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Ep. 856: Steve Blank Interview with Michael Covel on Trend Following Radio
24 segments available
Originally broadcast Apr. 6, 2020 --- My guest today is Steve Blank, eight-time entrepreneur-turned-educator. He is credited with launching the Lean Startup movement. He’s changed how startups are built, how entrepreneurship is taught, how science is commercialized, and how companies and the government innovate. Recognized as a thought leader on startups and innovation, Steve was named one of the Thinkers50 top management thinkers and recognized by the Harvard Business Review as one of 12 Masters of Innovation. The topic is his writing Virus Survival Strategy for your Startup. In this episode of Trend Following Radio we discuss: ▪️ Virus Survival Strategy for your Startup ▪️ COVID-19 affecting the Economics ▪️ 1st Engineered Economic Downturn ▪️ Social Distancing ▪️ Great Depression ▪️ The ripple and feedback effect Jump in! --- I’m MICHAEL COVEL, the host of TREND FOLLOWING RADIO, and I’m proud to have delivered 10+ million podcast listens since 2012. Investments, economics, psychology, politics, decision-making, human behavior, entrepreneurship and trend following are all passionately explored and debated on my show. To start? I’d like to give you a great piece of advice you can use in your life and trading journey… cut your losses! You will find much more about that philosophy here: https://www.trendfollowing.com/trend/ You can watch a free video here: https://www.trendfollowing.com/video/ Can’t get enough of this episode? You can choose from my thousand plus episodes here: https://www.trendfollowing.com/podcast My social media platforms: Twitter: @covel Facebook: @trendfollowing LinkedIn: @covel Instagram: @mikecovel Hope you enjoy my never-ending podcast conversation!
Segments Timeline
Introducing Steve Blank
Michael Covel introduces Steve Blank, a prominent Silicon Valley entrepreneur and educator known for his role in the Lean Startup movement. In this segment, Covel highlights Blank's expertise and the significance of his insights on the virus survival strategy for startups, emphasizing the importance of understanding the current economic climate.
"foreign this is Trend following radio where great thinking comes alive Nobel Prize winners legendary Traders best-selling authors and the pros that know what drive us irrational human beings I am your..."
The Engineered Economic Downturn
Steve Blank discusses the unprecedented nature of the COVID-19 pandemic as the first engineered economic downturn. He contrasts it with past economic crises, emphasizing that this shutdown was a conscious decision to save lives, leading to significant debates about its timing and impact on the economy.
"something that he just wrote which I think is a really important topic the virus survival strategy for your startup now our conversation goes beyond startup essentially the virus survival strategy for..."
Recognizing the Signs
Blank reflects on when he first realized the severity of the pandemic's impact on the economy. He shares his early observations about the shutdown of various sectors and the ripple effects on startups, highlighting the need for immediate action in response to the changing landscape.
"consciously designed to save hundreds of thousands or millions of lives and we've decided to shut down the economy to do that do you think when we have time to reflect it's going to always be hard bec..."
Assessing the Situation
In this segment, Blank emphasizes the importance of conducting an internal and external assessment for businesses during the pandemic. He advises CEOs to evaluate their cash flow, customer stability, and the overall economic forecast to make informed decisions about their business models.
"moment of oh my blank this is going to go off the rails yeah I think I started writing about it at the beginning of March we started isolating three weeks ago not like February but it wasn't like we w..."
Immediate Decisions for Survival
Steve Blank outlines the critical decisions businesses must make to survive the economic downturn. He stresses the need for immediate cash preservation strategies, including potential layoffs and pay cuts for executives, to ensure the longevity of the company.
"year yeah that's the real struggle is trying to lay a groundwork lay a plan for the future when there's so much uncertainty and I think a lot of people are probably just sitting back and saying well y..."
Reconfiguring Business Models
Blank discusses the necessity for companies to rethink their business models in light of the pandemic. He encourages businesses to pivot towards new customer segments and adapt to the current market demands, emphasizing the importance of quick decision-making and collaboration within teams.
"five quarters internally how much cash do we have if we're selling to companies are they still in business if our customers for the airlines or hotels or anything else I don't care what your VPS cell ..."
The Lifeboat Strategy
In this segment, Blank introduces the concept of the 'Lifeboat Strategy' for businesses facing economic challenges. He advises against gradual layoffs and instead advocates for decisive actions to preserve the core of the company while preparing for eventual recovery.
"what's going on that should take no more than a day or two and it should be done by you and your see if you're a large enough company you and your c-level staff your CFO your VP of sales Etc and then ..."
Compassionate Leadership During Crisis
Steve Blank emphasizes the importance of compassionate leadership during economic downturns. He discusses the need to support vulnerable employees and invest in their well-being, while also preparing for future growth and recovery as the economy stabilizes.
"something but you need to be able to preserve cash to keep your business alive as I said if you're the type of business that was either cash flow negative or teetering the same with all the other fixe..."
The Uncertainty of Recovery
Steve Blank discusses the uncertainty surrounding economic recovery post-COVID-19. He warns that if the situation escalates, it could lead to a prolonged depression. This segment emphasizes the unpredictability of the current crisis and the importance of proactive measures to mitigate risks.
"to take a big haircut but you need to take care of the most vulnerable people that you have is engine years will find another job janitors or people who are lower level jobs are actually the ones most..."
Learning from Past Recessions
Reflecting on past economic downturns, Steve Blank advises young entrepreneurs to heed the lessons learned from previous recessions. He highlights the importance of adaptability and the need to prepare for changing market conditions, especially for those who have only experienced a booming economy.
"depending on how long the shutdown happens and its impact of the number of people it kills Steve you're a guy that can game this out in many different ways and you've laid the scenario out that okay w..."
Navigating Startup Funding Challenges
In this segment, Steve Blank provides crucial advice for startups facing funding challenges during economic downturns. He encourages entrepreneurs to accept available funding, even if it comes at a lower valuation, to ensure survival. This advice underscores the importance of financial resilience in tough times.
"not because they're smarter but they just might have said I've seen some of this before no one's seen this one exactly but we have lived through recessions when for the last 12 years if you think abou..."
The Emotional Toll of Economic Stress
Steve Blank discusses the emotional impact of economic stress, particularly on the Boomer generation facing retirement uncertainties. He shares personal experiences from past market crashes, emphasizing the need for mental resilience and the importance of maintaining perspective during financial turmoil.
"let me pick your mind a little bit about you brought it up stress isolation one thing I've noticed too in conversations with friends and family especially in let's say mid-march when it was kind of re..."
Staying Nimble in Crisis Management
Steve Blank stresses the importance of being nimble in crisis management. He advises businesses to focus on immediate realities and prepare for a post-crisis world. This segment highlights the need for mental and physical health, as well as strategic planning for both personal and professional challenges.
"don't deserve it but Market cyclical going now you're about to experience what that feels like yeah you can hear it in your voice it's the word nimble no matter what the market situation is you have t..."
Reevaluating Career Paths in Uncertain Times
In this segment, Steve Blank encourages individuals to reconsider their career paths in light of the current crisis. He suggests that this is an opportunity for reflection and potential redirection towards more meaningful pursuits, especially in fields that contribute to societal well-being.
"responsible for the same thing so how do you do that well number one is you need to not have stuff happen to you even though a lot of it's out of your control a lot of it isn't your control keeping he..."
Education's Rapid Pivot to Online Learning
In this segment, Steve Blank emphasizes the need for educational institutions to adapt quickly to online learning in response to unexpected crises. He critiques the lack of preparedness in 2020 and discusses the potential long-term impacts of remote education on students and educators, highlighting the importance of being ready for future disruptions.
"many hours in your life you want to make sure they're well spent yeah that's well said I was thinking about the educational part that I brought up as you were talking it's like okay if we've got the c..."
Telemedicine and Remote Learning: A New Normal
Steve Blank explores the lasting changes in telemedicine and remote learning brought about by the pandemic. He notes the relaxation of regulations for remote diagnostics and predicts that the shift to online education will become embedded in society, creating new opportunities for startups and businesses in these sectors.
"so I mean I'm sure it's uneven across a whole set of schools but the fact that we could go to remote education is going to have some lasting effects if I was a startup in this space that might be wher..."
The Future of Social Connectivity
This segment delves into the limitations of current social media platforms during times of isolation. Steve Blank discusses the importance of physical presence and community, suggesting that the pandemic has highlighted the need for innovative solutions to foster genuine connections beyond digital interactions.
"about education but now that we are kind of on day one so to speak of a whole new world if you might want to share some ideas and thoughts about the changes because as we mentioned earlier business mo..."
Mental Health and Isolation
Steve Blank addresses the mental health challenges posed by social isolation during the pandemic. He emphasizes the need for increased counseling and support, recognizing that many individuals are struggling with their mental well-being and that shared experiences of isolation can create a collective need for help.
"time and I think Logistics and delivery are being tested in a way that no one could have predicted and surprisingly I think it's holding up pretty well we talk about shortages of face masks and ventil..."
Acting with Urgency in Crisis
In this concluding segment, Steve Blank stresses the importance of taking swift action during a crisis. He discusses the need for businesses to adapt quickly, seize opportunities, and acquire talent during downturns, emphasizing that waiting for perfect information can lead to missed chances for growth and recovery.
"hear them face to face it's a great experiment I mean not not one you could have ever ever ethically done before but we're doing it now you know we had missed the initial wave here in Vietnam it had r..."
The Wartime CEO Mindset
Steve Blank contrasts the roles of peacetime and wartime CEOs, stressing that many leaders have not trained for crisis management. He argues that effective leadership in a crisis requires a mindset shift towards urgency and action, rather than relying on established processes that may not apply in a rapidly changing environment.
"acquired if you do have cash and your business is booming Now's the Time to Overstock Talent you never could have gotten because there will be a recovery and those people will get jobs elsewhere but i..."
Preparing for the Unexpected
Reflecting on historical preparedness, Steve Blank shares insights on how individuals and organizations often forget the lessons learned from past crises. He emphasizes the importance of continuous training and preparation for unexpected events, drawing parallels to military training and the need for businesses to simulate crisis scenarios.
"for a wartime CEO people usually make those analogies or people have never served because being in a war is you screw up in a war it's not like your salary gets cut or you lose your job that's measure..."
Cultural Shifts Post-Crisis
Steve Blank discusses how societal behaviors change after crises, using examples from past disasters. He warns that while there may be an initial push for preparedness, complacency often returns, leading to a lack of long-term resilience. This segment highlights the need for businesses to embed a culture of preparedness to withstand future challenges.
"think you're going to strike a chord with folks people are going to they're looking in the mirror they're going to say well hold on I've just had a 10-year Fun Run of good times and now I got someone ..."
The Role of Preppers in Crisis
In a thought-provoking discussion, Steve Blank reflects on the preparedness of 'Preppers' who stockpile resources for emergencies. He contrasts their readiness with the general population's tendency to forget past lessons, emphasizing the importance of being proactive rather than reactive in the face of potential crises.
"goods etc etc a kind of living that we don't do today being prepared for hard times and I think this will probably also I would guess at least for those folks that want to be robust is going to re-for..."
Acting with Urgency
Steve Blank concludes with a powerful reminder of the need for businesses to act decisively during crises. He introduces the UDA loop (Observe, Orient, Decide, Act) as a framework for navigating challenges. This segment encapsulates the message that while crises are daunting, they also present opportunities for those willing to adapt and take action.
"companies unless you build simulations for and some Industries do disaster drills or God forbid We Now train for shooter on school the shooter on campus drills because we've gotten unfortunately used ..."