Q&A with the Father of the Lean Startup:

by on January 19th, 2014

Steve Blank is a legend in Silicon Valley circles. Bearded and bespectacled, the serial entrepreneur speaks in anecdotes and questionswhich he then answers, his voice rising with incredulity as though he’s continually uncovering new epiphanies.

He’s had plenty of those and laid them out in what has become a holy book for the Silicon Valley set, The Four Steps to the Epiphany: Successful Strategies for Products that Win. Startup entrepreneurs, veteran venture capitalists and even government officials swear by Blank’s customer development methodology, which treats startups as hypotheses and tests them through consumer feedback. The approach is credited with spawning the Lean Startup movement, which calls for nimble, bare-bones businesses that can “pivot” (startup lingo for change directions) based on customers’ reactions.

With eight startups under his belt, four of them public, Blank has experienced both the peaks and pitfalls of founding homeruns and complete craters. While not an MBA himself, Blank teaches at Berkeley’s Haas School of Business and Columbia Business School. He also lectures on entrepreneurship at Stanford’s School of Engineering. But Blank has a particular beef with business schools. In a wide-ranging interview with Poets&Quants he explains what entrepreneurs should really be learning, where B-schools are failing their students, and why not everyone is cut out to be a company founder.

Is an MBA a worthwhile investment for an aspiring entrepreneur?

This is a conversation I have with all my students who want to go to business school. If the question is should I ever go to business school? Of course. But the next question is: Should I go to business school first? My advice is if you haven’t worked in a startup, don’t go to business school to work in one. I want you to get your hands dirty doing scut work. Try to be a founder or be a spear carrier. After a year, you’re going to decide whether this is the career for you, or whether you’d really be more happy as an investment banker.

Business schools are still treating startups as small versions of large companies. Most of these principles are not only wrong, they’re toxic. They’re destructive to early stage ventures. So the value of business school is no longer what I’m learning in my classes, but the value of networking and some of the other things that I might need to know when my startup gets big. The value diminishes, but that doesn’t mean it’s zero. It just means that it will be awhile before business schools catch up to this idea that there’s a separate stack of skills and knowledge for founders than for people who execute existing companies.

Why do you think business schools are missing the mark?

The problem is the content of what we’ve been teaching. And here’s why it ended up like that from my point of view. If you ask business school professors, do you consult? I’d say you’d get an extraordinarily high percentage who do. Great. Where do you consult? They consult with people who pay them. Great. Where are those people? They’re at large companies.

The better the faculty are, the larger the company they’re consulting. They treat a 100,000-person company the same as two people in a garage. That was the mistakenot understanding we needed an entirely different language, architecture, and management stack. It was unfair to expect professors who’ve never had to take out the trash and unstop the toilet at three in the morning as part of their consulting jobs to figure this out. It wasn’t an intelligence problem. It’s not that business school professors are dumb. It’s just they haven’t been exposed to the profession.

Which are the best business schools for entrepreneurship?

Berkeley got it in a second. Columbia got it in a second. Harvard gets it, but they have to rename everything. The good news is they teach students the concepts. The bad news is those students have no idea what language everybody else is speaking. Then there’s the third group: Screw-you-you’re-wrong that says, ‘No, we’re not changing our curriculum.’ I respect that, too, because we can have an interesting conversation. The worst version, and I’ve seen this in another East Coast school, adds the new methodology on top of the old one. They’re checking all the possible boxes but not really understanding that they have to make an intellectual break. I think that does damage.

The faculty that get it are the ones who started companies. Why am I teaching at Stanford? The president of Stanford was an engineer and entrepreneur. Why am I teaching in the engineering school and not the business school? The guy who heads up the entrepreneurship program in the engineering school was an entrepreneur.

The joke is that the last people on earth to get it will be business school professors. But if you’ve ever been a practitioner, the minute you sit through a demo day, you go, ‘Boy, this is what we’ve been missing!’

How should business schools teach entrepreneurship in your opinion?

We made the mistake of thinking that we were teaching entrepreneurship in business school like we were teaching finance, investment banking or management. It turns out that the closest career to being a founder is an artist. I’m talking about founders, not early employees. Founders actually see and hear things that other people don’t. Founders create something out of nothing. Founders do things out of passion and vision. In fact, founders require passion and vision because most of the time life is shit if you’re a founder. It’s mostly people saying no. It’s mostly impossible odds.

Who else creates something out of vision and passion? Artists, composers, and sculptors. Where most people would have seen a huge block of marble, Michelangelo saw the Pietà. And when you asked him how he did it? He said I just removed the stone around it. Classic!

I’m a founder. I always kept my eye on the goaleverything else was just a f’ing obstacle. But when you talk to normal people, all they saw were the obstacles. Trying to teach those types of people with the same educators who teach accounting just doesn’t match. So we made a mistake thinking that an entrepreneurship curriculum is closer to business school or engineering school. I contend that it’s closer to art school.

Yes, it’s theory, but there’s a ton of experiential hands on. Where do we do that in universities? We do it in music schools, we do it in theater, we do it in medical school, but we don’t do it in business school.

So an entrepreneurial curriculum done my way would involve a ton of theory, but also a ton of practice. No one would be embarrassed and say that’s trade school. Now, if you try to practice in a traditional business school, you’ll get, ‘We don’t do that, that’s trade school.’

To what extent can you actually teach entrepreneurship?

Friends who knew me as an entrepreneur would laugh hysterically when they found out I was teaching. They’d say, ‘Steve, you know you can’t teach this.’ I really pondered this for a long time: Why did I think you could teach this? And I realized we were asking the wrong question. Let me reframe the question: Who can you teach entrepreneurship to? And the answer is to those who actually want to learn it.

It’s like being a brain surgeon. It’s not just technique. You’ve got to really want to be a surgeon. You’re going to be working your ass off as much as you would in a startup. Or like signing up for the Delta Force in the Marines; it’s so far above and beyond the standard path that you really have to want it. There is a set of things in life that you have to be passionate about, where you can’t just show up for class. This is one of them.

Some of my classes require an application and interview, and every once in a while I’ll turn a team down. Nearly 100% of the time they’ll chase me out to the parking lot fighting to get in. If it’s the wrong team, they’ll just say okay and walk away.

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