Bill aulet disciplined entrepreneurship pdf


IDE Entrepreneurship Table Source: Bill Aulet and Fiona Murray, “A Tale of Two Editorial Reviews. Review. Exclusive Q&A with Bill Aulet, author of Disciplined Entrepreneurship. Bill Aulet. Why did you name the book. first-time or repeat entrepreneur, Disciplined Entrepreneurship offers the tools you Disciplined Entrepreneurship: 24 Steps to a Successful Startup by Bill Aulet.

Language:English, Spanish, Japanese
Genre:Health & Fitness
Published (Last):20.04.2016
Distribution:Free* [*Register to download]
Uploaded by: BERTA

53352 downloads 102262 Views 39.86MB PDF Size Report

Bill Aulet Disciplined Entrepreneurship Pdf

Disciplined Entrepreneurship will change the way people think about .pdf. cintro 26 April ; Disciplined Entrepreneurship Cash Flow,Jobs over TimeRevenue/Cash Flow/JobstimeSource: Bill Aulet and Fiona. ENTREPRENEURSHIP? 1. Bill Aulet. Managing Director,. Martin Trust Center for MIT Entrepreneurship DISCIPLINED ENTREPRENEURSHIP. Definition of. Request PDF on ResearchGate | On Jan 6, , Ryan Field and others published Disciplined Entrepreneurship: 24 Steps to a Successful Startup by Bill Aulet.

Who should read this: First-time and serial entrepreneurs who are looking for a solid product-market fit. Elevator pitch: This step guide to product-market fit is based on a process that Aulet has been refining for years while teaching. Entrepreneurship is chaotic and unpredictable, and hopefully this will bring some method to the madness. Aulet has spent his time there teaching entrepreneurship and designing new classes, competitions, and accelerators. Previously, Aulet spent 11 years at IBM and got his real-life experience as a successful serial entrepreneur. Intro First off, entrepreneurship can be taught. Building a product is key to entrepreneurship, and that process is learnable. Other myths that entrepreneurs should reject include the role of the individual in fact, multiple cofounders are more successful than solopreneurs and the role of charisma communication, recruiting, and sales skills are much more important. This book will focus on innovation, which means taking an invention and commercializing it.

It is years of knowledge and wisdom in a box that every entrepreneur should read, even if you already have a business. That being said, after having worked through the steps in this book to launch Lark, I realize that some structure is very valuable. This book provides enough guidance to help you succeed but not too much to stifle creativity. It is a must-have for entrepreneurs to read the first time but also as a reference.

It moves the reader forward through practical and important steps that they might otherwise miss, in their innovation-driven startup journey. Marius Ursache Cover design: All rights reserved. Published simultaneously in Canada. Moore Consulting, Inc. Reprinted by permission of HarperCollins Publishers. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section or of the United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Rosewood Drive, Danvers, MA , , fax , or on the web at www.

While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with the respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials.

The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor the author shall be liable for damages arising herefrom. For general information about our other products and services, please contact our Customer Care Department within the United States at , outside the United States at or fax Wiley publishes in a variety of print and electronic formats and by print-on-demand.

Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you downloadd, you may download this material at http: For more information about Wiley products, visit www.

First, I had the best parents a son could ever have in the now-deceased Becky and Herb Aulet. Most of all, I dedicate this book to my wonderful and patient wife of 30 years, Lisa, who married a young corporate soldier so many years ago and ended up with a crazy old entrepreneur and stuck with me the whole time. This book is for you. Serial entrepreneurs with deep experience in a particular field or industry will also find this step guide useful to more efficiently bring products to market.

As an entrepreneur, I have found many sources to be helpful, from books to mentors, and most of all, my own experiences. However, I have not found a single source that pulls everything together and does it well.

Many of the books I have found are excellent and have great material, including: These are valuable books and I will reference many of them in this book. However, they are focused in depth on a few key points without providing the more fulsome roadmap that I have felt appropriate when teaching my students at the Massachusetts Institute of Technology MIT and in my other workshops. I believe that each is an important tool at the right time during product conception, development, and launch, but what was needed was a toolbox that contained these and more.

Using the analogy of a toolbox, a screwdriver is a great tool for certain situations, but it does not function as well as a hammer in other situations. Likewise, to choose one example, the ideas and techniques in Inbound Marketing are extremely valuable, but they are even more helpful as part of a broader context used at the right time.

The goal of this book, then, is to provide guidance in a messy and sometimes confusing process where you, the entrepreneur, are attempting to do something that has never been done before. What a terribly difficult task to take on, but what an incredibly important one. This book comes out of my workshops around the world and MIT courses where I built and refined this approach over years with hundreds of great entrepreneurs.

Certainly, there are other elements to consider when working toward a successful new venture, from culture and team to sales, financing, and leadership. But the foundation of an innovation-driven enterprise is the product that is created, and so that is the focus of this book. This process will not necessarily be sequential in nature. I tried to make a logical linear process of 24 steps to get you started, but you should realize that when you gain knowledge in one step, you may need to reevaluate previous steps, and refine or even redo your previous work.

You will need to make first-pass estimates based on research, and they will often need revision. Each of these steps has rigorously evaluated whether a customer would benefit from your product, regardless of whether an analyst, potential investor, or technology writer standing on the sidelines can see the value. I have carefully defined each step to refer to a discrete part of the process.

I recall my father getting very frustrated when he would ask for a pair of pliers and I would give him a wrench. But that is precisely why a framework to attack problems in a systematic manner is extremely valuable. You already have enough risk with factors that are beyond your control, so the framework provided by disciplined entrepreneurship helps you succeed by reducing your risk in factors that you can have control over. The process can help you succeed, or it can help you fail faster if failure was inevitable for the path you were on.

Either way, this process will help you. This is the book I wish I had 20 years ago when I first became an entrepreneur. Note on examples in this book: Throughout the book, I include a number of examples from MIT student teams who took the I provide them in this book as examples that illustrate the basic concepts of the steps.

I have altered some of them to better illustrate best practices and pitfalls for various steps, but kept the essence of the situations. The examples are all consistent with my experiences in founding companies. The projects described in the examples might not have turned into full-fledged companies, depending on the decisions the student teams made after completing their coursework, but their examples are educational nonetheless.

A very special thanks to my Romanian entrepreneur and friend Marius Ursache who did the illustrations for this book in such a delightful way that I was always like a kid on Christmas morning when I saw his e-mails come in with new drawings because I was so excited to see them and he never let me down.

This book came about because I have been able to work at MIT for the past six years and interact with the best entrepreneurship faculty in the world. I have been honored to work with them. Of the many who have made enormous intellectual contributions, special acknowledgement must go to Fiona Murray who co-authored the paper on innovation-driven entrepreneurship that I reference and paraphrase in the introduction and has provided hours of feedback on this book , Ed Roberts, Scott Stern, Charlie Cooney, Matt Marx, Catherine Tucker, Eric von Hippel, Jim Dougherty, Katie Rae, Reed Sturtevant, Elaine Chen, Peter Levine, and Brian Halligan, and of course my colleague in teaching this material for so many years, the legendary Howard Anderson.

They all contributed heavily to the intellectual content of the book, but I take responsibility for the interpretations on how to apply and integrate it for practical implementation, which is the goal herein.

The Kauffman Foundation for Entrepreneurship, specifically Wendy Torrance, Lesa Mitchell, and Dane Stangler, have been very helpful in this process and have pushed me to do this book for some time. I finally heard you and got it done. Thank you for your encouragement. They provided encouragement, perspective, and a sanity check every day I was in the center. Lastly I want to acknowledge the thousands of students and entrepreneurs who I have had the privilege to work with; you all give us such energy and hope every day.

We all want to help you so much, as you are our hope for the future. They wiggle uncomfortably in their seats. Some politely answer in the affirmative, telling me that is why they came to class in the first place. After a polite back-and-forth someone will invariably say what is on the mind of many in the room: I have to say that I tend to like this person, in large part because that person would have been me 15 years ago.

But now I know that entrepreneurship can be taught. When we look at Richard Branson, Steve Jobs, Bill Gates, Larry Ellison, and all the other highly visible entrepreneurs, they seem to be different from us. They seem extraordinary. But each of their successes is a result of great products that made them successful, not some special gene. To be a successful entrepreneur, you must have great and innovative products. Products can be physical goods, but also services or the delivery of information.

All the other factors that influence success are nothing without a product. And the process of making a great product can be taught. This book will teach you how to systematically improve your odds of making a great product. In this book I present a disciplined step-by-step approach to creating a new venture. This framework is useful both for a classroom setting and for those who want to create a new company that serves a new market. Before we begin, though, we must tackle three common myths about the entrepreneur that often hamper those wishing to start new companies or teach students how to do so.

Three Common Myths That Must Go There are many misconceptions about what entrepreneurship is and what is required to be an entrepreneur.

The first myth is that individuals start companies. While the entrepreneur as a lone hero is a common narrative, a close reading of the research tells a different story. Teams start companies. Importantly, a bigger team actually adds to the odds of success. In fact, while charisma may be effective for a short period, it is difficult to sustain.

Instead, research shows that more important than being charismatic, entrepreneurs need to be effective communicators, recruiters, and salespeople.

The third myth is that there is an entrepreneurship gene, that certain people are genetically predisposed for success in starting companies. As the cartoon at the beginning of this chapter suggests, such a physical gene has not and will not be found. Some believe personality traits like flamboyance or boldness are correlated with successful entrepreneurship, but that line of thought is misguided.

Instead, there are real skills that increase the odds of success, such as people management, sales skills, and the topic of this book, product conception and delivery. These skills can be taught. They are not genetically gifted to a few lucky souls. People can adapt and learn new behaviors, and entrepreneurship therefore can be broken down into discrete behaviors and processes that can be taught.

For evidence, we need look no further than the one magical square mile that is MIT. Students who attend MIT start companies at an absolutely prolific rate. In fact, as of , over 25, existed, and new ones are started each year.

To put that in perspective, the total annual revenue from MIT alumni—founded companies taken together would make them the eleventh-largest economy in the world. Why is MIT so successful at turning out entrepreneurs?

The first response people often have is that the students at MIT are extremely intelligent. The second response is that this success comes about because MIT students have access to leading-edge technologies in the laboratories, and thus it is easy for them to start companies. Again, this is a measurable hypothesis.

Because of the outstanding Technology Licensing Office TLO at MIT, there are numbers on how many companies are started each year with technology out of the labs because they have to be licensed through this office. This number is 20 to 30 companies per year, which is very impressive when compared to the stats at other universities. Yet this number seems small when we consider that MIT alumni as a whole start companies per year.

The real reason why MIT is so successful at creating new companies is a combination of spirit and skills. Role models are everywhere, and they are not abstract icons, but rather very real people no different from you.

Students are galvanized by the atmosphere of ambition and collaboration. The work of developing entrepreneurial skills comes from classes, competitions, extracurricular events, and networking programs, and the teachings available both in the classroom and outside are extremely relevant and immediately valuable to the students so that in this environment they attack the subjects with a greater level of interest and commitment. This is also amplified because every student in the class is fully engaged.

A class taught in such an engaging environment is far more productive for students and instructors. A major contributor to this virtuous cycle is the social herding mentality. As the students are learning and working on entrepreneurship, they are also collaborating with fellow students. They talk about their work when they are in social situations, and they naturally start to push one another with subtle or not-so- subtle competitiveness.

Not only do they learn from one another, but that learning becomes part of their individual and group identity. It is a positive feedback loop see Figure I.

Disciplined Entrepreneurship: 24 Steps to a Successful Startup

Figure I. Distinguishing Two Distinct Types of Entrepreneurship Entrepreneurship is about creating a new business where one did not exist before. That definition seemed clear until my colleagues Professors Fiona Murray and Scott Stern and I spent a good deal of time talking to various organizations about how to promote entrepreneurship in different regions of the world.

This is the type of business that is likely started by one person to serve a local market and grows to be a small or medium-size business that serves this local market. It is most often closely held, likely a family business, where close control of a small business is important. These businesses generally do not need to raise as much money, so when money is injected into these businesses, the resultant increase in revenue and jobs created is relatively rapid. The key distinguishing factor is their focus on local markets.

IDE entrepreneurs are aspiring to serve markets that go well beyond the local market. They are looking to sell their offering at a global or at least at a regional level. These entrepreneurs usually work in teams where they build their business off some technology, process, business model, or other innovation that will give them a significant competitive advantage as compared to existing companies.

They are interested in creating wealth more than they are interested in control, and they often have to sell equity in their company to support their ambitious growth plans. While they are often slower to start, IDE entrepreneurs tend to have more impressive exponential growth when they do get customer traction See Table I. Growth is what they seek, at the risk of losing control of their company and having multiple owners.

Table I. Innovation is not necessary to SME establishment and growth, The company is based on some sort of innovation tech, business nor is competitive advantage. Most often family businesses or businesses with very little More diverse ownership base including a wide array of external capital external capital. The company typically grows at a linear rate. When you put The company starts by losing money, but if successful will have money into the company, the system revenue, cash flow, jobs, exponential growth.

Requires investment. When you put money into the etc. These companies are much less likely to be geographically diverse and instead are concentrated around clusters of innovation. It is also generally the case that any injection of investment or money requires a much longer time to show results in terms of new revenues or jobs.

In the short run, the SME model will be more responsive; but with patience, the IDE ventures have the capacity to produce profound results as we have seen with companies like Apple, Google, Hewlett- Packard, and other publicly traded companies. Our Focus Is Innovation-Driven Enterprise A healthy economy consists of both types of entrepreneurship and both have their strengths and weaknesses.

Neither is better than the other. But they are substantively different enough that they require different mindsets and different sets of skills to be successful. What Is Innovation? The invention an idea, a technology, or some sort of intellectual property is important, but the entrepreneur does not need to create the invention. In fact, the inventions that lead to innovation-driven companies often come from elsewhere.

Likewise at Google, which has made most of its money through AdWords, the text-based, keyword-driven advertisements on their search results pages. These examples show that the capability to commercialize an invention is necessary for real innovation. An entrepreneur, then, serves primarily as the commercialization agent. Innovation can come in many varieties including technology, process, business model, positioning, and more.

Some of the most exciting innovations of our time, such as Google, iTunes, Salesforce. They are enabled by technology, yes—Zipcar would find it difficult to maintain its large network of cars without keyless-entry technology for its members.

There will still be many opportunities for technology-driven innovation in areas like energy storage, power electronics, wireless communications, and much more, but this is not the sole definition of innovation. Roberts, Entrepreneurs in High Technology: Oxford University Press, , Roberts and Charles E. Six Themes of the 24 Steps The 24 Steps are discrete and can be grouped into six themes. Each step should be done in numerical order with the understanding that in each step, you will learn things that will prompt you to revise the work you have done in earlier steps.

These themes present a general outline of how the 24 Steps will help you create a sustainable, innovation-based business.

Some students have worked in one industry for years and want a change. Some want to push their skills to the maximum and have the biggest impact on the world.

Some want to be their own boss. Some hold patents and are interested in the different ways they can commercialize them. Some have an idea about how their own life could be improved and they wonder if that idea is interesting to others. All of these reasons can be synthesized into three distinct categories see Table 0. Table 0. You should be able to sum up your idea, technology, or interest in one succinct sentence.

How prototype most any technological empower them with jobs. I cofounded a company, This person has identified a personal poor. The person may want to consider business.

Have an Idea: Have a Technology: You have come up with a technological breakthrough and want to capitalize on it, or simply expedite its deployment to have a positive effect on society. Or, you have learned about a technological breakthrough and you see great potential for a business. Have a Passion: You are confident and you are comfortable pushing yourself to develop your skills in the most comprehensive way possible. You also might believe that being an entrepreneur is the way to have the biggest impact on the world.

Read on to learn how to find a good idea or technology based on your passion. But that approach can be discouraging to someone who is unfamiliar with entrepreneurship. In time, they will find a customer with a pain, or opportunity, where the customer is willing to pay for a solution.

No matter how you have become interested in entrepreneurship, you need to start by first answering the following question: What can I do well that I would love to do for an extended period of time? Once you have answered this question, you will have taken the first step toward discovering a customer pain—a pain that you are interested in alleviating because it is in line with what you are interested in and have expertise in.

By first taking stock of your personal interests, strengths, and skills, you can more readily identify good opportunities. You can do this exercise either alone or with a group of potential cofounders. Consider the following: What was the focus of your education or career? What are you most proficient at? Who do you know that has expertise in different industries?

Do you know other entrepreneurs? Financial assets: Do you have access to significant financial capital, or will you be relying on a meager savings account to start out? Name recognition: What are you or your partners well-known for? Skills in engineering? Understanding fiber optics? Past work experience: Passion for a particular market: Does the idea of improving healthcare excite you?

How about education? Do you have the time and effort to devote to this endeavor? Are you ready to make a new venture your primary or only focus? If you or your founding group have strong coding and project management skills, you may be more inclined to develop a web app. If you are a pro at rapid prototyping, you may want to consider creating a physical product of some sort. Or if your past work experience is in education or medicine, you may want to consider what you can create that would improve those areas.

Often, you will find an idea or technology that improves something for you personally, then realize that idea or technology has the potential to help many others. This process is not an optimal way to form teams, but it is enough for the student teams to gain experience in team formation and for teams to implement in an accelerated manner the 24 Steps over the course of a semester. From the ideas in the class that turn into businesses, some teams stay intact, but far more often teams undergo a healthy reconfiguration of their membership at the end of the semester to create a stronger, more unified team that is better suited to capture an opportunity on a longer- term basis.

This is an important evolutionary process. Your choice of cofounders is extremely important. The research at MIT suggests that businesses with multiple founders are more successful than those founded by an individual.

For other valuable perspectives, here are a few articles that may be helpful: Your first goal is to assess the needs of potential customers, focusing on a target customer with the goal of achieving product—market fit—a product that matches what customers in a specific market are interested in downloading.

Focus is very important because entrepreneurs have very limited time and resources and so must be hyper-efficient. Figure 0. Brainstorm a wide array of potential customers and markets for your business. Narrow your list down to your top 6—12 markets. Gather primary market research on your top 6—12 markets.

Disciplined Entrepreneurship: 24 Steps to a Successful Startup

For success in entrepreneurship, there are some glasses that are better than others to view the situation. Now you will begin the 24 Steps by taking that idea or technology and brainstorming a wide array of potential customers who might be interested in some application of it.

Then you will choose 6—12 top opportunities and do in-depth primary market research, where you directly interview potential customers to learn more about them. While all those are great things for a business to have, none of them is the right answer. The single necessary and sufficient condition for a business is a paying customer. The day someone pays you money for your product or service, you have a business, and not a day before. This simple truth will keep you focused on what is important.

You cannot define a business as a product, because if nobody downloads your product, you simply do not have a business. The marketplace is the final arbiter of success. Now, just because you have a paying customer does not mean you have a good business. In order to have a good, sustainable business, you will need to gain enough customers paying enough money within a relatively short period of time so you do not run out of capital, but instead, become profitable.

And as a startup, you have few resources, so every action you take must be hyper-efficient. Therefore, you will not start by building a product or hiring developers or recruiting salespeople.

Instead, you will take a customer-driven approach by finding an unmet need and building your business around it. By creating a new market, you will have a very high, if not dominant, market share that you can use as a basis for future expansion. To create this company in a newly defined market space, you will focus on a target customer. A target customer is a group of potential customers who share many characteristics and who would all have similar reasons to download a particular product.

Focus is the most important skill for an entrepreneur, and as you will find throughout these steps, it is difficult to focus too much. In an adjacent market, some customer characteristics will be the same as your primary market, but there will be enough differences to require tailoring your strategy appropriately. That process is covered in Steps 14 and You first hear from your friend Sally, who read in the newspaper that camping equipment is a lucrative market, so she suggests you sell tents.

Your cousin Joe chimes in; he wants waterproof underwear. A neighbor thinks that easy-to-clean stuffed animals for children would be just lovely. To design and execute any of these products will take time and resources. After all, if you could get even a tenth of a percent of the toothbrush market in China population 1. The logic would go something like this: If they all have teeth, the market size is 1.

If each person downloads three toothbrushes a year, we could sell 3. Within the broad definition of a customer, there is the end user, who ultimately uses your product, and the economic downloader, who makes the final decision about whether to acquire the product.

The end user and economic downloader can be the same person, depending on the situation. But there are two cases in which this definition gets more complicated. The first is when your business model calls for both primary customers end users and secondary customers economic downloaders in order to make money. The second case is called a two-sided or multi-sided market, where you need multiple target customers for your business to exist. If you have a multi-sided market, you will complete each step once for each side of the market.

But you will likely find through your primary market research that one side of the market is more critical to win for your business to succeed; so you will want to focus there. For instance, two of my former students, Kim Gordon and Shambhavi Kadam, started Mediuum, an iTunes-like platform for digital artwork. As they investigated this concept, they realized that getting the demand side of customers to sign up to put digital art on their mobile phones, tablets, PC, and TVs was not the challenge.

The hard work was going to be signing up the digital artists who create the art and having them agree to make it available. Brainstorm Start by brainstorming a wide array of market opportunities.

Even at this early stage, talking about your idea or technology with potential customers will give you clear and accurate feedback for your market segmentation. You will find them at trade shows, through connections with fellow students and professors perhaps some of them would have been potential customers at their previous jobs , or, if others have heard about your idea or technology, perhaps they will be contacting you, suggesting potential uses.

The best scenario is when you are the potential customer yourself and have a deep understanding of the problem you are trying to solve. If you have an idea, you may think you already have a specific market and a specific application in mind.

However, as a first-time entrepreneur, you will want to carefully determine whether your perceptions are correct. Likely, your defined market is not specific enough, but you may also find that the market you have in mind is not a good match for your idea, or that other markets are better for starting a business.

Be open-minded and creative. If technology is your primary passion, you probably want to consider a wider range of industries than just education. If your passion is education, you can simply segment the education industry, but be open to other solutions besides one involving a high degree of technology.

If you have a new technology, you probably can think of a large number of industries that could benefit from your product. While you may have domain expertise in a certain field, that field may not have any good applications for your technology, so be open to different industries.

Later on, you will filter your ideas to take your passions into account. Start by identifying potential industries for your idea. Then, list who might benefit in each industry from your idea. Focus on end users, not customers, because you will need a committed group of end users to have a sustainable business.

For instance, if your idea is to improve education with technology, who would be your end user? Teachers, administrators, parents, and students are all potential end users. Each category can be further subdivided. Are you focusing on end users in universities or in grade school?

What different types of schools are these end users associated with? Which countries and regions do the end users work and live in? To elaborate on one example, in the grade school category for teachers, there are public school, private school, parochial school, and homeschool teachers.

Within public school teachers, there are various levels of schooling, depending on their country and region. In most middle and high schools, teachers specialize in a specific subject.

Even within a subject, such as social studies, there are subcategories such as history and geography.

Disciplined Entrepreneurship

In most schools, there are art, music, and physical education teachers, as well as paraprofessionals and special education teachers. See Figure 1. Figure 1. Segment first, and then determine whether any categories are common enough to merge. Next, identify the different tasks your end user performs. For a high school science teacher in a suburban area, these tasks may include teaching, grading, preparing lessons, training, discipline, dealing with parents, ordering chemicals, and more.

An elementary school teacher in a major city may not need to order chemicals, but may need to download classroom supplies, sometimes out of pocket. You may find enough similarities between certain subcategories that you can group them, depending on what your idea is, but you will find that out during your primary market research.

Do not start combining categories without knowing more about your customer. Sometimes, my students have an easy time segmenting end users when starting with an employee like a teacher, but have a much harder time when the end user is a consumer, downloading for personal or household use.

A useful question to ask is why the consumer would download a product in a particular industry segment. For the education segmentation above, why would a parent download a product that improves education? Or, consider a technology such as a long-lasting battery. If you are looking at the transportation industry, and have segmented down to consumers downloading a vehicle for personal transportation, why would a consumer use such a product?

Some possibilities include environmental conscientiousness, high performance, luxury, convenience, and value. Even within high performance, you can subdivide between consumers looking for a low-cost but high-performance vehicle, and price-insensitive consumers whose primary objective is high performance.

Be broad and expansive when segmenting end users for your new product. Step 1B: Narrow You have by now identified numerous potential end users and applications for your idea or technology. Your next task is to list the top 6—12 particularly interesting market opportunities, where a market opportunity consists of a specific end user and one or a handful of applications. As you do primary market research, the specific application you have in mind may not be one the end user is looking for, so it is better to focus on end users for now.

In Inside the Tornado, Geoffrey Moore identifies five criteria that the company Documentum used to narrow down its list of 80 potential markets. I have expanded this number to seven by splitting the first criterion into two parts, and adding one of my own to incorporate the passions of your founding team into the discussion.

Is the target customer well-funded? While the book was a bit too light for my taste, it does give a useful and accurate outline of the typical tech entrepreneur's startup trajectory.

A good book for the tech start up wannabe, but not necessary for people who want to become "disciplined entrepreneurs. The book guides through all the steps from selecting and finding the market, doing market research and finding the beachhead market to MVP and customer interviews. I feel the need to disclose this so people don't think I'm shilling for Bill's book, and to kind of nerdbrag a little bit.

I wish I had this 3 years ago. That said, the parts I focused on were great. It has a lot of shades of "Startup Owners Manual" and "Lean Startup", which makes sense consdiering those are two seminal tomes of the Entrepreneurship world. The book is presented beautifully. It's a combination of a graphic novel, coffee table book, and a technical manual. The point is made that Pricing can change as the business evolves — as you try to strike a balance between attracting as much revenue as possible and attracting as many customers as possible.

The chapter explains that the goal at this stage is to create a first pass strategy that will allow you to calculate the Lifetime Value of an Acquired Customer LTV , which along with the Cost of Customer Acquisition COCA is an important variable that indicates the profitability of your business. Chapter 17 provides step by step direction with worked examples on how to calculate LTV. There is a very serious warranted warning presented on page that COCA is extremely important and that care and attention is required to understand and calculate correctly.

The LTV and COCA analysis can kill many new businesses by identifying problems early in the process; but more often it highlights the importance of keeping an eye on key factors to make the business successful.

Your MVBP should balance simplicity with sufficiency. The example of Home Team Therapy perfectly illustrates this point — presented on page Finally, the Cartoons at the start of each chapter are thought provoking. This one is from Step 7: High Level Product Specification — makes point that until you scope out a product at a high level to include represent it visually, that your potential customer may not fully get it!

All the cartoons can be accessed via Safari Books Online as it shows the first page of each chapter. To conclude : Top of the Book List? This a 5 star book. I would recommend any startup founder to add this book to their Reading List.