‘Lean Startup’ Revolution Sweeps Through Business Schools

By fall of 2012, Redden and Heraud had harvested $3 million in funding for their new company, Blue River Technology, and their idea was making such a splash that it was profiled in The Economist. They launched the thinning service the next year. Last year, they received $10 million in additional funding. They now provide LettuceBot services to about 3% of America’s lettuce crop.

During Blank’s Lean LaunchPad courses, teams must conduct 100 or more interviews with potential customers, suppliers, distributors, and anyone else who might provide information or insights concerning their startup products. On the class dashboard, teams describe the results of each interview, and instructors keep track of the interview count, the subject matter, and the takeaways, to see how well students are performing in the key work that can happen only “out of the building.”

THE DOG WON’T PLAY WHEN THE OWNER’S AWAY

Haas Lean LaunchPad student Sharon Liu conceived “Woofyy” when she was suffering guilt over leaving her dog at home while she was at work. In Blank’s class, Liu teamed up with three other students to create a product that would solve the problem of owner guilt over stay-at-home dogs.

When team Woofyy comes up to the front of the class to make their presentation about their week’s work on a device that keeps dogs and their owners in virtual contact when the dog’s at home and the owner’s away, the value of the lean startup method’s  “agile development” component becomes apparent. The MVP prototypes, essential to consumer testing and investor attraction, are developed incrementally. Rather than taking the time to build an expensive prototype as close to a finished product as possible and then presenting it to consumers, the MVP method allows innovators – through “agile engineering” – to produce relatively low-cost prototypes that are continually tweaked in response to the discovery process, particularly the feedback from potential customers, but also from prospective investors. For products that aren’t physical objects, such as computer software or a mobile app, an initial MVP can be as simple as a schematic or explainer video.

The ideal MVP requires spending the minimum amount of time and money to produce a prototype for testing hypotheses. “MVPs can be very polished – they don’t have to be shoestring and bubblegum,” says Eisenmann of HBS. “If they can be shoestring and bubblegum . . . that’s what you should do.”

Team Woofyy from the Lean LaunchPad class at Haas

Team Woofyy from the Lean LaunchPad class at Haas

The Woofyy team began with a robotic, video camera-bearing MVP that a dog owner would move remotely around a home to approach their pet, watch it via the video camera, and dispense a treat. But when the team began taking the prototype to potential customers – and dogs – they soon discovered two major flaws with that MVP: potential customers were using the device as a toy for themselves, in their spare time, not to interact with their dogs while away from home. And the other portion of their user market – dogs – mostly couldn’t even be bothered to get up and sniff at the rambling robot. One dog ran away.

So, the team explains in class, “Woofyy 2.0” is a static device. Their latest iteration sits in a room. When the dog owner calls a number, a speaker on the machine emits a ring tone and a treat. The dog approaches for the treat and the owner can use a smartphone to operate a video camera on Woofyy, to see the beloved pet and interact with it. And the dogs appear to be further attracted to the device by a frog doll attached to it that holds the odor of their owners.

WAITING, NERVOUSLY, FOR THE VOICES FROM ABOVE

The team awaits feedback from the instructors. They’ve followed the protocols: left the building and interviewed some five dozen potential customers, including people randomly accosted in dog parks. Member Kiki Liu, who has a master’s in information science from Tsinghua University in China, is nervous every time the team presents, she says after class, but she welcomes any criticism that may come. “We learn more if they criticize us,” Liu says. But today, the team receives only praise and guidance.

“I really want to commend you for doing everything that the teaching team suggested that you do,” Engel tells the Woofyy team. “I want to push you a little further. Right now you’re set up with a one-time sale. I’d like you to think of recurring revenue.”

  • There can’t be much arguing done about the requirement to have a lean startup mind set in today’s digital age. It’s imperative if one wants to get product to market fast enough to sync with the market in a type of synergy. The time lag involved in a traditional plan means you simply don’t catch the markets move, akin to buying stocks at the top of the market, only to ride the crash down. Lean start up is agile and a bottom up approach to strategy which allows for adaptability and seamless evolution with market tides.

  • Stuart

    I actually agree with Andreesen’s statement that Steve Blank’s methodology isn’t necessarily an approach that should be taken with some of the bigger ideas. Elon Musk’s efforts in clean energy, given as an example, are a great example.

    That said, Steve Blank is amazing and Berkeley’s school of business should be given massive amounts of credit for giving him the platform to develop his thinking — and teaching. It’s a lucky set of students that have gone through or that are going through his program there — and now at the other schools where Blank has expanded his efforts. I’ve heard him speak a few times and his ideas are really compelling.