National Science Foundation - Innovation Network Meeting 041114

The Lean LaunchPadThe Story

Steve Blank@sgblank

www.steveblank.com

National Innovation Network MeetingApril 11, 2014

Time to Celebrate!

• From an idea to a movement!• Make possible by you • How did we get here?• Where are we going?

Rashomon Effect

Part 1:The Epiphany

Steve Blank@sgblank

www.steveblank.com

21 Years Executing the Plan

Actual Photo of What Happened When My Plan Had

First Contact With Customers

All I Need is the 5- Year Forecast

Previous 5-Year Plans

Is this all there is?

?

I Started Reading

• Lead User Research - Von Hippel• Crossing the Chasm - Moore• Entrepreneurial Mindset - McGrath/MacMillan• Innovators Dilemma - Christensen• Profitable Value - Lanning• Lanchester Strategy - Yano• High Tech Marketing - Davidow

• OODA Loop - Boyd• Question-based Selling - Freese• Solution Selling - Bosworth• Conceptual/Strategic Selling - Heiman• Spin Selling - Rackham• US Marine Corps Warfighting Manual• Tipping Point - Gladwell

It Resulted in a Few Hypotheses

Startups Are Not Smaller Versions of Large Companies

Startups Are Not Smaller Versions of Large Companies

Large Companies Execute Known Business Models

Startups Are Not Smaller Versions of Large Companies

Startups Search for Unknown Business Models

What’s A Startup?

A temporary organization designed to search

for a repeatable and scalable business model

A temporary organization designed to search

for a repeatable and scalable business model

A temporary organization designed to search

for a repeatable and scalable business model

A temporary organization designed to search

for a repeatable and scalable business model

Startups Fail Because They Confuse Search with Execute

Startups need their own tools, different from those used

in existing companies

Startups need their own tools, different from those used

in existing companies

And a Question

Can We Build a Process to Search?

Before we Execute

Yes

• Lead User Research - Von Hippel• Crossing the Chasm - Moore• Entrepreneurial Mindset - McGrath/MacMillan• Innovators Dilemma - Christensen• Profitable Value - Lanning• Lanchester Strategy - Yano• High Tech Marketing - Davidow

• OODA Loop - Boyd• Question-based Selling - Freese• Solution Selling - Bosworth• Conceptual/Strategic Selling - Heiman• Spin Selling - Rackham• US Marine Corps Warfighting Manual• Tipping Point - Gladwell

Customer Development Process

Yes

There are no facts inside your building

So get the heck outside

+

+ +

So I Wrote A “Book”

Part 2:Finding the Words

And Then A Class

MBA 295: Customer DevelopmentCo-taught with: Rob Majteles @ Treehouse Ventures

Eric Ries Extends the Model

• Took my class at U.C. Berkeley • Co-founded IMVU, I sat on his board

– 1st implementation of Customer Development– Paired it with an Agile Development Model

• Called it the Lean Startup

Which Turned Into A Better Model

+Agile Development

Alex Osterwalder - Business Model

• Business Model Generation• Defines what the “search” is about

Which Turned Into an Even Better Model

+

+

+

Hypotheses Testing and Insight

And that Turned into Another Book

Lean Startup = 3 parts

Business Model Canvas

Part 1

Lean Startup

Part 1

Part 2

Customer Development

+

Lean Startup

Part 1

Agile Engineering

+

+

Part 2

Agile Engineering

Part 3

Story 3Experiential

Existing pedagogy was designed by theorists not

practitioners

Entrepreneurship is Experiential

Let’s Teach it That Way

Entrepreneurship is Experiential

And Then Into Another Class

Engr 245: The Lean LaunchPadCo-taught with: Jon Feiber @ MDV

Ann Miura-Ko @ Floodgate

Admission By Application and Team(business model canvas)

Engr 245: The Lean LaunchPadCo-taught with: Jon Feiber @ MDV

Ann Miura-Ko @ Floodgate

VC’s As Part of the Teaching Team

Engr 245: The Lean LaunchPadCo-taught with: Jon Feiber @ MDV

Ann Miura-Ko @ Floodgate

Venture Capitalists

One Mentor Per Team

Engr 245: The Lean LaunchPadCo-taught with: Jon Feiber @ MDV

Ann Miura-Ko @ Floodgate

Venture CapitalistsMentors

Joint Engineering & MBA Class

Engr 245: The Lean LaunchPadCo-taught with: Jon Feiber @ MDV

Ann Miura-Ko @ Floodgate

Venture CapitalistsMentors

Add Teaching Resources

Story 4The Scientific Method

Then It Turned Into Another Class

Co-taught with: Jon Feiber @ MDV Jim Hornthal @ CMEA John Burke @ True Ventures Jerry Engel @ Haas/Monitor Ventures Bhavik Joshi @ Better Place Oren Jacob @ Pixar

Admission By Application and Team

Co-taught with: Jon Feiber @ MDV Jim Hornthal @ CMEA John Burke @ True Ventures Jerry Engel @ Haas/Monitor Ventures Bhavik Joshi @ Better Place Oren Jacob @ Pixar

VC’s As Part of the Teaching Team

Co-taught with: Jon Feiber @ MDV Jim Hornthal @ CMEA John Burke @ True Ventures Jerry Engel @ Haas/Monitor Ventures Bhavik Joshi @ Better Place Oren Jacob @ Pixar

Venture Capitalists

Mentors are Part of the Team

Co-taught with: Jon Feiber @ MDV Jim Hornthal @ CMEA John Burke @ True Ventures Jerry Engel @ Haas/Monitor Ventures Bhavik Joshi @ Better Place Oren Jacob @ Pixar

Venture Capitalists

Mentors

Add LaunchPad Central to Monitor and Measure Outcomes

Found a Secret Santa

• Congressman Dan Lipinski (IL-3)• Flew out to attend a class• Key supporter on the hill

Vitruvian

• Prevent incisional hernias via wound healing– Biocompatible microparticles + fibrin sealant

• Team:– Dr. Hobart Harris  Chief of General Surgery– Dr. David Young,  Prof Surgery– Cindy Chang, Enzymologist

• Went through the CTAS program• Then took the UCSF class

Trained the Trainers

Added two More Schools

Taught by Takashi Tsutsumi @ Hosei

Co-taught with Murray Low @ Columbia Bob Dorf Co-taught with: Jon Feiber @ MDV

Taught by Jim Hornthal

And Four More SchoolsAdd 5-day version of the class

5-day Version

68

Put the class online200,000 students

Lean LaunchPad Educators Class

• Train educators each quarter

Story 5The Real Story is About You

The Genius is in the Nodes/Sites

The Genius is in the Nodes/Sites

5 nodes15 sites

32 instructors42 universities

NSF I-Corps /Lean LaunchPad

General

Single Cohort

General

Single Cohort Multiple Cohorts

Multiple Nodes of NSF I-Corps /Lean LaunchPad

NSF I-Corps /Lean LaunchPad

General

Single Cohort Multiple Cohorts

Multiple Sites of NSF I-Corps /Lean LaunchPad

NSF I-Corps /Lean LaunchPad

Multiple Nodes of NSF I-Corps /Lean LaunchPad

Lean Startup

Business Model Canvas

Lean Startup

Business Model Canvas

Customer Development Agile Engineering+ +

Evidence-based Curriculum (NSF I-Corps/Lean LaunchPad)

Lean Startup

Business Model Canvas

Customer Development Agile Engineering+ +

Evidence-based Curriculum (NSF I-Corps/Lean LaunchPad)

Hypotheses

Lean Startup

Business Model Canvas

Customer Development Agile Engineering+ +

Evidence-based Curriculum (NSF I-Corps/Lean LaunchPad)

Hypotheses Experiments

Lean Startup

Business Model Canvas

Customer Development Agile Engineering+ +

Evidence-based Curriculum (NSF I-Corps/Lean LaunchPad)

Hypotheses Experiments Data

Lean Startup

Business Model Canvas

Customer Development Agile Engineering+ +

Evidence-based Curriculum (NSF I-Corps/Lean LaunchPad)

Hypotheses Experiments Data

Mentors

LaunchPad Central Software

Lean Startup

Business Model Canvas

Customer Development Agile Engineering+ +

Evidence-based Curriculum (NSF I-Corps/Lean LaunchPad)

Hypotheses Experiments Data

LaunchPad Central Software

DataDataData

Lean Startup

Business Model Canvas

Customer Development Agile Engineering+ +

Evidence-based Curriculum (NSF I-Corps/Lean LaunchPad)

Hypotheses Experiments Data

Weekly Progress

LaunchPad Central Software

DataDataData

Lean Startup

Business Model Canvas

Customer Development Agile Engineering+ +

Evidence-based Curriculum (NSF I-Corps/Lean LaunchPad)

Hypotheses Experiments Data

Weekly Progress Experiment Scorecard

+

LaunchPad Central Software

DataDataData

Lean Startup

Business Model Canvas

Customer Development Agile Engineering+ +

Evidence-based Curriculum (NSF I-Corps/Lean LaunchPad)

Hypotheses Experiments Data

Weekly Progress Experiment Scorecard

Data, Experiments, Trajectory, IRL

+ =

Story 6Domain Specific Cohorts

NSF I-Corps /Lean LaunchPad

General

Single Cohort

General

Single Cohort Multiple Cohorts

NSF I-Corps /Lean LaunchPad

Multiple Sites of NSF I-Corps /Lean LaunchPad

Multiple Nodes of NSF I-Corps /Lean LaunchPad

General

Single Cohort Multiple Cohorts

Domain Specific

I-Corps L for Educators Class

NSF I-Corps /Lean LaunchPad Multiple Sites

of NSF I-Corps /Lean LaunchPad

Multiple Nodes of NSF I-Corps /Lean LaunchPad

Lean LaunchPad for Life Sciences

• Therapeutics• Diagnostics• Devices• Digital Health

General

Single Cohort Multiple Cohorts

Domain Specific UCSF

Life Sciences

NSF I-Corps /Lean LaunchPad

I-Corps L for Educators Class

Multiple Sites of NSF I-Corps /Lean LaunchPad

Multiple Nodes of NSF I-Corps /Lean LaunchPad

Early Stage Therapeutic MythsThe Idea is Key

Better ideas create valueFunding GapEarly Stage

Investment as a market failure

Data Quality Findings in preclinical

research are often not reproducible

[email protected]

The real gap is the expertise to move early stage research toward industrial relevance

Early Stage Therapeutic Myths

[email protected]

Data Quality Findings in preclinical

research are often not reproducible

Data addressing keydevelopment criteria

Early Stage Therapeutic Myths

[email protected]

Data Quality Findings in preclinical

research are often not reproducible

Data addressing keydevelopment criteria

The Idea is KeyBetter ideas create value

Clear path to modifying a disease

Early Stage Therapeutic Myths

[email protected]

Data Quality Findings in preclinical

research are often not reproducible

Data addressing keydevelopment criteria

The Idea is KeyBetter ideas create value

Clear path to modifying a disease

Funding GapEarly Stage

Investment as a market failure

Operational plan justifying investment

Story 7Commercialization Insights

21st Century Commercialization Insight

• Gov’t Commercialization efforts have two components– The science/technology– The business model

• Current Commercialization efforts focus on #1• Successful efforts require the team to do both

98

Insight Technology Evidence but no Commercialization Evidence

physical space & equipment

seed $’s

MentorshipWorkshops/Webinars

Technology ProgressClinical Trials, etc.

Technology Progress ≠ Commercialization

100

Current Thinking about Translational Medicine

Research Performing InstitutionsTechnology

(diagnostic, device, therapeutic)

Solicit &Select

Develop Technology

Obtain AdditionalCapital

Research InstitutionsTechnology

(diagnostic, device, therapeutic)

Solicit & Select

Existing Company

New Company

Technology Development Process

RegulatoryIntellectual

Property

BusinessDevelopment

Project Management

Medical, Scientific, and Business Review

Licensing and Exit

Accepted

independent financing

Product Development

Additional Capital

Current Thinking about Translational Medicine

Mentors

102

InsightAdd a 2nd, Path for

Commercialization Evidence

physical space & equipment

seed $’s

MentorshipWorkshops/Webinars

Technology ProgressClinical Trials, etc.

CommercializationProgress – reducing market risk

Accelerating Commercialization: – Requires Parallel Paths

104

InsightCommercialization Evidence

Require Outward Focus

Research InstitutionsTechnology

(diagnostic, device, therapeutic)

Solicit & Select

Add Evidence-based Commercialization

Medical, Scientific, and Business Review

Accepted

Additional Capital

Inward-facing

Research InstitutionsTechnology

(diagnostic, device, therapeutic)

Solicit & Select

Add Evidence-based Commercialization

Medical, Scientific, and Business Review

Accepted

Additional Capital

Reimburse-men

Partners

Customers (users, payers, etc.)

Commercialization Development

Process

Value Propositio

n

Distribution Channels

Add a parallel Commercialization

Process

Inward-facing Outward-facing

Research Performing InstitutionsTechnology

(diagnostic, device, therapeutic)

Solicit & Select

Add Evidence-based Commercialization

Medical, Scientific, and Business Review

Accepted

Additional Capital Customers

Value Proposition

Channels

PartnersReimburse-

ment

Intellectual Property

Commercialization

Magnamosis

• Create a magnetic compression anastomosis with improved outcomes

• Team:– Michael Harrison, MD, Pediatric Surgeon– Elisabeth Leeflang, MD, General Surgery Resident– Michael Danty, MS, Business Development– Dillon Kwiat, BS, Medical Device Engineer

109

NSF I-Corps /Lean LaunchPad

General

Single Cohort

General

Single Cohort Multiple Cohorts

NSF I-Corps /Lean LaunchPad

Multiple Sites of NSF I-Corps /Lean LaunchPad

Multiple Nodes of NSF I-Corps /Lean LaunchPad

General

Single Cohort Multiple Cohorts

Domain Specific

I-Corps L for Educators Class

NSF I-Corps /Lean LaunchPad Multiple Sites

of NSF I-Corps /Lean LaunchPad

Multiple Nodes of NSF I-Corps /Lean LaunchPad

Lean LaunchPad for Life Sciences

• Therapeutics• Diagnostics• Devices• Digital Health

General

Single Cohort Multiple Cohorts

Domain Specific UCSF

Life Sciences

NSF I-Corps /Lean LaunchPad

I-Corps L for Educators Class

Multiple Sites of NSF I-Corps /Lean LaunchPad

Multiple Nodes of NSF I-Corps /Lean LaunchPad

Story 8What’s Next?

OSTP – Secret Santa II

• From Lab to Market: Accelerating Research Breakthroughs and Economic Growth

Lean LaunchPad for the NIH

• NCATS• NCI• NHLBI• NINDS

25 Teams fall 2014

Pivoting the SBIR Process

• SBIR grants describe a commitment to execute • How do you Pivot after a grant?

Change the grant process!

Making the Network a Network

• Share, share, share– Resources– Expertise– Mentors– Best practices

• Create a Nation of Innovators– Integrate experiential entrepreneurship on all levels

The Future Is Now in Your Hands

5 nodes15 sites

32 instructors42 universities