Issue link: http://www.e-digitaleditions.com/i/201447
32 November/December 2013 BizEd quis. "And it's shocking to have people say your baby is ugly. The most common answer to 'I have this new nano material' is 'Who cares?'" While participants might be stunned to hear such blunt responses, Marquis says, "I think it's fabulous. It gives us a teaching moment. Our job isn't to tell participants the answers—our job is to coach them so they can listen and learn on their own." Each team is required to interview 100 customers before the class is finished—and through these interviews, says Blank, the teams continually refine their offerings. "They use this information to build their products iteratively and incrementally, a piece at a time," says Blank. "These are called 'minimum viable products,' or MVPs. Instead of showing customers a whole mobile app, they might show a wire frame. Instead of designing a whole engine, they might create a diagram of a cylinder. This is known as agile engineering." Teams must get out of the building and speak to potential users. To keep track of how well they're designing products and delivering value to customers, teams must create a business model canvas, a term defined by Alexander Osterwalder in the book Business Model Generation. "Osterwalder believes any business can be described by nine components," says Blank. "What are you building, who are you building it for, what's the distribution channel, how do you create demand, how do you make money, do you need any partners, do you need special resources, do you need special activities, and what are the costs? You can diagram this canvas in one slide. So we make students write their hypotheses in yellow sticky notes." Early in the course, students must stand in front of the class to present their canvases, while the teaching team sits in the back and offers critiques. "By reacting to what they present, we convey lessons in every class," says Blank. "We do teach theory, but only after students have experiences." It's all part of teaching students to adapt and perfect their ideas until they have a winning invention that customers will pay to use—and investors will pay to commercialize. Expanding into I-Corps Blank began teaching a customer development class at Haas in 2003, but it was several years before he put all three pieces of the Lean LaunchPad course together. The first time he presented it in its entirety was for a class he taught in 2011 at Stanford's Technology Ventures Program through the school of engineering. He thought it was such an interesting experiment that he blogged it live so other educators could watch its progress. FLICKR R M /G ETTY I MAG ES about the entrepreneur's journey and teaching at schools that include Stanford and UC Berkeley. "Entrepreneurship educators usually treat startups as nothing more than smaller versions of large companies," says Blank. "They teach entrepreneurs how to write business plans, how to hire VPs of sales and marketing, how to do five-year forecasts, how to conduct market research. That makes sense for a large company, which knows who its customers are, who its competitors are, and what its pricing structure should be, because it's most often launching a next-generation or adjacent-market product. "But startups begin with a series of unknowns," he continues. "Entrepreneurs need to search for their business models, not search for their business plans. Successful ones tend to change their plans before they run out of money, because no business plan survives first contact with customers. This means the educational content of an entrepreneurship class needs to be different." Blank's Lean LaunchPad system has three parts: customer development, agile engineering, and business model design. The benignsounding "customer development" is the one that's hardest for most participants: To develop an idea of what customers might want in a product, a team must get out of the building and speak to potential users, asking what features they need, what channels they use to purchase products, and how much they're willing to pay. "Especially for people who spend a lot of time in the lab, it's frightening to go out and talk to customers," says Mar-