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Steve Blank Innovation and Entrepreneurship November 2014
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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> <!-- End Obar --> <div class="narrowcolumnwrapper"><div class="narrowcolumn"> <div id="content" class="content"> <div class="post-17776 post type-post status-publish format-standard hentry category-lean-launchpad category-nsf-national-science-foundation category-teaching" id="post-17776"> <h2><a href="https://steveblank.com/2014/11/20/impact-nyu-scales-the-lean-launchpad/" rel="bookmark">Impact! NYU Scales the Lean LaunchPad</a></h2> <div class="postinfo"> Posted on <span class="postdate">November 20, 2014</span> by steve blank </div> <div class="entry"> <p>NYU has adopted the Lean LaunchPad<sup>®</sup> class as a standard entrepreneurship course across twelve different schools/colleges within the University. Over 1,000 students a year are learning lean startup concepts.</p> <p>Impact!<a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2014/11/shutterstock_132023192.jpg?ssl=1"><img data-recalc-dims="1" fetchpriority="high" decoding="async" data-attachment-id="17778" data-permalink="https://steveblank.com/2014/11/20/impact-nyu-scales-the-lean-launchpad/shutterstock_132023192/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2014/11/shutterstock_132023192.jpg?fit=690%2C1000&ssl=1" data-orig-size="690,1000" 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":"","orientation":"0"}" data-image-title="shutterstock_132023192" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2014/11/shutterstock_132023192.jpg?fit=207%2C300&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2014/11/shutterstock_132023192.jpg?fit=468%2C678&ssl=1" class="alignright size-medium wp-image-17778" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2014/11/shutterstock_132023192.jpg?resize=207%2C300&ssl=1" alt="shutterstock_132023192" width="207" height="300" /></a></p> <p>—–</p> <p>In August 2011 I received an email from someone at NYU I never heard of. Frank Rimalovski, the Executive Director of the <a href="http://nyu.edu/entrepreneur" target="_blank">NYU Entrepreneurial Institute</a>, had just read about the National Science Foundation <a href="http://www.nsf.gov/news/special_reports/i-corps/" target="_blank">Innovation Corps</a> (I-Corps) in <a href="http://steveblank.com/2011/07/28/eureka-a-new-era-for-scientists-and-engineers/" target="_blank">my blog</a>, and he absolutely had to meet me. To Frank’s credit he wouldn’t take no for an answer. When I said, “I’m too busy,” Frank said he’d fly out to fit into my schedule. When I said, “I’m at my ranch on the coast,” Frank promised to drive to Santa Cruz as soon as he get off the plane.</p> <p>I figured any academic who was as persistent as an entrepreneur had earned my time.</p> <p>So we met, and I learned a lot. First, I learned that Frank was not your typical academic. He was a career VC, now at NYU and charged with building an entrepreneurial ecosystem across the university. Frank’s goal in the meeting was to figure out how to ensure that NYU would be one of the new universities selected when the National Science Foundation scaled the <a href="http://www.nsf.gov/news/special_reports/i-corps/" target="_blank">Innovation Corps</a> nationally. (The Innovation Corps, or I-Corps for short, is my Stanford <a href="http://steveblank.com/category/lean-launchpad/" target="_blank">Lean LaunchPad</a> class offered by the National Science Foundation to our leading scientists. The Lean LaunchPad class teaches students how to build a Lean Startup using business model design, customer development and agile engineering. Teams have to get out of the building and talk to 10-15 customers a week.) I gave Frank the same advice I offered all the other universities who asked. But the difference was that Frank took it and made it part of the NYU proposal.</p> <p>In 2012 NYU partnered with the City University of NY (CUNY) and Columbia University, and in early 2013 they won a grant from the National Science Foundation to build the Innovation Corps in New York City and jointly create the the <a href="http://nycrin.org/" target="_blank">NYC Regional Innovation Node</a> (NYCRIN).</p> <p><strong>Spend it Wisely<br /> </strong>As part of the National Science Foundation I-Corps program, NYU was responsible for training our country’s top scientists – and they’ve taught 170 of them so far.</p> <p>But what NYU did with the rest of their grant dollars was simply brilliant. Over the last two years they used part of the National Science Foundation funds to send eight NYU faculty to California attend <a href="http://venturewell.org/lean-launchpad/" target="_blank">the Lean LaunchPad Educators program</a>. (The Educators Program is a 2½ day class that teaches faculty how to create and teach their own Lean LaunchPad class.) In exchange the faculty had to agree to teach a Lean LaunchPad class at NYU within the next year. Unbelievably, they’ve delivered – and more. By this spring there will be 9 different Lean LaunchPad classes with 12 NYU instructors (and several more gearing up) teaching Lean at 12 of the schools/colleges within NYU. Some of these were brand new classes while others adapted existing business, design and engineering curricula to utilize the Lean approach.</p> <p><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2014/11/nyu-lean-2.jpg?ssl=1"><img data-recalc-dims="1" decoding="async" data-attachment-id="17793" data-permalink="https://steveblank.com/2014/11/20/impact-nyu-scales-the-lean-launchpad/nyu-lean-2/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2014/11/nyu-lean-2.jpg?fit=1617%2C897&ssl=1" data-orig-size="1617,897" 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":"","orientation":"1"}" data-image-title="NYU Lean 2" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2014/11/nyu-lean-2.jpg?fit=300%2C166&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2014/11/nyu-lean-2.jpg?fit=468%2C260&ssl=1" class="aligncenter size-large wp-image-17793" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2014/11/nyu-lean-2.jpg?resize=468%2C259&ssl=1" alt="NYU Lean 2" width="468" height="259" /></a></p> <p><strong>Spread it Widely<br /> </strong>In two short years, the Lean LaunchPad has had a major impact on teaching entrepreneurship at NYU. Starting this year all 750 incoming freshman at the NYU Polytechnic School of Engineering take the required <em>Innovation and Technology Forum</em> class. The class has been updated to cover the key elements of the Lean Startup (customer development, customer segments & value propositions, product/market fit, and minimal viable products)!</p> <p>In addition, 165 students from twelve different schools/colleges within the University took the full Lean LaunchPad class this year. And in each of the past two summers 10 teams with 30 students participated in the <a href="http://www.nyu.edu/about/university-initiatives/entrepreneurship-at-nyu/accelerate/nyu-summer-launchpad.html" target="_blank">NYU Summer Launchpad</a> accelerator program. Frank even convinced me to come to New York and teach a five-day 10-hour-a-day Lean LaunchPad class with him and his team each August.</p> <p><strong>Student Impact<br /> </strong>While classes offered and curriculums built are impressive, what really matters is whether we had any impact on the students. Did we open new eyes? Encourage new startups? Change lives? To my surprise the impact has been clear and immediate. A few of the students wrote blogs about their experience in the classes. Here are a a few quotes that stand out:</p> <p>Tlacael Esparza recently received his masters in music tech from NYU Steinhardt and is the co-founder of <a href="http://www.sensorypercussion.com/" target="_blank">Sensory Percussion</a>. <i>“…I found the idea of doing 10-15 customer interviews a week daunting and distracting. How can I commit to “getting out of the building” when I have so much more work to do building and improving our first product? … However, going through the customer development process showed me the danger in that kind of thinking. In talking to musicians and music producers…there was a lot to be learned about how our competitors’ products are perceived and used and how Sensory Percussion would fit into the current eco-system.”</i> Read Tlacael’s blog post about his Summer Launchpad experience <a href="http://www.nyuentrepreneur.com/lessons-learned-do-customer-interviews-even-when-you-dont-think-you-need-to/" target="_blank">here</a>.</p> <p><span style="line-height:1.5;">Fang-Ke Huang is a postdoctoral fellow in </span><a style="line-height:1.5;" href="http://www.med.nyu.edu/" target="_blank">NYU Langone Medical Center</a><span style="line-height:1.5;">, applying the </span><a style="line-height:1.5;" href="http://en.wikipedia.org/wiki/Proteomics" target="_blank">proteomic approach</a><span style="line-height:1.5;"> to understand the brain’s functionalities such as learning and memory.</span><em style="line-height:1.5;"> “</em><span style="line-height:1.5;">…</span><em style="line-height:1.5;">(The) class taught me not only the importance of customers, but also the application of the scientific method to the business model..</em><span style="line-height:1.5;">.I</span><em style="line-height:1.5;"> also learned that an entrepreneur should have a productive attitude towards setbacks. …, I started to view setbacks as a chance for feedback and as opportunities to redirect my efforts</em><span style="line-height:1.5;">.” Fang-Ke’s blog about the class is </span><a style="line-height:1.5;" href="http://www.nyuentrepreneur.com/lessons-learned-a-startups-secret-weapon-customers/" target="_blank">here</a><span style="line-height:1.5;">.</span></p> <p><strong>Make it Better<br /> </strong>Last but not least, Frank thought that neither the <a href="http://www.amazon.com/gp/product/0989200507/ref=as_li_tf_tl?ie=UTF8&camp=1789&creative=9325&creativeASIN=0989200507&linkCode=as2&tag=wwwsteveblank-20" target="_blank">Four Steps to the Epiphany</a> nor the <a href="http://www.amazon.com/gp/product/0984999302/ref=as_li_tf_tl?ie=UTF8&tag=wwwsteveblank-20&linkCode=as2&camp=1789&creative=9325&creativeASIN=0984999302" target="_blank">Startup Owners Manual</a> had enough specific advice on Customer Development. (Ouch.) I told him that if he thought he could do better he should write his own book. So Frank did. He collaborated with Giff Constable and wrote <a href="http://www.amazon.com/gp/product/099080092X/ref=as_li_tl?ie=UTF8&camp=1789&creative=9325&creativeASIN=099080092X&linkCode=as2&tag=wwwsteveblank-20&linkId=RLK5QONJI5ZZQ3QB" target="_blank">Talking to Humans: Success Starts with Understanding Your Customers</a><em> </em>to guide aspiring entrepreneurs through the process of securing, conducting and synthesizing early customer discovery interviews. And you know what? It is a great book. I used it in the <a href="http://sbir.cancer.gov/resource/icorps/" target="_blank">I-Corps @ NIH program</a>, and it’s now one of my class texts.</p> <p><strong>What’s Next?<br /> </strong>From my time at NYU last summer, it was clear there is already a growing demand and interest from faculty and administrators alike to apply Lean in life science and healthcare at NYU. Now that the National Institute of Health has run <a href="http://steveblank.com/2014/06/26/i-corps-nih-pivoting-the-curriculum/" target="_blank">an I-Corps class specifically targeted for Life Science and Healthcare</a> (therapeutics, diagnostics, medical devices and digital health), there’s now a Lean LaunchPad curriculum for Frank’s next target – bringing the Lean LaunchPad class into the NYU Medical Center in 2015</p> <p><strong>Lessons Learned</strong></p> <blockquote> <ul> <li>The National Science Foundation Innovation Corps has been a great investment for the country</li> <li>It’s spurred a renaissance in entrepreneurial education</li> <li>NYU has grabbed the opportunity with both hands</li> <li>They’ve made one heck of an impact in just two years</li> <li>I can’t wait to see what they do next</li> </ul> </blockquote> <iframe width="100%" height="66" scrolling="no" frameborder="no" src="https://w.soundcloud.com/player/?url=https%3A%2F%2Fapi.soundcloud.com%2Ftracks%2F178064211&width=false&auto_play=false&hide_related=false&visual=false&show_comments=false&color=false&show_user=false&show_reposts=false"></iframe> <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/2014/11/20/impact-nyu-scales-the-lean-launchpad/" 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%20Impact%21%20NYU%20Scales%20the%20Lean%20LaunchPad&body=https%3A%2F%2Fsteveblank.com%2F2014%2F11%2F20%2Fimpact-nyu-scales-the-lean-launchpad%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. 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They were the hallmark of innovative corporations.</span></p> <p>By the middle of the 21<sup>st</sup> century the only companies with skunk works will be the ones that have failed to master <em>continuous innovation</em>. Skunk works will be the signposts of companies that will be left behind.</p> <p> </p> <p>——–</p> <p>In the 20<sup>th</sup> century companies could be leaders in a market for decades by just focusing on their core product(s). Most companies incrementally improved their products with <em>process </em>innovation (better materials, cheaper, product line extensions) and/or through acquisitions. Building disruptive products were thought of as “risky” and a distraction since it was not “core” to the company and did not fit existing corporate structures. Why make big bets if no one was asking for them and competitors weren’t doing so.</p> <div id="attachment_17723" style="width: 310px" class="wp-caption alignright"><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2014/11/a-12.jpg?ssl=1"><img data-recalc-dims="1" loading="lazy" decoding="async" aria-describedby="caption-attachment-17723" data-attachment-id="17723" data-permalink="https://steveblank.com/2014/11/11/why-corporate-skunkworks-need-to-die/a-12/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2014/11/a-12.jpg?fit=564%2C345&ssl=1" data-orig-size="564,345" 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":"","orientation":"1"}" data-image-title="a-12" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2014/11/a-12.jpg?fit=300%2C184&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2014/11/a-12.jpg?fit=468%2C286&ssl=1" class="wp-image-17723 size-medium" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2014/11/a-12.jpg?resize=300%2C183&ssl=1" alt="a-12" width="300" height="183" /></a><p id="caption-attachment-17723" class="wp-caption-text">CIA A-12 spy plane. Developed by Lockheed Skunkworks</p></div> <p>A few innovative companies did push the envelope. The way they did so was to set up “skunk works” to develop their most advanced, disruptive products. (IBM used the process to develop the IBM PC.) But it was Lockheed, then an aircraft manufacturer that coined the term and perfected the art. The <a href="http://www.lockheedmartin.com/us/aeronautics/skunkworks.html" target="_blank">Lockheed Skunk Works</a>® <span style="line-height:1.5;">led by Kelly Johnson was responsible for its Advanced Development Projects – everything from the </span><a style="line-height:1.5;" href="http://www.aviation-history.com/lockheed/p80.html" target="_blank">P-80</a><span style="line-height:1.5;">, the first U.S. jet fighter plane, to the </span><a style="line-height:1.5;" href="https://www.cia.gov/library/center-for-the-study-of-intelligence/csi-publications/books-and-monographs/the-cia-and-the-u-2-program-1954-1974/" target="_blank">U-2</a><span style="line-height:1.5;"> and </span><a style="line-height:1.5;" href="http://www.foia.cia.gov/collection/12-oxcart-reconnaissance-aircraft-documentation" target="_blank">A-12</a><span style="line-height:1.5;"> spy planes.</span></p> <p>Skunk works differed from advanced research groups in that they were more than just product development groups. They had direct interaction with customers and controlled a sales channel which allowed them to negotiate their own deals with customers.</p> <p>Decades before we were able to articulate the value of “getting out of the building” and the Lean Startup, the value in having skunk works controlling their own distribution was starkly evident. Other companies with world-class R&D groups built radical innovations only to see their company fumble the future and others reap the rewards (think of Xerox and the personal computer, Fairchild and integrated circuits, Kodak and digital photography, etc.) Common themes in these failures were, 1) without a direct connection to the customer advanced R&D groups built products without understanding user needs, and 2) the core of the company was so focused on execution of current products that it couldn’t see that <em>the future didn’t look like the past</em>.</p> <p>Kelly Johnson’s <a href="http://www.lockheedmartin.com/us/aeronautics/skunkworks/14rules.html" target="_blank">14 rules about how to manage a disruptive project</a> described how to remove a small innovative team from the politics, policies, procedures and processes a large company had built to support execution of its core business (and its military customers had developed to procure large numbers of standard aircraft.)</p> <p>With the vantage point of the 21<sup>st</sup> century, we can now see that a successful skunk works – separated from its corporate parent, with its own culture, in control of its own R&D and distribution channel – <em>looked much like a startup</em>.</p> <p>But as successful as skunks works were to the companies that executed them well, innovation and execution couldn’t co-exist in the same corporate structure. <em>Skunk works were emblematic of corporate structures that focused on execution and devalued innovation</em>.</p> <p>Until now.</p> <p><strong>Continuous Disruption Requires Continuous Innovation<br /> </strong>In the 21<sup>st </sup>century market share is ephemeral – ask General Motors, Blackberry, Nokia, Microsoft, Blockbuster, etc. –disruption is <em>continual</em>.</p> <p>Therefore companies need to master <em>continuous innovation</em> – the art of executing on core products while continually inventing new products and new <em>businesses</em>. That means that somehow we need to take the innovation that a skunk works removed from the core of the company and integrate the two.</p> <p>Here’s how.</p> <p>We need to realize that skunk works epitomize <em>innovation by exception</em>. But to survive companies need <em>innovation by design.</em></p> <p>We now know how to do just that. We can get innovation and execution to work side-by-side.</p> <p>To start it requires board support and CEO and executive staff agreement. And recognition that cultural, process and procedure changes are needed to embrace learning and experimentation alongside the existing culture of execution.</p> <p>I’ll provide details on how companies can organize this way in a follow-on post.</p> <p><strong>Lessons Learned</strong></p> <blockquote> <ul> <li>Skunk were advanced/disruptive product groups organizational isolated from the rest of their company</li> <li>Skunk works had control over their sales channel and had direct customer feedback</li> <li>World-class R&D groups that didn’t control the channel often saw their innovation die internally</li> <li>Skunk works <em>looked much like a startup</em></li> <li>Skunk works epitomized <em>innovation by exception</em></li> <li>Companies now need <em>innovation by design – </em>innovation and execution that work side-by-side</li> <li>We now know how to do this</li> </ul> </blockquote> <iframe loading="lazy" width="100%" height="66" scrolling="no" frameborder="no" src="https://w.soundcloud.com/player/?url=https%3A%2F%2Fapi.soundcloud.com%2Ftracks%2F176552865&width=false&auto_play=false&hide_related=false&visual=false&show_comments=false&color=false&show_user=false&show_reposts=false"></iframe> <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/2014/11/11/why-corporate-skunkworks-need-to-die/" 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%20Why%20Corporate%20Skunk%20Works%20Need%20to%20Die&body=https%3A%2F%2Fsteveblank.com%2F2014%2F11%2F11%2Fwhy-corporate-skunkworks-need-to-die%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. 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