Monday, July 2, 2012

Steve Blank and Carl Schramm

Steve Blank, hailing from New York City, moved from being an entrepreneur to teaching entrepreneurship to both undergraduate and graduate students at U.C. Berkeley, Stanford University, Columbia University and the Joint Berkeley/Columbia Executive MBA program. After 21 years in 8 high technology companies, he retired in 1999. Steve Blank co-founded his last company, E.piphany, in his living room in 1996. His other startups include two semiconductor companies, Zilog and MIPS Computers, a workstation company Convergent Technologies, a consulting stint for a graphics hardware/software spinout Pixar, a supercomputer firm, Ardent, a computer peripheral supplier, SuperMac, a military intelligence systems supplier, ESL and a video game company, Rocket Science Games. [cited from: http://steveblank.com/about/]
In 2009, he was awarded the Stanford University Undergraduate Teaching Award in the department of Management Science and Engineering. The same year, the San Jose Mercury News listed him as one of the 10 Influencers in Silicon Valley. In 2010, he was awarded the Earl F. Cheit Outstanding Teaching Award at U.C. Berkeley Haas School of Business. In 2012 the Harvard Business Review listed him as one of the “Masters of Innovation.” [cited from: http://steveblank.com/about/]
Steve's view on "the business plan" is quite interesting. In his blog post "No One Wins In Business Plan Competitions" he touches on the controversial subject, stating that A business plan is the execution document that large companies write when planning product-line extensions where customer, market and product features are known. The plan describes the execution strategy for addressing these “knowns.” A startup is not executing a series of knowns. Steve Blank does admit that business plans are still quite useful. According to Steve, "The writing exercise forces you to think through all parts of your business. Putting together the financial model forces you to think about how to build a profitable business."
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Carl Schramm, a PhD economist and past President and CEO of the Ewing Marion Kauffman Foundation, is in great demand, sits on boards and manages his personal angel investments. He shared interesting views on entrepreneurship and the business plan. He points out characteristics of an entrepreneur:
  • They are an outsider, they ask the hard questions, and press leaders on the “why” around status quo.
  • They think in terms of disruption, and are often thought to be disruptive by the change-averse.
  • They see things differently, considering untraditional forces that others didn’t see.
  • They are often competent in a completely different field than the field they are working in.
  • They are very widely read, and know lots of facts and information that makes thinking richer.
  • They have worked in multiple places in the world.
  • They have worked in a startup.
  • They have worked in a job they didn’t like.
  • They have worked in multiple industries.
In his view toward the business plan, he feels that it rarely makes sense to write a business plan, nor does it make any real sense to manage from it. Carl’s point is it is never the case that the formal path mapped out in a business plan is the real path that a business takes to success. As soon as the plan is done, it is out of date. So, why write business plans at all? Stick to the minimal – what is the product, who’s going to buy it, why need it, and how you are going to build and deliver it based on what you know. It only needs to be one page.
Instead of spending time writing a business plan, get on with making the business. Carl shared that in all the investments in start-ups he’s made, he has not read a single business plan. For Carl, to invest in a new business, his measure is the person, not the business plan.
courtesy of Jackie Lynch

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