“I refuse to join any club that would have me as a member.” – Groucho Marx
In my 21 years as an entrepreneur, I would come up for air once a month to read Harvard Business Review. 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 Harvard Business Review I discovered the work of Peter Drucker and first read about management by objective. I learned about Michael Porter’s five forces. But the eye-opener for me was reading Clayton Christensen’s article on disruption in the mid-1990s and then reading the Innovators Dilemma. Each of these authors, along with others 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.
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 execute existing business models. As much as I loved the magazine, there was little in it for start-ups – or new divisions in established companies – searching 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 start-ups and new ventures needed their own tools and techniques, different from those written about in Harvard Business Review or taught in business schools.
To fill this gap I wrote The Four Steps to the Epiphany, a book about the customer development process and how it changes the way startups are built. The Four Steps drew the distinction that “start-ups are not smaller versions of large companies”. It defined a start-up as a “temporary organisation 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, The Startup Owners Manual, outlined the steps of building a start-up or new division inside a company in far greater detail. In the last decade it has become clear that companies are facing continuous disruption from globalisation, technology shifts, rapidly changing consumer tastes and so on.
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 US National Science Foundation and ARPA-E (Advanced Research Projects Agency-Energy) adopted it to accelerate commercialisation of new science.
Today, we have come full circle as lean goes mainstream.
250,000 copies of the May issue of Harvard Business Review are posted to corporate and start-up executives
and investors worldwide. In this month’s issue, I was honoured to write the cover article, Why the lean start-up changes everything. The article describes lean as the search for a repeatable and scalable business model – and business model design, customer development and agile engineering – and the way you implement it.
I am proud to be called the father of the lean start-up movement. But I hope at least two – if not 50 – 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 the lean start-up and wrote a great book with that name.
Alexander Osterwalder‘s inspired approach to defining the business model in his book Business Model Generation provides a framework for 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 start-ups’ progress as they turn their hypotheses about what customers want into actionable facts – before a start-up or new division has spent all or most of its capital.
For a while, Harvard Business Review is providing free access to Why the lean start-up changes everything. Read it here. Then do it.
This is an edited version of an article first published on Steve Blank’s blog