‘Lean Startup’ Revolution Sweeps Through Business Schools

At HBS, Eisenmann’s Launching Technology Ventures class led to formation of a teaching group of six to eight professors who focus on lean startup methodology. Eisenmann overhauled his course The Entrepreneurial Manager to incorporate more lean startup teachings, and included a case on Cake Financial, which offered a social media service for sharing investment portfolios, and failed in 2010 because it failed to follow lean startup discovery processes, Eisenmann says. “You better make sure the world wants what you’re building before you spend $9 million,” Eisenmann says.

In 2012, HBS launched its FIELD global immersion program, and built lean startup concepts into the module requiring groups of students to conceive and start a business.

‘CROSS-POLLINATION’ AT NYU STERN

In NYU’s Entrepreneurial Institute, which serves the entire university, Stern School of Business students practice lean startup methodology in collaboration with students in other fields, including medicine, engineering, law, computer science, public policy, and the arts – enabling valuable “cross-pollination,” Rimalovski says. “They’re really getting to take advantage of the diversity that is somewhat unique to NYU given our scale and breadth.

“They get to sit in the classroom or work on a project with someone who’s a designer or a scientist or an engineer or a law student. Collectively, they always learn more from each other when there is that greater diversity among and across the team.”

Rimalovski, with Blank and institute director Lindsey Gray, teach a five-day Lean LaunchPad credit course at the institute, for graduate students from all NYU schools. Also, the NYU Summer Launchpad program includes a “lean startup boot camp,” and attracts about a third of its teams from Stern, Rimalovski says.

The lean methodology’s requirement to get out of the building helps prevent entrepreneurs from putting excessive stock in expert advice, Rimalovski says. “It’s way too easy for an entrepreneur to go talk to a more seasoned entrepreneur, or a more seasoned investor, and have them say, ‘You should definitely do this,’” Rimalovski says.

GOSPEL ACCORDING TO WHOM?

“A young, impressionable entrepreneur will often take that for the gospel. It’s really important that they hear it for themselves over and over again (via discovery). They need to understand their customers – they need to get in their shoes. That’s the difference between insight and one expert’s opinion.

“The problem when you’re developing a startup is that 50% of your startup model is wrong – but you don’t know which 50%.”

The institute has so far sent 14 NYU faculty members, including from Stern, to take Blank’s 2 1/2 day Lean LaunchPad educators’ seminar.

“Though entrepreneurship clearly belongs squarely in the business school, it also has a home everywhere else in the university,” Rimalovski says.

At MIT Sloan, students in the Entrepreneurship & Innovation Track apply the principles underlying the lean startup methodology, lecturer Chen says. “We stress the importance of primary market research, which the Lean Movement refers to as customer development, as well as MVP testing,” Chen says. “We also stress the importance of staying lean and not scaling until after product-market fit, all of which are part of the core essence of the lean startup methodology.”

EVEN THE FEDS WANT WHAT LEAN’S GOT

To get an idea of how fast lean startup is taking hold as the new gospel of entrepreneurship, look no further than the notoriously non-nimble behemoth that is the federal government. The U.S. National Science Foundation has built its iCorps program around Blank’s Lean LaunchPad teachings, to generate commercial products from NSF-funded research. Researchers are teamed with an “entrepreneurial lead” and a mentor in seven-week courses intended to “turn scientific discovery into a business,” Blank says. In the past three years, more than 400 teams of scientists in 20 major universities have taken the course.

“The best thing here is teaching people how to be entrepreneurial,” says Illinois congressman Dan Lipinski, who sits on the House Science and Technology Committee and visited Blank’s class at Haas this semester. “It’s a very simple but profound program, way of thinking, way of working on a startup that has just has not been done before. A lot of people who have done great research, had great ideas, had no idea how to go about making it into a product. This can be very helpful all across the federal government.”

The iCorps model is spreading quickly through federal agencies, with the Department of Energy and the National Institutes of Health adopting it, the USDA sending teams to be taught, and the defense department taking up lean startup training initiatives, says Jonathan Fay, an associate director at the University of Michigan Center for Entrepreneurship, and a former Silicon Valley medical device entrepreneur.

ANDREESSEN THROWS A COUPLE STONES

However, the rise of lean startup methodology has led to warnings against adopting it as a universal doctrine of entrepreneurship. At the Lean Startup Conference in San Francisco in 2012, legendary entrepreneur and investor Marc Andreessen, an admitted Blank fan, told attendees that the methodology may not fit “audacious” projects. “The Macintosh, that product had to exist in its entirety for people to wrap their heads around it,” Andreessen said. He also referred to Elon Musk’s space ventures, suggesting that for some products, there is no product till there’s a final product. “You got to get the rocket into space,” Andreessen said. “I don’t think the Lean Startup idea, as brilliant as it is, and as widely applicable as it is, should halt us from investing in these big ideas right out of the gate.”