Scary fun was the motto for one of the startups I worked for back in the day.
Many who choose to create and
build organizations can surely relate to this idea.
Hello, I'm Matt Abrahams, and
I teach Strategic Communication at Stanford Graduate School of Business.
Welcome to Think Fast, Talk Smart, The Podcast.
I am incredibly excited and honored today to chat with Steve Blank.
Steve is an adjunct professor at Stanford in the Department of Management, Science,
and Engineering.
He teaches courses on lean startups, innovation, and entrepreneurship.
He is credited with launching the Lean startup movement, and
he's the author of The Four Steps to the Epiphany,
The Startup Owner's Manual, and Holding a Cat by its Tail.
Welcome, Steve.
>> Thanks for having me, Matt.
>> You've been an entrepreneur for over 45 years,
founding or co-founding eight businesses and helping countless others.
You mentioned this lean startup methodology, can you summarize that
approach and what it looks like and what are some best practices included in it?
>> Well, Matt, that's usually a semester class, but I'll try to do it.
[LAUGH] Don't cut me off.
>> Right, we'll take the cliffnotes version, if you don't mind.
>> The cliffnotes version basically says, and it's so obvious it's like duh,
but we didn't quite process it,
is that there are no facts inside your building, so get the heck outside.
>> Right? >> And what I mean by that is,
if you remember, what I said is startups used to believe it's all they needed to do
is write a plan and raise some money and now execute for the plan.
Why?
Because if the plan was funded, well, VCs and God have blessed that plan.
Those aren't hypotheses, those are facts, right?
People give you money for them, so let's go build it.
The lean method simply says, look, you have a set of hypotheses.
It's okay, you're out there on day one, a start up is a faith-based enterprise.
But we want to turn it into facts as rapidly as possible.
And no facts exist inside your building, or very few.
And if you're in sales or marketing,
it's impossible to be smarter than the collective intelligence of your potential
customers sitting in your building.
So let's go out and test these hypotheses.
So piece one of the lean startup is a formal methodology called customer
development.
Let's go do these things to validate who are the customers,
what features do they want, [INAUDIBLE] do they want, competitors, etc.
But while we're doing that, something else evolved in the 21st century.
And that's the way to build products using something called Agile engineering.
That is, let's build products iteratively and incrementally,
rather than using a waterfall method, which is a write this spec,
build the product, go through alpha test, beta test, first customership.
If you use Agile instead, you could be building wireframes, or tests, or
spreadsheets, or something to put in front of customers very early on,
or potential customers, and get their feedback.
And then take that back and say, well, wait a minute,
were the assumptions correct?
So Agile engineering is part two of the lean startup.
And then finally, what hypotheses should you be testing?
I just mentioned some of them,
it turns out that someone named Alexander Osterwalder had put together
something called the Business Model Canvas.
And that's a pretty good roadmap of the nine things you need to worry about when
you're building a new venture.
Not all of them, but it gets about 80 to 90%.
Now, in fact, Lean is those three components, customer development,
agile engineering, and business model design.
>> That was an amazing crash course, thank you.
>> You got the whole semester.
>> There we go.
>> Nobody needs to take my class.
>> I was just going to say, send me the final exam, I'm ready to graduate.
I like the way you package that up.
And faith to fact, I think, is a really interesting way to think about it.
Generating hypotheses, testing them with people who actually might want to buy your
product, what a brilliant idea.
And then this notion of rapid iteration and prototyping, critical as well.
I have a hypothesis I'd like to run by you.
So part of what you discussed as the lean methodology is this notion of
minimally viable product design where you test for user requirements,
you understand, at least have some hypotheses about the market,
come up with some wireframes, and then test and iterate.
I feel that same process can apply to our communication as well.
It's about, as you said, understanding your audience.
It's about understanding the context in which the messages need to be created and
deployed.
It's about structuring those messages,
much like you would build a wireframe of a product or service.
And then you iterate and test.
Does the concept of minimally viable communication resonate with you at all?
>> I think that's a key tenet of everything I teach you about
communications.
For a startup, and I don't mean to diss on these folks, but hiring a PR agency
too early is a sign that the CEO is treating this as someone else's problem.
For me, in a startup, the first task,
the minimum viable product of understanding audience message,
media and messenger can only be done with the founders and CEO engaged.
That is, even if they think they know nothing about any of this stuff,
I want them to actually get out of the building and figure this out, why?
Because they'll get it wrong and whatever, but they'll have a fingertip feel now of,
this is our stake in the ground, now let's hire professionals who could do this.
But we've built our own MVPs with, in fact,
the people who best know the product and think they know the rest of these things.
It makes a much better relationship with a agency and
the founders, who typically never get engaged in this part of the business,
to actually have to have done it themselves.
And I don't mean six months of this, but
I mean a couple of weeks of trying to figure this out.
I make them draft those audience message messengers and media draft themselves.
And then when they're interviewing an agency, they could say, well,
this is what we found.
Tell us what's wrong, or how do we do this better?
And usually good agencies could add huge value here, but
at least they're talking to an educated founding team who appreciates what
the language means and the value.
>> Excellent, so getting your hands dirty as a founder and
really understanding the impact and importance of that communication can serve
you well when you then go get professional help to help move things forward.
>> And let me double down why.
Because smart CEOs treat communications as a force multiplier,
a tool to dramatically increase sales or valuation, or
the vehicles to get acquired lined up at the door.
Not so successful CEOs treat it as a tactic that could be handed to others.
And that's the difference for me about where marketing and
marketing communications needs to sit in the early days of a company.
If the founders never been engage,
you're never going to get high quality communications.
And I think the canonical or the pinnacle of this was Steve Jobs.
He was engaged.
This to him wasn't some other thing that you handed to someone else,
he was constantly engaged,
and Apple had some of the most brilliant marketing of the 20th and 21st century.
>> Absolutely, and it still reverberates today.
I'd like to dig a little deeper into the role of communication.
And how have you seen communication played not just in marketing and
selling of products and ideas, but within organizations in terms of teams, etc.
What best practices or advice and guidance have you seen that can really make
a difference with regard to communication?
>> Boy, do we have another semester?
I mean, [LAUGH] stop me when we run out of airtime.
But let me start with, even today, people tend to make the same mistakes about
marketing and communication in startups as I did when I was a young entrepreneur.
Number one is they often confuse communications tactics.
What should my webpage look like, or should I be using Facebook or
Instagram, with a strategy.
A communication strategy, at least for me, answers a couple questions.
Why are we doing these activities?
For example, and I'll give you four examples, these happen to be my four, but
we could make us some others is, is there a communication strategy designed
to create demand for our products and drive them into a sales channel?
And are we trying to create awareness of our company and brand for
potential customers, are we try to educate and position the company?
Are we trying to create awareness for fundraising?
That is, gee, we're out raising money and
we're hoping that we could get the attention of some folks.
Or do we want to create awareness for potential acquirers?
So once you figured out the why you're creating this strategy,
I just gave you a list of mine.
And then you need to figure out the how.
There's just four steps.
One is understand your audience.
Number two is, what's the message for that specific audience?
So we got audience and we got message.
Three is, what's the media you want the message to be read or seen or heard on?
And then four is, who's the messenger you want to carry your message?
>> I think that's really, really helpful to break it down into those ways.
There's a very simple model of communication that I will teach, and
others, that looks at those elements.
It's you have a sender, and who is that sender and who's the best sender?
What's the message?
What's the appropriate channel?
And what can you do to make the likelihood that your message will resonate
the most with the receiver?
And I hear you talking about all of those elements, for sure.
>> With one addition, and the one addition I start with is, so who's the audience?
Because in a startup, there's multiple audiences typically in your head.
Do I want to reach the customers, or do I want to reach VCs, or
do I want to reach other companies?
And what's confusing is, when you're trying to figure this out,
the way I tend to say, well, timeout, let's go back to our strategy.
Are we trying to reach customers or investors or acquirers?
And they're very different audiences with each requiring their own message media and
messengers.
And if you try to kind of put them together, you end up with a ball of twine.
So how do you figure out which one of these are most important in what order?
It turns out, if you remember, we talked about the business model.
If you drill down on it, you kind of understood that there are typically
multiple customer segments, each one of them who have their own pains that
they want solved or are looking for solution.
VCs are looking for hot deals in this area.
Corporate customers might be looking for something very specific.
And so to figure out who the audience is, you need to go back,
all the way to the back, to what's our strategy and what's our business model?
The second part is, what's the message?
I tend to think that messages answer three questions.
Why should the audience care?
What are you offering?
And more importantly, what's the call to action?
The last one is to me the most important, it's like, okay,
what do you want them to do?
You want to pick up the phone, or click here, or do something else?
Or are you just trying to kind of get into their heads and you could own a space?
Now what's nice is if you've been doing some of this customer development that's
getting out in the building, this is a big idea is that your customers have already
told you how to craft the first part of the message, that is,
why they should care.
That comes directly from the, if you've done customer development correctly,
they've told you what their pains and gains are.
If you haven't done any of this getting out of the building, then you're staring
at a blank sheet of paper going, I wonder what they care about.
>> Many things you've said are absolutely critical to all types of communication.
You have to know your audience.
You have to understand what's relevant to them.
Then you have to craft messages that are tailored
to that audience that are in service of the broader strategy.
And one key point that I really want to echo for everybody to really internalize
is, you have to adjust and adapt the message for that audience.
It is so often that people try to create one pitch deck or one message and
then spread it among multiple audiences.
And that's where you dilute the message, and
you can actually confuse the people you're talking to.
So that point you made, all the points were valuable, but
that one in particular I wanted to highlight.
>> There's a couple more things about the message that I run into all the time, but
particularly entrepreneurs coming out of a technical world, is what are you offering?
And almost always they start with a feature list.
Here are all the bullets, and here's why we're doing X or Y.
And I just kind of shut them down.
I go, wait a minute, if we've gotten out of the building and talked to customers,
we should know what's important to them.
It's not the feature list, but what relieves pain or creates gain for them.
And again, if you've just sitting in the building staring at a blank sheet
of paper, you're not going to have a clue.
But if you've talked to them, you would have known it.
And then finally, the call to action.
As I said, what do you want them to do?
The other thing is context for messages.
A message that's brilliant today might be met with blank stares two years ago or
two years from now.
So remember that all messages operate in context,
that it sometimes have an expiration date.
And then finally, messages need to be memorable, they need to be sticky.
Because the more memorable the message, the greater its ability to create change.
The classic analogy is, consider if you were told you were going to pay for
cold dead fish wrapped in seaweed, you might not be too hungry.
But when we call it sushi, people line up and pay lots of money.
So that's enough about message.
Matt, back to you.
>> When I'm hearing you say about messages are so many valuable things.
One, it has to be tailored to an audience and their specific needs.
Second, it should not just be a list of features,
it needs to be value and relevance.
Bullets kill, don't kill your audience with bullet points.
You must consider the context as well, and
the context in which the message is delivered can change dramatically.
And then finally, your last point was we need to make it memorable so it sticks.
And that has to do with not only relevance, but the words you use,
the framing you use, etc.
All of that is such valuable advice, thank you.
>> And Matt, the last two points, go back were media messengers.
Media today, when I was an entrepreneur,
we used to cut down dead trees and put ink on them,
people used to have antennas on their roofs and watch broadcast TV.
Today we just kind of think of social media, but you need to have a media mix.
It's likely that each audience reads different media,
potential customers read something different then potential investors.
You need to have a media strategy, and
that's a plan that describes the mix of media and how you use it.
And by the way, the media to me also includes your website, your Facebook page,
your Twitter page, etc.
It should be the first place that you experiment finding your audience and
messengers.
And then the last part is, messengers, and these are kind of the well placed and
highly leveraged individuals who influence your audience.
And I'm not talking about your CEO, I'm talking about who's respected
in that industry that now you've actually given them your PowerPoint slide and
they they're using it to diagram the space.
Messengers are the one who convey and
amplify your message to your audience through the media you've chosen.
And so some types of messengers, for example, are reporters, industry experts,
evangelists, connectors, and each audience has their own unique set of messengers.
And some of them nowadays, social media can be bought, like influencers.
So you could actually pay for some messengers as well.
And depending on your industry and what you're trying to achieve,
messengers will vary very wildly, >> Very useful reminders there that your
communication is not just the messages that you create, it's the media and
channels through which you release them.
And it's the messengers who act on your behalf to amplify and spread them, very,
very important.
So before we end,
I'd like to ask you the same three questions I ask everyone who joins me.
You okay with that?
>> Sure.
>> All right, here we go.
If you were to capture the best communication advice you ever received
as a five to seven word presentation slide title, what would it be?
>> Well, it's the one I kind of lived on, is any idiot can make a complicated thing
sound complicated, it takes real skill to make it sound simple.
>> So it takes real skill to make something sound simple, absolutely.
We've spent a lot of time on this podcast with many guests talking about how to make
complex information accessible to an audience.
So it's not about dumbing it down, it's about making it relevant and
putting it in into terms that people can understand.
Let me ask you question number two, who is a communicator that you admire and
why >> The individual communicator, obviously,
again, I grew up in a world of the 20th century Steve Jobs and
the 21st century Steve Jobs.
Probably the best in my mind about being able to create a reality distortion field
that made you want to throw out a perfectly good product every year and
buy the next one.
Steve Jobs reinvented the 20th century automobile model change.
It used to be in the 50s and 60s people would stand in line to
see the next year's car model, hard to believe now, and
actually buy it because it had bigger tail fins or flashier chrome.
Steve Jobs essentially resurrected that idea and managed to convince people that
the last year's iPhone that they loved is completely obsolete, but
you should still love the company, because this one has a flashier feature.
The phrase was planned obsolescence.
And at the same time, obviously, was able to communicate the benefits of new product
breakthroughs like iPod and iPhone and etc.
>> Final question, what are the first three ingredients that
go into a successful communication recipe?
>> I mentioned kind of the audience message or message, etc.
But I guess I would tell you it's something different,
to kind of just put a cap on it.
If the CEO thinks this is a tactic,
there isn't going to be a successful communication recipe.
If the CEO thinks it's a strategy, an integral and a force multiplier for
the company, then there's going to be a successful communication strategy and
recipe.
>> Right, so it's really the investment and focus on communication.
So many entrepreneurs see communication as a necessary evil,
rather than as something that really needs to have some deep strategy behind it.
Thank you so much.
Your insights, perspectives, and passion are incredibly helpful and motivational.
I've thoroughly enjoyed our time together, and
all of us have learned a lot from your experience.
Thank you.
>> Well, thank you, Matt, I learned a lot, actually, when you asked the question.
>> Well, excellent, thank you.
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