Steve Blank on Maintaining a Culture of Innovation

Serial entrepreneur-turned-educator and Silicon Valley legend Steve Blank discusses the challenges companies face during the transition from the startup to the expansion stage, and shares his advice for how founders can successfully navigate it while keeping a culture of innovation intact.

Steve Blank on maintaining a culture of innovation

Steve Blank wasn’t always perceived as an entrepreneurial genius, high-tech visionary, culture of innovation expert, or in-demand academic. In fact, as Blank writes on his website, peers at his New York City high school, if given the opportunity, may very well have voted him “least likely to succeed.”

Considering all that Blank has accomplished in the last 30-plus years (including being recently listed as one of the world’s “Masters of Innovation” by the Harvard Business Review), it’s safe to say the slacker label didn’t stick.

Since arriving in Silicon Valley in 1978, Blank has founded or worked for eight high-tech companies, served as a consultant for Pixar, and written three books (including The Four Steps to the Epiphany, a resource that is largely credited with launching the Lean Startup movement).

Today, Blank contributes blog posts and articles to the Wall Street Journal, Forbes, and Huffington Post, and teaches entrepreneurship at Stanford University, the University of California-Berkeley, CalTech, Columbia University and the National Science Foundation.

Needless to say, Blank knows business. In particular, he knows how to create and implement a sustainable culture of innovation that can help growing businesses continuously disrupt their markets.

Blank recently sat down with OpenView to discuss why innovation sometimes stalls as a business begins to scale, and why the concept of “continuous innovation” is so critical to the future of corporate development and entrepreneurship.

OpenView: You’ve identified three primary stages in a company’s lifecycle: 1) Search for a Business Model; 2) Build; 3) Execution & Scale. And during the transition to the latter two stages, you suggest there’s a tendency for innovation to suffer. Why is that?

steveblankSteve Blank: Because the process of searching for a business model is very different from trying to scale one. Instead of running around 24-hours-a-day trying to figure out who your customers are, and what features they’d use and pay for, growing companies are trying to figure out how to make what they’ve already done repeatable and profitable.

Complicating things further, you begin recruiting a bunch of specialists and operating executives who are focused on bring order out of chaos.

That transition isn’t easy. And guess what’s usually forgotten in the process? The need to continuously invent, innovate, and disrupt. Companies become so focused on growing via execution that they forget what got them there in the first place.

Article continues on the next page: Managing Growing Pains

photo by: Paul Stevenson

Share Your Thoughts

  • nhammerschalg_openview

    I both agree and disagree with Steve’s assessment. I disagree that we investors start approaching an investment differently once it is on a rapid growth trajectory. We invested in the business for exactly that reason – because we had a strong belief that the management team and underlying business were capable (and in our belief more likely than not) to become successful.

    I do agree that we investors are constantly trying to mitigate risk and fulfill our fiduciary responsibilities by ensuring that our capital is being used as efficiently possible. If it becomes clear the a company’s founder is negligent or clearly incapable of scaling with the business, then of course we would like to introduce a more qualified leader/management team.

    That said, it is not a rule of thumb (at all) to replace founding management teams with more experienced operating executives. The vast majority of our portfolio companies are either led by the management teams that were in the place at the time of our investment or by management teams that were selected with the input of the founding team.