Napkin Entrepreneurs

Opinion

The barriers for starting a company have come down. Today the total available markets for new applications are hundreds of millions if not billion of users, while new classes of investors are popping up all over (angels, superangels, archangels, and even seraphim and cherubim have been spotted).

Entrepreneurship departments are now the cool thing to have in colleges and universities, and classes on how to start a company are being taught over a weekend, a month, six weeks, and via correspondence course.

If the opportunity is so large, and the barriers to starting up so low, why haven’t the number of scalable startups exploded exponentially? What’s holding us back?

It might be that it’s easier than ever to draw an idea on the back of the napkin, but it’s still hard to quit your day job.

Napkin Entrepreneurs

One of the amazing consequences of the low cost of creating web and mobile apps is that you can get a lot of them up and running simultaneously and affordably. I call these app development projects “science experiments.”

These web science experiments are the logical extension of the Customer Discovery step in the Customer Development process. They’re a great way to brainstorm outside the building, getting real customer feedback as you think through your ideas about value proposition/customer/demand creation/revenue model.

They’re the 21st century version of a product sketch on a back of napkin. But instead of just a piece of paper, you end up with a site that users can visit, use and even pay for.

Ten of thousands of people who could never afford to start a company can now start several over their lunch break. And with any glimmer of customer interest they can decide whether they want to:

  • run it as a part-time business
  • commit full-time to build a “buyable startup” (~$5-$25 Million exit)
  • commit full-time and try to build a scalable startup

But it’s important to note what these napkin projects/test are not. They are not a company, nor are they are a startup. Running them doesn’t make you a founder. And while they are entrepreneurial experiments, until you actually commit to them by choosing one idea, quitting your day job and committing yourself 24/7 it’s not clear that the word “founder or entrepreneur” even applies.

Lessons Learned

  • The web now allows you to turn your “back of the napkin” ideas into live experiments
  • Running lots of app experiments is a great idea
  • But these experiments are not a company and you’re not a “founder”. You’re just a “napkin entrepreneur.”
  • Founding a company is an act of complete commitment.

Steve Blank is the co-author of The Startup Owner's Manual and author of the Four Steps to the Epiphany, which details his Customer Development process for minimizing risk and optimizing chances for startup success. A retired serial entrepreneur, Steve teaches at Stanford University Engineering School and at U.C. Berkeley's Haas Business School. He blogs at www.steveblank.com. Follow @sgblank

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