Episode 014: ”Just Because We Covered It, Doesn’t Mean They Learned It.”

Doris: So we met a while ago, a few years ago and you were still at the point where you were training a lot of graduate school professors on Lean LaunchPad. It was sort of what I would call kind of the early days and even then, you were very interested in what we were doing with K12. I’m just wondering why were you interested then. Why are you interested now?

Steve: Well, one of the things I wanted to do with Lean methodology was a couple of things. One is I wanted to change how startups were building their companies in Silicon Valley, which was the original intent. I just thought there was a smarter way to use resources, time, money, etc. that we essentially had spent the 20th century telling startups that they were nothing more than smaller versions of large companies, when in fact, startups were very different.

Large companies execute known business models, meaning they know who their customers and partners and customers and everything else is, but startups actually search for business models. So at their core, that meant we had spent 100 years building tools and techniques for execution. That is, the degree you get from a business school is the master of business administration, not the master of business innovation. Those are very different things.

The graduate degree and MBA is how to manage an existing corporation. There was nothing wrong with that. We trained generations of corporate managers, but we didn’t train generations of innovators. That was kind of okay in the 20th century, but certainly in Silicon Valley at the end of the 20th and certainly into the 21st, I just realized we were doing something pretty inefficient and we didn’t have a language to describe what was missing. So the Lean Startup was an attempt to provide that language and structure.

And then at Stanford and then eventually and other schools, I realized to do that, we were also going to have to hack entrepreneurship education because the Capstone class, even in business schools and engineering schools was still how to write a business plan.

In fact, that was what we taught you when you said you wanted to be an entrepreneur. At least inside a university and wanted to take a class, we taught how you how to put a PowerPoint deck in and write a five-year forecast and put together a business plan and then present it, etc., never once actually admitting that in the real world, no business plan survives first contact with customers.

It was even worse because most of us who were adjuncts who had been entrepreneurs and were now teaching how to write a business plan actually knew we were lying to our students. But the bad part is we didn’t know what else to teach them. That is, there were no other tools or classes or anything else.

For me to ramble another minute or two, I realized that not only were we going to have to change the Lean methodology outside in startups, but we were going to have to throw a hand grenade into entrepreneurial education as well. So I started a class at Stanford called the Lean LaunchPad that basically put the principles of Lean Startup, business model design, customer development and agile engineering, in a class and started teaching that.

And then where you and ran into each other was that the class got adopted by the National Science Foundation as the basis of commercializing all science in the United States. It became so successful that universities asked the National Science Foundation to train their educators. So I wrote a two and a half-day class to teach other teachers how to teach this class focused on graduate education. You were brave enough to kind of fight your way . . .

Doris: Crazy enough.

Steve: Into a class, which had nothing to do with K-12 entrepreneurship education. So to answer your question, I was incredibly intrigued because of course, innovation doesn’t start in grad school. It doesn’t start at universities. It doesn’t even start in school. It starts in the world around us. We’re not making the same thing we’ve been making for the last couple thousand years. Innovation is all around us.

More importantly, the pace of innovation is picking up. So the education that our kids learned in the 20th century doesn’t necessarily prepare them for life in the 21st. That’s why I was intrigued with what you wanted to do with the Lean Startup methodology.

Now, was that your question?

Doris: Yeah. Absolutely. That’s great. Then what we’ve seen in these past three years since is we’ve seen this explode and I would bet that of the thousands and thousands of people who are now taking classes and learning the Lean Startup methodology and that as the basis of their entrepreneurship education or endeavor, not all of them are not only going to be successful entrepreneurs, but probably a lot of them are even intending to become entrepreneurs.

Steve: Right.

Doris: That to me is kind of interesting. Think about the difference between entrepreneurship education today versus when you and I met. What is that about? Why would we care? Why do you think we care about K-12 students, many of whom will never take on a startup experiencing entrepreneurship education? That to me is what’s been really, really interesting. For me personally with what we’re seeing in K-12, it’s not even necessarily about whether these kids become the next 12-year old who’s got a successful startup at all.

Steve: Of course. When I teach this in universities, I don’t assume every one of my students are going to want to do a startup, in fact, I’m hoping to scare most of them away from it because . . .

Doris: The numbers aren’t so good.

Steve: I remind them that even though startups are now cool and part of the lexicon, a startup, at least being a founder of a startup is not a job. It’s a calling.

Doris: Yeah.

Steve: In fact, I teach my students that entrepreneurship as a founder is you’re closer to an artist than any other profession.

Doris: I know that’s true. And it’s your entire life. It’s all-consuming.

Steve: Right. It’s all-consuming. You see things and hear things that other people don’t. Most of the things you do are failed experiments, etc. If you’re doing it for the money, it’s almost Zen-like because the money runs away from you. If you’re doing it because you’re called, then you enjoy it because of the journey, not because of the rewards. Now, the nice part about entrepreneurship is there are large rewards, but those are, at least to true founders, are almost secondary.

Doris: Sure.

Steve: So that’s one. Two is whether the students are going to be entrepreneurs themselves or not, they’re going to be living in a society that’s dramatically changed than where their parents lived in terms of how the workforce is structured, the nature of work itself, how problems get understood and solved, the speed of change. If they still think that it’s a 20th century factory like in the old movies, they’re going to be solely disappointed or kind of like their head’s going to be spinning around going, “What’s going on? How do I even cope with that?”

If you just think about what you’re teaching or what I teach but when applied through K-12, I consider those basic survival skills in the workplace for the 21st century. In fact, what you did to my stuff is actually got it down to a way that other educators could teach through K-12, but more importantly so students could grasp the lessons without getting pedantic about the terms or the terminology or the details, but they grasp it intuitively. Getting out of the classroom is probably the most fun these students do.

Doris: Absolutely.

Steve: They’re talking to customers, “This is class? What are you talking about?”

Doris: Yeah.

Steve: You’ve seen it. A good number of them are more fearless than the adults in talking to people and asking them about . . .

Doris: Oh, and it’s empowering, right? It’s what I call they gain a substantive confidence. What we’re doing is we’re creating the curricular systems so that a classroom teacher in K-12 can actually do this thing. How do you teach this as a course? But they get out of the building and they talk to people and they realize what they’re capable of, not only in learning but in creating with the power of their own ideas and their ability to turn them into something. It’s pretty exciting stuff.

Steve: I think that’s something that sticks with them their whole lives. Once they know that this is something they could do, it’s not something adults do or something that especially you’ve got to be a tech nerd to do this or if you are a nerd, you hire salespeople to do this, but knowing that, “Oh, that’s what this is about,” I just think it changes their view for the rest of their lives. As an educator, that’s your job, to kind of plant those seeds of what’s possible.

I think of entrepreneurship education as the art of what’s possible. And at least in the United States and some parts of the world, there are no limits on what’s possible. In fact, if you use the artist metaphor again, the amount of entrepreneurship that can occur in a country is directly related to the amount of art that a dissident could do.

That is when you actually put bounding boxes around artists and say, “You can’t go here, here or here because you can’t offend X, Y and Z,” then that’s about the equivalent of what you can do about entrepreneurship in that same country, “No, no, no, there are these data on enterprises or you can’t criticize the government. This is owned by the president’s cousin.”

In the US, the bounding box is almost unlimited, in fact, only limited by your imagination. They might ignore you or laugh at you, but you don’t end up with broken kneecaps or new partners or in jail. And I think teaching our students there are no limits on what we have to tell them, “Don’t go here,” no, you could tell them, “You too could launch rockets to Mars or build electric cars,” and by the way, both of those were done by immigrants.

Doris: Right. And it’s funny because you talk about the art of it. I also think it’s interesting the science of innovation or of entrepreneurship, which is what really a lot of what you really did with Lean LaunchPad is you start . . .

Steve: Adopted the scientific method, right?

Doris: Yeah.

Steve: Which made the techies kind of adopt it as well. You’re right. I never realized this until you said it, but Lean actually has two interesting intersections. One is the metaphor of the artist, but the other is the methodology itself is almost identical to the scientific method.

Doris: Absolutely.

Steve: You come up with hypotheses. You design some experiments to test them. You get out of the lab, in this case out of the building, the classroom. You go test them. If they fail, you don’t get fired or shot or quit, you go, “Yeah, that didn’t work. What did we learn?” Take that data and modify the hypothesis and run it again to either validate or invalidate hypotheses.

This time, though, these hypotheses are around what we call commercialization. That is we might have an idea, but can we sell it, build it, sell it at enough quantity? Are there customers? Do they like the features? Is it the right price? What’s the distribution channel? Is it a web thing? Is it a license or is it freemium? All those are experiments.

In the old days, we wouldn’t do that. In the old days, we would write a plan. We’d write a five-year forecast and then we would spend all that time and money executing just assuming our plan was right because people said, “Oh, here, you’re a genius, take some money and go build this,” and only find out at the end after we burn through a lot of time, money, etc. It’s very funny.

When startups were doing five-year plans, that is their investors would make them write five-year looks into the future called five-year forecasts, no one ever made the observation that investors were making startups do five-year plans on a series of unknowns, meaning large companies could do five-year plans because they had knowns. They had known customers, known distribution channel, known salespeople, known competitors. But startups were a series of unknowns.

The only two organizations in the entire world who did five-year plans on unknowns were the Soviet Union, its venture capitalists and it didn’t work well for at least one of those groups. I’ll contend for the second one, at least for venture capitalists, they left a lot of money on the table when they could have been more efficient about how to build these new organizations.

Doris: Yeah. It’s like if I can make all the assumptions I want, then I can set the table for any conclusion I can come up with.

Steve: Well, the problem is very smart people, and I used to do this all the time and I’m not sure if it’s very smart people, but I would fall in the trap of assuming I understood a customer problem, that is I wrote it in the plan, therefore it must be true, the real trap is not that you thought you understood the problem.

The real trap is then you immediately go, “Well, if I understand the problem, all I need to do is build the solution. Don’t bother me, I’m here coding or building hardware or whatever,” and then I’ll ship it and I’ll make sure I have a big enough office to put the bags of money that will naturally come.

It gets pretty lonely because no money is coming in after you ship it because you got it wrong in step one. You assumed you understood the problem in enough detail to actually build the solution that people would want, love, use, etc. When in fact you should have done things that might be more uncomfortable, which is actually getting out, talking to people, building what we call minimum viable products, that is iterative and incremental prototypes at different points to get people’s feedback.

Which by the way, none of this guarantees success, but it guarantees getting more information and data much earlier in the game than we used to be able to do.

Doris: Yeah. It’s all about a different landscape because of technology.

Steve: Right.

Doris: One of the things that’s been interesting, you were there. You pushed me to do this first workshop and we did it in your living room, where we had educators come and we trained them on how to build their own entrepreneurship K-12 programs.

Steve: And it’s been amazing, huh?

Doris: It’s been pretty amazing. What has evolved since then and actually the big epiphanies for me that first summer, that first workshop, were number one, that there were all these teachers from all over the country who were really excited about doing this, about learning how to do this and they weren’t entrepreneurship teachers, all of them. They were science teachers and history teachers and math teachers.

So that was crazy and the other thing that was crazy to me was that we actually could teach teachers to do this and that we could over time we’ve been helping teachers use these systems and these methodologies to teach Chinese history and to teach statistics and to teach subject matter courses in K-12. But in a way that allows students to . . . it’s been kind of crazy transformative for these students because they’re learning in the course of working on real problems. These methodologies in other contexts people are learning to create high-tech startup businesses can be adopted in a fifth grade social studies class.

Steve: Yeah.

Doris: It’s kind of crazy.

Steve: It is kind of crazy. I think it’s the fact that the framework is just so general that it allows you to adapt and adopt it to almost any curriculum because it goes back to the basics of scientific method. Scientific method doesn’t limit you to what kind of science you’re attempting. It’s just kind of a set of first principles. I think the Lean methodology might turn out to be almost as durable. That would be actually amusing to me to find out. It’s not just a fad.

But my hope, by the way, about the Lean methodology, as I tell people, it’s not the methodology. It’s a methodology, but please let me know if you have a better one. I think hopefully over time, people will improve on it. It just made me think it might be as durable as a scientific method in that it seems to be adaptable and generalizable enough to work across a whole set of whether it’s social studies or political science or let’s do something else.

Doris: I think it is going to be as durable. I think the way I describe it is a scientific method for today. Today is a time where we’re doubling our collective knowledge every year.

Steve: And I have to tell you, for me, back to K-12, my daughters took what was called an entrepreneurship class in middle school. The school, I won’t name it, but it’s here in Silicon Valley, a middle school for girls, they felt incredibly innovative that they were teaching this entrepreneurship class.

Here I am in the middle of it realizing that essentially what they’re teaching them is how to run a lemonade stand. Meaning it was innovation and entrepreneurship and it was considered cutting edge and they still teach it, which I cringe, was basically how to run a small business. Now, there’s nothing wrong with small businesses in the United States. They’re still the majority of businesses, but to call that innovation, I think, was a mistake. In fact, I truly believe the educators themselves were confused.

If you want to run a small business class for K-12, then feel free to do that. They were truly teaching them about balance sheet and income statement and cash flow and how to do manufacturing. That was all fine. I called it a glorified lemonade stand. Obviously they made little jewelry and they made cookies and they made something else.

But that wasn’t the curriculum I was thinking about innovation. You would teach those same kids about how to talk to customers, how to actually understand customer needs and desires, how to pivot, how to iterate, how to do whatever. While you might end up with the same products, I’ll contend you end up with something a lot more interesting that wouldn’t look like anything that these kids have done before. Does that make sense? I don’t know if you’ve run into the lemonade stand.

Doris: Well, totally. I think the issue is it’s apples and oranges, the word entrepreneurship. For a long time for me, I don’t know if this has been true for you, for me for a long time, the minute I said “entrepreneurship education,” that’s where people went. People went to, “Oh, you’re teaching business. You’re teaching business and this is what that means. It means are you teaching them financials and . . .”

Steve: Accounting.

Doris: Right. And fortunately, it’s getting a lot better now where I think more people realize that entrepreneurship is more about a mindset and it’s more about what you’re saying. It’s innovation. It’s how to innovate more than anything else. It’s an entirely different animal.

Steve: So it’s the difference between creation and accounting. Again, I don’t want your listeners to think that I think there’s anything wrong with accounting. But not understanding the distinction between do you want to teach your kids accounting or do you want to teach them how to innovate, they are not the same thing.

Doris: Right.

Steve: Now, my joke is great entrepreneurs eventually hire accountants but accountants don’t start startups.

Doris: Right.

Steve: Very interesting.

Doris: And to put in the K-12 sort of space, if you want a student to get to learn really hard physics, given the rate of change in physics and science and technology and all of that, can a student or team of students work on a contemporary problem they care about, applying the scientific method to it and in the course of it, do they end up as a byproduct learning a ton of physics if you set it up right?

Steve: Right.

Doris: They do.

Steve: And I think you just mentioned another key characteristic of you teaching K-12 and we learned how to teach it as well is that entrepreneurship is a team-based sport. That is this is not some individual coming up with a great idea in a garage and running something themselves. It also brings in how do you work with others who are not you with different mindsets, different motivations, different whatever. I know that’s how you teach it at Hawken.

Doris: It’s a huge part. How to collaborate. It’s not just a, “Well, we hope they figure it out along the way.” A huge part of our curriculum is about teaming and collaboration. You said earlier that it’s really about learning skills.

Steve: And the other piece is that I know you emphasize which is what the kids love is it’s experiential, right? They love that.

Doris: They love it.

Steve: It’s like, “Man, we don’t have to sit in the classroom listening to you? We get to talk? We get to experiment?”

Doris: It’s relevant. It’s meaningful. So I was telling somebody the other day when you and I were kids in a classroom and the teacher was going on and on about something and you were thinking to yourself or I can say for myself, I was thinking, “Why do I need to know this?” I assumed that the adults, when my parents said, “Just trust me you need to know it. Someday you’ll be glad.” I believed them.

Kids today, they see the world through their smartphones from the time they’re very young. When they’re sitting in the room, if I’m going on and on for 45 minutes about something and I tell them, “Don’t worry. Trust me. You memorizing this is going to be important to you later, they know it’s not true.”

Steve: Right.

Doris: So they want to work on something relevant. So I want to ask you, kind of a last thing, when you scan the landscape of all the thousands and thousands of students and programs that you’ve seen adopting Lean startup methodologies and you think about when it’s done well, the kind of skills people are learning, what do you think?

Steve: Well, I think the best skills is that students can immediately ask, “Is this a fact or is this a hypothesis? Do we know this or do we believe this?”

Doris: Yeah.

Steve: And if we know it, then we can start building solutions to it. But if we just think it, what’s the consequence of getting it wrong versus actually making some effort and trying to get some facts inside the building? I think that’s the biggest one. And again, the biggest thing that falls out of that is they get skills about making eye contact with adults. Some adults even have that problem. But teaching students early that that’s kind of easy to do, surprisingly, at least in our culture, people are more than happy to give you some answers in a way that blows kids away, even adults away, “Hey, they were happy to talk to me.”

Doris: Yeah. They learn how to communicate as well. It’s amazing thing.

Steve: How about you? Is that what you think?

Doris: I think they learn all those C’s, the C-skills everybody is talking about. They learn creative problem solving. They learn how to innovate. They learn how to collaborate in a big way. That’s really rough at first. We don’t give them opportunities to learn that in traditional school or even in their day to day life that much. They learn what it is to do something really well.

To your point about what do I know versus what do I just believe, they have to be able to give and articulate the proof behind what they’re saying if they say it’s a fact and that’s really useful. They have to learn how to communicate. The other thing that is kind of crazy interesting to me in all this in all these programs that either we’ve built or we’ve helped others build, it opens students up to the rest of the world outside the classroom.

They have to be engaged and they want to be engaged with what’s going on outside the building, outside the classroom in the world. Getting 10-year olds, 12-year olds, 16-year olds, 18-year olds to genuinely be interested in things outside their own little world is a transformative experience for these guys. It’s really cool.

Steve: And I think you’ve put together the program for K-12 educators and K-12 students. So I’m proud to say I was there at the beginning, Doris. You’ve taken it and you and Hawken have run with this in a way that’s been great for everybody.

Doris: Thank you, Steve, you’ve been a huge supporter and we’ll see you in your living room this summer again.

Steve: Looking forward to it.

Doris: Thanks, Steve.

Steve: Take care. Bye.