Driving Corporate Innovation: Design Thinking vs. Customer Development

7/30/14Follow @sgblank

Startups are not smaller versions of large companies, but interestingly we also see that companies are not larger versions of startups.

I’ve been spending some time with large companies that are interested in using “Lean Startup” methods. One of the conundrums is why does innovation take so long to happen in corporations? Previously Hank Chesbrough and I have written about some of the strategic issues that impede innovation inside large corporations here and here.

Two methods, Design Thinking and Customer Development (the core of the Lean Startup) provide the tactical day-to-day process of how to turn ideas into products.

While they both emphasize getting out of the building and taking to customers, they’re not the same. Here’s why.

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Urgency Drives Innovation Speed

Startups operate quickly – at a speed driven by the urgency of a proverbial gun-to-their-head called “burn rate.” Any founding CEO can tell you three numbers they live and breathe by:

—the amount of cash left in the bank

—their burn rate (the amount of money they’re spending monthly minus any revenue coming in) and

—the day they run out of money and have to shut the doors (or get a new round of funding.)

If you’re a founder, there’s a constant gnawing fear in the pit of your stomach that it will all end badly; running out of money, having to fire all your employees and failing publicly. (Whoever says, “Failure feels OK in startups has clearly never run a startup.)

A startup CEO adroitly translates this urgency to … Next Page »

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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