Steve Blank: Entrepreneurship Strengthens a Nation [Entire Talk] | Summary and Q&A

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November 9, 2016
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Stanford eCorner
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Steve Blank: Entrepreneurship Strengthens a Nation [Entire Talk]

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Summary

This video explores the history and growth of entrepreneurship and innovation at Stanford University. It covers the influence of the Cold War, the role of Stanford professor Fred Terman, the establishment of the Lean Methodology, and the emergence of startups and venture capital. It also introduces the concept of Lean Entrepreneurship and how it has provided management tools for startups. Finally, it discusses the Hacking for Defense and Hacking for Diplomacy initiatives, where the Lean Methodology is applied to real problems in the Department of Defense and Intelligence Community.

Questions & Answers

Q: Why does Stanford have so many entrepreneurship and innovation courses?

Stanford currently has 163 entrepreneurship and innovation courses because of its long history of encouraging and supporting entrepreneurship. This growth can be attributed to several factors, including the influence of the Cold War, the innovation and entrepreneurship ecosystem built by Stanford professor Fred Terman, the adoption and promotion of the Lean Methodology, and external factors such as disruptive adversaries.

Q: What was the role of Vannevar Bush during World War II?

Vannevar Bush, a scientist, approached the President of the United States during World War II with the idea that civilians could build better military weapon systems than the military laboratories. He believed that World War II would be a technology war and that civilians could use their expertise to create advanced technologies. Despite initial skepticism from the military, a deal was struck allowing civilian scientists to work on cutting-edge technologies while the military focused on traditional weapons.

Q: How did Stanford become involved in the development of weapon systems during World War II?

Stanford became involved in the development of weapon systems during World War II through the efforts of Fred Terman, an engineering professor from Stanford who was appointed as the director of the Harvard Radio Research Lab. Terman assembled the best microwave and electronics experts at Harvard to build electronic warfare equipment that made US bombers essentially invisible to enemy radar. These developments positioned Stanford as a leader in electronics and engineering.

Q: What impact did World War II have on federal funding for research in US universities?

Before World War II, US universities received minimal or no federal funding for research. However, during the war, the Office of Scientific Research and Development (OSRD) was established and funded several research organizations at universities, including Stanford. This marked the first significant federal funding of science research in the United States. After the war, this led to the establishment of federal research agencies such as the National Science Foundation, NASA, and DARPA.

Q: How did Stanford become an engineering powerhouse?

Fred Terman, who had connections with the military through his work in World War II, became the Dean of Engineering at Stanford in 1946. He recruited top engineers from the Harvard Radio Research Lab and made them tenured academic faculty at Stanford. Terman also built relationships with military customers, encouraged his students to start companies based on their research, and helped establish the Stanford Industrial Park. These efforts transformed Stanford into a leading engineering institution by the 1950s.

Q: How did venture capital and startups emerge in Silicon Valley?

In 1956, the aerospace company Lockheed set up a facility in the Santa Clara Valley (now known as Silicon Valley) to build submarine-launched ballistic missiles. This led to the emergence of other subcontractors and created a defense-focused innovation ecosystem. Simultaneously, William Shockley, who co-invented the transistor, founded the first semiconductor company in Silicon Valley. Shockley's employees eventually left and started their own companies, including Fairchild Semiconductor and Intel. This started the wave of startups and the venture capital ecosystem in Silicon Valley.

Q: What is the Lean Startup methodology?

The Lean Startup methodology is a risk reduction approach for early-stage ventures. It consists of three components: business model design, customer development, and agile engineering. Instead of developing elaborate business plans, startups focus on validating their core hypotheses by understanding their target customers and rapidly iterating their products through minimum viable prototypes. This methodology helps startups discover viable business models and adapt to changing market conditions.

Q: How did Lean Entrepreneurship provide management tools for startups?

Lean Entrepreneurship introduced management tools specifically designed for startups, distinguishing them from large companies. Startups are not smaller versions of large companies; they are in the search phase for viable business models. The tools include customer development to understand customer needs, agile engineering to iteratively build products, and the Business Model Canvas to visualize and validate core commercialization hypotheses. These tools have become essential for startups and are now taught in entrepreneurship education.

Q: What is Hacking for Defense?

Hacking for Defense is an initiative that applies the Lean Startup methodology to real problems faced by the Department of Defense (DoD) and the Intelligence Community. It brings together students and innovators from universities to work on solving these challenges while learning entrepreneurship and engaging in national public service. The program aims to provide practical solutions and bridge the gap between the DoD and the innovation community.

Q: How did the Hacking for Defense initiative originate?

Hacking for Defense originated from the collaboration between Pete Newell, the former head of the Army's Rapid Equipping Force (REF), and Steve Blank, the creator of the Lean Startup methodology. Pete realized that the biggest impediments to innovation in the Army were a lack of understanding of the problems, slow innovation cycles, limited collaboration, risk aversion, and outdated policies. Hacking for Defense was created to address these challenges and deliver rapid solutions with the help of students and the Lean Startup methodology.

Takeaways

The history of entrepreneurship and innovation at Stanford University can be traced back to the influence of the Cold War, the role of Stanford professor Fred Terman, the adoption of the Lean Methodology, and the growth of startups and venture capital. Stanford became an engineering powerhouse through Terman's efforts, which included recruiting top engineers, building relationships with military customers, encouraging student entrepreneurship, and establishing the Stanford Industrial Park. The Lean Startup methodology provided management tools for startups, focusing on customer development, agile engineering, and business model design. The Hacking for Defense initiative introduced the Lean Methodology to the Department of Defense, addressing challenges in understanding problems, rapid innovation, collaboration, risk aversion, and outdated policies. It allowed students to work on real problems and engage in national public service.

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