Steve Blank Podcast

One day I was having lunch with a VC sharing what I learned from my students. “Steve,” he said, “you’re missing the most interesting part of vertical markets. Our firm has a portfolio of companies across a broad range of markets and the way we look at it is pretty simple – the deals fall into two types: those with customer/market risk and those with invention risk.”

In the past entrepreneurship was viewed (and taught) as a single process, with a single approach to creating a business plan and securing funding for a startup. The best entrepreneurship textbooks and blogs assume that advice to startups is generalizable. But as I learned from my students this “one-size-fits-all” approach does not work for all startups. Different market opportunities present radically different startup risks and costs.

Ignore This Post If you’re selling via the web and trade shows are something your grandfather told you about, ignore this post. If you’re in markets that still exhibit at them (semiconductors, communications, enterprise software, medical devices, etc.,) you know they’re expensive in time, dollars and resources.

It was 1978. Here I was, a very junior employee of ESL, a company with its hands in the heart of our Cold War strategy. Clueless about the chess game being played in Washington, I was just a minion in a corporate halfway house in between my military career and entrepreneurship.

1978. Two years out of the Air Force, serendipity (which would be my lifelong form of career planning) found me in Silicon Valley working for my first company: ESL. If you’re an entrepreneur, ESL is the most important company you’ve never heard of. If you are a practitioner of Customer Development, ESL was doing it before most us were born. If you think the Cold War turned out the right side up (i.e. Communism being a bad science experiment) ESL’s founder Bill Perry was moving the chess pieces. And no one who really knew could tell you.

I love business plan competitions. I hate business plan competitions.

I just finished reading Donovan Campbell’s eye-opening book, “Joker One“, about his harrowing combat tour in Iraq leading a Marine platoon. This book may be the Iraq war equivalent of “Dispatches” which defined Vietnam for my generation. (Both reminded me why National Service would be a very good idea.)

I was visiting a friend whose company teaches executives how to communicate effectively. He had just filmed the second of a series of videos called, Speaking to the Big Dogs: How mid-level managers can communicate effectively with C-level executives (CEO, VP’s, General Managers, etc.) As we were plotting marketing strategy, I mentioned that the phrase “Speaking to the Big Dogs” might end up as his corporate brand. And that he might want to think about aligning all his video and Internet products under that name.

This article in the NY Times about China’s thinking strategically about electric cars was a poignant contrast to our struggles in the U.S. with the auto bailout. It reminded me about the adage, “when you’re up to your neck in alligators, the last thing you remember is that you were supposed to drain the swamp.” Memo to Washington – weren’t we were to be the country innovating here?

I saw an article in the New York Times about Google’s hiring practices that reminded me of the differences between great big successful technology companies and small scrappy startups.