Steve Blank Teaches Entrepreneurs How To Fail Less

Editor’s Note: This guest post is written by Derek Andersen, who is the founder of StartupGrind and Vaporware Labs, and is a former entertainment development manager at Electronic Arts.

While secretly wanting to be an entrepreneur but working at Electronic Arts, I would sometimes sneak out early and jet to Stanford campus to crash Steve Blank’s entrepreneurial lecture series. Steve literally wrote the book on customer development with “Four Steps To The Epiphany” and now he’s back again co-authoring a 500-page reference guide with Bob Dorf called “The Startup Owner’s Manual”.

If you don’t know Steve or his blog, he’s a founder eight times over who teaches at both Stanford and Cal Berkeley. His insights and association with Eric Ries laid the foundation for “The Lean Startup” methodology, and I was fortunate enough to interview him last week at Startup Grind.

Founder Background

Steve was raised in Brooklyn New York by immigrant parents who arrived via Ellis Island. In true American dream fashion, they eventually opened a grocery store in the Lower East Side. He and his sister were mostly raised by their single divorced mother doing their best to work and struggle to get ahead. After high school he attended University of Michigan and dropped out after the first semester.

Bored with college, he hitchhiked to Florida and worked “loading race horses onto airplanes.” He became fascinated with the airplanes and started taking home manuals learning the technical ins and outs of the planes.

He volunteered to serve in the Air Force during the Vietnam War and ended up in Thailand repairing electronics and working on the war planes. He learned through that experience that he operated easily under chaos. This served him well after he arrived in Silicon Valley. He told a story of a co-worker complaining, “Oh Steve this place is so hard. You could get fired here,” to which Steve responded, “I was in a place where you could get killed so ‘hard’ is all relative.”

Silicon Valley And Its Unique Culture

In the 1950’s and 1960’s Silicon Valley was one of the largest weapons manufacturing centers in the United States. Submarines, launch tubes, and missiles were all built and tested here. East Palo Alto was home to a Lockette secret spy satellite facility. Stanford had a 400-person secret weapons lab. Silicon Valley has always been great at keeping secrets and that legacy continues with Palantir and others fulfilling government contracts.

In the 1970’s Silicon Valley was an engineer’s dream. Engineering jobs were highlighted on TV and radio ads, plus 45 pages of job listings were posted in the San Jose Mercury Sunday edition. When Steve arrived from Michigan the excitement around engineering was nothing he’d ever seen, and he loved it so much he never really left again.

But even with all that it was an “information sparse area. If you had a coffee once a month with someone that knew something, that was a lot of data. Now entrepreneurs have a much worse problem, it’s too much information. An opinion on everything exists on the web. You need to build your own entrepreneurship compass.”

With each technology wave people say there is no more need for innovation but Silicon Valley remains the center of innovation and entrepreneurship in the world. “What we do here is we encourage risk and accept failure. Do you know what we call a failed entrepreneur in SV? Experienced.”

Being A Founder Is Hard Especially The First Time

Steve refers to the eight companies he has founded as his apprenticeship to learning entrepreneurship. “This is the book on how to fail less but first time entrepreneurs file away advice along with other interesting tidbits like the Celsius and Fahrenheit table. It’s not until you’ve had that experience that you really internalize it.”

At SXSW Reid Hoffman said that you shouldn’t go all in on a single startup. I heard co-founder Tony Conrad recently say that you should look at your entrepreneurial career in terms of 20-30 years. That perspective can change everything. Steve adds, “The entrepreneurs journey is not a singular journey. There are a set of patterns that we follow. Businesses, apps, and technology may be unique, but how we build companies follows a pattern.”

Steve stresses that if you weren’t willing to work to the bone then you will lose because there are always people out there like him that will. “Relentless execution is part of the game. My colleagues were sleeping under your desk because I was sleeping under the desk. This is a full body sport. If you’re not relentless, and if you’re not making people exhausted then you’re not doing a startup.”

While the trendiness of startups has increased, entrepreneurship should not be confused with a fun job. “This is not a hobby. Everybody on the founding team and your early employees better be committed or you’re going to lose them the first time the going gets tough and in a startup the going gets tough quite often.”

Entrepreneurs Are Artists

Entrepreneurs must have vision and passion to lead the team into battle. “One of the wonderful things about entrepreneurship is you have to believe. If you don’t believe and you quiver, everyone else behind you will crack. When you’re a founder you’re an artist.” You see something and then recruit a group to show it to (and build it). If you don’t have that vision and passion then you can’t recruit a team to get there with you.”

But as entrepreneurs fail and the product vision changes, doubt can set in. Almost all initial ideas and hypothesis are wrong. Instagram, Twitter, Pinterest, and many others started as a company building something other what ended up being their big ticket. The key is understanding Blank’s customer development process. As you “get out of the office” and test the early product with actual customers, you can refine and solidify the idea with real data that confirms and morphs the vision that you had from the beginning. This is precisely what The Startup Owner’s Manual teaches entrepreneurs.