This recent blog post from Steve Blank is the best summary of his contribution to thinking about entrepreneurship that I’ve seen. Highly recommended – and it’s just as highly relevant to non-profits as it is to startups. Here are a couple of highlights:
On traditional business school vs the needs of startups
… the case method [popular at most business schools] is the antithesis of how entrepreneurs create a startup. Cases teaches pattern recognition tools for static patterns—and has limited value as a tool for teaching entrepreneurship. Analyzing a case in the classroom, removed from the realities of a new venture, adds little to an entrepreneur’s preparation for the chaos, uncertainty, and conflicting customer responses that all entrepreneurs face.
Business plans presume that building a startup is a series of predictable steps requiring execution of a plan which assumes a series of known facts: known customers, known features, known pricing, known distribution channel. As a serial entrepreneur turned educator, this didn’t make sense to me. In a new venture none of these things are truly known. The reality is that most business plans don’t survive first contact with customers.
Neither cases nor business plans replicate the actual startup experience. Cases and plans are useful for teaching managers of process, not founders. Founders of startups (and new ventures inside existing companies) are searching for product/market fit and a repeatable and scalable business model. Searching, unlike execution, is not a predictable pattern. An entrepreneur must start with the belief that all their assumptions are simply hypotheses that will undoubtedly be challenged by what they learn from customers.
On pedagogy: ambiguity, Realism and Complexity
Ambiguity in a class means the subject can have multiple right answers. Or even no right answer. Searching for answers to the business and mission problems i.e. product/market fit has maximum ambiguity – there isn’t always a correct answer, nor will the same path get you to the same answer in different circumstances.
Realism in a class means, how well does the class content match an actual problem in practice? Learning accounting in a classroom is likely similar to doing accounting in an office. However, reading case studies about startup problems in a classroom has little connection to the real world and has low realism.
Complexity refers to the number of things that can change that may affect the outcome of a decision. As the number of things that change goes up the so does the complexity of the learning process.
New ventures are ambiguous, real and complex. Teaching “how to write a business plan” as a method to build a startup assumes low ambiguity, low realism, and low complexity when the opposite is true. So we structured the class to model a startup; extremely ambiguous with multiple possible answers (or at times none), realism in the pressures, chaos and uncertainty of a startup, and complex in trying to understand all parts of a business model.Steve Blank – The Class That Changed The Way Entrepreneurship is Taught
More from Steve Blank:
Steve Blank: definition of a startup
Resource: A Path to the Minimum Viable Product from Shawn Carolan, via Steve Blank
Steve Blank: customer discovery story
Resource: Steve Blank on the startup journey
Fantastic resource page from Steve Blank
Resources: Steve Blank Playlist