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 The Lean Startup Movement and 21st Century Entrepreneurship Education
Author: Alex DeNoble
Entrepreneurship educators are in the business of preparing the next generation of entrepreneurs. If we truly believe in this mission and mindset, we must think about how we design programs and courses in ways that truly help our students to excel in environments characterized by constant change and uncertainty. I believe that we are at a strategic inflection point in terms of our approaches to entrepreneurship pedagogy. Emerging technologies and social trends have led to new business models and ways to reach and interact with desired customer segments. Accordingly, while the fundamentals of the entrepreneurial process remain stable, our discipline must continue to evolve in order to keep pace with core changes in political, socio-economic and technological environments that shape the way entrepreneurship is enacted in contemporary society.
As we strive to develop and maintain high impact learning environments that meet the needs of millennial students, we must be willing and able to adapt our pedagogical approaches to the demands and requirements of changing environments. Accordingly, in this article, I highlight a key trend that I believe will have a profound effect on how we develop future programs that best prepare our next generation of entrepreneurs.
The Lean Start-up Movement
The lean startup movement is an adaptation of the lean manufacturing approach popularized by Toyota in the 1990s. The first time I encountered -lean thinking- in the context of Entrepreneurship is when Ian MacMillan and Rita McGrath published their book, The Entrepreneurial Mindset in the early 2000s. In this work, they brought to light the fact that in the early stages of a new venture (whether in the context of an independent startup or a corporate initiative), the entrepreneur champion is operating under conditions of high assumptions and very little knowledge. Thus, through a disciplined approach of -discovery driven planning- they advocated a -learning philosophy- designed to convert assumptions to knowledge. Later, individuals such as Eric Reis, Steve Blank and Alex Osterwalder popularized the Lean Startup movement based on principles such as -minimum viable product-, -designed experimentation-, and business model pivots and iterations as a result of -out of the building- market encounters.
This emerging lean startup philosophy advocates that we train our entrepreneurship students to think differently. Traditional entrepreneurship education has centered around the business plan. In many of our entrepreneurship programs, the culminating experience is the requirement that students create a comprehensive business plan document that describes an intended company along with a set of five-year -pie in the sky- financial projections. Unfortunately this approach does not leave much room for experimentation and adaptation. Alternatively, in a -lean startup- approach students begin with a vision for a company and an initial set of assumptions based around key design levers of a business model. Thus, we must offer pedagogy that teaches and encourages our students to recognize the critical assumptions underlying their thinking about a business and more importantly to proactively design experiments to test these assumptions.
Such an approach requires that we develop curriculum that encourages students to adopt a proactive mindset that enables them to go into the market and encounter customers and other key stakeholders through face to face interactions. I believe that this may be a challenging task for millennials who have grown up on the internet and social networking. While these tools create whole new possibilities for the 21st century entrepreneurs, they also can be quite limiting in terms of competency building. Often I encounter students who believe that they have conducted meaningful market assessments through in depth Google searches and on-line customer surveys. When truly teaching concepts such as designed experimentation, we have to encourage our students to develop the confidence to engage in insightful face-to- face interactions. It is important for them to be open minded enough to realize that many of their initial assumptions will not hold up under intensive market scrutiny. They must have the opportunity to practice the art of the -pivot-. This approach will lead to a comfort level in understanding that progress comes from numerous prior failed attempts.
Entrepreneurship education should be about competency building and experimentation. It is our responsibility as entrepreneurship educators to establish an environment in our classrooms and in our programs for students to create, fail, move on and evolve. Such a learning environment can only be achieved by energetic and engaged educators who are capable of developing repeatable and scalable learning processes for students to acquire the competencies and confidence they will need to compete in a 21st century marketplace.
More About the Author:
Alex F. DeNoble is a Professor of Management and Executive Director of the Lavin Entrepreneurship Center in the College of Business at San Diego State University. He also is the current President-Elect of the United States Association for Small Business and Entrepreneurship (USASBE). Prior to his role in the Lavin Entrepreneurship Center, he served for 3 years as the Chair of the Management Department and as Chair of the Steering Committee in the College of Business. His primary areas of expertise include entrepreneurship and corporate innovation, technology commercialization and strategic management. He has conducted research in these areas and has taught related classes in the University's undergraduate, graduate and executive MBA programs. He has published articles in such journals as IEEE Transactions on Management, the Journal of Business Venturing, the Journal of High Technology Management Research, the Journal of Technology Transfer, International Marketing Review, and Entrepreneurship: Theory and Practice. Dr. DeNoble also works extensively with startup companies in the San Diego region and corporate new ventures around the world.