Steve Blank Hands A New Owner’s Manual to Startup Founders

3/30/12Follow @wroush

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focus on business plans and organizational charts. Those are execution tools. But we shouldn’t be executing on Day One—we should be searching. Having that insight helped me to understand that, just like an MBA program has a “management stack” of books on executing, we needed our own stack for search.

There is no right process for this search, but once we have the language we can now have the discussion. The mistake we were making was thinking that startups were just small versions of large companies. That was the fatal error, and we were getting it wrong time after time. People who run big companies aren’t innovators, they are financial people, with different risk profiles. To expect accountants and venture capitalists to come up with innovative ideas is an oxymoron—with an emphasis on the second part of that word.

WR: The book is way too long and detailed to be consumed in a linear way. How do you think people will actually use it?

SB: Unlike Four Steps, where I fooled myself into thinking that it was a book, this definitely isn’t a book. It’s a manual. Reading it any other way, you will get frustrated and exhausted. It’s like pointing a fire hose at your head and having someone say, “Here, let me show you everything you are going to spend the next four years doing.”

People can tell you things forever, but the most important things are experiential. You can talk about customer development and getting out of the building, but until you have actually screwed something up, you won’t understand. It would be like reading an auto repair manual without having a car. It’s one thing to read a car repair manual, but let me tell you, when you try to rebuild a carburetor, you wind up with pieces all over the garage. That’s why there is a picture of a transmission on the cover.

WR: You break down the process of searching for a business model into steps like customer discovery and customer validation, and you break down those steps into many substeps, each with their own flowcharts and business model diagrams. It seems to me that an entrepreneur really tried to go through each step carefully, it could take a very long time. How long do you think it should take to launch a startup?

SB: That really depends on market timing. If you are in an existing market and you happen to be a domain expert, then it can happen quickly, in months. If you are resegmenting a market, or you are testing a first-time hypothesis, or you are just wrong, then man, it is going to be a tough first year or two. Which it normally is—remember that most startups fail. No one says that enough. If we were honest about this book the title should really be “Read this and you will fail less.” It doesn’t guarantee that you will succeed more, but it means that you will last longer and do fewer stupid things.

And you will also be acutely aware than when a customer grabs you buy the collar and says “You can’t leave until I have this product,” or when 10 or 100 times more customers show up than you planed, you can put the book on the shelf and go deal with your success, rather than implementing the next step. If that happens, go find the tallest point of your building, tear the book in half, and throw it off the goddamn roof. But the book is for the situations where that is not happening. We forget that 99 percent of entrepreneurship is learning from failure to failure.

WR: One of your most fundamental messages is that startup founders need to “get out of the building” and talk with prospective customers. But most high-tech entrepreneurs are probably the kinds of people who would prefer just to sit at their computer or their workbench, build a better widget, and have the world show up at their door. How do you force yourself to get out of the building?

SB: I’ve got to tell you, personally this was the hardest thing for me, ever. I was incredibly introverted—my default is sitting around the ranch and reading. It explains why startups are best done by teams. But even the most technical founder, unless they want to be an employee rather than a real founder, needs to get out of the building and talk to people, just so they can … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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  • Joao Hornburg

    A Startup Manual not available in Kindle Format!? Thanks, but no. Won’t buy it.

  • http://www.xconomy.com/author/wroush/ Wade Roush

    Joao — Have no far, Steve Blank says an e-book version of the book is coming (but probably on iBooks before Kindle). The book has a lot of special formatting and Blank told me it isn’t a simple matter to make it look right as an e-book.

    • http://www.facebook.com/jayajha Jaya Jha

      MVP anyone? :)

  • Eric

    I have an issue with the lack of an ebook as well. I read a large part of Steve’s other book and he talks a lot about connecting with customers , listening to them, and understanding your market. The fact that he didn’t publish an ebook makes me feel that he doesn’t understand his own customers, doesn’t listen to them, and writes about principles he doesn’t practice. In short, it makes me feel like he isn’t particularly relevant. Hoping I’ll be proven wrong on this one.

  • http://www.xconomy.com/author/wroush/ Wade Roush

    Eric — As I just mentioned, Steve says an e-book version is on the way. And no one is a bigger fan of e-books than me. But just take my word for it — this is one book where you probably want to buy a physical copy (perhaps in addition to a digital version). It’s a textbook, not really a book you sit down and page through. You need to be able to dog-ear the important pages, scribble on it, put it on the shelf, pull it down when you’re in a bind, spill coffee on it, etc. It’s still a little harder to do all that with an e-book!

  • Chris

    Wade- GREAT piece. Steve has a lot of interesting ideas, and draws logical associations in entrepreneurship to his days in the Air Force, like the OODA loop for strategic thinking.

    This is a reference book for the shelf, certainly will be picking up a hard copy. For folks wanting a primer in ebook format, there is a well-designed shorthand version on Customer Development in PDF here: http://custdev.com/

  • superbowlpatriot

    But then artists don’t care if their “model” can be immediately leveraged into a successful business. As programmers we are still allowed to choose what we do, so it’s always good to bring up the fact that there are differences.

  • http://www.digitalculture.la Brittney

    We had a great phone interview with Steve about the book and its uses outside the traditional Silicon Valley Startup: http://www.digitalculture.la/home/2012/3/26/the-startup-owners-manual-your-guide-to-starting-an-economic.html

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  • https://plus.google.com/+Howentrepreneur1/ Zohaib Akhlaq

    The Startup Owner’s Manual book is dry and formulaic, but it has one basic insight that’s worth repeating: don’t bother making anything until you discover & understand who’s going to buy.

    Many aspiring entrepreneurs fancy themselves as undiscovered geniuses, but the reality is that bootstrapping a product or company is much more formulaic than inspired — it requires lots of gumshoe work finding and listening to potential customers. Any clown can make something. It’s the clowns who make something that people will buy that count.