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officer (CFO) a year later and says, “We have failed to meet the growth targets we predicted. In fact, we have almost no new customers and no new revenue. However, we have learned an incredible amount and are on the cusp of a breakthrough new line of business. All we need is another year.” Most of the time, this would be the last report this intrapreneur would give her employer. The reason is that in general management, a failure to deliver results is due to either a failure to plan adequately or a failure to execute properly. Both are significant lapses, yet new product development in our modern economy routinely requires exactly this kind of failure on the way to greatness. In the Lean Startup movement, we have come to realize that these internal innovators are actually entrepreneurs, too, and that entrepreneurial management can help them succeed; this is the subject of the next chapter.

2

DEFINE

WHO, EXACTLY, IS AN ENTREPRENEUR?

As I travel the world talking about the Lean Startup, I’m consistently surprised that I meet people in the audience who seem out of place. In addition to the more traditional startup entrepreneurs I meet, these people are general managers, mostly working in very large companies, who are tasked with creating new ventures or product innovations. They are adept at organizational politics: they know how to form autonomous divisions with separate profit and loss statements (P&Ls) and can shield controversial teams from corporate meddling. The biggest surprise is that they are visionaries. Like the startup founders I have worked with for years, they can see the future of their industries and are prepared to take bold risks to seek out new and innovative solutions to the problems their companies face.

Mark, for example, is a manager for an extremely large company who came to one of my lectures. He is the leader of a division that recently had been chartered to bring his company into the twenty-first century by building a new suite of products designed to take advantage of the Internet. When he came to talk to me afterward, I started to give him the standard advice about how to create innovation teams inside big companies, and he stopped me in midstream: “Yeah, I’ve read The Innovator’s Dilemma.1 I’ve got that all taken care of.” He was a long-term employee of the company and a successful manager to boot, so managing internal politics was the least of his problems. I should have known; his success was a testament to his ability to navigate the company’s corporate policies, personnel, and processes to get things done.

Next, I tried to give him some advice about the future, about cool new highly leveraged product development technologies. He interrupted me again: “Right. I know all about the Internet, and I have a vision for how our company needs to adapt to it or die.”

Mark has all the entrepreneurial prerequisites nailed—proper team structure, good personnel, a strong vision for the future, and an appetite for risk taking—and so it finally occurred to me to ask why he was coming to me for advice. He said, “It’s as if we have all of the raw materials: kindling, wood, paper, flint, even some sparks. But where’s the fire?” The theories of management that Mark had studied treat innovation like a “black box” by focusing on the structures companies need to put in place to form internal startup teams. But Mark found himself working inside the black box—and in need of guidance.

What Mark was missing was a process for converting the raw materials of innovation into real-world breakthrough successes. Once a team is set up, what should it do? What process should it use? How should it be held accountable to performance milestones? These are questions the Lean Startup methodology is designed to answer.

My point? Mark is an entrepreneur just like a Silicon Valley high-tech founder with a garage startup. He needs the principles of the Lean Startup just as much as the folks I thought of as classic entrepreneurs do.

Entrepreneurs who operate inside an established organization sometimes are called