectrum) !important;}.has-blush-light-purple-gradient-background{background: var(--wp--preset--gradient--blush-light-purple) !important;}.has-blush-bordeaux-gradient-background{background: var(--wp--preset--gradient--blush-bordeaux) !important;}.has-luminous-dusk-gradient-background{background: var(--wp--preset--gradient--luminous-dusk) !important;}.has-pale-ocean-gradient-background{background: var(--wp--preset--gradient--pale-ocean) !important;}.has-electric-grass-gradient-background{background: var(--wp--preset--gradient--electric-grass) !important;}.has-midnight-gradient-background{background: var(--wp--preset--gradient--midnight) !important;}.has-small-font-size{font-size: var(--wp--preset--font-size--small) !important;}.has-medium-font-size{font-size: var(--wp--preset--font-size--medium) !important;}.has-large-font-size{font-size: var(--wp--preset--font-size--large) !important;}.has-x-large-font-size{font-size: var(--wp--preset--font-size--x-large) !important;}.has-albert-sans-font-family{font-family: var(--wp--preset--font-family--albert-sans) !important;}.has-alegreya-font-family{font-family: var(--wp--preset--font-family--alegreya) !important;}.has-arvo-font-family{font-family: var(--wp--preset--font-family--arvo) !important;}.has-bodoni-moda-font-family{font-family: var(--wp--preset--font-family--bodoni-moda) !important;}.has-bricolage-grotesque-font-family{font-family: var(--wp--preset--font-family--bricolage-grotesque) !important;}.has-cabin-font-family{font-family: var(--wp--preset--font-family--cabin) !important;}.has-chivo-font-family{font-family: var(--wp--preset--font-family--chivo) !important;}.has-commissioner-font-family{font-family: var(--wp--preset--font-family--commissioner) !important;}.has-cormorant-font-family{font-family: var(--wp--preset--font-family--cormorant) !important;}.has-courier-prime-font-family{font-family: var(--wp--preset--font-family--courier-prime) !important;}.has-crimson-pro-font-family{font-family: var(--wp--preset--font-family--crimson-pro) !important;}.has-dm-mono-font-family{font-family: var(--wp--preset--font-family--dm-mono) !important;}.has-dm-sans-font-family{font-family: var(--wp--preset--font-family--dm-sans) !important;}.has-dm-serif-display-font-family{font-family: var(--wp--preset--font-family--dm-serif-display) !important;}.has-domine-font-family{font-family: var(--wp--preset--font-family--domine) !important;}.has-eb-garamond-font-family{font-family: var(--wp--preset--font-family--eb-garamond) !important;}.has-epilogue-font-family{font-family: var(--wp--preset--font-family--epilogue) !important;}.has-fahkwang-font-family{font-family: var(--wp--preset--font-family--fahkwang) !important;}.has-figtree-font-family{font-family: var(--wp--preset--font-family--figtree) !important;}.has-fira-sans-font-family{font-family: var(--wp--preset--font-family--fira-sans) !important;}.has-fjalla-one-font-family{font-family: var(--wp--preset--font-family--fjalla-one) !important;}.has-fraunces-font-family{font-family: var(--wp--preset--font-family--fraunces) !important;}.has-gabarito-font-family{font-family: var(--wp--preset--font-family--gabarito) !important;}.has-ibm-plex-mono-font-family{font-family: var(--wp--preset--font-family--ibm-plex-mono) !important;}.has-ibm-plex-sans-font-family{font-family: var(--wp--preset--font-family--ibm-plex-sans) !important;}.has-ibarra-real-nova-font-family{font-family: var(--wp--preset--font-family--ibarra-real-nova) !important;}.has-instrument-serif-font-family{font-family: var(--wp--preset--font-family--instrument-serif) !important;}.has-inter-font-family{font-family: var(--wp--preset--font-family--inter) !important;}.has-josefin-sans-font-family{font-family: var(--wp--preset--font-family--josefin-sans) !important;}.has-jost-font-family{font-family: var(--wp--preset--font-family--jost) !important;}.has-libre-baskerville-font-family{font-family: var(--wp--preset--font-family--libre-baskerville) !important;}.has-libre-franklin-font-family{font-family: var(--wp--preset--font-family--libre-franklin) !important;}.has-literata-font-family{font-family: var(--wp--preset--font-family--literata) !important;}.has-lora-font-family{font-family: var(--wp--preset--font-family--lora) !important;}.has-merriweather-font-family{font-family: var(--wp--preset--font-family--merriweather) !important;}.has-montserrat-font-family{font-family: var(--wp--preset--font-family--montserrat) !important;}.has-newsreader-font-family{font-family: var(--wp--preset--font-family--newsreader) !important;}.has-noto-sans-mono-font-family{font-family: var(--wp--preset--font-family--noto-sans-mono) !important;}.has-nunito-font-family{font-family: var(--wp--preset--font-family--nunito) !important;}.has-open-sans-font-family{font-family: var(--wp--preset--font-family--open-sans) !important;}.has-overpass-font-family{font-family: var(--wp--preset--font-family--overpass) !important;}.has-pt-serif-font-family{font-family: var(--wp--preset--font-family--pt-serif) !important;}.has-petrona-font-family{font-family: var(--wp--preset--font-family--petrona) !important;}.has-piazzolla-font-family{font-family: var(--wp--preset--font-family--piazzolla) !important;}.has-playfair-display-font-family{font-family: var(--wp--preset--font-family--playfair-display) !important;}.has-plus-jakarta-sans-font-family{font-family: var(--wp--preset--font-family--plus-jakarta-sans) !important;}.has-poppins-font-family{font-family: var(--wp--preset--font-family--poppins) !important;}.has-raleway-font-family{font-family: var(--wp--preset--font-family--raleway) !important;}.has-roboto-font-family{font-family: var(--wp--preset--font-family--roboto) !important;}.has-roboto-slab-font-family{font-family: var(--wp--preset--font-family--roboto-slab) !important;}.has-rubik-font-family{font-family: var(--wp--preset--font-family--rubik) !important;}.has-rufina-font-family{font-family: var(--wp--preset--font-family--rufina) !important;}.has-sora-font-family{font-family: var(--wp--preset--font-family--sora) !important;}.has-source-sans-3-font-family{font-family: var(--wp--preset--font-family--source-sans-3) !important;}.has-source-serif-4-font-family{font-family: var(--wp--preset--font-family--source-serif-4) !important;}.has-space-mono-font-family{font-family: var(--wp--preset--font-family--space-mono) !important;}.has-syne-font-family{font-family: var(--wp--preset--font-family--syne) !important;}.has-texturina-font-family{font-family: var(--wp--preset--font-family--texturina) !important;}.has-urbanist-font-family{font-family: var(--wp--preset--font-family--urbanist) !important;}.has-work-sans-font-family{font-family: var(--wp--preset--font-family--work-sans) !important;} :where(.wp-block-post-template.is-layout-flex){gap: 1.25em;}:where(.wp-block-post-template.is-layout-grid){gap: 1.25em;} :where(.wp-block-columns.is-layout-flex){gap: 2em;}:where(.wp-block-columns.is-layout-grid){gap: 2em;} :root :where(.wp-block-pullquote){font-size: 1.5em;line-height: 1.6;} </style> <style id='jetpack-global-styles-frontend-style-inline-css'> :root { --font-headings: unset; --font-base: unset; --font-headings-default: -apple-system,BlinkMacSystemFont,"Segoe UI",Roboto,Oxygen-Sans,Ubuntu,Cantarell,"Helvetica Neue",sans-serif; --font-base-default: -apple-system,BlinkMacSystemFont,"Segoe UI",Roboto,Oxygen-Sans,Ubuntu,Cantarell,"Helvetica Neue",sans-serif;} </style> <script type="text/javascript" id="jetpack-mu-wpcom-settings-js-before"> /* <![CDATA[ */ var JETPACK_MU_WPCOM_SETTINGS = {"assetsUrl":"https:\/\/steveblank.com\/wp-content\/mu-plugins\/wpcomsh\/vendor\/automattic\/jetpack-mu-wpcom\/src\/build\/"}; /* ]]> */ </script> <link rel="https://api.w.org/" href="https://steveblank.com/wp-json/" /><link rel="EditURI" type="application/rsd+xml" title="RSD" href="https://steveblank.com/xmlrpc.php?rsd" /> <style>img#wpstats{display:none}</style> <meta name="description" content="7 posts published by steve blank during April 2013" /> <style type="text/css"> #header h1 a, #header h1 a:hover, #header .description { color: #eb221e; } </style>   <meta property="og:type" content="website" /> <meta property="og:title" content="Steve Blank Innovation and Entrepreneurship April 2013" /> <meta property="og:site_name" content="Steve Blank" /> <meta property="og:image" content="https://s0.wp.com/i/blank.jpg" /> <meta property="og:image:alt" content="" /> <meta property="og:locale" content="en_US" />  <link rel="icon" href="https://s0.wp.com/i/webclip.png" sizes="32x32" /> <link rel="icon" href="https://s0.wp.com/i/webclip.png" sizes="192x192" /> <link rel="apple-touch-icon" href="https://s0.wp.com/i/webclip.png" /> <meta name="msapplication-TileImage" content="https://s0.wp.com/i/webclip.png" />  <script type='text/javascript'> var _gaq = _gaq || []; _gaq.push(['_setAccount', 'UA-85363375-1']); _gaq.push(['_trackPageview']); (function() { var ga = document.createElement('script'); ga.type = 'text/javascript'; ga.async = true; ga.src = ('https:' === document.location.protocol ? 'https://ssl' : 'http://www') + '.google-analytics.com/ga.js'; var s = document.getElementsByTagName('script')[0]; s.parentNode.insertBefore(ga, s); })(); </script>  </head> <body class="archive date"><div id="container"> <div id="header"> <div id="menu"> <ul id="menu-menu" class="menu"><li id="menu-item-12086" class="menu-item menu-item-type-custom menu-item-object-custom menu-item-home menu-item-12086"><a href="http://steveblank.com">Home</a></li> <li id="menu-item-12085" class="menu-item menu-item-type-post_type menu-item-object-page menu-item-12085"><a href="https://steveblank.com/about/">About Steve</a></li> <li id="menu-item-12083" class="menu-item menu-item-type-post_type menu-item-object-page menu-item-12083"><a href="https://steveblank.com/books-for-startups/">Startup Books</a></li> <li id="menu-item-12080" class="menu-item menu-item-type-post_type menu-item-object-page menu-item-12080"><a href="https://steveblank.com/slides/">Slides/Videos</a></li> <li id="menu-item-25611" class="menu-item menu-item-type-post_type menu-item-object-page menu-item-25611"><a href="https://steveblank.com/raising-money/">Fund Raising</a></li> <li id="menu-item-12082" class="menu-item menu-item-type-post_type menu-item-object-page menu-item-12082"><a href="https://steveblank.com/tools-and-blogs-for-entrepreneurs/">Tools!</a></li> <li id="menu-item-12084" class="menu-item menu-item-type-post_type menu-item-object-page menu-item-12084"><a href="https://steveblank.com/secret-history/">Secret History</a></li> </ul> </div> <div id="header-box"> <div id="header-image"> <img src="https://steveblank.com/wp-content/uploads/2009/02/cropped-100_3947-ks-far-away-download10.jpg" alt="" /> </div> <div id="header-overlay"> <img src="https://steveblank.com/wp-content/themes/digg3/images/bg_header_overlay.png" alt="" /> </div> <div id="pagetitle"> <h1><a href="https://steveblank.com/" title="Steve Blank">Steve Blank</a></h1> </div> <div id="syndication"> <a href="https://steveblank.com/feed/" title="Syndicate this site using RSS" class="feed">Entries <abbr title="Really Simple Syndication">RSS</abbr></a> | <a href="https://steveblank.com/comments/feed/" title="Syndicate comments using RSS">Comments RSS</a> </div> <div id="searchbox"> <form method="get" id="searchform" action="https://steveblank.com/"> <div> <input type="text" value="" name="s" id="s" /> <input type="submit" id="searchsubmit" value="Search" /> </div> </form> </div> </div> </div> <div class="pagewrapper"><div id="page">  <div class="obar"> <ul> <li id="blog_subscription-3" class="widget widget_blog_subscription jetpack_subscription_widget"><h2 class="widgettitle">Email Subscription</h2> <div class="wp-block-jetpack-subscriptions__container"> <form action="#" method="post" accept-charset="utf-8" id="subscribe-blog-blog_subscription-3" data-blog="6599589" data-post_access_level="everybody" > <div id="subscribe-text"><p>Enter your email address to subscribe to this blog and receive notifications of new posts by email.</p> </div> <p id="subscribe-email"> <label id="jetpack-subscribe-label" class="screen-reader-text" for="subscribe-field-blog_subscription-3"> Email Address </label> <input type="email" name="email" required="required" value="" id="subscribe-field-blog_subscription-3" placeholder="Email Address" /> </p> <p id="subscribe-submit" > <input type="hidden" name="action" value="subscribe"/> <input type="hidden" name="source" value="https://steveblank.com/2013/04/"/> <input type="hidden" name="sub-type" value="widget"/> <input type="hidden" name="redirect_fragment" value="subscribe-blog-blog_subscription-3"/> <input type="hidden" id="_wpnonce" name="_wpnonce" value="3b7b47dbf4" /><input type="hidden" name="_wp_http_referer" value="/2013/04/" /> <button type="submit" class="wp-block-button__link" name="jetpack_subscriptions_widget" > Sign me up! </button> </p> </form> <div class="wp-block-jetpack-subscriptions__subscount"> Join 55.5K other subscribers </div> </div> </li> <li id="categories-356180491" class="widget widget_categories"><h2 class="widgettitle">Categories</h2> <ul> <li class="cat-item cat-item-64203016"><a href="https://steveblank.com/category/2-minute-lessons/">2 Minute Lessons</a> (15) </li> <li class="cat-item cat-item-2450"><a href="https://steveblank.com/category/air-force/">Air Force</a> (19) </li> <li class="cat-item cat-item-1457175"><a href="https://steveblank.com/category/ardent/">Ardent</a> (9) </li> <li class="cat-item cat-item-45014641"><a href="https://steveblank.com/category/business-model-versus-business-plan/">Business Model versus Business Plan</a> (64) </li> <li class="cat-item cat-item-4787488"><a href="https://steveblank.com/category/california-coastal-commission/">California Coastal Commission</a> (9) </li> <li class="cat-item cat-item-1470"><a href="https://steveblank.com/category/china/">China</a> (9) </li> <li class="cat-item cat-item-6987201"><a href="https://steveblank.com/category/commencement-speeches/">Commencement Speeches</a> (9) </li> <li class="cat-item cat-item-23993"><a href="https://steveblank.com/category/conservation/">Conservation</a> (4) </li> <li class="cat-item cat-item-3075385"><a href="https://steveblank.com/category/convergent-technologies/">Convergent Technologies</a> (4) </li> <li class="cat-item cat-item-635806586"><a href="https://steveblank.com/category/corporate-govt-innovation/">Corporate/Gov't Innovation</a> (131) </li> <li class="cat-item cat-item-697702677"><a href="https://steveblank.com/category/covid-19-recovery/">Covid-19/Recovery</a> (10) </li> <li class="cat-item cat-item-1874987"><a href="https://steveblank.com/category/customer-development/">Customer Development</a> (323) </li> <li class="cat-item cat-item-25337102"><a href="https://steveblank.com/category/customer-development-manifesto/">Customer Development Manifesto</a> (34) </li> <li class="cat-item cat-item-16840"><a href="https://steveblank.com/category/epiphany/">E.piphany</a> (13) </li> <li class="cat-item cat-item-697967638"><a href="https://steveblank.com/category/educators-summit/">Educators Summit</a> (7) </li> <li class="cat-item cat-item-697967634"><a href="https://steveblank.com/category/esl/">ESL</a> (8) </li> <li class="cat-item cat-item-64567312"><a href="https://steveblank.com/category/familycareerculture/">Family/Career/Culture</a> (81) </li> <li class="cat-item cat-item-697967641"><a href="https://steveblank.com/category/gordian-knot-center-for-national-security-innovation/">Gordian Knot Center for National Security Innovation</a> (11) </li> <li class="cat-item cat-item-479441927"><a href="https://steveblank.com/category/hacking-for-defense/">Hacking For Defense</a> (41) </li> <li class="cat-item cat-item-526158618"><a href="https://steveblank.com/category/hacking-for-diplomacy/">Hacking for Diplomacy</a> (10) </li> <li class="cat-item cat-item-697967637"><a href="https://steveblank.com/category/hacking-for-recovery/">Hacking for Recovery</a> (5) </li> <li class="cat-item cat-item-105397"><a href="https://steveblank.com/category/harvard-business-review/">Harvard Business Review</a> (12) </li> <li class="cat-item cat-item-684268037"><a href="https://steveblank.com/category/innovation-doctrine/">Innovation Doctrine</a> (3) </li> <li class="cat-item cat-item-340390495"><a href="https://steveblank.com/category/innovation-outposts/">Innovation Outposts</a> (4) </li> <li class="cat-item cat-item-217160777"><a href="https://steveblank.com/category/investment-readiness-level/">Investment Readiness Level</a> (6) </li> <li class="cat-item cat-item-53169179"><a href="https://steveblank.com/category/lean-launchpad/">Lean LaunchPad</a> (117) </li> <li class="cat-item cat-item-261983049"><a href="https://steveblank.com/category/life-sciences-nih/">Life Sciences (NIH)</a> (26) </li> <li class="cat-item cat-item-16879037"><a href="https://steveblank.com/category/market-types/">Market Types</a> (15) </li> <li class="cat-item cat-item-175"><a href="https://steveblank.com/category/marketing/">Marketing</a> (27) </li> <li class="cat-item cat-item-28276971"><a href="https://steveblank.com/category/mips-computers/">MIPS Computers</a> (2) </li> <li class="cat-item cat-item-697967640"><a href="https://steveblank.com/category/national-security/">National Security</a> (40) </li> <li class="cat-item cat-item-2064"><a href="https://steveblank.com/category/navy/">Navy</a> (6) </li> <li class="cat-item cat-item-34826422"><a href="https://steveblank.com/category/nih-national-institutes-of-health/">NIH (National Institutes of Health)</a> (17) </li> <li class="cat-item cat-item-16770755"><a href="https://steveblank.com/category/nsf-national-science-foundation/">NSF (National Science Foundation)</a> (18) </li> <li class="cat-item cat-item-16848661"><a href="https://steveblank.com/category/rocket-science-games/">Rocket Science Games</a> (10) </li> <li class="cat-item cat-item-137272104"><a href="https://steveblank.com/category/science-and-industrial-policy/">Science and Industrial Policy</a> (27) </li> <li class="cat-item cat-item-16849552"><a href="https://steveblank.com/category/secret-history-of-silicon-valley/">Secret History of Silicon Valley</a> (26) </li> <li class="cat-item cat-item-50184180"><a href="https://steveblank.com/category/siriusxm-radio-show/">SiriusXM Radio Show</a> (50) </li> <li class="cat-item cat-item-235742"><a href="https://steveblank.com/category/supermac/">SuperMac</a> (12) </li> <li class="cat-item cat-item-1591"><a href="https://steveblank.com/category/teaching/">Teaching</a> (178) </li> <li class="cat-item cat-item-6"><a href="https://steveblank.com/category/technology/">Technology</a> (86) </li> <li class="cat-item cat-item-697967636"><a href="https://steveblank.com/category/technology-innovation-and-modern-war/">Technology Innovation and Great Power Competition</a> (17) </li> <li class="cat-item cat-item-697967642"><a href="https://steveblank.com/category/technology-innovation-and-modern-war-2/">Technology Innovation and Modern War</a> (20) </li> <li class="cat-item cat-item-429989"><a href="https://steveblank.com/category/tesla/">Tesla</a> (5) </li> <li class="cat-item cat-item-1"><a href="https://steveblank.com/category/uncategorized/">Uncategorized</a> (8) </li> <li class="cat-item cat-item-202"><a href="https://steveblank.com/category/venture-capital/">Venture Capital</a> (82) </li> <li class="cat-item cat-item-1087649"><a href="https://steveblank.com/category/vertical-markets/">Vertical Markets</a> (5) </li> <li class="cat-item cat-item-715437"><a href="https://steveblank.com/category/zilog/">Zilog</a> (5) </li> </ul> </li> <li id="rss_links-3" class="widget widget_rss_links"><h2 class="widgettitle">Get Steve Blank via your RSS Feed</h2> <ul><li><a target="_self" href="https://steveblank.com/feed/" title="Subscribe to posts">RSS - Posts</a></li><li><a target="_self" href="https://steveblank.com/comments/feed/" title="Subscribe to comments">RSS - Comments</a></li></ul> </li> <li id="recent-posts-2" class="widget widget_recent_entries"> <h2 class="widgettitle">Recent Posts</h2> <ul> <li> <a href="https://steveblank.com/2024/10/22/quantum-computing-an-update/">Quantum Computing – An Update</a> </li> <li> <a href="https://steveblank.com/2024/10/08/how-saboteurs-threaten-innovation-and-what-to-do-about-it/">How Saboteurs Threaten Innovation–and What to Do About It</a> </li> <li> <a href="https://steveblank.com/2024/10/05/what-does-product-market-fit-sound-like-this/">What Does Product Market Fit Sound Like? This.</a> </li> <li> <a href="https://steveblank.com/2024/09/17/the-directory-of-dod-program-executive-offices-and-officers-peos/">How To Find Your Customer In the Dept of Defense – The Directory of DoD Program Executive Offices</a> </li> <li> <a href="https://steveblank.com/2024/08/13/security-clearances-at-the-speed-of-startups/">Security Clearances at the Speed of Startups</a> </li> <li> <a href="https://steveblank.com/2024/07/30/why-large-organizations-struggle-with-disruption-and-what-to-do-about-it/">Why Large Organizations Struggle With Disruption, and What to Do About It</a> </li> <li> <a href="https://steveblank.com/2024/06/27/lean-launchpad-stanford-2024-8-teams-in-8-companies-out/">Lean LaunchPad @Stanford 2024 – 8 Teams In, 8 Companies Out</a> </li> <li> <a href="https://steveblank.com/2024/06/24/hacking-for-defense-stanford-2024-lessons-learned-presentations/">Hacking for Defense @ Stanford 2024 – Lessons Learned Presentations</a> </li> <li> <a href="https://steveblank.com/2024/06/03/youre-invited-hacking-for-defense-and-lean-launchpad-final-presentations/">You’re Invited: Hacking for Defense and Lean LaunchPad Final Presentations</a> </li> <li> <a href="https://steveblank.com/2024/05/26/gordon-bell-r-i-p/">Gordon Bell R.I.P.</a> </li> </ul> </li> <li id="search-2" class="widget widget_search"><form method="get" id="searchform" action="https://steveblank.com/"> <div> <input type="text" value="" name="s" id="s" /> <input type="submit" id="searchsubmit" value="Search" /> </div> </form></li> <li id="archives-2" class="widget widget_archive"><h2 class="widgettitle">Archives</h2> <ul> <li><a href='https://steveblank.com/2024/10/'>October 2024</a></li> <li><a href='https://steveblank.com/2024/09/'>September 2024</a></li> <li><a href='https://steveblank.com/2024/08/'>August 2024</a></li> <li><a href='https://steveblank.com/2024/07/'>July 2024</a></li> <li><a href='https://steveblank.com/2024/06/'>June 2024</a></li> <li><a href='https://steveblank.com/2024/05/'>May 2024</a></li> <li><a href='https://steveblank.com/2024/04/'>April 2024</a></li> <li><a href='https://steveblank.com/2024/03/'>March 2024</a></li> <li><a href='https://steveblank.com/2024/02/'>February 2024</a></li> <li><a href='https://steveblank.com/2024/01/'>January 2024</a></li> <li><a href='https://steveblank.com/2023/12/'>December 2023</a></li> <li><a href='https://steveblank.com/2023/11/'>November 2023</a></li> <li><a href='https://steveblank.com/2023/10/'>October 2023</a></li> <li><a href='https://steveblank.com/2023/09/'>September 2023</a></li> <li><a href='https://steveblank.com/2023/08/'>August 2023</a></li> <li><a href='https://steveblank.com/2023/07/'>July 2023</a></li> <li><a href='https://steveblank.com/2023/04/'>April 2023</a></li> <li><a href='https://steveblank.com/2023/02/'>February 2023</a></li> <li><a href='https://steveblank.com/2023/01/'>January 2023</a></li> <li><a href='https://steveblank.com/2022/11/'>November 2022</a></li> <li><a href='https://steveblank.com/2022/10/'>October 2022</a></li> <li><a href='https://steveblank.com/2022/09/'>September 2022</a></li> <li><a href='https://steveblank.com/2022/06/'>June 2022</a></li> <li><a href='https://steveblank.com/2022/05/'>May 2022</a></li> <li><a href='https://steveblank.com/2022/04/'>April 2022</a></li> <li><a href='https://steveblank.com/2022/03/'>March 2022</a></li> <li><a href='https://steveblank.com/2022/01/'>January 2022</a></li> <li><a href='https://steveblank.com/2021/12/'>December 2021</a></li> <li><a href='https://steveblank.com/2021/11/'>November 2021</a></li> <li><a href='https://steveblank.com/2021/10/'>October 2021</a></li> <li><a href='https://steveblank.com/2021/09/'>September 2021</a></li> <li><a href='https://steveblank.com/2021/08/'>August 2021</a></li> <li><a href='https://steveblank.com/2021/07/'>July 2021</a></li> <li><a href='https://steveblank.com/2021/06/'>June 2021</a></li> <li><a href='https://steveblank.com/2021/05/'>May 2021</a></li> <li><a href='https://steveblank.com/2021/04/'>April 2021</a></li> <li><a href='https://steveblank.com/2021/03/'>March 2021</a></li> <li><a href='https://steveblank.com/2021/02/'>February 2021</a></li> <li><a href='https://steveblank.com/2021/01/'>January 2021</a></li> <li><a href='https://steveblank.com/2020/12/'>December 2020</a></li> <li><a href='https://steveblank.com/2020/11/'>November 2020</a></li> <li><a href='https://steveblank.com/2020/10/'>October 2020</a></li> <li><a href='https://steveblank.com/2020/09/'>September 2020</a></li> <li><a href='https://steveblank.com/2020/08/'>August 2020</a></li> <li><a href='https://steveblank.com/2020/07/'>July 2020</a></li> <li><a href='https://steveblank.com/2020/06/'>June 2020</a></li> <li><a href='https://steveblank.com/2020/05/'>May 2020</a></li> <li><a href='https://steveblank.com/2020/04/'>April 2020</a></li> <li><a href='https://steveblank.com/2020/03/'>March 2020</a></li> <li><a href='https://steveblank.com/2020/02/'>February 2020</a></li> <li><a href='https://steveblank.com/2020/01/'>January 2020</a></li> <li><a href='https://steveblank.com/2019/12/'>December 2019</a></li> <li><a href='https://steveblank.com/2019/11/'>November 2019</a></li> <li><a href='https://steveblank.com/2019/10/'>October 2019</a></li> <li><a href='https://steveblank.com/2019/09/'>September 2019</a></li> <li><a href='https://steveblank.com/2019/06/'>June 2019</a></li> <li><a href='https://steveblank.com/2019/05/'>May 2019</a></li> <li><a href='https://steveblank.com/2019/04/'>April 2019</a></li> <li><a href='https://steveblank.com/2019/03/'>March 2019</a></li> <li><a href='https://steveblank.com/2019/01/'>January 2019</a></li> <li><a href='https://steveblank.com/2018/12/'>December 2018</a></li> <li><a href='https://steveblank.com/2018/11/'>November 2018</a></li> <li><a href='https://steveblank.com/2018/10/'>October 2018</a></li> <li><a href='https://steveblank.com/2018/09/'>September 2018</a></li> <li><a href='https://steveblank.com/2018/08/'>August 2018</a></li> <li><a href='https://steveblank.com/2018/07/'>July 2018</a></li> <li><a href='https://steveblank.com/2018/06/'>June 2018</a></li> <li><a href='https://steveblank.com/2018/04/'>April 2018</a></li> <li><a href='https://steveblank.com/2018/03/'>March 2018</a></li> <li><a href='https://steveblank.com/2018/02/'>February 2018</a></li> <li><a href='https://steveblank.com/2018/01/'>January 2018</a></li> <li><a href='https://steveblank.com/2017/11/'>November 2017</a></li> <li><a href='https://steveblank.com/2017/10/'>October 2017</a></li> <li><a href='https://steveblank.com/2017/09/'>September 2017</a></li> <li><a href='https://steveblank.com/2017/08/'>August 2017</a></li> <li><a href='https://steveblank.com/2017/07/'>July 2017</a></li> <li><a href='https://steveblank.com/2017/06/'>June 2017</a></li> <li><a href='https://steveblank.com/2017/05/'>May 2017</a></li> <li><a href='https://steveblank.com/2017/04/'>April 2017</a></li> <li><a href='https://steveblank.com/2017/03/'>March 2017</a></li> <li><a href='https://steveblank.com/2017/02/'>February 2017</a></li> <li><a href='https://steveblank.com/2017/01/'>January 2017</a></li> <li><a href='https://steveblank.com/2016/12/'>December 2016</a></li> <li><a href='https://steveblank.com/2016/11/'>November 2016</a></li> <li><a href='https://steveblank.com/2016/10/'>October 2016</a></li> <li><a href='https://steveblank.com/2016/09/'>September 2016</a></li> <li><a href='https://steveblank.com/2016/08/'>August 2016</a></li> <li><a href='https://steveblank.com/2016/07/'>July 2016</a></li> <li><a href='https://steveblank.com/2016/06/'>June 2016</a></li> <li><a href='https://steveblank.com/2016/05/'>May 2016</a></li> <li><a href='https://steveblank.com/2016/04/'>April 2016</a></li> <li><a href='https://steveblank.com/2016/03/'>March 2016</a></li> <li><a href='https://steveblank.com/2016/02/'>February 2016</a></li> <li><a href='https://steveblank.com/2016/01/'>January 2016</a></li> <li><a href='https://steveblank.com/2015/12/'>December 2015</a></li> <li><a href='https://steveblank.com/2015/11/'>November 2015</a></li> <li><a href='https://steveblank.com/2015/10/'>October 2015</a></li> <li><a href='https://steveblank.com/2015/09/'>September 2015</a></li> <li><a href='https://steveblank.com/2015/08/'>August 2015</a></li> <li><a href='https://steveblank.com/2015/07/'>July 2015</a></li> <li><a href='https://steveblank.com/2015/06/'>June 2015</a></li> <li><a href='https://steveblank.com/2015/05/'>May 2015</a></li> <li><a href='https://steveblank.com/2015/03/'>March 2015</a></li> <li><a href='https://steveblank.com/2015/02/'>February 2015</a></li> <li><a href='https://steveblank.com/2015/01/'>January 2015</a></li> <li><a href='https://steveblank.com/2014/12/'>December 2014</a></li> <li><a href='https://steveblank.com/2014/11/'>November 2014</a></li> <li><a href='https://steveblank.com/2014/10/'>October 2014</a></li> <li><a href='https://steveblank.com/2014/09/'>September 2014</a></li> <li><a href='https://steveblank.com/2014/08/'>August 2014</a></li> <li><a href='https://steveblank.com/2014/07/'>July 2014</a></li> <li><a href='https://steveblank.com/2014/06/'>June 2014</a></li> <li><a href='https://steveblank.com/2014/05/'>May 2014</a></li> <li><a href='https://steveblank.com/2014/04/'>April 2014</a></li> <li><a href='https://steveblank.com/2014/03/'>March 2014</a></li> <li><a href='https://steveblank.com/2014/02/'>February 2014</a></li> <li><a href='https://steveblank.com/2014/01/'>January 2014</a></li> <li><a href='https://steveblank.com/2013/12/'>December 2013</a></li> <li><a href='https://steveblank.com/2013/11/'>November 2013</a></li> <li><a href='https://steveblank.com/2013/10/'>October 2013</a></li> <li><a href='https://steveblank.com/2013/09/'>September 2013</a></li> <li><a href='https://steveblank.com/2013/08/'>August 2013</a></li> <li><a href='https://steveblank.com/2013/07/'>July 2013</a></li> <li><a href='https://steveblank.com/2013/06/'>June 2013</a></li> <li><a href='https://steveblank.com/2013/05/'>May 2013</a></li> <li><a href='https://steveblank.com/2013/04/' aria-current="page">April 2013</a></li> <li><a href='https://steveblank.com/2013/03/'>March 2013</a></li> <li><a href='https://steveblank.com/2013/02/'>February 2013</a></li> <li><a href='https://steveblank.com/2013/01/'>January 2013</a></li> <li><a href='https://steveblank.com/2012/12/'>December 2012</a></li> <li><a href='https://steveblank.com/2012/11/'>November 2012</a></li> <li><a href='https://steveblank.com/2012/10/'>October 2012</a></li> <li><a href='https://steveblank.com/2012/09/'>September 2012</a></li> <li><a href='https://steveblank.com/2012/08/'>August 2012</a></li> <li><a href='https://steveblank.com/2012/07/'>July 2012</a></li> <li><a href='https://steveblank.com/2012/06/'>June 2012</a></li> <li><a href='https://steveblank.com/2012/05/'>May 2012</a></li> <li><a href='https://steveblank.com/2012/04/'>April 2012</a></li> <li><a href='https://steveblank.com/2012/03/'>March 2012</a></li> <li><a href='https://steveblank.com/2012/02/'>February 2012</a></li> <li><a href='https://steveblank.com/2012/01/'>January 2012</a></li> <li><a href='https://steveblank.com/2011/12/'>December 2011</a></li> <li><a href='https://steveblank.com/2011/11/'>November 2011</a></li> <li><a href='https://steveblank.com/2011/10/'>October 2011</a></li> <li><a href='https://steveblank.com/2011/09/'>September 2011</a></li> <li><a href='https://steveblank.com/2011/08/'>August 2011</a></li> <li><a href='https://steveblank.com/2011/07/'>July 2011</a></li> <li><a href='https://steveblank.com/2011/06/'>June 2011</a></li> <li><a href='https://steveblank.com/2011/05/'>May 2011</a></li> <li><a href='https://steveblank.com/2011/04/'>April 2011</a></li> <li><a href='https://steveblank.com/2011/03/'>March 2011</a></li> <li><a href='https://steveblank.com/2011/02/'>February 2011</a></li> <li><a href='https://steveblank.com/2011/01/'>January 2011</a></li> <li><a href='https://steveblank.com/2010/12/'>December 2010</a></li> <li><a href='https://steveblank.com/2010/11/'>November 2010</a></li> <li><a href='https://steveblank.com/2010/10/'>October 2010</a></li> <li><a href='https://steveblank.com/2010/09/'>September 2010</a></li> <li><a href='https://steveblank.com/2010/08/'>August 2010</a></li> <li><a href='https://steveblank.com/2010/07/'>July 2010</a></li> <li><a href='https://steveblank.com/2010/06/'>June 2010</a></li> <li><a href='https://steveblank.com/2010/05/'>May 2010</a></li> <li><a href='https://steveblank.com/2010/04/'>April 2010</a></li> <li><a href='https://steveblank.com/2010/03/'>March 2010</a></li> <li><a href='https://steveblank.com/2010/02/'>February 2010</a></li> <li><a href='https://steveblank.com/2010/01/'>January 2010</a></li> <li><a href='https://steveblank.com/2009/12/'>December 2009</a></li> <li><a href='https://steveblank.com/2009/11/'>November 2009</a></li> <li><a href='https://steveblank.com/2009/10/'>October 2009</a></li> <li><a href='https://steveblank.com/2009/09/'>September 2009</a></li> <li><a href='https://steveblank.com/2009/08/'>August 2009</a></li> <li><a href='https://steveblank.com/2009/07/'>July 2009</a></li> <li><a href='https://steveblank.com/2009/06/'>June 2009</a></li> <li><a href='https://steveblank.com/2009/05/'>May 2009</a></li> <li><a href='https://steveblank.com/2009/04/'>April 2009</a></li> <li><a href='https://steveblank.com/2009/03/'>March 2009</a></li> <li><a href='https://steveblank.com/2009/02/'>February 2009</a></li> </ul> </li> <li id="pages-2" class="widget widget_pages"><h2 class="widgettitle">Other Stuff</h2> <ul> <li class="page_item page-item-2"><a href="https://steveblank.com/about/">About Steve</a></li> <li class="page_item page-item-22"><a href="https://steveblank.com/tools-and-blogs-for-entrepreneurs/">Startup Tools</a></li> <li class="page_item page-item-62"><a href="https://steveblank.com/secret-history/">Secret History</a></li> <li class="page_item page-item-68"><a href="https://steveblank.com/books-for-startups/">Books for Startups</a></li> <li class="page_item page-item-11025"><a href="https://steveblank.com/slides/">Slides/Videos</a></li> <li class="page_item page-item-25609"><a href="https://steveblank.com/raising-money/">Raising Money</a></li> </ul> </li> </ul> </div>  <div class="narrowcolumnwrapper"><div class="narrowcolumn"> <div id="content" class="content"> <div class="post-13785 post type-post status-publish format-standard hentry category-air-force category-customer-development category-lean-launchpad category-teaching" id="post-13785"> <h2><a href="https://steveblank.com/2013/04/29/fly-high/" rel="bookmark">Fly High</a></h2> <div class="postinfo"> Posted on <span class="postdate">April 29, 2013</span> by steve blank </div> <div class="entry"> <p>Todd Branchflower was one of my <a href="http://steveblank.com/2010/12/07/the-lean-launchpad-–-teaching-entrepreneurship-as-a-management-science/" target="_blank">Lean LaunchPad</a> students entrepreneurial enough to convince the Air Force send him to Stanford to get his graduate engineering degree. After watching my <a href="http://steveblank.com/secret-history/" target="_blank">Secret History of Silicon Valley</a> talk, he became fascinated by how serendipity created both weapon systems and entrepreneurship in World War II – and brought us <a href="14/the-endless-frontier-u-s-science-and-national-industrial-policy-part-1/" target="_blank">federal support of science</a> and Silicon Valley.</p> <span class="embed-youtube" style="text-align:center; display: block;"><iframe class="youtube-player" width="468" height="264" src="https://www.youtube.com/embed/ZTC_RxWN_xo?version=3&rel=1&showsearch=0&showinfo=1&iv_load_policy=1&fs=1&hl=en-US&autohide=2&wmode=transparent" allowfullscreen="true" style="border:0;" sandbox="allow-scripts allow-same-origin allow-popups allow-presentation allow-popups-to-escape-sandbox"></iframe></span> <p>In class I would tease Todd that while the Navy had me present the Secret History talk in front of 4,000 cadets at the <a href="http://www.nps.edu" target="_blank">Naval Post Graduate School</a>, I had yet to hear from the <a href="http://www.usafa.af.mil">Air Force Academy</a>. He promised that one day he would fix that.</p> <p><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/f-22.jpg"><img data-recalc-dims="1" decoding="async" data-attachment-id="13794" data-permalink="https://steveblank.com/2013/04/29/fly-high/f-22/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/f-22.jpg?fit=800%2C531&ssl=1" data-orig-size="800,531" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="F-22" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/f-22.jpg?fit=300%2C199&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/f-22.jpg?fit=468%2C311&ssl=1" class=" wp-image-13794 alignright" alt="F-22" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/f-22.jpg?resize=240%2C159" width="240" height="159" /></a>Fast-forward three years and Todd is now <i>Captain </i><a href="https://www.linkedin.com/pub/todd-branchflower/26/103/42b">Todd Branchflower</a>, teaching electrical engineering at the Air Force Academy. He extended an invitation to me to come out to the Academy in Colorado Springs to address the cadets and meet the faculty.</p> <p>Out of the airport the first stop was in Denver – an impromptu meetup at <a href="http://galvanize.it" target="_blank">Galvanize</a> and a fireside chat with a roomful of 200 great entrepreneurs.</p> <p><b>U.S. Military Academies<br /> </b>Then it was on to Colorado Springs and the Air Force Academy. All officers in the U.S. military need a college degree. The <a href="http://www.usafa.af.mil" target="_blank">Air Force Academy</a> is one of the four U.S. military service academies (academy is a fancy word for 4-year college.) The oldest is the Army’s <a href="http://www.usma.edu/SitePages/Home.aspx">U.S. Military Academy</a> at West Point in New York, founded in 1802 to educate Army officers. The next military college was the <a href="http://www.usna.edu/homepage.php">Naval Academy</a> in Annapolis Maryland, set up in 1845 to train Navy officers. The <a href="http://www.uscga.edu/display.aspx?id=338" target="_blank">Coast Guard Academy</a> opened in New London Connecticut in 1876. The Air Force, originally part of the U.S. Army, wasn’t an <a href="http://en.wikipedia.org/wiki/National_Security_Act_of_1947">independent military branch</a> until 1947, set up their academy in 1955 in Colorado Springs. Only ~20% of officers go through a service academy. Over 40% get the military to pay for their college by joining via the Reserve Officers Training Corps (<a href="http://en.wikipedia.org/wiki/Air_Force_Reserve_Officer_Training_Corps">ROTC</a>) program. The rest get their college degree in a civilian college or university and then join their branch of the military after a 10-week <a href="http://en.wikipedia.org/wiki/Air_Force_Officer_Training_School">Officer Training School</a>.</p> <p><b>Secret History<br /> </b>Given <a href="http://steveblank.com/category/air-force/" target="_blank">my Air Force career</a> I came thinking that sharing the <a href="http://steveblank.com/secret-history/">Secret History of Silicon Valley</a> talk with 1000 soon to be Air Force Officers would be the highpoint of the visit. And it <i>was</i> as much fun as I expected – a full auditorium – a standing ovation, great feedback and a trophy – but two other things, completely unexpected, made the visit even more interesting.<a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/air-force-trophy1.jpg"><img data-recalc-dims="1" fetchpriority="high" decoding="async" data-attachment-id="13816" data-permalink="https://steveblank.com/2013/04/29/fly-high/air-force-trophy-2/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/air-force-trophy1.jpg?fit=1906%2C3262&ssl=1" data-orig-size="1906,3262" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="Air Force Trophy" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/air-force-trophy1.jpg?fit=175%2C300&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/air-force-trophy1.jpg?fit=468%2C801&ssl=1" class="alignright size-medium wp-image-13816" alt="Air Force Trophy" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/air-force-trophy1.jpg?resize=175%2C300" width="175" height="300" /></a></p> <p>First, I got to meet the faculty in both <a href="http://www.usafa.edu/df/dfec/faculty.cfm">electrical/computer engineering</a> and <a href="http://www.usafa.edu/df/dfm/Faculty_and_Staff.cfm">management</a> and share what I’ve learned about <a href="http://hbr.org/2013/05/why-the-lean-start-up-changes-everything" target="_blank">Lean</a> and the <a href="http://steveblank.com/2010/12/07/the-lean-launchpad-–-teaching-entrepreneurship-as-a-management-science/" target="_blank">Lean LaunchPad class</a>. In their senior year all Air Force cadets on the electrical engineering track have a two-semester <a href="http://www.usafa.edu/df/dfec/courses.cfm">“Capstone” class project</a>. They specify, design and build a project that may be of use. Unfortunately the class operates much like the military acquisition system: the project specification has minimal input from real world users, the product gets built with a waterfall engineering process, and there’s no input on whether the product actually meets real world needs until the product is delivered. This means students spend a ton of time and effort to deliver a “final” product release but it’s almost certain that it wouldn’t meet real world users’ needs without extensive rework and modification.</p> <p>I was surprised how interested the faculty was in exploring whether the Capstone class could be modified to use the Customer Development process to get input from potential “customers” inside the Air Force. And how the engineering process could be turned Agile. with the product built incrementally and iteratively, as students acquire more customer feedback. Success in the Capstone project would not only be measured on the technical basis of “did it work?” but also on how much they learned about the users and their needs. I invited the faculty to attend the <a href="http://nciia.org/LLP" target="_blank">Lean LaunchPad educators’ course</a> to learn how we teach the class.</p> <p>We’ll see if I made a dent.</p> <p><b>Table for 4000<br /> </b>In between faculty meetings I got a great tour of the Academy facilities and some of the classes. As on any college campus there are dorms, great sports facilities (<a href="http://www.goairforcefalcons.com/ot/afa-phys-ed.html" target="_blank">sports</a> is not optional), classrooms, etc. The curriculum was definitely oriented to practical science and service. However not on too many other college campuses will you find dorms arranged in squadrons of 40 of 100 students each, where students have to make their beds and have full-time hall monitors, and <i>simultaneously </i>eat lunch with 4,000 other cadets in one dining room (an experience I got to participate in from the guest tower overlooking the dining hall.) All the hierarchal rituals were on display; freshman have to run on the main quad walking on narrow strips, carry their backpacks in their hands, daily room inspections, etc.</p> <p>And I saw things that made this uniquely an <i>Air Force</i> college – they had their own airfield, <a href="http://www.usafa.edu/cadetFocus/cadetClubs/">flying clubs</a>, the Aero Lab with three wind tunnels, heavy emphasis on <a href="http://www.usafa.edu/index.cfm?catname=Dean%20of%20Faculty">engineering and aeronautics</a>, etc. (And it was fun to play “what aircraft is that” with those <a href="http://www.usafa.af.mil/information/baseinfo/historicalproperties.asp" target="_blank">on static display</a> around the grounds.) But the second surprise for me was the one that made me feel very, very old – it was the Academy’s Cyber Warfare curriculum.</p> <p><b>Cyber Warfare<br /> </b>I visited the <a href="http://www.af.mil/news/story.asp?id=123265104">Cyber 256 class</a> and got a look at the syllabus. Imagine going to college not only to learn how to hack computers but also actually majoring in it. The class consisted of basic networking and administration, network mapping, remote exploits, denial of service, web vulnerabilities, social engineering, password vulnerabilities, wireless network exploitation, persistence, digital media analysis, and cyber mission operations. In addition to the class in Cyber Warfare, there was also a cadet <a href="https://www.facebook.com/UsAirForceAcademyCyberCompetitionTeam" target="_blank">Cyber Warfare Club</a> and an annual National Security Agency <a href="http://www.csoonline.com/article/731796/military-academies-take-on-nsa-in-cybersecurity-competition" target="_blank">Cyber Warfare competition</a>. The Air Force competes with other military branches and National Guard units; the instructor proudly told me that the Air Force has won for the last two years. I only wish I had taken a picture of the huge trophy in the back of the classroom.</p> <p><b>We do what?<br /> </b>On the plane ride home I had time to process what I saw.</p> <p>When I was in the military the battle was just ending between the <a href="http://www.nsa.gov" target="_blank">National Security Agency</a> (NSA) and the military branches over who owned signals and communications intelligence. Was it the military (Air Force, Navy) or was it our intelligence agencies? In the end the NSA became the primary owner, the NRO (National Reconnaissance Office) owned and built the spacecraft that collected the intelligence and the military branches had organizations (Air Force Security Services, Army Security Agency or Naval Security Group) that manned the collection platforms (airplanes, listening posts, etc) which all fed back into the National Security Agency.</p> <p>Cyber Warfare has been through the same battles. While each of the military branches have Cyber Warfare organizations reporting into a unified military <a href="http://en.wikipedia.org/wiki/United_States_Cyber_Command">Cyber Command</a>, the head of the <a href="http://www.defense.gov/home/features/2011/0411%5Fcyberstrategy/" target="_blank">National Security Agency</a> is its director, making the <a href="http://www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB424/?utm_source=Sinocism+Newsletter&utm_campaign=5b8e2a7f18-Sinocism04_28_13&utm_medium=email" target="_blank">NSA the agency</a> that owns <a href="http://www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB424/?utm_source=Sinocism+Newsletter&utm_campaign=5b8e2a7f18-Sinocism04_28_13&utm_medium=email" target="_blank">Cyber Warfare</a> for the U.S. Cyber Warfare has three components:</p> <p>1) Computer Network Attack (CNA) – shut down an enemies ability to command and control its weapon systems in a war (i.e. Chinese satellite and over the horizon radar systems targeting U.S. carriers) or prevent potential adversaries from creating weapons of mass destruction, (i.e. Stuxnet targeted at the Iranian nuclear weapons program),<br /> 2) Computer Network Defense (CND) – stop potential adversaries from doing the same to you.<br /> 3) Computer Network Espionage (CNE) – steal everything you can get your hands (<a href="http://www.darkreading.com/attacks-breaches/china-hacked-rsa-us-official-says/232700515" target="_blank">China and RSA’s SecureID breach</a>, hacks of Google and AWS.)</p> <p>While the U.S. complains about the Chinese military hackers from the <a href="http://project2049.net/documents/pla_third_department_sigint_cyber_stokes_lin_hsiao.pdf">PLA’s GSD 3<span style="text-decoration:underline;"><sup>rd</sup></span> Department</a> (the equivalent of our <a href="http://www.nsa.gov/">National Security Agency</a>,) and their <a href="http://intelreport.mandiant.com/Mandiant_APT1_Report.pdf">2nd Bureau, Unit 61398</a> tasked euphemistically for “Computer Network Operations,” we’ve done the same.</p> <p>Unfortunately, potential adversaries have much softer targets in the U.S. While the military is hardening its command and control systems, <a href="http://www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB424/docs/Cyber-078.pdf" target="_blank">civilian computer systems are relatively unprotected</a>. Financial institutions have successfully lobbied against the U.S. government forcing them to take responsibility in protecting your data/money. Given our economy is just bits, the outcome of a successful attack will not be pretty.</p> <p><b>Summary</b></p> <blockquote> <ul> <li>Thanks to the Air Force Academy, it’s faculty, cadets and Captain Todd Branchflower for a great visit</li> <li>The Lean LaunchPad class may find a place in the military</li> <li>We should be glad that the military is taking Cyber Warfare seriously, you should wish your bank did the same</li> </ul> </blockquote> <p>Listen to the post here or download the podcast <a href="http://clearshore.net" target="_blank">here</a></p> <div class="sharedaddy sd-sharing-enabled"><div class="robots-nocontent sd-block sd-social sd-social-official sd-sharing"><h3 class="sd-title">Share this:</h3><div class="sd-content"><ul><li class="share-print"><a rel="nofollow noopener noreferrer" data-shared="" class="share-print sd-button" href="https://steveblank.com/2013/04/29/fly-high/" target="_blank" title="Click to print" ><span>Print</span></a></li><li class="share-email"><a rel="nofollow noopener noreferrer" data-shared="" class="share-email sd-button" href="mailto:?subject=%5BShared%20Post%5D%20Fly%20High&body=https%3A%2F%2Fsteveblank.com%2F2013%2F04%2F29%2Ffly-high%2F&share=email" target="_blank" title="Click to email a link to a friend" data-email-share-error-title="Do you have email set up?" data-email-share-error-text="If you're having problems sharing via email, you might not have email set up for your browser. You may need to create a new email yourself." data-email-share-nonce="e2b2948956" data-email-share-track-url="https://steveblank.com/2013/04/29/fly-high/?share=email"><span>Email</span></a></li><li class="share-facebook"><div class="fb-share-button" data-href="https://steveblank.com/2013/04/29/fly-high/" data-layout="button_count"></div></li><li class="share-twitter"><a href="https://twitter.com/share" class="twitter-share-button" data-url="https://steveblank.com/2013/04/29/fly-high/" data-text="Fly High" >Tweet</a></li><li class="share-linkedin"><div class="linkedin_button"><script type="in/share" data-url="https://steveblank.com/2013/04/29/fly-high/" data-counter="right"></script></div></li><li class="share-reddit"><a rel="nofollow noopener noreferrer" data-shared="" class="share-reddit sd-button" href="https://steveblank.com/2013/04/29/fly-high/?share=reddit" target="_blank" title="Click to share on Reddit" ><span>Reddit</span></a></li><li class="share-jetpack-whatsapp"><a rel="nofollow noopener noreferrer" data-shared="" class="share-jetpack-whatsapp sd-button" href="https://steveblank.com/2013/04/29/fly-high/?share=jetpack-whatsapp" target="_blank" title="Click to share on WhatsApp" ><span>WhatsApp</span></a></li><li class="share-pinterest"><div class="pinterest_button"><a href="https://www.pinterest.com/pin/create/button/?url=https%3A%2F%2Fsteveblank.com%2F2013%2F04%2F29%2Ffly-high%2F&media=http%3A%2F%2Fsteveblank.com%2Fwp-content%2Fuploads%2F2013%2F04%2Ff-22.jpg%3Fw%3D300&description=Fly%20High" data-pin-do="buttonPin" data-pin-config="beside"><img data-recalc-dims="1" src="https://i0.wp.com/assets.pinterest.com/images/pidgets/pinit_fg_en_rect_gray_20.png?w=468" /></a></div></li><li class="share-telegram"><a rel="nofollow noopener noreferrer" data-shared="" class="share-telegram sd-button" href="https://steveblank.com/2013/04/29/fly-high/?share=telegram" target="_blank" title="Click to share on Telegram" ><span>Telegram</span></a></li><li class="share-tumblr"><a class="tumblr-share-button" target="_blank" href="https://www.tumblr.com/share" data-title="Fly High" data-content="https://steveblank.com/2013/04/29/fly-high/" title="Share on Tumblr"data-posttype="link">Share on Tumblr</a></li><li class="share-pocket"><div class="pocket_button"><a href="https://getpocket.com/save" class="pocket-btn" data-lang="en" data-save-url="https://steveblank.com/2013/04/29/fly-high/" data-pocket-count="horizontal" >Pocket</a></div></li><li class="share-end"></li></ul></div></div></div><div class='sharedaddy sd-block sd-like jetpack-likes-widget-wrapper jetpack-likes-widget-unloaded' id='like-post-wrapper-6599589-13785-673e47a6a30b9' data-src='https://widgets.wp.com/likes/?ver=14.1-a.3#blog_id=6599589&post_id=13785&origin=steveblank.com&obj_id=6599589-13785-673e47a6a30b9&n=1' data-name='like-post-frame-6599589-13785-673e47a6a30b9' data-title='Like or Reblog'><h3 class="sd-title">Like this:</h3><div class='likes-widget-placeholder post-likes-widget-placeholder' style='height: 55px;'><span class='button'><span>Like</span></span> <span class="loading">Loading...</span></div><span class='sd-text-color'></span><a class='sd-link-color'></a></div> <p class="postinfo"> Filed under: <a href="https://steveblank.com/category/air-force/" rel="category tag">Air Force</a>, <a href="https://steveblank.com/category/customer-development/" rel="category tag">Customer Development</a>, <a href="https://steveblank.com/category/lean-launchpad/" rel="category tag">Lean LaunchPad</a>, <a href="https://steveblank.com/category/teaching/" rel="category tag">Teaching</a> | <a href="https://steveblank.com/2013/04/29/fly-high/#comments">10 Comments »</a> </p> </div> </div> <div class="post-13746 post type-post status-publish format-standard hentry category-business-model-versus-business-plan category-corporate-govt-innovation category-customer-development category-customer-development-manifesto category-lean-launchpad category-teaching category-venture-capital" id="post-13746"> <h2><a href="https://steveblank.com/2013/04/16/when-hell-froze-over-in-the-harvard-business-review/" rel="bookmark">When Hell Froze Over – in the Harvard Business Review</a></h2> <div class="postinfo"> Posted on <span class="postdate">April 16, 2013</span> by steve blank </div> <div class="entry"> <p style="text-align:center;" align="center"><a href="https://archive.harvardbusiness.org/cla/web/pl/product.seam?c=25903&i=25905&cs=f85785d3580feb87e2bce1535af10c2f"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13747" data-permalink="https://steveblank.com/2013/04/16/when-hell-froze-over-in-the-harvard-business-review/page-1-hbr-with-text/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/page-1-hbr-with-text.jpg?fit=1696%2C1126&ssl=1" data-orig-size="1696,1126" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="Page 1 HBR with text" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/page-1-hbr-with-text.jpg?fit=300%2C199&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/page-1-hbr-with-text.jpg?fit=468%2C311&ssl=1" class="aligncenter size-large wp-image-13747" alt="Page 1 HBR with text" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/page-1-hbr-with-text.jpg?resize=468%2C310" width="468" height="310" /></a></p> <p align="center"><i>“I refuse to join any club that would have me as a member.” </i></p> <p align="center">Groucho Marx</p> <p>In my 21 years as an entrepreneur, I would come up for air once a month to religiously read the <a href="https://archive.harvardbusiness.org/cla/web/pl/product.seam?c=25903&i=25905&cs=f85785d3580feb87e2bce1535af10c2f" target="_blank">Harvard Business Review</a>. It was not only my secret weapon in thinking about new startup strategies, it also gave me a view of the management issues my customers were dealing with. Through HBR I discovered the work of <a href="http://en.wikipedia.org/wiki/Peter_F._Drucker" target="_blank">Peter Drucker</a> and first read about <a href="http://www.economist.com/node/14299761" target="_blank">management by objective</a>. I learned about <a href="http://en.wikipedia.org/wiki/Michael_E._Porter">Michael Porter</a>s’s <a href="http://www.amazon.com/gp/product/0684841487/ref=as_li_tf_tl?ie=UTF8&tag=wwwsteveblank-20&linkCode=as2&camp=217145&creative=399377&creativeASIN=0684841487">five forces</a>. But the eye opener for me was reading <a href="http://en.wikipedia.org/wiki/Clayton_M._Christensen">Clayton Christensen</a> HBR article on disruption in the mid 1990’s and then reading the <a href="http://www.amazon.com/gp/product/0060521996?ie=UTF8&tag=wwwsteveblank-20&linkCode=as2&camp=1789&creative=9325&creativeASIN=0060521996">Innovators Dilemma</a>. Each of these authors (<a href="http://steveblank.com/books-for-startups/">along with others</a> too numerous to mention) profoundly changed my view of management and strategy. All of this in one magazine, with no hype, just a continual stream of great ideas.</p> <p><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13743" data-permalink="https://steveblank.com/2013/04/16/when-hell-froze-over-in-the-harvard-business-review/hbr-differences/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/hbr-differences.jpg?fit=624%2C988&ssl=1" data-orig-size="624,988" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="HBR Differences" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/hbr-differences.jpg?fit=189%2C300&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/hbr-differences.jpg?fit=468%2C741&ssl=1" class="alignright size-medium wp-image-13743" alt="HBR Differences" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/hbr-differences.jpg?resize=189%2C300" width="189" height="300" /></p> <p>For decades this revered business magazine described management techniques that were developed in and were for large corporations – offering more efficient and creative ways to <i>execute </i>existing business models. As much as I loved the magazine, there was little in it for startups (or new divisions in established companies) <i>searching</i> for a business model. (The articles about innovation and entrepreneurship, while insightful felt like they were variants of the existing processes and techniques developed for running existing businesses.) There was nothing suggesting that startups and new ventures needed <em>their own</em> tools and techniques, different from those written about in HBR or taught in business schools.</p> <p>To fill this gap I wrote <a href="http://www.amazon.com/gp/product/0976470705/ref=as_li_tf_tl?ie=UTF8&tag=wwwsteveblank-20&linkCode=as2&camp=1789&creative=9325&creativeASIN=0976470705" target="_blank">The Four Steps to the Epiphany</a>, a book about the Customer Development process and how it changes the way startups are built. The Four Steps drew the distinction that “startups are not smaller versions of large companies.” It defined a startup as a “temporary organization designed to search for a repeatable and scalable business model.” Today its concepts of “minimum viable product,” “iterate and pivot”, “get out of the building,” and “no business plan survives first contact with customers,” have become part of the entrepreneurial lexicon. My new book, <a href="http://buildabetterstartup.com" target="_blank">The Startup Owners Manual</a>, outlined the steps of building a startup or new division inside a company in far greater detail.</p> <p><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/hbr-cust-dev.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13744" data-permalink="https://steveblank.com/2013/04/16/when-hell-froze-over-in-the-harvard-business-review/hbr-cust-dev/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/hbr-cust-dev.jpg?fit=614%2C760&ssl=1" data-orig-size="614,760" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="HBR Cust Dev" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/hbr-cust-dev.jpg?fit=242%2C300&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/hbr-cust-dev.jpg?fit=468%2C579&ssl=1" class="alignleft size-medium wp-image-13744" alt="HBR Cust Dev" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/hbr-cust-dev.jpg?resize=242%2C300" width="242" height="300" /></a>In the last decade it’s become clear that companies are facing <em>continuous disruption </em>from globalization, technology shifts, rapidly changing consumer tastes, etc. Business-as-usual management techniques focused on efficiency and execution are no longer a credible response. The techniques invented in what has become the Lean Startup movement are now more than ever applicable to reinventing the modern corporation. Large companies like GE, Intuit, Merck, Panasonic, and Qualcomm are leading the charge to adopt the lean approach to drive corporate innovation. And the <a href="http://steveblank.com/2012/03/26/the-national-science-foundation-innovation-corps-what-america-does-best/" target="_blank">National Science Foundation and ARPA-E</a> adopted it to accelerate commercialization of new science.</p> <p>Today, we’ve come full circle as Lean goes mainstream. 250,0000 copies of the May issue of <i>Harvard Business Review</i> go in the mail to corporate and startup executives and investors worldwide. In this month’s issue, I was honored to write the cover story article, “<a href="http://hbr.org/2013/05/why-the-lean-start-up-changes-everything/ar/1">Why the Lean Startup Changes Everything</a>.” The article describes Lean as the search for a repeatable and scalable business model – and business model design, customer development and agile engineering – as the way you implement it.</p> <p>I’m proud to be called the “father” of the Lean Startup Movement. But I hope at least two—if not fifty—other catalysts of the movement are every bit as proud today. Eric Ries, who took my first Customer Development class at Berkeley, had the insight that Customer Development should be paired with Agile Development. He called the combination “<a href="http://www.amazon.com/gp/product/0307887898/ref=as_li_tf_tl?ie=UTF8&tag=wwwsteveblank-20&linkCode=as2&camp=217145&creative=399373&creativeASIN=0307887898">The Lean Startup</a>” and wrote a great book with that name.</p> <p><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/hbr-canvas.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13745" data-permalink="https://steveblank.com/2013/04/16/when-hell-froze-over-in-the-harvard-business-review/hbr-canvas/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/hbr-canvas.jpg?fit=1043%2C623&ssl=1" data-orig-size="1043,623" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="HBR Canvas" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/hbr-canvas.jpg?fit=300%2C179&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/hbr-canvas.jpg?fit=468%2C280&ssl=1" class="alignright size-medium wp-image-13745" alt="HBR Canvas" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/hbr-canvas.jpg?resize=300%2C179" width="300" height="179" /></a><a href="http://www.businessmodelalchemist.com" target="_blank">Alexander Osterwalder</a>‘s inspired approach to defining the business model in his book <a href="http://www.amazon.com/gp/product/0470876417?ie=UTF8&tag=wwwsteveblank-20&linkCode=as2&camp=1789&creative=9325&creativeASIN=0470876417">Business Model Generation</a> provide a framework for the Customer Development and the search for facts behind the hypotheses that make up a new venture. Osterwalder’s business model canvas is the starting point for Customer Development, and the “scorecard” that monitors startups’ progress as they turn their hypotheses about what customers want into actionable facts—all before a startup or new division has spent all or most of its capital.</p> <p>The Harvard Business Review is providing free access to the cover story article, “<a href="https://archive.harvardbusiness.org/cla/web/pl/product.seam?c=25903&i=25905&cs=f85785d3580feb87e2bce1535af10c2f" target="_blank">Why the Lean Startup Changes Everything</a>. Go read it.</p> <p>Then go do it.</p> <p style="text-align:center;"><a href="https://archive.harvardbusiness.org/cla/web/pl/product.seam?c=25903&i=25905&cs=f85785d3580feb87e2bce1535af10c2f"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13747" data-permalink="https://steveblank.com/2013/04/16/when-hell-froze-over-in-the-harvard-business-review/page-1-hbr-with-text/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/page-1-hbr-with-text.jpg?fit=1696%2C1126&ssl=1" data-orig-size="1696,1126" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="Page 1 HBR with text" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/page-1-hbr-with-text.jpg?fit=300%2C199&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/page-1-hbr-with-text.jpg?fit=468%2C311&ssl=1" class="aligncenter size-large wp-image-13747" alt="Page 1 HBR with text" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/page-1-hbr-with-text.jpg?resize=468%2C310" width="468" height="310" /></a></p> <p>Listen to the post here or download the podcast <a href="http://clearshore.net" target="_blank">here</a></p> <div class="sharedaddy sd-sharing-enabled"><div class="robots-nocontent sd-block sd-social sd-social-official sd-sharing"><h3 class="sd-title">Share this:</h3><div class="sd-content"><ul><li class="share-print"><a rel="nofollow noopener noreferrer" data-shared="" class="share-print sd-button" href="https://steveblank.com/2013/04/16/when-hell-froze-over-in-the-harvard-business-review/" target="_blank" title="Click to print" ><span>Print</span></a></li><li class="share-email"><a rel="nofollow noopener noreferrer" data-shared="" class="share-email sd-button" href="mailto:?subject=%5BShared%20Post%5D%20When%20Hell%20Froze%20Over%20%E2%80%93%20in%20the%20Harvard%20Business%20Review&body=https%3A%2F%2Fsteveblank.com%2F2013%2F04%2F16%2Fwhen-hell-froze-over-in-the-harvard-business-review%2F&share=email" target="_blank" title="Click to email a link to a friend" data-email-share-error-title="Do you have email set up?" data-email-share-error-text="If you're having problems sharing via email, you might not have email set up for your browser. You may need to create a new email yourself." data-email-share-nonce="11a57b61ae" data-email-share-track-url="https://steveblank.com/2013/04/16/when-hell-froze-over-in-the-harvard-business-review/?share=email"><span>Email</span></a></li><li class="share-facebook"><div class="fb-share-button" data-href="https://steveblank.com/2013/04/16/when-hell-froze-over-in-the-harvard-business-review/" data-layout="button_count"></div></li><li class="share-twitter"><a href="https://twitter.com/share" class="twitter-share-button" data-url="https://steveblank.com/2013/04/16/when-hell-froze-over-in-the-harvard-business-review/" data-text="When Hell Froze Over – in the Harvard Business Review" >Tweet</a></li><li class="share-linkedin"><div class="linkedin_button"><script type="in/share" data-url="https://steveblank.com/2013/04/16/when-hell-froze-over-in-the-harvard-business-review/" data-counter="right"></script></div></li><li class="share-reddit"><a rel="nofollow noopener noreferrer" data-shared="" class="share-reddit sd-button" href="https://steveblank.com/2013/04/16/when-hell-froze-over-in-the-harvard-business-review/?share=reddit" target="_blank" title="Click to share on Reddit" ><span>Reddit</span></a></li><li class="share-jetpack-whatsapp"><a rel="nofollow noopener noreferrer" data-shared="" class="share-jetpack-whatsapp sd-button" href="https://steveblank.com/2013/04/16/when-hell-froze-over-in-the-harvard-business-review/?share=jetpack-whatsapp" target="_blank" title="Click to share on WhatsApp" ><span>WhatsApp</span></a></li><li class="share-pinterest"><div class="pinterest_button"><a href="https://www.pinterest.com/pin/create/button/?url=https%3A%2F%2Fsteveblank.com%2F2013%2F04%2F16%2Fwhen-hell-froze-over-in-the-harvard-business-review%2F&media=http%3A%2F%2Fsteveblank.com%2Fwp-content%2Fuploads%2F2013%2F04%2Fpage-1-hbr-with-text.jpg%3Fw%3D468&description=When%20Hell%20Froze%20Over%20%E2%80%93%20in%20the%20Harvard%20Business%20Review" data-pin-do="buttonPin" data-pin-config="beside"><img data-recalc-dims="1" src="https://i0.wp.com/assets.pinterest.com/images/pidgets/pinit_fg_en_rect_gray_20.png?w=468" /></a></div></li><li class="share-telegram"><a rel="nofollow noopener noreferrer" data-shared="" class="share-telegram sd-button" href="https://steveblank.com/2013/04/16/when-hell-froze-over-in-the-harvard-business-review/?share=telegram" target="_blank" title="Click to share on Telegram" ><span>Telegram</span></a></li><li class="share-tumblr"><a class="tumblr-share-button" target="_blank" href="https://www.tumblr.com/share" data-title="When Hell Froze Over – in the Harvard Business Review" data-content="https://steveblank.com/2013/04/16/when-hell-froze-over-in-the-harvard-business-review/" title="Share on Tumblr"data-posttype="link">Share on Tumblr</a></li><li class="share-pocket"><div class="pocket_button"><a href="https://getpocket.com/save" class="pocket-btn" data-lang="en" data-save-url="https://steveblank.com/2013/04/16/when-hell-froze-over-in-the-harvard-business-review/" data-pocket-count="horizontal" >Pocket</a></div></li><li class="share-end"></li></ul></div></div></div><div class='sharedaddy sd-block sd-like jetpack-likes-widget-wrapper jetpack-likes-widget-unloaded' id='like-post-wrapper-6599589-13746-673e47a6a6a59' data-src='https://widgets.wp.com/likes/?ver=14.1-a.3#blog_id=6599589&post_id=13746&origin=steveblank.com&obj_id=6599589-13746-673e47a6a6a59&n=1' data-name='like-post-frame-6599589-13746-673e47a6a6a59' data-title='Like or Reblog'><h3 class="sd-title">Like this:</h3><div class='likes-widget-placeholder post-likes-widget-placeholder' style='height: 55px;'><span class='button'><span>Like</span></span> <span class="loading">Loading...</span></div><span class='sd-text-color'></span><a class='sd-link-color'></a></div> <p class="postinfo"> Filed under: <a href="https://steveblank.com/category/business-model-versus-business-plan/" rel="category tag">Business Model versus Business Plan</a>, <a href="https://steveblank.com/category/corporate-govt-innovation/" rel="category tag">Corporate/Gov't Innovation</a>, <a href="https://steveblank.com/category/customer-development/" rel="category tag">Customer Development</a>, <a href="https://steveblank.com/category/customer-development-manifesto/" rel="category tag">Customer Development Manifesto</a>, <a href="https://steveblank.com/category/lean-launchpad/" rel="category tag">Lean LaunchPad</a>, <a href="https://steveblank.com/category/teaching/" rel="category tag">Teaching</a>, <a href="https://steveblank.com/category/venture-capital/" rel="category tag">Venture Capital</a> | <a href="https://steveblank.com/2013/04/16/when-hell-froze-over-in-the-harvard-business-review/#comments">20 Comments »</a> </p> </div> </div> <div class="post-13608 post type-post status-publish format-standard hentry category-china category-customer-development category-technology category-venture-capital" id="post-13608"> <h2><a href="https://steveblank.com/2013/04/14/china-startups-the-gold-rush/" rel="bookmark">China Startups – The Gold Rush and Fire Extinguishers (Part 5 of 5)</a></h2> <div class="postinfo"> Posted on <span class="postdate">April 14, 2013</span> by steve blank </div> <div class="entry"> <div> <p>I just spent a few weeks in Japan and China on a book tour for the <a href="http://www.amazon.co.jp/gp/product/4798128511/ref=s9_simh_gw_p14_d0_i2?pf_rd_m=AN1VRQENFRJN5&pf_rd_s=center-2&pf_rd_r=0PAZ1HB7XD4YSDJZDRBQ&pf_rd_t=101&pf_rd_p=463376756&pf_rd_i=489986">Japanese</a> and <a href="http://www.amazon.cn/dp/B00AR8T2MC/">Chinese</a> versions of the Startup Owners Manual. In these series of 5 posts, I thought I’d share what I learned in China. All the usual caveats apply. I was only in China for a week so this a cursory view. Thanks to <a href="http://en.wikipedia.org/wiki/Kai-Fu_Lee" target="_blank">Kai-Fu Lee</a> of Innovation Works, David Lin of Microsoft Accelerator, <a href="http://kevindewalt.com/2013/03/22/why-were-launching-steve-blanks-next-program-in-beijing/" target="_blank">Kevin Dewalt</a> and Frank Hawke of the <a href="http://scpku.stanford.edu" target="_blank">Stanford Center in Beijing</a>, and my publisher China Machine Press.<b> </b></p> <p><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-dragon.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13560" data-permalink="https://steveblank.com/2013/04/14/china-startups-the-gold-rush/china-dragon/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-dragon.jpg?fit=2658%2C1616&ssl=1" data-orig-size="2658,1616" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="China Dragon" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-dragon.jpg?fit=300%2C182&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-dragon.jpg?fit=468%2C285&ssl=1" class="aligncenter size-large wp-image-13560" alt="China Dragon" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-dragon.jpg?resize=468%2C284" width="468" height="284" /></a></p> <p><a href="http://steveblank.com/2013/04/13/zhongguancun-in-beijing-chinas-silicon-valley-part-4-of-5/" target="_blank">The previous post, part 4,</a> was about Beijing’s entrepreneurial ecosystem these are my final observations.</p> </div> <p><b>Land Rush<br /> </b>For the last 10 years China essentially closed its search, media and social network software market to foreign companies with the result that Google, Facebook, Twitter, YouTube, Dropbox, and 30,000 other websites were not accessible from China. This left an open playing field for Chinese software startups as they “copy to China” existing U.S. business models. Of course “copy” is too strong a word. Adapt, adopt and extend is probably a better description. But for the last decade “innovation” in Chinese software meant something different than it did in Silicon Valley.</p> <p>The Chinese Social Media Landscape diagram below from <a href="http://www.resonancechina.com/2012/03/13/updated-2012-china-social-media-landscape/">Resonance</a> does a great job of illustrating the players in the Chinese market. (Note that the inner ring shows their global equivalents.)</p> <p><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-social-media-ecosystem.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13615" data-permalink="https://steveblank.com/2013/04/14/china-startups-the-gold-rush/china-social-media-ecosystem/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-social-media-ecosystem.jpg?fit=1502%2C1448&ssl=1" data-orig-size="1502,1448" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="China Social Media Ecosystem" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-social-media-ecosystem.jpg?fit=300%2C289&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-social-media-ecosystem.jpg?fit=468%2C451&ssl=1" class="aligncenter size-large wp-image-13615" alt="China Social Media Ecosystem" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-social-media-ecosystem.jpg?resize=468%2C451" width="468" height="451" /></a></p> <p>The downside is that with so much venture and angel capital available, investors have been willing to fund the 10<sup>th</sup> Groupon clone. For the last few years, there really hasn’t been a demand to innovate on top of the ecosystem that’s been built.</p> <p><b>New Rules for China<br /> </b>Not only is the Chinese ecosystem completely different but also the consumer demographics and user expectations are equally unique. 70% of Chinese Internet users are under 30. Instead of email, they’ve grown up with QQ instant messages. They’re used to using the web and increasingly the<i> mobile web </i>for everything, commerce, communication, games, etc. (They also probably haven’t seen a phone that isn’t mobile.) By the end of 2012, there were 85 million iOS and 160 million Android devices in China. And they were increasing at an aggregate 33 million IOS and Android activations <span style="text-decoration:underline;">per month.</span></p> <p>It was interesting to learn about China’s digital divide – the gap between East China and Midwest China, and between urban and rural areas. <a href="http://www.idgvc.com/en/show/470.html">Internet penetration in Beijing is greater than 70%</a> while it’s less than 25% in Yunnan, Jiangxi, Guizhou and other provinces. While there are 564 <i>million</i> web users with <i>420 million </i>having mobile web access,<b></b> 74% of Chinese Internet users make less than $500/month and are students, blue-collar workers or jobless.</p> <p>Unlike U.S. websites that are sparse and slick, Chinese users currently expect complicated, crowded and busy web pages. However, there’s a growing belief that the “design preferences” of Chinese consumers are just bad design. TenCents <a href="http://pandodaily.com/2013/01/29/facebook-looks-more-like-wechat-every-day/">WeChat</a>, (designed for an international market) is the first incredibly popular app in China to dramatically raise the bar for what a good user interface and user experience looks and feels like. <a href="http://www.wired.co.uk/magazine/archive/2013/03/ideas-bank/what-wechats-eastern-promise-can-teach-the-west">WeChat</a> may change the game for Chinese U/I and U/X experience. The one caveat about online commerce is that while Chinese users will buy physical goods online (<a href="%25E2%2580%259Csea%2520turtles%25E2%2580%259D%25E2%2580%2594Chinese%2520who%2520have%2520studied%2520or%2520worked%2520abroad%25E2%2580%2594returns%2520home.%2520Many%2520have%2520mixed%2520with%2520the%2520world%25E2%2580%2599s%2520best%2520engineers%2520at%2520MIT%2520and%2520Stanford.%2520Many%2520have%2520seen%2520first-hand%2520">Taobao</a> is huge), they seem to hate to pay for music or software, and the model for games seems to be moving to free play with in-app-purchases for accessories and powers. An interesting consequence of the rigid censoring and control of mainstream media is that blogging – reading and writing – is much higher than U.S.</p> <p>My guess is the current wave of “copy to China” will burn itself out in the next few years as the smart money starts to move to “innovate in China” (i.e. like <a href="http://www.wired.co.uk/magazine/archive/2013/03/ideas-bank/what-wechats-eastern-promise-can-teach-the-west">WeChat</a>.)</p> <p><b>Competition<br /> </b>If you’re a software startup competing in China, the words that come to mind are “ruthless and relentless.” The not so polite ones I’ve heard from others are “vicious, unethical and illegal.” Intellectual property protection is great on paper and “limited” in practice. The large players like Alibaba, Baidu and Tencent historically would be more likely to simply copy a startup’s features than to hire their talent. The large companies strategy seems to be to cover every possible market niche by copying successful models from others.</p> <p>The slide below from the <a href="http://www.slideshare.net/ZhenFund/chinas-startup-ecosystem">Zhen Fund</a> shows the breadth of business coverage of each of the Chinese Internet incumbents. Each column represents a company (QQ, Sina, Baidu, Netease, Sohu etc.) and the rows indicates their offerings in open platform, group buying, online games, microblogging, Instant Messaging, BBS, Q&A and E-commerce.</p> <p><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/internet-giants-want-to-do-it-all.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13618" data-permalink="https://steveblank.com/2013/04/14/china-startups-the-gold-rush/internet-giants-want-to-do-it-all/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/internet-giants-want-to-do-it-all.jpg?fit=1504%2C1129&ssl=1" data-orig-size="1504,1129" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="Internet Giants Want to do it all" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/internet-giants-want-to-do-it-all.jpg?fit=300%2C225&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/internet-giants-want-to-do-it-all.jpg?fit=468%2C351&ssl=1" class="aligncenter size-large wp-image-13618" alt="Internet Giants Want to do it all" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/internet-giants-want-to-do-it-all.jpg?resize=468%2C351" width="468" height="351" /></a></p> <p>Small startups act the same way, simply cloning each other’s products. Sharing and cooperation is not yet part of the ethos. I can’t imagine a U.S. company setting up some subsidiary here and expecting them to compete while they were following U.S. rules. In some ways, the best description of the market dynamics would be “imagine you were competing with 100 companies who are as rapacious as Microsoft was in the 1980’s and 1990’s.” Eventually, China’s innovation-driven economy needs intellectual property rights and anti-trust laws that are enforced.</p> <p><b>Sea Turtles and VPN – the connections to the rest of the world<br /> </b>Entrepreneurs in Beijing were knowledgeable about Silicon Valley, entrepreneurship and the state of software and tools available for two reasons. First, there are continuous stream of “sea turtles”—Chinese who have studied or worked abroad—returning home. (The Chinese government must be laughing hysterically over U.S. immigration policy that’s forcing Chinese grad students out of the U.S.) Many of these returnees have worked in Silicon Valley and startups or went to school at MIT and Stanford. (There is a huge difference between the Chinese who have never left and those who went to school abroad, even for a few months – at least a difference in their ability to relate to me and have a conversation on the same wavelength. It’s clear why families try so hard to send their children abroad. It changes everything for them.)</p> <p>Second, most websites that a non-Chinese would use are blocked including Facebook, Twitter, Youtube, Google Docs, Scribd, Blogspot, Dropbox, New York Times, etc. Almost every entrepreneur I met was using VPN to circumvent the Great Firewall. When the Chinese government censors (run by their <a href="http://secondchina.com/Learning_Modules/GOV/content/GOV_propaganda_dep.html">propaganda department</a>) shutdown access to yet another U.S. web site, they create another 100,000 VPN users. And when the government tools to detect encrypted VPN’s get more sophisticated, (as it did last year), Chinese users just use stealthier tools. It’s an amazing cat and mouse system.</p> <p><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/ccp-propaganda-department-logo.png"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13636" data-permalink="https://steveblank.com/2013/04/14/china-startups-the-gold-rush/ccp-propaganda-department-logo/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/ccp-propaganda-department-logo.png?fit=2008%2C296&ssl=1" data-orig-size="2008,296" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="CCP Propaganda Department logo" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/ccp-propaganda-department-logo.png?fit=300%2C44&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/ccp-propaganda-department-logo.png?fit=468%2C69&ssl=1" class="aligncenter size-large wp-image-13636" alt="CCP Propaganda Department logo" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/ccp-propaganda-department-logo.png?resize=468%2C68" width="468" height="68" /></a>(Note to Chinese Communist party – the best name for your propaganda department should probably not be the “Propaganda Department.”)</p> <p><b>Beijing’s Academic Hub<br /> </b>Right next door to Zhongguancun are China’s top two universities, Peking University and Tsinghua University. Northwest of Beijing is also home to other universities, including technical universities like <a href="http://en.ustb.edu.cn">USTB</a>, <a href="http://english.bit.edu.cn">BIT</a>, <a href="http://english.bupt.edu.cn">BUPT</a>, and <a href="http://ev.buaa.edu.cn">Beihang</a>. Like Silicon Valley, Zhongguancun also has a critical mass of people who are crazy enough to do startups. Equally of interest is a good number of them end up in the <a href="http://project2049.net/documents/pla_third_department_sigint_cyber_stokes_lin_hsiao.pdf">PLA’s GSD 3<sup>rd</sup> Department</a> (the equivalent of our <a href="http://www.nsa.gov">National Security Agency</a>. ) And some of their best and brightest have ended up in the organizations like the <a href="http://intelreport.mandiant.com/Mandiant_APT1_Report.pdf">2nd Bureau, Unit 61398</a> tasked euphemistically for “Computer Network Operations.”</p> <p>While I didn’t get much time with the academic community, in talking to students, education seems to still be one of China’s bottlenecks – rote lectures, passive learning, follow the process, exam-based performance, etc. And while startups and entrepreneurship courses are now being added to the curriculum, “How to write a business plan” seems to be the state of the art. China’s education system needs to give more attention to fostering students’ innovative thinking, creativity and entrepreneurship.</p> <p><b>Entrepreneurial</b><strong> Culture</strong></p> <p><i>Fear of Failure<br /> </i>Though they’re familiar with technology in the valley, I picked up some important cultural difference from students and startup engineers I talked to. Even though they’re next to Zhongguancun, the hottest place for startups in China, there seems to be a lower appetite for risk, a lack of interest in equity (instead optimizing for a high salary) and very little loyalty to any one company. The overall culture still has a fear of failure. Most of their parents still tell them to work for the government or a big company.</p> <p><i>Talent<br /> </i>I heard from a few investors that as the startup ecosystem is relatively new, there’s a battle for experienced engineering talent and lack of experienced C-level execs. The lack of a previous generation of successful startup CEOs means the current pool of mentors to coach this generation is almost non-existent.</p> <p>Because salaries are cheap, startups seem to try to solve every problem by throwing bodies at it. Startup teams feel like they are 2-5x the size of American teams. There seems to be little appreciation or interest in multi-skilled people.</p> <p>Turnover of employees in capital in Beijing is <i>very </i>high. Employees work here for a few months and are suddenly gone. There’s a noticeable lack of tenacity in young, new entrepreneurs. They start a project, and if it isn’t a home run, they’re gone. Perhaps it’s the weather. Silicon Valley has great weather and lifestyle, and nobody wants to leave. Beijing has awful weather and pollution, it’s a temporary place to get rich and then leave.</p> <p><i></i><i>Management 101<br /> </i>The board/CEO relationship still isn’t clearly understood by either party. I’ve talked to entrepreneurs who view the investors as a “boss.” A good number of startups in Beijing seem driven by the VCs – and not the founders. This might also be a hangover from the command and control system of a state-driven planned economy. Ironically investors told me that the reverse has been true as well. Some startups acted like the VC was a bank. They took the money and then ignored their board. Over time, as investors add more value than writing checks, this relationship will mature.</p> <p><i>Creativity<br /> </i>I was surprised that startup teams ask what seems like the kind of questions Americans learn at their first jobs.</p> <p>Team: “We keep spending money trying to get people to our web site but they don’t come back. We are almost out of money.”</p> <p>Me: “Ok. Why are you still spending money?”</p> <p>Team: “long…silence…we need people to come to the website.”</p> <p>On the other hand, for most of them it probably <span style="text-decoration:underline;">is</span> their first job. And the educational system hasn’t prepared them for executing anything other than a plan. Iterations and pivots are a tough concept if you’ve never been taught to think for yourself. And <a href="http://steveblank.com/2012/11/06/entrepreneurs-as-dissidents/" target="_blank">challenging the system</a> is not something that’s actually encouraged in China.</p> <p><i></i>They also ask questions I just don’t know how to answer. “How do you know how to be creative? What do we have to do to be creative?” “You Americans just seem to know how to do things even if you’ve never done them – can you show us how to do that?” This seems to be an artifact of the Chinese rote educational system and its current system of government.</p> <p><b>Innovation Ecosystem<br /> </b>On the plane ride home I started to think about the similarities and differences between the innovation ecosystems of Silicon Valley and the TMT segment I saw in Beijing. The motivations are the same – profit – driven by entrepreneurs and venture finance. And the infrastructure is close to the same – research universities, predictable economic system, a path to liquidity, a stable legal system and 24/7 utilities. But the differences are worth noting – it’s a young ecosystem, so startup management tools are nearly non-existent. But there’s a difference in the culture of failure and risk taking – the current cultural pressure is to “work for a big company or the government.” Outward facing Universities are just starting to appear, and while there’s a free flow of information <em>inside</em> China, it suffers from the constraints of the Great Firewall.</p> <p><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-vs-us-ecosystem1.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13696" data-permalink="https://steveblank.com/2013/04/14/china-startups-the-gold-rush/china-vs-us-ecosystem/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-vs-us-ecosystem1.jpg?fit=1741%2C728&ssl=1" data-orig-size="1741,728" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="China vs. US ecosystem" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-vs-us-ecosystem1.jpg?fit=300%2C125&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-vs-us-ecosystem1.jpg?fit=468%2C196&ssl=1" class="aligncenter size-large wp-image-13696" alt="China vs. US ecosystem" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-vs-us-ecosystem1.jpg?resize=468%2C195" width="468" height="195" /></a></p> <p>But there are two striking differences. The first is the lack of creativity. The Beijing software ecosystem I saw has spent the last decade in a protected market copying successful U.S. business models. “Copying, adopting and adapting,” is not the same as “competing, innovating and creating” in a <em>global</em> market. Perhaps products like <a href="http://pandodaily.com/2013/01/29/facebook-looks-more-like-wechat-every-day/">WeChat</a>, designed for an international market, might be the beginning of real innovation.</p> <p>The second difference in ecosystems – the lack of freedom to dissent – goes deeper to the difference between the two systems. In the U.S. entrepreneurs are encouraged to “Think Different.” Our touchstone for creativity is the Apple ad that said, “<a href="https://www.youtube.com/watch?v=8rwsuXHA7RA" target="_blank">Here’s to the crazy ones</a>, the misfits, the rebels, the troublemakers,… the ones who see things differently — they’re not fond of rules… You can quote them, disagree with them, glorify or vilify them, but the only thing you can’t do is ignore them because they change things….” This spirit of rebellion against the status quo got us Steve Jobs. In China the same attitude is likely to get you jail time. Unless you can speak truth to power, you’ll never have an innovation economy.</p> <p><b>Conclusion<br /> </b>China is astonishing. The country has risen. Their economy is the envy of the world. The entrepreneurial and “can do” spirit reminds me of what the U.S. was known for. Chinese citizens are proud of their country and believe the world is theirs in the way Americans did in the 1950’s. Their leadership has shown incredible foresight in engineering an amazing economic engine and formidable military. They come so far, and yet…</p> <p>To take nothing away from what China has accomplished, a visit to Beijing had all the subtle reminders that this version of capitalism has come without democracy or justice; the guards in the Forbidden City armed with <a href="http://mountaingroovephotography.smugmug.com/Adventures/Travel/China-2009-10/24118048_f5CjGp/1959797827_NBNpfWf#!i=1959797827&k=NBNpfWf">fire extinguishers</a> in case more protestors try to set themselves on fire, the security around Tiananmen Square to prevent protestors from gathering, and the “<a href="http://blogs.wsj.com/chinarealtime/2013/02/05/beijing-court-takes-rare-swipe-at-black-jail-system/?KEYWORDS=beijing+jails">black jails</a>” to keep rural petitioners out of Beijing. And of course the “great firewall,” attempting to keep information about the outside world from reaching inside China.</p> <p>The bet the government is making is that if they can keep the economy cooking and distract the masses with ever increasing consumer goods and foreign adventures, maybe it can survive.</p> <p>All of these are signs of a weak China not a strong one. They are the signs of a leadership frightened not by external enemies but by their own people.</p> <p>It usually doesn’t end well.</p> <p>——</p> <p>all five China blog posts available as a download <a href="http://www.slideshare.net/sblank/china-has-risen-rev-5" target="_blank">here</a></p> <p>List to the post here: or download the podcasts <a href="http://clearshore.net" target="_blank">here</a></p> <div class="sharedaddy sd-sharing-enabled"><div class="robots-nocontent sd-block sd-social sd-social-official sd-sharing"><h3 class="sd-title">Share this:</h3><div class="sd-content"><ul><li class="share-print"><a rel="nofollow noopener noreferrer" data-shared="" class="share-print sd-button" href="https://steveblank.com/2013/04/14/china-startups-the-gold-rush/" target="_blank" title="Click to print" ><span>Print</span></a></li><li class="share-email"><a rel="nofollow noopener noreferrer" data-shared="" class="share-email sd-button" href="mailto:?subject=%5BShared%20Post%5D%20China%20Startups%20%E2%80%93%20The%20Gold%20Rush%20and%20Fire%20Extinguishers%20%28Part%205%20of%205%29&body=https%3A%2F%2Fsteveblank.com%2F2013%2F04%2F14%2Fchina-startups-the-gold-rush%2F&share=email" target="_blank" title="Click to email a link to a friend" data-email-share-error-title="Do you have email set up?" data-email-share-error-text="If you're having problems sharing via email, you might not have email set up for your browser. You may need to create a new email yourself." data-email-share-nonce="5684e71d7b" data-email-share-track-url="https://steveblank.com/2013/04/14/china-startups-the-gold-rush/?share=email"><span>Email</span></a></li><li class="share-facebook"><div class="fb-share-button" data-href="https://steveblank.com/2013/04/14/china-startups-the-gold-rush/" data-layout="button_count"></div></li><li class="share-twitter"><a href="https://twitter.com/share" class="twitter-share-button" data-url="https://steveblank.com/2013/04/14/china-startups-the-gold-rush/" data-text="China Startups – The Gold Rush and Fire Extinguishers (Part 5 of 5)" >Tweet</a></li><li class="share-linkedin"><div class="linkedin_button"><script type="in/share" data-url="https://steveblank.com/2013/04/14/china-startups-the-gold-rush/" data-counter="right"></script></div></li><li class="share-reddit"><a rel="nofollow noopener noreferrer" data-shared="" class="share-reddit sd-button" href="https://steveblank.com/2013/04/14/china-startups-the-gold-rush/?share=reddit" target="_blank" title="Click to share on Reddit" ><span>Reddit</span></a></li><li class="share-jetpack-whatsapp"><a rel="nofollow noopener noreferrer" data-shared="" class="share-jetpack-whatsapp sd-button" href="https://steveblank.com/2013/04/14/china-startups-the-gold-rush/?share=jetpack-whatsapp" target="_blank" title="Click to share on WhatsApp" ><span>WhatsApp</span></a></li><li class="share-pinterest"><div class="pinterest_button"><a href="https://www.pinterest.com/pin/create/button/?url=https%3A%2F%2Fsteveblank.com%2F2013%2F04%2F14%2Fchina-startups-the-gold-rush%2F&media=http%3A%2F%2Fsteveblank.com%2Fwp-content%2Fuploads%2F2013%2F04%2Fchina-dragon.jpg%3Fw%3D468&description=China%20Startups%20%E2%80%93%20The%20Gold%20Rush%20and%20Fire%20Extinguishers%20%28Part%205%20of%205%29" data-pin-do="buttonPin" data-pin-config="beside"><img data-recalc-dims="1" src="https://i0.wp.com/assets.pinterest.com/images/pidgets/pinit_fg_en_rect_gray_20.png?w=468" /></a></div></li><li class="share-telegram"><a rel="nofollow noopener noreferrer" data-shared="" class="share-telegram sd-button" href="https://steveblank.com/2013/04/14/china-startups-the-gold-rush/?share=telegram" target="_blank" title="Click to share on Telegram" ><span>Telegram</span></a></li><li class="share-tumblr"><a class="tumblr-share-button" target="_blank" href="https://www.tumblr.com/share" data-title="China Startups – The Gold Rush and Fire Extinguishers (Part 5 of 5)" data-content="https://steveblank.com/2013/04/14/china-startups-the-gold-rush/" title="Share on Tumblr"data-posttype="link">Share on Tumblr</a></li><li class="share-pocket"><div class="pocket_button"><a href="https://getpocket.com/save" class="pocket-btn" data-lang="en" data-save-url="https://steveblank.com/2013/04/14/china-startups-the-gold-rush/" data-pocket-count="horizontal" >Pocket</a></div></li><li class="share-end"></li></ul></div></div></div><div class='sharedaddy sd-block sd-like jetpack-likes-widget-wrapper jetpack-likes-widget-unloaded' id='like-post-wrapper-6599589-13608-673e47a6ad73e' data-src='https://widgets.wp.com/likes/?ver=14.1-a.3#blog_id=6599589&post_id=13608&origin=steveblank.com&obj_id=6599589-13608-673e47a6ad73e&n=1' data-name='like-post-frame-6599589-13608-673e47a6ad73e' data-title='Like or Reblog'><h3 class="sd-title">Like this:</h3><div class='likes-widget-placeholder post-likes-widget-placeholder' style='height: 55px;'><span class='button'><span>Like</span></span> <span class="loading">Loading...</span></div><span class='sd-text-color'></span><a class='sd-link-color'></a></div> <p class="postinfo"> Filed under: <a href="https://steveblank.com/category/china/" rel="category tag">China</a>, <a href="https://steveblank.com/category/customer-development/" rel="category tag">Customer Development</a>, <a href="https://steveblank.com/category/technology/" rel="category tag">Technology</a>, <a href="https://steveblank.com/category/venture-capital/" rel="category tag">Venture Capital</a> | <a href="https://steveblank.com/2013/04/14/china-startups-the-gold-rush/#comments">27 Comments »</a> </p> </div> </div> <div class="post-13598 post type-post status-publish format-standard hentry category-china category-customer-development category-technology category-venture-capital" id="post-13598"> <h2><a href="https://steveblank.com/2013/04/13/zhongguancun-in-beijing-chinas-silicon-valley-part-4-of-5/" rel="bookmark">Zhongguancun in Beijing – China’s Silicon Valley (Part 4 of 5)</a></h2> <div class="postinfo"> Posted on <span class="postdate">April 13, 2013</span> by steve blank </div> <div class="entry"> <p>I just spent a few weeks in Japan and China on a book tour for the <a href="http://www.amazon.co.jp/gp/product/4798128511/ref=s9_simh_gw_p14_d0_i2?pf_rd_m=AN1VRQENFRJN5&pf_rd_s=center-2&pf_rd_r=0PAZ1HB7XD4YSDJZDRBQ&pf_rd_t=101&pf_rd_p=463376756&pf_rd_i=489986" target="_blank">Japanese</a> and <a href="http://www.amazon.cn/dp/B00AR8T2MC/" target="_blank">Chinese</a> versions of the Startup Owners Manual. In these series of 5 posts, I thought I’d share what I learned in China. All the usual caveats apply. I was only in China for a week so this a cursory view. Thanks to <a href="http://en.wikipedia.org/wiki/Kai-Fu_Lee">Kai-Fu Lee</a> of Innovation Works, David Lin of Microsoft Accelerator, Frank Hawke of the <a href="http://scpku.stanford.edu" target="_blank">Stanford Center in Beijing</a>, and my publisher China Machine Press.</p> <p><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/beijing-with-kai-fu-lee.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13561" data-permalink="https://steveblank.com/2013/04/13/zhongguancun-in-beijing-chinas-silicon-valley-part-4-of-5/beijing-with-kai-fu-lee/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/beijing-with-kai-fu-lee.jpg?fit=2644%2C1763&ssl=1" data-orig-size="2644,1763" data-comments-opened="1" data-image-meta="{"aperture":"4","credit":"","camera":"PENTAX K-r","caption":"","created_timestamp":"1364309561","copyright":"","focal_length":"24.38","iso":"1600","shutter_speed":"0.022222222222222","title":""}" data-image-title="Beijing with Kai-fu Lee" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/beijing-with-kai-fu-lee.jpg?fit=300%2C200&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/beijing-with-kai-fu-lee.jpg?fit=468%2C312&ssl=1" class="aligncenter size-large wp-image-13561" alt="Beijing with Kai-fu Lee" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/beijing-with-kai-fu-lee.jpg?resize=468%2C312" width="468" height="312" /></a></p> <p><a href="http://steveblank.com/2013/04/12/the-rise-of-chinese-venture-capital/" target="_blank">The previous post </a>described the evolution of the Chinese Venture Capital system. The next two posts are about what I saw and learned in my short stay exploring Beijing’s entrepreneurial ecosystem.</p> <p><b>Entrepreneurship in Beijing<br /> </b>In the few days I was in China I met with several VC’s, angel investors, business press and spoke to hundreds of entrepreneurs. I was blown away by what I saw in Beijing. First, I was amazed by the physical impact of the city itself. This was a modern city in a hurry to make a first impression – think of what Rome looked like in the time of the empire or New York in the 1920’s – now it’s Beijing announcing that China has arrived.</p> <p>However if you scratch the surface, you can still find a bit of the old Beijing in the <a href="http://blog.beijingholiday.com/beijing/top-10-beijing-hutongs/">hutongs</a>. Drive 50 miles outside the city into the surrounding villages and you see the distance China has to travel to bring the rural areas into the 21<sup>st</sup> century. In Beijing we hadn’t seen air so badly polluted since we had been in Agra in India in the winter where I swear there was a day you could wave your hand in front of you and see traces of it in the air (and their excuse was they burn dung for heat.)</p> <p>David Lin and the <a href="http://www.blonde20.com/microsoft_ch/">Microsoft China Accelerator</a> was gracious enough to host two wonderful days of events for me. I trained the <a href="http://www.swnext.co" target="_blank">Startup Weekend Next</a> Beijing mentors and instructors, presented to several hundred entrepreneurs, and had a great fireside chat with <a href="http://501.hicloudsoft.com/meworksv2a/meworks/page1.aspx?no=600">Zhen Fund founding partner Xu Xiaoping</a> in front of another roomful of entrepreneurs.<a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/microsoft-accelerator-china.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13547" data-permalink="https://steveblank.com/2013/04/13/zhongguancun-in-beijing-chinas-silicon-valley-part-4-of-5/microsoft-accelerator-china/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/microsoft-accelerator-china.jpg?fit=983%2C1052&ssl=1" data-orig-size="983,1052" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="Microsoft Accelerator China" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/microsoft-accelerator-china.jpg?fit=280%2C300&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/microsoft-accelerator-china.jpg?fit=468%2C501&ssl=1" class="aligncenter size-large wp-image-13547" alt="Microsoft Accelerator China" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/microsoft-accelerator-china.jpg?resize=468%2C500" width="468" height="500" /></a></p> <p><a href="http://www.bbc.co.uk/news/world-asia-20041320">Kai-fu Lee of Innovation Works</a> was equally generous with his time. We had a fireside chat with a room full of eager entrepreneurs. And he was generous in sharing his insights about the current state of entrepreneurship and investment in China. And through it all Louis Yuan my patient and wonderful publisher from <a href="http://translate.google.com/translate?u=http%3A%2F%2Fwww.cmpbook.com%2F&hl=en&langpair=auto%7Cen&tbb=1&ie=GBK">China Machine Press</a> kept me moving through the events.</p> <p>But what made the overwhelming impression for me was finding an entrepreneurial <i>software </i>cluster on par with the Internet software portion of Silicon Valley. The physical heart of the Beijing startups is in <a href="http://techcrunch.com/2011/12/27/geeks-guide-china-silicon-valley/" target="_blank">Zhongguancun</a> in the Haidian District, located in the northwest side of Beijing. Startups here are primarily in what they call the TMT (Technology, Media and Telecommunications) segment. Not only does Zhongguancun have Chinese startups, but global technology companies (Nokia, Ericsson, Motorola, Sony Ericsson, Microsoft, IBM, Sun, Oracle, BEA, Alcatel Lucent, Google) all have offices here or elsewhere in Beijing.</p> <p>If there ever was any question about the value of China’s <a href="http://steveblank.com/2013/04/11/chinas-torch-program-the-glow-that-can-light-the-world-part-2-of-5/" target="_blank">Torch Program</a> walk around <a href="http://techcrunch.com/2011/12/27/geeks-guide-china-silicon-valley/">Zhongguancun</a>. It was the first of the 54 Science and Technology Industrial Parks.</p> <p><b>China Venture Capital<br /> </b>An entrepreneurial ecosystem is driven one of two ways; either by a <i>crisis</i> (i.e. innovation in the U.S. during World War II,) or during peacetime by <i>profit</i>.</p> <p><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13692" data-permalink="https://steveblank.com/2013/04/13/zhongguancun-in-beijing-chinas-silicon-valley-part-4-of-5/finance-plus-entreprenuers/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/finance-plus-entreprenuers.jpg?fit=1371%2C557&ssl=1" data-orig-size="1371,557" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="Finance plus Entreprenuers" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/finance-plus-entreprenuers.jpg?fit=300%2C122&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/finance-plus-entreprenuers.jpg?fit=468%2C190&ssl=1" class="alignright size-medium wp-image-13692" alt="Finance plus Entreprenuers" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/finance-plus-entreprenuers.jpg?resize=300%2C121" width="300" height="121" /></p> <p>If it’s driven by profit then the ecosystem needs both entrepreneurs as well as Venture Finance.</p> <p>China now has plenty of both.</p> <p>China has the biggest Venture Capital industry outside the U.S. To compare the two, in 2011 U.S. venture capitalists invested $26.5 billion in all deals. Out of that total, they funded 967 Internet deals with $6.7 billion.</p> <p><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/vc-funding-usa.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13566" data-permalink="https://steveblank.com/2013/04/14/china-startups-the-gold-rush/vc-funding-usa/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/vc-funding-usa.jpg?fit=1704%2C1170&ssl=1" data-orig-size="1704,1170" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="VC Funding USA" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/vc-funding-usa.jpg?fit=300%2C206&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/vc-funding-usa.jpg?fit=468%2C321&ssl=1" class="aligncenter size-large wp-image-13566" alt="VC Funding USA" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/vc-funding-usa.jpg?resize=468%2C321" width="468" height="321" /></a></p> <p>By comparison, in 2011 Chinese VC’s invested $13 billion in all deals. Out of that total, they funded 268 Internet deals with $3.2 billion. About <a href="http://en.zgc.gov.cn/2011-11/14/content_14025989.htm" target="_blank">1/3 of all China’s Venture Capital investment</a> is made in Beijing and the majority of those investments are in the Technology, Media and Telecommunications (TMT) sector I’ll describe shortly.</p> <p>As vibrant as the China venture business has been, 2012 was a different story. VC’s pulled back and only invested $3.7 billion in all deals, funding just only 43 deals with $563 million.</p> <p><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/vc-funding-china.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13565" data-permalink="https://steveblank.com/2013/04/14/china-startups-the-gold-rush/vc-funding-china/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/vc-funding-china.jpg?fit=1794%2C1176&ssl=1" data-orig-size="1794,1176" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="VC Funding China" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/vc-funding-china.jpg?fit=300%2C197&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/vc-funding-china.jpg?fit=468%2C307&ssl=1" class="aligncenter size-large wp-image-13565" alt="VC Funding China" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/vc-funding-china.jpg?resize=468%2C306" width="468" height="306" /></a></p> <p><b>Closed for You, Open For Us<br /> </b>First a bit of context in what the VC’s in Beijing are investing in. China has essentially closed its internal search, media and social network software market to foreign companies who wouldn’t play with the government rules on the <a href="https://en.wikipedia.org/wiki/Internet_censorship_in_the_People's_Republic_of_China">Great Firewall</a>. (China blocks “objectionable” website content and monitors everyone’s Internet access.)</p> <p>Google retreated to Hong Kong and <a href="http://www.baidu.com">Baidu</a> took its place. Facebook was too frightening to Chinese censors, so <a href="http://www.renren.com">Renren</a> is the leading social media player. Email? Working professionals/white collar use emails, but most users grew up instant messaging on TenCent’s QQ and most are moving to <a href="http://brianmahoney.ca/2012/05/weixin-or-wechat-the-hottest-new-chat-app-out-there/">Weixin/WeChat</a>. Twitter? No, it’s Sina <a href="http://hk.weibo.com">Weibo</a>, and if you want games with your chat – <a href="http://t.qq.com">TenCent</a>. Amazon and Ebay? Nope in China it’s <a href="http://www.taobao.com/index_global.php">Alibaba’s Taobao</a> or <a href="http://360buy.com/">360buy.com</a>. If you’re outside of China, you never hear about these companies or interact with them because they’re geared to serve only Chinese users.</p> <p>This closed but very large market means that greater than 90% of Chinese software startups focus exclusively on the Chinese market. (The <10% that decide to go global early do so by starting <i>outside</i> of China. Another 10% may try to go global when they’re larger and have the resources for two languages, cultures and regulations. )</p> <p>This has resulted in a completely different consumer software ecosystem than found elsewhere in the world. Given the closed market to U.S. Internet companies, VC’s in China have guided startups to execute the “copy to China” model. Thinking, if it worked in the U.S., copying a known model is less risky than trying something new and untested. The problem is that this space is getting really crowded – from the bottom up as everyone tries the 200<sup>th</sup> clone – and from the top down, as the major incumbents try to fill every possible market niche.</p> <p>The table below maps the type of software in China to their global equivalents in each product category in the Technology, Media and Telecommunications (TMT) sector.</p> <p><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13549" data-permalink="https://steveblank.com/2013/04/13/zhongguancun-in-beijing-chinas-silicon-valley-part-4-of-5/china-vs-us-players-2/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-vs-us-players-2.jpg?fit=2009%2C1317&ssl=1" data-orig-size="2009,1317" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="China Vs US players 2" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-vs-us-players-2.jpg?fit=300%2C197&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-vs-us-players-2.jpg?fit=468%2C307&ssl=1" class="aligncenter size-large wp-image-13549" alt="China Vs US players 2" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-vs-us-players-2.jpg?resize=468%2C306" width="468" height="306" /></p> <p><b>A Huge Market Is Finally Real<br /> </b>For a hundred years the fantasy of global marketers was, “ if only everyone in China would buy one…” That day is final here. The numbers of mobile subscribers are staggering – <a href="http://translate.googleusercontent.com/translate_c?depth=1&hl=en&ie=UTF8&langpair=auto%7Cen&rurl=translate.google.com&tbb=1&u=http://www.miit.gov.cn/n11293472/n11293832/n11294132/n12858447/15310704.html&usg=ALkJrhi5tHW8kP0ohKBsNDIauYfO2jsc6Q">1.18 billon, 260 million are 3G</a>. Chinese Internet companies live in a large closed, self-contained ecosystem with 564 <i>million</i> web users with <i>420 million</i> having mobile web access. 309 million use microblogs and 242 million shop online. (BTW, market research, financial and other statistical information<b> </b>are usually unreliable in China, but even taken with a grain of salt these are staggering numbers.)</p> <p>The table below from <a href="http://www.slideshare.net/GeeksOnaPlane/western-internet-companies-in-china-chinese-internet-companies-in-the-world">web2asia.com</a> shows the number of users of online social networks as of 2009. Did I mention this is a huge market.</p> <p><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/social-network-services-in-china.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13603" data-permalink="https://steveblank.com/2013/04/13/zhongguancun-in-beijing-chinas-silicon-valley-part-4-of-5/social-network-services-in-china/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/social-network-services-in-china.jpg?fit=1405%2C932&ssl=1" data-orig-size="1405,932" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="Social Network Services in China" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/social-network-services-in-china.jpg?fit=300%2C199&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/social-network-services-in-china.jpg?fit=468%2C310&ssl=1" class="aligncenter size-large wp-image-13603" alt="Social Network Services in China" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/social-network-services-in-china.jpg?resize=468%2C310" width="468" height="310" /></a></p> <p><b>Investment in the Technology, Media and Telecommunications (TMT) sector<br /> </b>The charts below from David Lin, Microsoft Accelerator detail investments in the Technology, Media and Telecommunications (TMT) sector – almost all of it is centered in Beijing. (Note that these numbers differ from the Zhen Fund data -welcome to statistics in China – but they both provide an overall sense of the market size and direction.)</p> <p>45% of all Venture Capital Investment in China went into the Technology, Media and Telecommunications (TMT) sector.</p> <p><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-vc-market.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13669" data-permalink="https://steveblank.com/2013/04/14/china-startups-the-gold-rush/china-vc-market/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-vc-market.jpg?fit=1404%2C653&ssl=1" data-orig-size="1404,653" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="China VC Market" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-vc-market.jpg?fit=300%2C140&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-vc-market.jpg?fit=468%2C218&ssl=1" class="aligncenter size-large wp-image-13669" alt="China VC Market" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-vc-market.jpg?resize=468%2C217" width="468" height="217" /></a></p> <p>The number of deals in Technology, Media and Telecommunications more than doubled in 2011 over the previous five years and slowed back down dramatically in 2012. More than 1,600 VC investments in TMT have been made since 2007, with a record high of 436 in 2011.</p> <p style="text-align:center;"><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/tmt-investments-2007-2012.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13671" data-permalink="https://steveblank.com/2013/04/14/china-startups-the-gold-rush/tmt-investments-2007-2012/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/tmt-investments-2007-2012.jpg?fit=718%2C472&ssl=1" data-orig-size="718,472" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="TMT Investments 2007-2012" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/tmt-investments-2007-2012.jpg?fit=300%2C197&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/tmt-investments-2007-2012.jpg?fit=468%2C308&ssl=1" class="aligncenter wp-image-13671" alt="TMT Investments 2007-2012" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/tmt-investments-2007-2012.jpg?resize=374%2C246" width="374" height="246" /></a></p> <p>Internet investments makes up more than 50% of all the deals in Technology, Media and Telecommunications made since 2011, while, E-commerce investments, in turn, accounts for nearly 50% of the investment deals in Internet. Investments in Mobile Internet makes up roughly 11% of all the deals in Technology, Media and Telecommunications, and have been on the rise since 2011.</p> <p><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/tmt-investments-by-sector-2007-2012.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13673" data-permalink="https://steveblank.com/2013/04/14/china-startups-the-gold-rush/tmt-investments-by-sector-2007-2012/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/tmt-investments-by-sector-2007-2012.jpg?fit=901%2C442&ssl=1" data-orig-size="901,442" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="TMT Investments by sector 2007-2012" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/tmt-investments-by-sector-2007-2012.jpg?fit=300%2C147&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/tmt-investments-by-sector-2007-2012.jpg?fit=468%2C230&ssl=1" class="aligncenter size-large wp-image-13673" alt="TMT Investments by sector 2007-2012" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/tmt-investments-by-sector-2007-2012.jpg?resize=468%2C229" width="468" height="229" /></a></p> <p>Series-A round investments dominates Technology, Media and Telecommunications (TMT) deals, making up 60% of all.</p> <p style="text-align:center;"><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/tmt-investments-by-round-2011-2012.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13672" data-permalink="https://steveblank.com/2013/04/14/china-startups-the-gold-rush/tmt-investments-by-round-2011-2012/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/tmt-investments-by-round-2011-2012.jpg?fit=651%2C471&ssl=1" data-orig-size="651,471" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="TMT Investments by round 2011-2012" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/tmt-investments-by-round-2011-2012.jpg?fit=300%2C217&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/tmt-investments-by-round-2011-2012.jpg?fit=468%2C339&ssl=1" class="aligncenter wp-image-13672" alt="TMT Investments by round 2011-2012" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/tmt-investments-by-round-2011-2012.jpg?resize=341%2C247" width="341" height="247" /></a>Beijing, Guangdong (including Shenzhen) and Shanghai came out as the most dynamic spots for Technology, Media and Telecommunications (TMT) investments.</p> <p style="text-align:left;"><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/tmt-investments-by-region-2011-2012.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13670" data-permalink="https://steveblank.com/2013/04/14/china-startups-the-gold-rush/tmt-investments-by-region-2011-2012/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/tmt-investments-by-region-2011-2012.jpg?fit=923%2C492&ssl=1" data-orig-size="923,492" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="TMT Investments by region 2011-2012" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/tmt-investments-by-region-2011-2012.jpg?fit=300%2C160&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/tmt-investments-by-region-2011-2012.jpg?fit=468%2C249&ssl=1" class="aligncenter size-large wp-image-13670" alt="TMT Investments by region 2011-2012" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/tmt-investments-by-region-2011-2012.jpg?resize=468%2C249" width="468" height="249" /></a></p> <p><b>Beijing Venture/Angel Ecosystem<br /> </b>While Beijing has VC’s and Angel investors happy to write a check there aren’t as many angels/VCs in China versus US per capita. Several VC’s mentioned that there’s a funding gap for seed stage investments. The Angel/Seed network in Beijing feels fragmented and mostly inexperienced (as are a good number of the China VC’s). Kind of reminded me of the drivers in Beijing – they were all driving in a way that made me think they all just got their drivers license – until I remembered that they did. Car sales in China went from 1 million in 2001 to 14 million in 2011.</p> <p><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/active-player-in-china-vc.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13567" data-permalink="https://steveblank.com/2013/04/14/china-startups-the-gold-rush/active-player-in-china-vc/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/active-player-in-china-vc.jpg?fit=1398%2C1047&ssl=1" data-orig-size="1398,1047" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="Active Player in China VC" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/active-player-in-china-vc.jpg?fit=300%2C225&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/active-player-in-china-vc.jpg?fit=468%2C350&ssl=1" class="aligncenter size-large wp-image-13567" alt="Active Player in China VC" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/active-player-in-china-vc.jpg?resize=468%2C350" width="468" height="350" /></a></p> <p>Other Beijing ecosystem issues I heard about were the things we take for granted: the lack of knowledge sharing (“<a href="http://steveblank.com/2011/09/15/the-pay-it-forward-culture/">pay it forward</a>” isn’t part of the culture,) limited mentoring (few experienced mentors,) and a lack of open source education, and no <a href="https://angel.co">AngelList</a> model. In the U.S. it’s easy to share and browse ideas and deals, but in China there’s a long legacy of guarding knowledge as power, and the justifiable paranoia of someone copying your idea prevents sharing.</p> <p><b></b><b>Liquidity<br /> </b>Unlike the U.S. there are almost no mergers or acquisitions in this market segment. It’s much easier to just steal their ideas and hire their employees. So big companies rarely acquire startups. Liquidity for most Internet startups happens via IPO’s. 70% of exits in China are via IPO (in the U.S. on NASDAQ or the NYSE or on ChiNext, China’s equivalent of NASDAQ) compared to the 90% of exits in US via mergers or acquisitions. Alibaba (commerce), Tencent (games/chat) and Baidu (search) all have market caps over $40 billion.</p> <div> <p><a href="http://steveblank.com/2013/04/14/china-startups-the-gold-rush/?preview=true">The next post, the Gold Rush and Fire Extinguishers</a> – Beijing entrepreneurs, startup culture and some conclusions.</p> <p><b>Lessons Learned</b></p> <blockquote> <ul> <li>China has the biggest Venture Capital industry outside the U.S</li> <li>For software, the action is in Beijing</li> <li>China has closed its search, media and social network software market to foreign companies</li> <li>Beijing’s VC’s primarily invest in the Technology, Media and Telecommunications segmentLiquidity is via IPO’s not buy outs</li> </ul> </blockquote> </div> <p>Listen to the post here: or download the podcast <a href="http://clearshore.net" target="_blank">here</a></p> <div class="sharedaddy sd-sharing-enabled"><div class="robots-nocontent sd-block sd-social sd-social-official sd-sharing"><h3 class="sd-title">Share this:</h3><div class="sd-content"><ul><li class="share-print"><a rel="nofollow noopener noreferrer" data-shared="" class="share-print sd-button" href="https://steveblank.com/2013/04/13/zhongguancun-in-beijing-chinas-silicon-valley-part-4-of-5/" target="_blank" title="Click to print" ><span>Print</span></a></li><li class="share-email"><a rel="nofollow noopener noreferrer" data-shared="" class="share-email sd-button" href="mailto:?subject=%5BShared%20Post%5D%20Zhongguancun%20in%20Beijing%20-%20China%27s%20Silicon%20Valley%20%28Part%204%20of%205%29&body=https%3A%2F%2Fsteveblank.com%2F2013%2F04%2F13%2Fzhongguancun-in-beijing-chinas-silicon-valley-part-4-of-5%2F&share=email" target="_blank" title="Click to email a link to a friend" data-email-share-error-title="Do you have email set up?" data-email-share-error-text="If you're having problems sharing via email, you might not have email set up for your browser. You may need to create a new email yourself." data-email-share-nonce="48a53d1462" data-email-share-track-url="https://steveblank.com/2013/04/13/zhongguancun-in-beijing-chinas-silicon-valley-part-4-of-5/?share=email"><span>Email</span></a></li><li class="share-facebook"><div class="fb-share-button" data-href="https://steveblank.com/2013/04/13/zhongguancun-in-beijing-chinas-silicon-valley-part-4-of-5/" data-layout="button_count"></div></li><li class="share-twitter"><a href="https://twitter.com/share" class="twitter-share-button" data-url="https://steveblank.com/2013/04/13/zhongguancun-in-beijing-chinas-silicon-valley-part-4-of-5/" data-text="Zhongguancun in Beijing - China's Silicon Valley (Part 4 of 5)" >Tweet</a></li><li class="share-linkedin"><div class="linkedin_button"><script type="in/share" data-url="https://steveblank.com/2013/04/13/zhongguancun-in-beijing-chinas-silicon-valley-part-4-of-5/" data-counter="right"></script></div></li><li class="share-reddit"><a rel="nofollow noopener noreferrer" data-shared="" class="share-reddit sd-button" href="https://steveblank.com/2013/04/13/zhongguancun-in-beijing-chinas-silicon-valley-part-4-of-5/?share=reddit" target="_blank" title="Click to share on Reddit" ><span>Reddit</span></a></li><li class="share-jetpack-whatsapp"><a rel="nofollow noopener noreferrer" data-shared="" class="share-jetpack-whatsapp sd-button" href="https://steveblank.com/2013/04/13/zhongguancun-in-beijing-chinas-silicon-valley-part-4-of-5/?share=jetpack-whatsapp" target="_blank" title="Click to share on WhatsApp" ><span>WhatsApp</span></a></li><li class="share-pinterest"><div class="pinterest_button"><a href="https://www.pinterest.com/pin/create/button/?url=https%3A%2F%2Fsteveblank.com%2F2013%2F04%2F13%2Fzhongguancun-in-beijing-chinas-silicon-valley-part-4-of-5%2F&media=http%3A%2F%2Fsteveblank.com%2Fwp-content%2Fuploads%2F2013%2F04%2Fbeijing-with-kai-fu-lee.jpg%3Fw%3D468&description=Zhongguancun%20in%20Beijing%20-%20China%27s%20Silicon%20Valley%20%28Part%204%20of%205%29" data-pin-do="buttonPin" data-pin-config="beside"><img data-recalc-dims="1" src="https://i0.wp.com/assets.pinterest.com/images/pidgets/pinit_fg_en_rect_gray_20.png?w=468" /></a></div></li><li class="share-telegram"><a rel="nofollow noopener noreferrer" data-shared="" class="share-telegram sd-button" href="https://steveblank.com/2013/04/13/zhongguancun-in-beijing-chinas-silicon-valley-part-4-of-5/?share=telegram" target="_blank" title="Click to share on Telegram" ><span>Telegram</span></a></li><li class="share-tumblr"><a class="tumblr-share-button" target="_blank" href="https://www.tumblr.com/share" data-title="Zhongguancun in Beijing - China's Silicon Valley (Part 4 of 5)" data-content="https://steveblank.com/2013/04/13/zhongguancun-in-beijing-chinas-silicon-valley-part-4-of-5/" title="Share on Tumblr"data-posttype="link">Share on Tumblr</a></li><li class="share-pocket"><div class="pocket_button"><a href="https://getpocket.com/save" class="pocket-btn" data-lang="en" data-save-url="https://steveblank.com/2013/04/13/zhongguancun-in-beijing-chinas-silicon-valley-part-4-of-5/" data-pocket-count="horizontal" >Pocket</a></div></li><li class="share-end"></li></ul></div></div></div><div class='sharedaddy sd-block sd-like jetpack-likes-widget-wrapper jetpack-likes-widget-unloaded' id='like-post-wrapper-6599589-13598-673e47a6b4df6' data-src='https://widgets.wp.com/likes/?ver=14.1-a.3#blog_id=6599589&post_id=13598&origin=steveblank.com&obj_id=6599589-13598-673e47a6b4df6&n=1' data-name='like-post-frame-6599589-13598-673e47a6b4df6' data-title='Like or Reblog'><h3 class="sd-title">Like this:</h3><div class='likes-widget-placeholder post-likes-widget-placeholder' style='height: 55px;'><span class='button'><span>Like</span></span> <span class="loading">Loading...</span></div><span class='sd-text-color'></span><a class='sd-link-color'></a></div> <p class="postinfo"> Filed under: <a href="https://steveblank.com/category/china/" rel="category tag">China</a>, <a href="https://steveblank.com/category/customer-development/" rel="category tag">Customer Development</a>, <a href="https://steveblank.com/category/technology/" rel="category tag">Technology</a>, <a href="https://steveblank.com/category/venture-capital/" rel="category tag">Venture Capital</a> | <a href="https://steveblank.com/2013/04/13/zhongguancun-in-beijing-chinas-silicon-valley-part-4-of-5/#comments">13 Comments »</a> </p> </div> </div> <div class="post-13584 post type-post status-publish format-standard hentry category-china category-customer-development category-technology category-venture-capital" id="post-13584"> <h2><a href="https://steveblank.com/2013/04/12/the-rise-of-chinese-venture-capital/" rel="bookmark">The Rise of Chinese Venture Capital – (Part 3 of 5)</a></h2> <div class="postinfo"> Posted on <span class="postdate">April 12, 2013</span> by steve blank </div> <div class="entry"> <p>I just spent a few weeks in Japan and China on a book tour for the <a href="http://www.amazon.co.jp/gp/product/4798128511/ref=s9_simh_gw_p14_d0_i2?pf_rd_m=AN1VRQENFRJN5&pf_rd_s=center-2&pf_rd_r=0PAZ1HB7XD4YSDJZDRBQ&pf_rd_t=101&pf_rd_p=463376756&pf_rd_i=489986">Japanese</a> and <a href="http://www.amazon.cn/dp/B00AR8T2MC/">Chinese</a> versions of the Startup Owners Manual. In these series of 5 posts, I thought I’d share what I learned in China. All the usual caveats apply. I was only in China for a week so this a cursory view. Thanks to <a href="http://en.wikipedia.org/wiki/Kai-Fu_Lee" target="_blank">Kai-Fu Lee</a> of Innovation Works, David Lin of Microsoft Accelerator, Frank Hawke of the <a href="http://scpku.stanford.edu" target="_blank">Stanford Center in Beijing</a>, and my publisher China Machine Press.</p> <p><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-speaking-2.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13562" data-permalink="https://steveblank.com/2013/04/12/the-rise-of-chinese-venture-capital/china-speaking-2/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-speaking-2.jpg?fit=4288%2C2848&ssl=1" data-orig-size="4288,2848" data-comments-opened="1" data-image-meta="{"aperture":"5.6","credit":"","camera":"NIKON D90","caption":"","created_timestamp":"1364048139","copyright":"","focal_length":"105","iso":"1600","shutter_speed":"0.05","title":""}" data-image-title="China speaking 2" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-speaking-2.jpg?fit=300%2C199&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-speaking-2.jpg?fit=468%2C311&ssl=1" class="aligncenter size-large wp-image-13562" alt="China speaking 2" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-speaking-2.jpg?resize=468%2C310" width="468" height="310" /></a></p> <p><a href="http://steveblank.com/2013/04/10/china-the-sleeper-awakens/" target="_blank">The first post described how China built a science and technology infrastructure</a> to support advanced weapons systems development. The previous post described <a href="http://steveblank.com/2013/04/11/chinas-torch-program-the-glow-that-can-light-the-world-part-2-of-5/" target="_blank">how the Torch program built China’s innovation clusters</a>. This post is about the rise of Chinese venture capital and how it helped build the countries entrepreneurial ecosystem.</p> <p><b>The Rise of Chinese Venture Capital<br /> </b>China’s move away from a state system that solely depended on a command and control economy started in the 1990s. <a href="http://www.insead.edu/facultyresearch/research/details_papers.cfm?id=11674">The first wave of startups</a> began when R&D centers and universities began to provide the technology and seed capital for new startups that were spin-outs or spin-offs. This could be a group of individuals leaving a university or research center or an entire department leaving. For example, in the 1990’s 85% of the start-up funds of the new technology companies founded in Beijing came from the research center or university they left.</p> <p><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-startup-funding.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13589" data-permalink="https://steveblank.com/2013/04/12/the-rise-of-chinese-venture-capital/china-startup-funding/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-startup-funding.jpg?fit=1800%2C1350&ssl=1" data-orig-size="1800,1350" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="China Startup Funding" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-startup-funding.jpg?fit=300%2C225&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-startup-funding.jpg?fit=468%2C351&ssl=1" class="aligncenter size-large wp-image-13589" alt="China Startup Funding" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-startup-funding.jpg?resize=468%2C351" width="468" height="351" /></a></p> <p>The second wave of technology investors were Chinese banks, who provided the majority of the later stage investments in the Torch Program. By 1991, 70% of the Torch funded startups were getting bank financing for expansion and later stages of the new ventures, with local governments acting as guarantors. Like the U.S. SBIR and STTR programs, the Torch Program’s funding for new ventures was limited to seed funding the front end. Being designated as a Torch Program startup gave banks comfort to provide loans to these ventures for technology commercialization.</p> <p>Technology zones with Science and Technology Industrial Parks were the third source of support for new ventures. Inside the zones were Torch Technology Business Incubators<i> </i>with startups licensed by the local governments. These local governments financially supported the startups because, by locating in these zones, the new ventures were seen as contributing to local economic development. This helped the startups qualify for funding from banks and venture capital firms.</p> <p>By the mid-1990s, Chinese leaders realized that the Torch program couldn’t be the source of all capital for startups. At the same time neither banks nor local governments had the cash to finance startups on the scale the country needed. The problem was that in China the government didn’t recognize venture capital firms as a legitimate organizational type. The founding of domestic VC firms began with the establishment of local government-financed venture capital firms (GVCFs), followed by university-backed VC firms (UVCFs). (The State Science and Technology Commission and the Ministry of Finance formed the China New Technology Venture Investment Corporation in 1986, but it was a government agency supporting national technology venture policy objectives, rather than a profit-oriented private enterprise. It went bankrupt in 1997.)</p> <p>A few foreign VC firms like IDG Capital Partners entered China in the early 1990s. Gradually, from the mid-1990s, the perception of venture capital shifted from its being a type of government funding to being a commercial activity necessary to support the commercialization of new technology. But it wasn’t until 1998 that corporate-backed VC firms could be established, and that started a wave of VC funds backed by government, corporate and foreign capital.</p> <p>A great summary diagram below from OECD’s <a href="http://www.oecd.org/science/inno/39177453.pdf" target="_blank">Report on China’s Innovation Policy</a> traces the evolution of China’s Innovation Ecosystem.</p> <p><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/evolution-of-chinas-innovation-ecosystem.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13591" data-permalink="https://steveblank.com/2013/04/12/the-rise-of-chinese-venture-capital/evolution-of-chinas-innovation-ecosystem/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/evolution-of-chinas-innovation-ecosystem.jpg?fit=1633%2C1481&ssl=1" data-orig-size="1633,1481" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="Evolution of China’s Innovation Ecosystem" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/evolution-of-chinas-innovation-ecosystem.jpg?fit=300%2C272&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/evolution-of-chinas-innovation-ecosystem.jpg?fit=468%2C424&ssl=1" class="aligncenter size-large wp-image-13591" alt="Evolution of China's Innovation Ecosystem" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/evolution-of-chinas-innovation-ecosystem.jpg?resize=468%2C424" width="468" height="424" /></a></p> <p><b>Investing in China Today<br /> </b>Fast forward a decade, today the Private Equity and Venture Capital business is booming in China with over 1000 firms actively investing. Most of the early deals were done by offshore venture funds – with their fund registered in countries outside China and using dollars. The latest trends are as <a href="http://en.wikipedia.org/wiki/Renminbi">Renminbi</a> (“RMB”) funds (the Renminbi is the official currency in China.) In the past foreign funds who wanted to invest in China had to set up funds using dollars with complicated offshore structures with exits through offshore listings. The Renminbi funds have fewer restrictions on what industries the fund can invest in, less regulatory oversight and access to listing a portfolio company in China. There are two types of Renminbi funds: domestic funds and foreign-invested funds. Domestic Renminbi funds are fully owned by Chinese investors, while foreign-invested Renminbi funds may be partially or fully owned by non-Chinese investors. Both types of funds are organized under Chinese law and use Renminbi to invest in Chinese companies.</p> <p>The other big change was the creation of ChiNext, China’s equivalent of NASDAQ stock exchange for start-ups, in 2009. The market was created to provide startups and their investors liquidity. Over 100 startups were listed on ChiNext the first year of its launch at sky-high valuations (average of 66 times earnings.) About 60% of the startups listed on ChiNext were backed by Renminbi funds, making the investors of these funds one of the main beneficiaries of the exchange.</p> <p>The next posts <a href="http://steveblank.com/2013/04/13/zhongguancun-in-beijing-chinas-silicon-valley-part-4-of-5" target="_blank">Part 4 Zhongguancun in Beijing</a> – China’s Silicon Valley and <a href="http://steveblank.com/2013/04/14/china-startups-the-gold-rush" target="_blank">part 5, the Gold Rush and Fire Extinguishers</a> describe the Beijing entrepreneurship ecosystem.</p> <p><b>Lessons Learned</b></p> <blockquote> <ul> <li>China’s venture capital system has made a remarkable journey from the “state owns everything” to the free market</li> <li>It’s done it in a series of evolutionary stages, each new one learning from the last</li> </ul> </blockquote> <p>Listen to the post here: or download the podcast <a href="http://clearshore.net" target="_blank">here</a></p> <div class="sharedaddy sd-sharing-enabled"><div class="robots-nocontent sd-block sd-social sd-social-official sd-sharing"><h3 class="sd-title">Share this:</h3><div class="sd-content"><ul><li class="share-print"><a rel="nofollow noopener noreferrer" data-shared="" class="share-print sd-button" href="https://steveblank.com/2013/04/12/the-rise-of-chinese-venture-capital/" target="_blank" title="Click to print" ><span>Print</span></a></li><li class="share-email"><a rel="nofollow noopener noreferrer" data-shared="" class="share-email sd-button" href="mailto:?subject=%5BShared%20Post%5D%20The%20Rise%20of%20Chinese%20Venture%20Capital%20-%20%28Part%203%20of%205%29&body=https%3A%2F%2Fsteveblank.com%2F2013%2F04%2F12%2Fthe-rise-of-chinese-venture-capital%2F&share=email" target="_blank" title="Click to email a link to a friend" data-email-share-error-title="Do you have email set up?" data-email-share-error-text="If you're having problems sharing via email, you might not have email set up for your browser. You may need to create a new email yourself." data-email-share-nonce="6a6aade064" data-email-share-track-url="https://steveblank.com/2013/04/12/the-rise-of-chinese-venture-capital/?share=email"><span>Email</span></a></li><li class="share-facebook"><div class="fb-share-button" data-href="https://steveblank.com/2013/04/12/the-rise-of-chinese-venture-capital/" data-layout="button_count"></div></li><li class="share-twitter"><a href="https://twitter.com/share" class="twitter-share-button" data-url="https://steveblank.com/2013/04/12/the-rise-of-chinese-venture-capital/" data-text="The Rise of Chinese Venture Capital - (Part 3 of 5)" >Tweet</a></li><li class="share-linkedin"><div class="linkedin_button"><script type="in/share" data-url="https://steveblank.com/2013/04/12/the-rise-of-chinese-venture-capital/" data-counter="right"></script></div></li><li class="share-reddit"><a rel="nofollow noopener noreferrer" data-shared="" class="share-reddit sd-button" href="https://steveblank.com/2013/04/12/the-rise-of-chinese-venture-capital/?share=reddit" target="_blank" title="Click to share on Reddit" ><span>Reddit</span></a></li><li class="share-jetpack-whatsapp"><a rel="nofollow noopener noreferrer" data-shared="" class="share-jetpack-whatsapp sd-button" href="https://steveblank.com/2013/04/12/the-rise-of-chinese-venture-capital/?share=jetpack-whatsapp" target="_blank" title="Click to share on WhatsApp" ><span>WhatsApp</span></a></li><li class="share-pinterest"><div class="pinterest_button"><a href="https://www.pinterest.com/pin/create/button/?url=https%3A%2F%2Fsteveblank.com%2F2013%2F04%2F12%2Fthe-rise-of-chinese-venture-capital%2F&media=http%3A%2F%2Fsteveblank.com%2Fwp-content%2Fuploads%2F2013%2F04%2Fchina-speaking-2.jpg%3Fw%3D468&description=The%20Rise%20of%20Chinese%20Venture%20Capital%20-%20%28Part%203%20of%205%29" data-pin-do="buttonPin" data-pin-config="beside"><img data-recalc-dims="1" src="https://i0.wp.com/assets.pinterest.com/images/pidgets/pinit_fg_en_rect_gray_20.png?w=468" /></a></div></li><li class="share-telegram"><a rel="nofollow noopener noreferrer" data-shared="" class="share-telegram sd-button" href="https://steveblank.com/2013/04/12/the-rise-of-chinese-venture-capital/?share=telegram" target="_blank" title="Click to share on Telegram" ><span>Telegram</span></a></li><li class="share-tumblr"><a class="tumblr-share-button" target="_blank" href="https://www.tumblr.com/share" data-title="The Rise of Chinese Venture Capital - (Part 3 of 5)" data-content="https://steveblank.com/2013/04/12/the-rise-of-chinese-venture-capital/" title="Share on Tumblr"data-posttype="link">Share on Tumblr</a></li><li class="share-pocket"><div class="pocket_button"><a href="https://getpocket.com/save" class="pocket-btn" data-lang="en" data-save-url="https://steveblank.com/2013/04/12/the-rise-of-chinese-venture-capital/" data-pocket-count="horizontal" >Pocket</a></div></li><li class="share-end"></li></ul></div></div></div><div class='sharedaddy sd-block sd-like jetpack-likes-widget-wrapper jetpack-likes-widget-unloaded' id='like-post-wrapper-6599589-13584-673e47a6bb7b3' data-src='https://widgets.wp.com/likes/?ver=14.1-a.3#blog_id=6599589&post_id=13584&origin=steveblank.com&obj_id=6599589-13584-673e47a6bb7b3&n=1' data-name='like-post-frame-6599589-13584-673e47a6bb7b3' data-title='Like or Reblog'><h3 class="sd-title">Like this:</h3><div class='likes-widget-placeholder post-likes-widget-placeholder' style='height: 55px;'><span class='button'><span>Like</span></span> <span class="loading">Loading...</span></div><span class='sd-text-color'></span><a class='sd-link-color'></a></div> <p class="postinfo"> Filed under: <a href="https://steveblank.com/category/china/" rel="category tag">China</a>, <a href="https://steveblank.com/category/customer-development/" rel="category tag">Customer Development</a>, <a href="https://steveblank.com/category/technology/" rel="category tag">Technology</a>, <a href="https://steveblank.com/category/venture-capital/" rel="category tag">Venture Capital</a> | <a href="https://steveblank.com/2013/04/12/the-rise-of-chinese-venture-capital/#comments">11 Comments »</a> </p> </div> </div> <div class="post-13557 post type-post status-publish format-standard hentry category-china category-customer-development category-technology category-venture-capital" id="post-13557"> <h2><a href="https://steveblank.com/2013/04/11/chinas-torch-program-the-glow-that-can-light-the-world-part-2-of-5/" rel="bookmark">China’s Torch Program – the glow that can light the world (Part 2 of 5)</a></h2> <div class="postinfo"> Posted on <span class="postdate">April 11, 2013</span> by steve blank </div> <div class="entry"> <p style="text-align:left;">I just spent a few weeks in Japan and China on a book tour for the <a href="http://www.amazon.co.jp/gp/product/4798128511/ref=s9_simh_gw_p14_d0_i2?pf_rd_m=AN1VRQENFRJN5&pf_rd_s=center-2&pf_rd_r=0PAZ1HB7XD4YSDJZDRBQ&pf_rd_t=101&pf_rd_p=463376756&pf_rd_i=489986" target="_blank">Japanese</a> and <a href="http://www.amazon.cn/dp/B00AR8T2MC/">Chinese</a> versions of the Startup Owners Manual. In these series of 5 posts, I thought I’d share what I learned in China. All the usual caveats apply. I was only in China for a week so this a cursory view.Thanks to <a href="http://en.wikipedia.org/wiki/Kai-Fu_Lee">Kai-Fu Lee</a> of Innovation Works, David Lin of Microsoft Accelerator, Frank Hawke of the <a href="http://scpku.stanford.edu" target="_blank">Stanford Center in Beijing</a>, and my publisher China Machine Press.<a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-book-unveiling.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13564" data-permalink="https://steveblank.com/2013/04/11/chinas-torch-program-the-glow-that-can-light-the-world-part-2-of-5/china-book-unveiling/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-book-unveiling.jpg?fit=851%2C448&ssl=1" data-orig-size="851,448" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="China Book Unveiling" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-book-unveiling.jpg?fit=300%2C158&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-book-unveiling.jpg?fit=468%2C246&ssl=1" class="size-large wp-image-13564 aligncenter" alt="China Book Unveiling" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-book-unveiling.jpg?resize=468%2C246" width="468" height="246" /></a></p> <p><a href="http://steveblank.com/2013/04/10/china-the-sleeper-awakens/" target="_blank">The previous post</a> described how China built its science and technology infrastructure. This post is about the how the Chinese government engineered technology clusters.</p> <p>—</p> <p><b>The Torch Program<br /> </b>In size, scale and commercial results China’s <a href="http://translate.google.com/translate?u=http%3A%2F%2Fwww.ctp.gov.cn%2F&hl=en&langpair=auto|en&tbb=1&ie=GBK" target="_blank">Torch Program</a> from <a href="http://www.most.gov.cn/eng/index.htm">MOST (the Ministry of Science and Technology)</a> is the most successful entrepreneurial program in the world. Of all the Chinese government programs, the Torch Program is the one program that kick-started Chinese high-tech innovation and startups.</p> <p>In the last decade <a href="http://www.ctp.gov.cn/ctp-eng/areas.htm" target="_blank">Torch</a> managed to break free of China’s state central planning bureaucracies. Of all the Chinese innovation programs, Torch is the one that was run like a startup – iterating and pivoting as it learned and discovered. This enabled Torch to evolve with China’s rapidly global economy.</p> <p>Torch has four major parts: <a href="http://www.ctp.gov.cn/ctp-eng/areas_two.htm">Innovation Clusters</a>, <i>Technology Business Incubators (TBIs), Seed Funding (Innofund) and Venture Guiding Fund</i><i>.</i></p> <p><i>Innovation Clusters<br /> </i>Industries have a competitive advantage when related companies cluster in a geographical location. Examples are Hollywood for movies, Milan for fashion, New York for finance and today, Silicon Valley for technology entrepreneurship. The early clusters occurred by happenstance of geography or history. But the theory is that you can artificially create a cluster by concentrating resources, finance and competences to a critical threshold, giving the cluster a decisive sustainable competitive advantage over other places. Israel, Singapore and now China are the three countries that have successfully put that theory into practice.</p> <p><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/stips-in-china.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13574" data-permalink="https://steveblank.com/2013/04/11/chinas-torch-program-the-glow-that-can-light-the-world-part-2-of-5/stips-in-china/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/stips-in-china.jpg?fit=910%2C768&ssl=1" data-orig-size="910,768" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="STIPS in China" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/stips-in-china.jpg?fit=300%2C253&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/stips-in-china.jpg?fit=468%2C395&ssl=1" class="alignleft size-medium wp-image-13574" alt="STIPS in China" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/stips-in-china.jpg?resize=300%2C253" width="300" height="253" /></a>The Torch program created <a href="http://www.ctp.gov.cn/ctp-eng/areas_two.htm">Innovation Clusters</a> by creating national Science and Technology Industrial Parks (STIPs), Software Parks, and Productivity Promotion Centers.</p> <p>The first Science and Technology Industrial Park was <a href="http://en.wikipedia.org/wiki/Zhongguancun">Zhongguancun Science Park</a> in Beijing. It has become China’s Silicon Valley. (This was the area I visited in this trip to China.) In addition to the one in Beijing, China has set up <a href="http://www.ctp.gov.cn/ctp-eng/stips.htm">53 additional industrial parks</a> and in them are ~60,000 companies with <a href="http://www.chinadaily.com.cn/bizchina/2011-01/03/content_11787836.htm">8 million</a> employees. Industry or technology specific versions of these clusters have been set up; for example Donghu in Wuhan – specializing in optoelectronics, Zhangjiang in Shanghai – focusing on integrated circuits and pharmaceuticals, Tianjin – biotech and new energy, Shenzhen – telecommunications and Zhongshan – medical devices and electronics.</p> <p>The Science and Technology Industrial Parks contributed 7% of China’s GDP and close to 50% of all of China’s R&D spending.</p> <p>In addition to the 54 Science and Technology Industrial Parks, the Torch program also set up an additional 32 Torch Program Software Parks.<a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/stips-revenue.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13576" data-permalink="https://steveblank.com/2013/04/11/chinas-torch-program-the-glow-that-can-light-the-world-part-2-of-5/stips-revenue/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/stips-revenue.jpg?fit=962%2C450&ssl=1" data-orig-size="962,450" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="STIPs revenue" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/stips-revenue.jpg?fit=300%2C140&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/stips-revenue.jpg?fit=468%2C219&ssl=1" class="aligncenter size-large wp-image-13576" alt="STIPs revenue" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/stips-revenue.jpg?resize=468%2C218" width="468" height="218" /></a></p> <p>Another key part of China’s cluster strategy was collaboration between research and business, as well as between large enterprises and tech-based small and medium enterprises. It did so by building a national network of a 1,000+ Productivity Promotion Centers. They provide consulting, promotion, product testing, hiring, training and incubation services to startups.</p> <p><i>Technology Business Incubators (TBIs)<br /> </i>While the Innovation Clusters designated specific areas of the countries where high tech was to occur, it’s the Technology Business incubators located inside these clusters where the startup companies physically reside. Much like incubators worldwide, they provide startups with office space, free rent, access to university technology transfer, etc.</p> <p>By 2011, there were a total of 1034 Technology Business Incubators<i> </i>across China, including 336 as National incubators, hosting nearly 60,000 companies. (20% of the National Incubators were privately-run and their percentage is steadily increasing.) In recent years Business Incubators<i> </i>have developed into diverse models. For example, the Ministry of Education and the Ministry of Science and Technology teamed up to put 45 incubators in universities. There are close to 100 specialized incubators for companies founded by returned overseas Chinese scientists and engineers. There are a dozen sector-specific incubators (a Biomedicine Incubator in Shanghai, Advanced Material Incubator in Beijing, a Marine Technology Incubator in Tianjin, etc.) These incubators are mostly clustered in the eastern coastal regions, and disproportionately target TMT (Technology Media and Telecom) and Biotech.</p> <p>Some of the startups coming out of these incubators have become large international companies including Lenovo, Huawai, Suntech Power, etc.</p> <p><i>Seed Funding (Innofund).<br /> </i>The best analog for China’s <a href="http://rightsite.asia/en/article/chinas-innovation-fund-supports-high-tech-startups">InnoFund</a> is the U.S. government’s <a href="http://www.sbir.gov/about/about-sbir">SBIR</a> and <a href="http://www.sbir.gov/about/about-sttr">STTR</a> programs. Set up in 1999, Innofund offers grants ($150 – $250K), loan interest subsidies and equity investment. Innofund is designed to bridge early stage technology companies that have innovative technology and good market potential but are too early for commercial funding (banks or VCs.) Innofund applicants have to be in high-tech R&D, have less than 500 people, at least 30% of the employees have to be technical and the majority of the company owned by Chinese. The ultimate goal of Innofund is to get the startups far enough along in technology and market validation so other sources of financial capital (banks, VC’s, corporate partners) will invest.</p> <p>Since its establishment, there’s been over 35,000 applications with <a href="http://translate.googleusercontent.com/translate_c?depth=1&hl=en&ie=GBK&langpair=auto%7Cen&rurl=translate.google.com&tbb=1&u=http://www.innofund.gov.cn/innobull/Acc_List.asp%3FCYear%3D2012%26CNum%3D3%26title%3D2012%E5%B9%B4%E7%AC%AC%E4%B8%89%E6%89%B9%E9%25A">9,000 projects approved</a> and close to a $1 billion allocated.</p> <p>Most Venture Capitalists in China viewed the Innofund the same way most U.S. VC’s treat the <a href="http://www.sbir.gov/about/about-sbir">SBIR</a> and <a href="http://www.sbir.gov/about/about-sttr">STTR</a> programs – they never heard of it, or they think it takes too much time to apply for too little money. And with the same complaints; tedious, relationship driven application process, bureaucratic reporting requirements, and outcomes often measured in quantity and not quality. However, for startups who have gotten an Innofund grant, it does provide the same positive cachet as an <a href="http://www.sbir.gov/about/about-sbir">SBIR</a> and <a href="http://www.sbir.gov/about/about-sttr">STTR</a> grant – the government has reviewed your technology and thought it was worthy.</p> <p><i>Venture Guiding Fund<br /> </i>In 2007 the Ministries of Science and Finance raised the stakes to get VC’s focused on funneling more VC money into growing startups – they set up a <i>Venture Guiding Fund</i>. The Venture Guiding Fund invests directly into VC funds, co-invests with VC’s, and covers some VC bets. It does this with four programs: 1) A fund of funds, holding < 25% equity in VC firms, requiring only a fixed rate return; 2) the fund will co-invest with other VC firms matching up to 50% of other VC firm’s equity investment or a maximum of $500K; 3) Risk subsidies for VC firms, where the fund will be compensated for the cost and loss of VC firms which have made investments in technology-based startups; and 4) Grants for portfolio reserves, where the fund will provide grants for technology-based startups which are being incubated and coached by VC firms.</p> <p><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/funding-for-mosst-programs.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13577" data-permalink="https://steveblank.com/2013/04/11/chinas-torch-program-the-glow-that-can-light-the-world-part-2-of-5/funding-for-mosst-programs/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/funding-for-mosst-programs.jpg?fit=1633%2C306&ssl=1" data-orig-size="1633,306" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="Funding for MOSST Programs" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/funding-for-mosst-programs.jpg?fit=300%2C56&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/funding-for-mosst-programs.jpg?fit=468%2C88&ssl=1" class="aligncenter size-large wp-image-13577" alt="Funding for MOSST Programs" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/funding-for-mosst-programs.jpg?resize=468%2C87" width="468" height="87" /></a></p> <p>Part 3, the next post describes the rise of Chinese venture capital.</p> <p><b>Lessons Learned</b></p> <blockquote> <ul> <li>The Torch Program is the worlds largest “lets engineer entrepreneurial clusters” experiment</li> <li>Torch has four major parts: Clusters, Business Incubators, Seed Funding, and Funds to support Venture Capital firms</li> <li>Torch was the rare government program that was run like a startup – iterating and pivoting as it learned and discovered.</li> </ul> </blockquote> <p>Listen to the post here: or download the podcast <a href="http://clearshore.net" target="_blank">here</a></p> <div class="sharedaddy sd-sharing-enabled"><div class="robots-nocontent sd-block sd-social sd-social-official sd-sharing"><h3 class="sd-title">Share this:</h3><div class="sd-content"><ul><li class="share-print"><a rel="nofollow noopener noreferrer" data-shared="" class="share-print sd-button" href="https://steveblank.com/2013/04/11/chinas-torch-program-the-glow-that-can-light-the-world-part-2-of-5/" target="_blank" title="Click to print" ><span>Print</span></a></li><li class="share-email"><a rel="nofollow noopener noreferrer" data-shared="" class="share-email sd-button" href="mailto:?subject=%5BShared%20Post%5D%20China%E2%80%99s%20Torch%20Program%20-%20the%20glow%20that%20can%20light%20the%20world%20%28Part%202%20of%205%29&body=https%3A%2F%2Fsteveblank.com%2F2013%2F04%2F11%2Fchinas-torch-program-the-glow-that-can-light-the-world-part-2-of-5%2F&share=email" target="_blank" title="Click to email a link to a friend" data-email-share-error-title="Do you have email set up?" data-email-share-error-text="If you're having problems sharing via email, you might not have email set up for your browser. You may need to create a new email yourself." data-email-share-nonce="7bc339cf98" data-email-share-track-url="https://steveblank.com/2013/04/11/chinas-torch-program-the-glow-that-can-light-the-world-part-2-of-5/?share=email"><span>Email</span></a></li><li class="share-facebook"><div class="fb-share-button" data-href="https://steveblank.com/2013/04/11/chinas-torch-program-the-glow-that-can-light-the-world-part-2-of-5/" data-layout="button_count"></div></li><li class="share-twitter"><a href="https://twitter.com/share" class="twitter-share-button" data-url="https://steveblank.com/2013/04/11/chinas-torch-program-the-glow-that-can-light-the-world-part-2-of-5/" data-text="China’s Torch Program - the glow that can light the world (Part 2 of 5)" >Tweet</a></li><li class="share-linkedin"><div class="linkedin_button"><script type="in/share" data-url="https://steveblank.com/2013/04/11/chinas-torch-program-the-glow-that-can-light-the-world-part-2-of-5/" data-counter="right"></script></div></li><li class="share-reddit"><a rel="nofollow noopener noreferrer" data-shared="" class="share-reddit sd-button" href="https://steveblank.com/2013/04/11/chinas-torch-program-the-glow-that-can-light-the-world-part-2-of-5/?share=reddit" target="_blank" title="Click to share on Reddit" ><span>Reddit</span></a></li><li class="share-jetpack-whatsapp"><a rel="nofollow noopener noreferrer" data-shared="" class="share-jetpack-whatsapp sd-button" href="https://steveblank.com/2013/04/11/chinas-torch-program-the-glow-that-can-light-the-world-part-2-of-5/?share=jetpack-whatsapp" target="_blank" title="Click to share on WhatsApp" ><span>WhatsApp</span></a></li><li class="share-pinterest"><div class="pinterest_button"><a href="https://www.pinterest.com/pin/create/button/?url=https%3A%2F%2Fsteveblank.com%2F2013%2F04%2F11%2Fchinas-torch-program-the-glow-that-can-light-the-world-part-2-of-5%2F&media=http%3A%2F%2Fsteveblank.com%2Fwp-content%2Fuploads%2F2013%2F04%2Fchina-book-unveiling.jpg%3Fw%3D468&description=China%E2%80%99s%20Torch%20Program%20-%20the%20glow%20that%20can%20light%20the%20world%20%28Part%202%20of%205%29" data-pin-do="buttonPin" data-pin-config="beside"><img data-recalc-dims="1" src="https://i0.wp.com/assets.pinterest.com/images/pidgets/pinit_fg_en_rect_gray_20.png?w=468" /></a></div></li><li class="share-telegram"><a rel="nofollow noopener noreferrer" data-shared="" class="share-telegram sd-button" href="https://steveblank.com/2013/04/11/chinas-torch-program-the-glow-that-can-light-the-world-part-2-of-5/?share=telegram" target="_blank" title="Click to share on Telegram" ><span>Telegram</span></a></li><li class="share-tumblr"><a class="tumblr-share-button" target="_blank" href="https://www.tumblr.com/share" data-title="China’s Torch Program - the glow that can light the world (Part 2 of 5)" data-content="https://steveblank.com/2013/04/11/chinas-torch-program-the-glow-that-can-light-the-world-part-2-of-5/" title="Share on Tumblr"data-posttype="link">Share on Tumblr</a></li><li class="share-pocket"><div class="pocket_button"><a href="https://getpocket.com/save" class="pocket-btn" data-lang="en" data-save-url="https://steveblank.com/2013/04/11/chinas-torch-program-the-glow-that-can-light-the-world-part-2-of-5/" data-pocket-count="horizontal" >Pocket</a></div></li><li class="share-end"></li></ul></div></div></div><div class='sharedaddy sd-block sd-like jetpack-likes-widget-wrapper jetpack-likes-widget-unloaded' id='like-post-wrapper-6599589-13557-673e47a6c0df1' data-src='https://widgets.wp.com/likes/?ver=14.1-a.3#blog_id=6599589&post_id=13557&origin=steveblank.com&obj_id=6599589-13557-673e47a6c0df1&n=1' data-name='like-post-frame-6599589-13557-673e47a6c0df1' data-title='Like or Reblog'><h3 class="sd-title">Like this:</h3><div class='likes-widget-placeholder post-likes-widget-placeholder' style='height: 55px;'><span class='button'><span>Like</span></span> <span class="loading">Loading...</span></div><span class='sd-text-color'></span><a class='sd-link-color'></a></div> <p class="postinfo"> Filed under: <a href="https://steveblank.com/category/china/" rel="category tag">China</a>, <a href="https://steveblank.com/category/customer-development/" rel="category tag">Customer Development</a>, <a href="https://steveblank.com/category/technology/" rel="category tag">Technology</a>, <a href="https://steveblank.com/category/venture-capital/" rel="category tag">Venture Capital</a> | <a href="https://steveblank.com/2013/04/11/chinas-torch-program-the-glow-that-can-light-the-world-part-2-of-5/#comments">9 Comments »</a> </p> </div> </div> <div class="post-13529 post type-post status-publish format-standard hentry category-china category-customer-development category-technology category-venture-capital" id="post-13529"> <h2><a href="https://steveblank.com/2013/04/10/china-the-sleeper-awakens/" rel="bookmark">China – The Sleeper Awakens (Part 1 of 5)</a></h2> <div class="postinfo"> Posted on <span class="postdate">April 10, 2013</span> by steve blank </div> <div class="entry"> <p>I just spent a few weeks in Japan and China on a book tour for the <a href="http://www.amazon.co.jp/gp/product/4798128511/ref=s9_simh_gw_p14_d0_i2?pf_rd_m=AN1VRQENFRJN5&pf_rd_s=center-2&pf_rd_r=0PAZ1HB7XD4YSDJZDRBQ&pf_rd_t=101&pf_rd_p=463376756&pf_rd_i=489986" target="_blank">Japanese</a> <a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/japan-bookcover.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13539" data-permalink="https://steveblank.com/2013/04/10/china-the-sleeper-awakens/japan-bookcover/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/japan-bookcover.jpg?fit=836%2C1190&ssl=1" data-orig-size="836,1190" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="Japan bookcover" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/japan-bookcover.jpg?fit=211%2C300&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/japan-bookcover.jpg?fit=468%2C666&ssl=1" class="size-thumbnail wp-image-13539 alignright" alt="Japan bookcover" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/japan-bookcover.jpg?resize=105%2C150" width="105" height="150" /></a>and <a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-bookcover1.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13540" data-permalink="https://steveblank.com/2013/04/10/china-the-sleeper-awakens/china-bookcover-2/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-bookcover1.jpg?fit=747%2C1032&ssl=1" data-orig-size="747,1032" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="China bookcover" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-bookcover1.jpg?fit=217%2C300&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-bookcover1.jpg?fit=468%2C647&ssl=1" class="alignleft size-thumbnail wp-image-13540" alt="China bookcover" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/china-bookcover1.jpg?resize=108%2C150" width="108" height="150" /></a><a href="http://www.amazon.cn/dp/B00AR8T2MC/" target="_blank">Chinese</a> versions of the <i>Startup Owners Manual</i>. In these series of 5 posts, I thought I’d share what I learned in China. My post about Japan will follow. All the usual caveats apply. I was only in China for a week so this a cursory view. Thanks to <a href="http://en.wikipedia.org/wiki/Kai-Fu_Lee">Kai-Fu Lee</a> of Innovation Works, David Lin of Microsoft Accelerator, Frank Hawke of the <a href="http://scpku.stanford.edu/">Stanford Center in Beijing</a>, and my publisher China Machine Press.</p> <p>Summary: I’ve lived in Silicon Valley for 35 years, I’ve taught in entrepreneurial clusters in New York, Boston, Helsinki, Santiago Chile, St. Petersburg, Moscow, Prague, and Tokyo, but the visit to the heart of the Beijing startup world Zhongguancun has truly blown me away.</p> <p>Each of these clusters has wondered how to become the next Silicon Valley. Beijing is already there.</p> <p>———-</p> <p>What a long strange trip China has been through. After the creation of the Peoples Republic of China in 1949, all industry was nationalized, agriculture was collectivized, and the private sector was eliminated. All companies were owned by the state, all planning was centralized, and the state determined the allocation of resources. This was the China I grew up with – the one where private enterprise was a crime and marketing wasn’t a profession.</p> <p>To say China has transformed itself is perhaps the biggest understatement one can make. China has embraced state capitalism in a way Wall Street can only dream about.</p> <p><strong>Startups, Venture Capital and the Communist Party: how did this happen in China?<br /> </strong>The best analogy to describe the relationship of science and technology and the Chinese startup scene is to understand its parallels with the United States during the Cold War with the Soviet Union. During World War II, the U.S. mobilized scientists in a way <a href="http://steveblank.com/2013/01/14/the-endless-frontier-u-s-science-and-national-industrial-policy-part-1/" target="_blank">no other country had</a>. For 45 years – post World War II until the fall of the Soviet Union – the U.S. viewed science and technology as a strategic asset. <a href="http://steveblank.com/2013/01/14/the-endless-frontier-u-s-science-and-national-industrial-policy-part-1/" target="_blank">We made major investments</a> in it, understanding that establishing basic and applied science leadership was necessary for us to build advanced weapons systems to defend our country and deter and if necessary, wage and win a war with the Soviet Union.</p> <p>These investments took the form of building national research organizations, several for basic science (NSF, NIH) and others for applied weapons research (DOD, <a href="http://www.darpa.mil/our_work/" target="_blank">DARPA</a>, DOE, etc.) Research universities also became an <a href="http://steveblank.com/secret-history/">integral part of the military ecosystem</a> as the federal government pumped billions into supporting science.</p> <p>Startups, entrepreneurship and commercial applications are happy byproducts of those military investments. For example, as the semiconductor business started, the largest customers for Fairchild’s and Texas Instruments new integrated circuits were the <a href="http://www.computerhistory.org/semiconductor/timeline/1962-Apollo.html">Apollo Guidance Computer</a> and the <a href="http://www.ti.com/corp/docs/company/history/timeline/defense/1960/docs/62-special_ics.htm">guidance system for the Minuteman II ICBM</a>.</p> <p><strong>China is following the same path.</strong>..<br /> Over the last three decades, to achieve strategic parity with the United States and to construct a modern military, the Chinese have made massive investments in building their science and technology infrastructure. China has gone from a land-based army to one that can support its territorial claims to the South China Sea and Taiwan with anti-access/area-denial weapons. This evolution required a transition, moving from a reliance on the numerical superiority of its land army toward a force boasting sophisticated aircraft and naval platforms, precision- strike weapons, and modern C4SIR (Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance) capabilities. Its <a href="http://www.ausairpower.net/APA-PLA-Second-Artillery-Corps.html">Second Artillery Corps</a> not only controls China’s ICBMs, but also its short range missiles pointed at Taiwan, Vietnam, Philippines, and U.S. bases in Guam and Okinawa. And its new <a href="http://blogs.defensenews.com/intercepts/2013/01/china-tests-carrier-killer-df-21d-missile-sinks-us-aircraft-carrier/">terminally guided ICBMs</a> have put U.S. aircraft carriers in harms way in any regional confrontation. Its air force and navy have gone from a self-defense force to one that can project regional power effectively to the <a href="http://en.wikipedia.org/wiki/First_island_chain">first island chain</a> and beyond.</p> <p><em id="__mceDel"><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/dongfeng-21c-css-5-mod-3.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13543" data-permalink="https://steveblank.com/2013/04/10/china-the-sleeper-awakens/dongfeng-21c-css-5-mod-3/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/dongfeng-21c-css-5-mod-3.jpg?fit=450%2C299&ssl=1" data-orig-size="450,299" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="DongFeng 21C (CSS-5 Mod-3)" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/dongfeng-21c-css-5-mod-3.jpg?fit=300%2C199&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/dongfeng-21c-css-5-mod-3.jpg?fit=450%2C299&ssl=1" class="alignright size-thumbnail wp-image-13543" alt="DongFeng 21C (CSS-5 Mod-3)" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/dongfeng-21c-css-5-mod-3.jpg?resize=150%2C99" width="150" height="99" /></a></em></p> <p>China’s military modernization depends heavily on investments in China’s science and technology infrastructure, reform of its defense industry, <a href="http://www.fas.org/irp/agency/dod/dtra/strategies.pdf">and overt and covert procurement of advanced technology</a> and weapons from abroad.</p> <p><b>Building China’s Science and Technology infrastructure<br /> </b>Science and startups have come a long way since the 1980’s when the Chinese government owned everything and controlled it through a central planning system. But before startups could happen, China’s basic science, technology and finance infrastructure and ecosystem needed to be built. Here’s how a national policy for science and technology emerged.</p> <p>Beginning in the 1982, <a href="http://www.chinaconsulatechicago.org/eng/kj/t31882.htm" target="_blank">China started a series of science and technology programs in five areas:</a> support of basic research, high technology R&D, technology innovation and commercialization, construction of scientific research infrastructure, and development of human resources in science and technology.</p> <p>The majority of the science and technology programs are driven by <a href="http://www.most.gov.cn/eng/index.htm">MOST (Ministry of Science and Technology</a>) and NSFC (National Natural Science Foundation). As we’ll see later, the MOF (Ministry of Finance) also has had a hand in funding new ventures.</p> <p><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/most-logo.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13634" data-permalink="https://steveblank.com/2013/04/10/china-the-sleeper-awakens/most-logo/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/most-logo.jpg?fit=1956%2C272&ssl=1" data-orig-size="1956,272" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="MOST logo" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/most-logo.jpg?fit=300%2C42&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/most-logo.jpg?fit=468%2C65&ssl=1" class="aligncenter size-large wp-image-13634" alt="MOST logo" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/most-logo.jpg?resize=468%2C65" width="468" height="65" /></a>The diagram below from OECD’s <a href="http://www.oecd.org/science/inno/39177453.pdf">Report on China’s Innovation Policy</a> puts the ministries involved in science in context. (Note that it does not show the military technology ministries.)</p> <p><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/most-in-china.jpg"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="13533" data-permalink="https://steveblank.com/2013/04/10/china-the-sleeper-awakens/most-in-china-2/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/most-in-china.jpg?fit=1514%2C1581&ssl=1" data-orig-size="1514,1581" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="MOST in China" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/most-in-china.jpg?fit=287%2C300&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/most-in-china.jpg?fit=468%2C489&ssl=1" class="aligncenter size-large wp-image-13533" alt="MOST in China" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2013/04/most-in-china.jpg?resize=468%2C488" width="468" height="488" /></a></p> <ul> <li><i>Basic research</i>: <a href="http://www.nsfc.gov.cn/Portal0/default166.htm">National Natural Science Foundation</a> (equivalent to the <a href="http://www.nsf.gov">U.S. National Science Foundation</a>,) ~$1.75 billion budget. The <a href="http://www.973.gov.cn/English/Index.aspx">973 program</a> (National Basic Research Program) part of the Ministry of Science and Technology.</li> <li><i>High technology R&D</i>: <a href="http://www.most.gov.cn/eng/programmes1/200610/t20061009_36225.htm">863 Program</a> (State High Technology R&D Program) headed by ex leaders of Chinese strategic weapons programs, and the <a href="http://www.most.gov.cn/eng/programmes1/200610/t20061009_36224.htm">National Key Technology R&D Program</a>.</li> <li><i>Technology innovation and commercialization</i>: <a href="http://gr.china-embassy.org/eng/kxjs/gjjh/t146172.htm">National New Product Program</a>, <a href="http://translate.google.com/translate?u=http%3A%2F%2Fwww.cnsp.org.cn%2F&hl=en&langpair=auto%7Cen&tbb=1&ie=GBK">the Spark program</a> for rural innovation, and probably the most important one for startups in China , the <a href="http://www.ctp.gov.cn/ctp-eng/areas.htm">Torch Program</a></li> <li><i>Science research infrastructure: </i> National Key Laboratories Program, and the MOST program for the construction of research facilities, R&D databases, and a scientific research network</li> <li><i>Development of human resources</i> in science and technology: Programs for attracting returnees or overseas Chinese talent: from the Ministry of Education – the Seed Funds for Returned Overseas Scholars, Chunhui Program, and the Cheung Kong Scholar Program. From the Ministry of Personnel – the Hundred Talents Program. From the National Science Foundation – the National Distinguished Young Scholars Program.</li> </ul> <p><a href="http://steveblank.com/2013/04/11/chinas-torch-program-the-glow-that-can-light-the-world-part-2-of-5/" target="_blank">Part two the next post, describes China’s Torch Program</a>, the largest government-run entrepreneurial program in the world.</p> <p><strong>Lessons Learned</strong></p> <blockquote> <ul> <li>China is working to build basic and applied science and technology leadership</li> <li>Like the U.S. and the Soviet Union in the Cold War they are using science and technology to build advanced weapons systems</li> <li>Technology startups are a side effect from these investments</li> </ul> </blockquote> <p>Listen to the post here: or download the podcast <a href="http://clearshore.net" target="_blank">here</a></p> <div class="sharedaddy sd-sharing-enabled"><div class="robots-nocontent sd-block sd-social sd-social-official sd-sharing"><h3 class="sd-title">Share this:</h3><div class="sd-content"><ul><li class="share-print"><a rel="nofollow noopener noreferrer" data-shared="" class="share-print sd-button" href="https://steveblank.com/2013/04/10/china-the-sleeper-awakens/" target="_blank" title="Click to print" ><span>Print</span></a></li><li class="share-email"><a rel="nofollow noopener noreferrer" data-shared="" class="share-email sd-button" href="mailto:?subject=%5BShared%20Post%5D%20China%20%E2%80%93%20The%20Sleeper%20Awakens%20%28Part%201%20of%205%29&body=https%3A%2F%2Fsteveblank.com%2F2013%2F04%2F10%2Fchina-the-sleeper-awakens%2F&share=email" target="_blank" title="Click to email a link to a friend" data-email-share-error-title="Do you have email set up?" data-email-share-error-text="If you're having problems sharing via email, you might not have email set up for your browser. You may need to create a new email yourself." data-email-share-nonce="78586e95f9" data-email-share-track-url="https://steveblank.com/2013/04/10/china-the-sleeper-awakens/?share=email"><span>Email</span></a></li><li class="share-facebook"><div class="fb-share-button" data-href="https://steveblank.com/2013/04/10/china-the-sleeper-awakens/" data-layout="button_count"></div></li><li class="share-twitter"><a href="https://twitter.com/share" class="twitter-share-button" data-url="https://steveblank.com/2013/04/10/china-the-sleeper-awakens/" data-text="China – The Sleeper Awakens (Part 1 of 5)" >Tweet</a></li><li class="share-linkedin"><div class="linkedin_button"><script type="in/share" data-url="https://steveblank.com/2013/04/10/china-the-sleeper-awakens/" data-counter="right"></script></div></li><li class="share-reddit"><a rel="nofollow noopener noreferrer" data-shared="" class="share-reddit sd-button" href="https://steveblank.com/2013/04/10/china-the-sleeper-awakens/?share=reddit" target="_blank" title="Click to share on Reddit" ><span>Reddit</span></a></li><li class="share-jetpack-whatsapp"><a rel="nofollow noopener noreferrer" data-shared="" class="share-jetpack-whatsapp sd-button" href="https://steveblank.com/2013/04/10/china-the-sleeper-awakens/?share=jetpack-whatsapp" target="_blank" title="Click to share on WhatsApp" ><span>WhatsApp</span></a></li><li class="share-pinterest"><div class="pinterest_button"><a href="https://www.pinterest.com/pin/create/button/?url=https%3A%2F%2Fsteveblank.com%2F2013%2F04%2F10%2Fchina-the-sleeper-awakens%2F&media=http%3A%2F%2Fsteveblank.com%2Fwp-content%2Fuploads%2F2013%2F04%2Fjapan-bookcover.jpg%3Fw%3D105&description=China%20%E2%80%93%20The%20Sleeper%20Awakens%20%28Part%201%20of%205%29" data-pin-do="buttonPin" data-pin-config="beside"><img data-recalc-dims="1" src="https://i0.wp.com/assets.pinterest.com/images/pidgets/pinit_fg_en_rect_gray_20.png?w=468" /></a></div></li><li class="share-telegram"><a rel="nofollow noopener noreferrer" data-shared="" class="share-telegram sd-button" href="https://steveblank.com/2013/04/10/china-the-sleeper-awakens/?share=telegram" target="_blank" title="Click to share on Telegram" ><span>Telegram</span></a></li><li class="share-tumblr"><a class="tumblr-share-button" target="_blank" href="https://www.tumblr.com/share" data-title="China – The Sleeper Awakens (Part 1 of 5)" data-content="https://steveblank.com/2013/04/10/china-the-sleeper-awakens/" title="Share on Tumblr"data-posttype="link">Share on Tumblr</a></li><li class="share-pocket"><div class="pocket_button"><a href="https://getpocket.com/save" class="pocket-btn" data-lang="en" data-save-url="https://steveblank.com/2013/04/10/china-the-sleeper-awakens/" data-pocket-count="horizontal" >Pocket</a></div></li><li class="share-end"></li></ul></div></div></div><div class='sharedaddy sd-block sd-like jetpack-likes-widget-wrapper jetpack-likes-widget-unloaded' id='like-post-wrapper-6599589-13529-673e47a6c7a66' data-src='https://widgets.wp.com/likes/?ver=14.1-a.3#blog_id=6599589&post_id=13529&origin=steveblank.com&obj_id=6599589-13529-673e47a6c7a66&n=1' data-name='like-post-frame-6599589-13529-673e47a6c7a66' data-title='Like or Reblog'><h3 class="sd-title">Like this:</h3><div class='likes-widget-placeholder post-likes-widget-placeholder' style='height: 55px;'><span class='button'><span>Like</span></span> <span class="loading">Loading...</span></div><span class='sd-text-color'></span><a class='sd-link-color'></a></div> <p class="postinfo"> Filed under: <a href="https://steveblank.com/category/china/" rel="category tag">China</a>, <a href="https://steveblank.com/category/customer-development/" rel="category tag">Customer Development</a>, <a href="https://steveblank.com/category/technology/" rel="category tag">Technology</a>, <a href="https://steveblank.com/category/venture-capital/" rel="category tag">Venture Capital</a> | <a href="https://steveblank.com/2013/04/10/china-the-sleeper-awakens/#comments">25 Comments »</a> </p> </div> </div> <div class="browse"></div> </div> </div></div> <div class="sidebar"> <ul> <li><h2>Calendar</h2> <ul> <li><table id="wp-calendar" class="wp-calendar-table"> <caption>April 2013</caption> <thead> <tr> <th scope="col" title="Monday">M</th> <th scope="col" title="Tuesday">T</th> <th scope="col" title="Wednesday">W</th> <th scope="col" title="Thursday">T</th> <th scope="col" title="Friday">F</th> <th scope="col" title="Saturday">S</th> <th scope="col" title="Sunday">S</th> </tr> </thead> <tbody> <tr><td>1</td><td>2</td><td>3</td><td>4</td><td>5</td><td>6</td><td>7</td> </tr> <tr> <td>8</td><td>9</td><td><a href="https://steveblank.com/2013/04/10/" aria-label="Posts published on April 10, 2013">10</a></td><td><a href="https://steveblank.com/2013/04/11/" aria-label="Posts published on April 11, 2013">11</a></td><td><a href="https://steveblank.com/2013/04/12/" aria-label="Posts published on April 12, 2013">12</a></td><td><a href="https://steveblank.com/2013/04/13/" aria-label="Posts published on April 13, 2013">13</a></td><td><a href="https://steveblank.com/2013/04/14/" aria-label="Posts published on April 14, 2013">14</a></td> </tr> <tr> <td>15</td><td><a href="https://steveblank.com/2013/04/16/" aria-label="Posts published on April 16, 2013">16</a></td><td>17</td><td>18</td><td>19</td><td>20</td><td>21</td> </tr> <tr> <td>22</td><td>23</td><td>24</td><td>25</td><td>26</td><td>27</td><td>28</td> </tr> <tr> <td><a href="https://steveblank.com/2013/04/29/" aria-label="Posts published on April 29, 2013">29</a></td><td>30</td> <td class="pad" colspan="5"> </td> </tr> </tbody> </table><nav aria-label="Previous and next months" class="wp-calendar-nav"> <span class="wp-calendar-nav-prev"><a href="https://steveblank.com/2013/03/">« Mar</a></span> <span class="pad"> </span> <span class="wp-calendar-nav-next"><a href="https://steveblank.com/2013/05/">May »</a></span> </nav></li> </ul> </li> <li id="linkcat-697967627" class="linkcat"><h2>Customer Development</h2> <ul class='xoxo blogroll'> <li><a href="http://www.slideshare.net/sblank" rel="noopener" target="_blank">Customer Development Methodology – slides</a></li> <li><a href="http://startuplessonslearned.blogspot.com/search?q=%22customer+development%22" rel="noopener" target="_blank">Eric Ries on Customer Development</a></li> <li><a href="http://www.amazon.com/Four-Steps-Epiphany-Steven-Blank/dp/0976470705" rel="noopener" title="My book about Customer Development and more" target="_blank">Four Steps to the Epiphany – the book</a></li> <li><a href="http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2048" rel="noopener" target="_blank">Stanford Entrepreneurial Leadership Talks by Steve Blank</a></li> <li><a href="http://www.slideshare.net/startuplessonslearned/lean-startup-presentation-to-maples-investments-by-steve-blank-and-eric-ries-presentation" rel="noopener" target="_blank">The Lean Startup by Eric Ries & Steve Blank – slides</a></li> </ul> </li> <li id="linkcat-697967628" class="linkcat"><h2>Secret History of Silicon Valley</h2> <ul class='xoxo blogroll'> <li><a href="http://www.slideshare.net/sblank/secret-history-of-silicon-valley-rev-4-dec-09" rel="noopener" target="_blank">The Secret History of Silicon Valley – Dec 2009 slides</a></li> <li><a href="http://www.youtube.com/watch?v=ZTC_RxWN_xo" rel="noopener" title="Recorded at the Computer History Museum Nov. 20, 2008" target="_blank">The Secret History of Silicon Valley – video</a></li> </ul> </li> </ul> </div> </div> <div id="footer"> <p><a href="https://wordpress.com/?ref=footer_custom_powered">Powered by WordPress.com</a>. WP Designer.</p> </div> </div> </div>  <script defer id="bilmur" data-customproperties="{"woo_active":"0"}" data-provider="wordpress.com" data-service="atomic" src="https://s0.wp.com/wp-content/js/bilmur.min.js?m=202447"></script> <div id="jp-carousel-loading-overlay"> <div id="jp-carousel-loading-wrapper"> <span id="jp-carousel-library-loading"> </span> </div> </div> <div class="jp-carousel-overlay" style="display: none;"> <div class="jp-carousel-container">  <div class="jp-carousel-wrap swiper-container jp-carousel-swiper-container jp-carousel-transitions" itemscope itemtype="https://schema.org/ImageGallery"> <div class="jp-carousel swiper-wrapper"></div> <div class="jp-swiper-button-prev swiper-button-prev"> <svg width="25" height="24" viewBox="0 0 25 24" fill="none" xmlns="http://www.w3.org/2000/svg"> <mask id="maskPrev" mask-type="alpha" maskUnits="userSpaceOnUse" x="8" y="6" width="9" height="12"> <path d="M16.2072 16.59L11.6496 12L16.2072 7.41L14.8041 6L8.8335 12L14.8041 18L16.2072 16.59Z" fill="white"/> </mask> <g mask="url(#maskPrev)"> <rect x="0.579102" width="23.8823" height="24" fill="#FFFFFF"/> </g> </svg> </div> <div class="jp-swiper-button-next swiper-button-next"> <svg width="25" height="24" viewBox="0 0 25 24" fill="none" xmlns="http://www.w3.org/2000/svg"> <mask id="maskNext" mask-type="alpha" maskUnits="userSpaceOnUse" x="8" y="6" width="8" height="12"> <path d="M8.59814 16.59L13.1557 12L8.59814 7.41L10.0012 6L15.9718 12L10.0012 18L8.59814 16.59Z" fill="white"/> </mask> <g mask="url(#maskNext)"> <rect x="0.34375" width="23.8822" height="24" fill="#FFFFFF"/> </g> </svg> </div> </div>  <div class="jp-carousel-close-hint"> <svg width="25" height="24" viewBox="0 0 25 24" fill="none" xmlns="http://www.w3.org/2000/svg"> <mask id="maskClose" mask-type="alpha" maskUnits="userSpaceOnUse" x="5" y="5" width="15" height="14"> <path d="M19.3166 6.41L17.9135 5L12.3509 10.59L6.78834 5L5.38525 6.41L10.9478 12L5.38525 17.59L6.78834 19L12.3509 13.41L17.9135 19L19.3166 17.59L13.754 12L19.3166 6.41Z" fill="white"/> </mask> <g mask="url(#maskClose)"> <rect x="0.409668" width="23.8823" height="24" fill="#FFFFFF"/> </g> </svg> </div>  <div class="jp-carousel-info"> <div class="jp-carousel-info-footer"> <div class="jp-carousel-pagination-container"> <div class="jp-swiper-pagination swiper-pagination"></div> <div class="jp-carousel-pagination"></div> </div> <div class="jp-carousel-photo-title-container"> <h2 class="jp-carousel-photo-caption"></h2> </div> <div class="jp-carousel-photo-icons-container"> <a href="#" class="jp-carousel-icon-btn jp-carousel-icon-info" aria-label="Toggle photo metadata visibility"> <span class="jp-carousel-icon"> <svg width="25" height="24" viewBox="0 0 25 24" fill="none" xmlns="http://www.w3.org/2000/svg"> <mask id="maskInfo" mask-type="alpha" maskUnits="userSpaceOnUse" x="2" y="2" width="21" height="20"> <path fill-rule="evenodd" clip-rule="evenodd" d="M12.7537 2C7.26076 2 2.80273 6.48 2.80273 12C2.80273 17.52 7.26076 22 12.7537 22C18.2466 22 22.7046 17.52 22.7046 12C22.7046 6.48 18.2466 2 12.7537 2ZM11.7586 7V9H13.7488V7H11.7586ZM11.7586 11V17H13.7488V11H11.7586ZM4.79292 12C4.79292 16.41 8.36531 20 12.7537 20C17.142 20 20.7144 16.41 20.7144 12C20.7144 7.59 17.142 4 12.7537 4C8.36531 4 4.79292 7.59 4.79292 12Z" fill="white"/> </mask> <g mask="url(#maskInfo)"> <rect x="0.8125" width="23.8823" height="24" fill="#FFFFFF"/> </g> </svg> </span> </a> <a href="#" class="jp-carousel-icon-btn jp-carousel-icon-comments" aria-label="Toggle photo comments visibility"> <span class="jp-carousel-icon"> <svg width="25" height="24" viewBox="0 0 25 24" fill="none" xmlns="http://www.w3.org/2000/svg"> <mask id="maskComments" mask-type="alpha" maskUnits="userSpaceOnUse" x="2" y="2" width="21" height="20"> <path fill-rule="evenodd" clip-rule="evenodd" d="M4.3271 2H20.2486C21.3432 2 22.2388 2.9 22.2388 4V16C22.2388 17.1 21.3432 18 20.2486 18H6.31729L2.33691 22V4C2.33691 2.9 3.2325 2 4.3271 2ZM6.31729 16H20.2486V4H4.3271V18L6.31729 16Z" fill="white"/> </mask> <g mask="url(#maskComments)"> <rect x="0.34668" width="23.8823" height="24" fill="#FFFFFF"/> </g> </svg> <span class="jp-carousel-has-comments-indicator" aria-label="This image has comments."></span> </span> </a> </div> </div> <div class="jp-carousel-info-extra"> <div class="jp-carousel-info-content-wrapper"> <div class="jp-carousel-photo-title-container"> <h2 class="jp-carousel-photo-title"></h2> </div> <div class="jp-carousel-comments-wrapper"> <div id="jp-carousel-comments-loading"> <span>Loading Comments...</span> </div> <div class="jp-carousel-comments"></div> <div id="jp-carousel-comment-form-container"> <span id="jp-carousel-comment-form-spinner"> </span> <div id="jp-carousel-comment-post-results"></div> <form id="jp-carousel-comment-form"> <label for="jp-carousel-comment-form-comment-field" class="screen-reader-text">Write a Comment...</label> <textarea name="comment" class="jp-carousel-comment-form-field jp-carousel-comment-form-textarea" id="jp-carousel-comment-form-comment-field" placeholder="Write a Comment..." ></textarea> <div id="jp-carousel-comment-form-submit-and-info-wrapper"> <div id="jp-carousel-comment-form-commenting-as"> <fieldset> <label for="jp-carousel-comment-form-email-field">Email</label> <input type="text" name="email" class="jp-carousel-comment-form-field jp-carousel-comment-form-text-field" id="jp-carousel-comment-form-email-field" /> </fieldset> <fieldset> <label for="jp-carousel-comment-form-author-field">Name</label> <input type="text" name="author" class="jp-carousel-comment-form-field jp-carousel-comment-form-text-field" id="jp-carousel-comment-form-author-field" /> </fieldset> <fieldset> <label for="jp-carousel-comment-form-url-field">Website</label> <input type="text" name="url" class="jp-carousel-comment-form-field jp-carousel-comment-form-text-field" id="jp-carousel-comment-form-url-field" /> </fieldset> </div> <input type="submit" name="submit" class="jp-carousel-comment-form-button" id="jp-carousel-comment-form-button-submit" value="Post Comment" /> </div> </form> </div> </div> <div class="jp-carousel-image-meta"> <div class="jp-carousel-title-and-caption"> <div class="jp-carousel-photo-info"> <h3 class="jp-carousel-caption" itemprop="caption description"></h3> </div> <div class="jp-carousel-photo-description"></div> </div> <ul class="jp-carousel-image-exif" style="display: none;"></ul> <a class="jp-carousel-image-download" href="#" target="_blank" style="display: none;"> <svg width="25" height="24" viewBox="0 0 25 24" fill="none" xmlns="http://www.w3.org/2000/svg"> <mask id="mask0" mask-type="alpha" maskUnits="userSpaceOnUse" x="3" y="3" width="19" height="18"> <path fill-rule="evenodd" clip-rule="evenodd" d="M5.84615 5V19H19.7775V12H21.7677V19C21.7677 20.1 20.8721 21 19.7775 21H5.84615C4.74159 21 3.85596 20.1 3.85596 19V5C3.85596 3.9 4.74159 3 5.84615 3H12.8118V5H5.84615ZM14.802 5V3H21.7677V10H19.7775V6.41L9.99569 16.24L8.59261 14.83L18.3744 5H14.802Z" fill="white"/> </mask> <g mask="url(#mask0)"> <rect x="0.870605" width="23.8823" height="24" fill="#FFFFFF"/> </g> </svg> <span class="jp-carousel-download-text"></span> </a> <div class="jp-carousel-image-map" style="display: none;"></div> </div> </div> </div> </div> </div> </div> <script type="text/javascript"> window.WPCOM_sharing_counts = {"https:\/\/steveblank.com\/2013\/04\/29\/fly-high\/":13785,"https:\/\/steveblank.com\/2013\/04\/16\/when-hell-froze-over-in-the-harvard-business-review\/":13746,"https:\/\/steveblank.com\/2013\/04\/14\/china-startups-the-gold-rush\/":13608,"https:\/\/steveblank.com\/2013\/04\/13\/zhongguancun-in-beijing-chinas-silicon-valley-part-4-of-5\/":13598,"https:\/\/steveblank.com\/2013\/04\/12\/the-rise-of-chinese-venture-capital\/":13584,"https:\/\/steveblank.com\/2013\/04\/11\/chinas-torch-program-the-glow-that-can-light-the-world-part-2-of-5\/":13557,"https:\/\/steveblank.com\/2013\/04\/10\/china-the-sleeper-awakens\/":13529}; </script> <div id="fb-root"></div> <script>(function(d, s, id) { var js, fjs = d.getElementsByTagName(s)[0]; if (d.getElementById(id)) return; js = d.createElement(s); js.id = id; js.src = 'https://connect.facebook.net/en_US/sdk.js#xfbml=1&appId=249643311490&version=v2.3'; fjs.parentNode.insertBefore(js, fjs); }(document, 'script', 'facebook-jssdk'));</script> <script> document.body.addEventListener( 'is.post-load', function() { if ( 'undefined' !== typeof FB ) { FB.XFBML.parse(); } } ); </script> <script>!function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0],p=/^http:/.test(d.location)?'http':'https';if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src=p+'://platform.twitter.com/widgets.js';fjs.parentNode.insertBefore(js,fjs);}}(document, 'script', 'twitter-wjs');</script> <script type="text/javascript"> ( function () { var currentScript = document.currentScript; // Helper function to load an external script. function loadScript( url, cb ) { var script = document.createElement( 'script' ); var prev = currentScript || document.getElementsByTagName( 'script' )[ 0 ]; script.setAttribute( 'async', true ); script.setAttribute( 'src', url ); prev.parentNode.insertBefore( script, prev ); script.addEventListener( 'load', cb ); } function init() { loadScript( 'https://platform.linkedin.com/in.js?async=true', function () { if ( typeof IN !== 'undefined' ) { IN.init(); } } ); } if ( document.readyState === 'loading' ) { document.addEventListener( 'DOMContentLoaded', init ); } else { init(); } document.body.addEventListener( 'is.post-load', function() { if ( typeof IN !== 'undefined' ) { IN.parse(); } } ); } )(); </script> <script type="text/javascript"> ( function () { // Pinterest shared resources var s = document.createElement( 'script' ); s.type = 'text/javascript'; s.async = true; s.setAttribute( 'data-pin-hover', true ); s.src = window.location.protocol + '//assets.pinterest.com/js/pinit.js'; var x = document.getElementsByTagName( 'script' )[ 0 ]; x.parentNode.insertBefore(s, x); // if 'Pin it' button has 'counts' make container wider function init() { var shares = document.querySelectorAll( 'li.share-pinterest' ); for ( var i = 0; i < shares.length; i++ ) { var share = shares[ i ]; var countElement = share.querySelector( 'a span' ); if (countElement) { var countComputedStyle = window.getComputedStyle(countElement); if ( countComputedStyle.display === 'block' ) { var countWidth = parseInt( countComputedStyle.width, 10 ); share.style.marginRight = countWidth + 11 + 'px'; } } } } if ( document.readyState !== 'complete' ) { document.addEventListener( 'load', init ); } else { init(); } } )(); </script> <script id="tumblr-js" type="text/javascript" src="https://assets.tumblr.com/share-button.js"></script> <script> ( function () { var currentScript = document.currentScript; // Don't use Pocket's default JS as it we need to force init new Pocket share buttons loaded via JS. function jetpack_sharing_pocket_init() { var script = document.createElement( 'script' ); var prev = currentScript || document.getElementsByTagName( 'script' )[ 0 ]; script.setAttribute( 'async', true ); script.setAttribute( 'src', 'https://widgets.getpocket.com/v1/j/btn.js?v=1' ); prev.parentNode.insertBefore( script, prev ); } if ( document.readyState === 'loading' ) { document.addEventListener( 'DOMContentLoaded', jetpack_sharing_pocket_init ); } else { jetpack_sharing_pocket_init(); } document.body.addEventListener( 'is.post-load', jetpack_sharing_pocket_init ); } )(); </script> <script type="text/javascript" id="jetpack-carousel-js-extra"> /* <![CDATA[ */ var jetpackSwiperLibraryPath = {"url":"https:\/\/steveblank.com\/wp-content\/plugins\/jetpack\/_inc\/build\/carousel\/swiper-bundle.min.js"}; var jetpackCarouselStrings = {"widths":[370,700,1000,1200,1400,2000],"is_logged_in":"","lang":"en","ajaxurl":"https:\/\/steveblank.com\/wp-admin\/admin-ajax.php","nonce":"d9a6f3ace7","display_exif":"1","display_comments":"1","single_image_gallery":"1","single_image_gallery_media_file":"","background_color":"black","comment":"Comment","post_comment":"Post Comment","write_comment":"Write a Comment...","loading_comments":"Loading Comments...","image_label":"Open image in full-screen.","download_original":"View full size <span class=\"photo-size\">{0}<span class=\"photo-size-times\">\u00d7<\/span>{1}<\/span>","no_comment_text":"Please be sure to submit some text with your comment.","no_comment_email":"Please provide an email address to comment.","no_comment_author":"Please provide your name to comment.","comment_post_error":"Sorry, but there was an error posting your comment. Please try again later.","comment_approved":"Your comment was approved.","comment_unapproved":"Your comment is in moderation.","camera":"Camera","aperture":"Aperture","shutter_speed":"Shutter Speed","focal_length":"Focal Length","copyright":"Copyright","comment_registration":"0","require_name_email":"0","login_url":"https:\/\/steveblank.com\/wp-login.php?redirect_to=https%3A%2F%2Fsteveblank.com%2F2013%2F04%2F29%2Ffly-high%2F","blog_id":"1","meta_data":["camera","aperture","shutter_speed","focal_length","copyright"]}; /* ]]> */ </script> <script type='text/javascript' src='https://steveblank.com/_static/??-eJyVzM0OgjAQBOAXsmwVf07GRzGl3eC2y1JpN4S3h4NcjR5nJvPN2fhRKkqFzNqTFIhYs/MJniQeOiUO4N00akHeN7MXzUDSxHKYf2IqMQbTO2aclm/pP5YpYYG3ouLLSdiAz/8x3I+31p7s9XK2KyLnV3k='></script> <script type="text/javascript" src="https://stats.wp.com/e-202447.js" id="jetpack-stats-js" data-wp-strategy="defer"></script> <script type="text/javascript" id="jetpack-stats-js-after"> /* <![CDATA[ */ _stq = window._stq || []; _stq.push([ "view", JSON.parse("{\"v\":\"ext\",\"blog\":\"6599589\",\"post\":\"0\",\"tz\":\"-8\",\"srv\":\"steveblank.com\",\"hp\":\"atomic\",\"ac\":\"2\",\"amp\":\"0\",\"j\":\"1:14.1-a.3\"}") ]); _stq.push([ "clickTrackerInit", "6599589", "0" ]); /* ]]> */ </script> <script type="text/javascript" id="sharing-js-js-extra"> /* <![CDATA[ */ var sharing_js_options = {"lang":"en","counts":"1","is_stats_active":"1"}; /* ]]> */ </script> <script type="text/javascript" src="https://steveblank.com/wp-content/plugins/jetpack/_inc/build/sharedaddy/sharing.min.js?ver=14.1-a.3" id="sharing-js-js"></script> <script type="text/javascript" id="sharing-js-js-after"> /* <![CDATA[ */ var windowOpen; ( function () { function matches( el, sel ) { return !! ( el.matches && el.matches( sel ) || el.msMatchesSelector && el.msMatchesSelector( sel ) ); } document.body.addEventListener( 'click', function ( event ) { if ( ! event.target ) { return; } var el; if ( matches( event.target, 'a.share-facebook' ) ) { el = event.target; } else if ( event.target.parentNode && matches( event.target.parentNode, 'a.share-facebook' ) ) { el = event.target.parentNode; } if ( el ) { event.preventDefault(); // If there's another sharing window open, close it. if ( typeof windowOpen !== 'undefined' ) { windowOpen.close(); } windowOpen = window.open( el.getAttribute( 'href' ), 'wpcomfacebook', 'menubar=1,resizable=1,width=600,height=400' ); return false; } } ); } )(); var windowOpen; ( function () { function matches( el, sel ) { return !! ( el.matches && el.matches( sel ) || el.msMatchesSelector && el.msMatchesSelector( sel ) ); } document.body.addEventListener( 'click', function ( event ) { if ( ! event.target ) { return; } var el; if ( matches( event.target, 'a.share-telegram' ) ) { el = event.target; } else if ( event.target.parentNode && matches( event.target.parentNode, 'a.share-telegram' ) ) { el = event.target.parentNode; } if ( el ) { event.preventDefault(); // If there's another sharing window open, close it. if ( typeof windowOpen !== 'undefined' ) { windowOpen.close(); } windowOpen = window.open( el.getAttribute( 'href' ), 'wpcomtelegram', 'menubar=1,resizable=1,width=450,height=450' ); return false; } } ); } )(); /* ]]> */ </script> <iframe src='https://widgets.wp.com/likes/master.html?ver=20241120#ver=20241120&n=1' scrolling='no' id='likes-master' name='likes-master' style='display:none;'></iframe> <div id='likes-other-gravatars' class='wpl-new-layout' role="dialog" aria-hidden="true" tabindex="-1"><div class="likes-text"><span>%d</span></div><ul class="wpl-avatars sd-like-gravatars"></ul></div> </body> </html>