Napkin Entrepreneurs

3/29/11Follow @sgblank

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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  • TOSG

    Call it what you wanna call it, self-promoting mustache.

  • http://dealometry.com Bob Crimmins

    Steve, I think a lot of us “get” your point. It happens all the time… an idea, a sketch, a conversation — kapow! an wantrepreneur is born. There’s a LOT of ground to cover between the napkin and employee number two… and a real product… and real revenue… and revenue growth… and profitability… etc. And typically a LOT of commitment and hardship as well.

    Your observations seem right but what I’m more interested in is your ideas about what the practical implications are of a bunch of folks running around thinking they are more than napkin entrepreneurs… more than wantrepreneurs. Part of me wants to say “so what”. A lot of folks who legitimately call themselves entrepreneurs now were once napkin entrepreneurs themselves. After all, there’s no Entrepreneurial Police Department (EPD) on the hunt for wanton dissemblers posing as entrepreneurs. Is it that it just creates an atmosphere of misunderstanding that promotes unrealistic expectations? Is it an injustice to those vaunted few who have achieved true entrepreneur status? Does it dilute their exalted title? Is it just that our expectations for a boom of “real entrepreneurs” is not being met and we think it should… given how low the barriers seem now compared to 10 years ago… 5 year ago… last august? Should we be alerted that somethings wrong if the ease of napkin sketches isn’t translating into real entrepreneurial endeavor like we think/hope it should? Certainly, raising the bar on what is understood as entrepreneurship would help save a lot of folks are lot of wasted time and some heartache too but might it also have the unwanted consequence of dissuading some otherwise good entrepreneurs from taking the plunge? Or maybe the good ones don’t need to be coddled?

    Sincerely interested in your thoughts.

  • http://www.steveblank.com steve blank

    Bob,
    Nope it’s not about some kind of injustice to existing entrepreneurs. It’s actually meant to prevent self-inflicted injustices to those thinking that they are.

    The analogy I use that when page-layout programs came out with the Macintosh in 1984, everyone thought it was going to be the end of graphic artists and designers. “Now everyone can do design,” was the mantra. Users quickly learned how hard it was do design well (yes. it is an art) and again hired professionals.

    The same thing happened with the first bit-mapped word processors. We didn’t get more or better authors. Instead we ended up with poorly written documents that looked like ransom notes. Today’s equivalent is Apple’s “Garageband”. Not everyone who uses composition tools can actually write music that anyone wants to listen to.

    Just getting an app on-line is equivalent to writing a song on GarageBand. It doesn’t mean you’re a composer. I see this every semester with students who worked over 3 months and then thinking they were done building the company.

    The Napkin metaphor was trying to provide some reality to where you on in the process.

    steve