Why are you Interested in

Entrepreneurship?
• You may have an idea that can change the world or improve an
exisng process you are familiar with
Entrepreneurial • You may have a technological breakthrough and want to capitalize on

Startups it (perhaps, by founding a startup)

• You may have a passion and want to learn about entrepreneurship

while looking for a good idea, technology, and/or a partner

Why are you Interested in

What is a Startup?
Entrepreneurship?
• A startup is an organizaon designed to innovate a new product or service
under condions of extreme uncertainty (“The Lean Startup” by Eric Ries)
• An organizaon encompasses mission, vision, strategy, hiring, accounng,
$nance, operaons, etc.,

• In this context, however, it operates under too much uncertainty, following

leap-of-faith assumpons concerning its invenon

• Innovaon = Invenon × commercializaon

• This implies that having a product does not mean you have a business
In any of these cases, at this stage you may want simply to uncover the world
of startups and entrepreneurship. If so, let us get started!
 The Single Condition for a Business Entrepreneurship
• The single necessary and su(cient condion for a business is a paying • Entrepreneurship is the process of creang a sustainable business
customer
• There are two types of entrepreneurship
• The day someone pays you money for your product or service, you have a • Small and Medium Enterprise (SME)
business, and NOT the day before • Innovaon-Driven Enterprise (IDE)

SME IDE
• But, having a paying customer does not mean you have a sustainable Market Local and/or Regional Regional/Global
business! Invenon Not Necessary Necessary
Jobs Non-tradable Tradable
External Capital Typically No Yes
• To have a sustainable business, you need enough customers paying enough Growth Linear Exponenal
money within a reasonable amount of me

SME and IDE Expected Revenue &

STARUPS
Job Trends
Revenue & Jobs

Revenue & Jobs

Revenue & Jobs

“Burning Area” “Burning Area”

Time Time Time

SME : Usually Not Risky IDE: Much Riskier, but IDE : Much Riskier, but
More Ambious (Go Big More Ambious (Go Big
or Go Home!) or Go Home!)
STARUPS Entrepreneurship vs. Management
• IDE entrepreneurship is a special kind of management
• Entrepreneurship is cool, innovave, and excing
• Management is dull, serious, and bland
• What is actually excing is to see a startup succeed and change the
world
• This cannot happen without managing it rightly
• The road to excitement passes through the (boring)
management stu7!

• Why IDE entrepreneurship is a special kind of management?

Schools of Thought in
Entrepreneurship vs. Management
Entrepreneurship
• Why special? • Three major schools of thought:
• Tradional business thinking suggests: 1. “Just Do It”
• Perfecng a product, even if takes a great deal of me; hence, long cycle mes • Most entrepreneurs are wary of implemenng tradional management pracces,
• Large teams and hierarchical organizaons afraid that this will invite bureaucracy or s>e creavity
• Failures are unacceptable • They assume management is the problem, hence, chaos is the answer
• Unfortunately, this approach leads to chaos more oDen than it does to success
• Modern business (or entrepreneurial) thinking suggests:
• Building a minimum viable product (MVP); hence, short cycle mes 2. “Launch a Rocket Ship”
• Focusing on what customers want, thus experimenng tremendously • Specify every single step to take in excruciang details (typically by tapping into a
proven set of techniques used for managing big companies)
• Failing as a prerequisite for success
• Specify the expected result of every single step taken– what happens if a ny error
• Small teams and >at organizaons occurs? Can you adapt or pivot?
 Schools of Thought in
Who is an Entrepreneur?
Entrepreneurship
• Three major schools of thought: • Anyone who creates a startup is an entrepreneur
3. “Drive a Car” • This implies that an entrepreneur should have a (strong) appete of risk taking
• Set a (hypothecal) path to reach a desnaon (you are not sure whether
this path will lead to the desnaon) • But an entrepreneur needs not create a startup; she/he can operate inside
• Experiment with and validate your path “established” organizaons
• Persevere, adapt, or even pivot if needed • This entrepreneur is typically referred to as “intrapreneur”
• If you are driving to work, do you give up if there is a detour in the
road or you made a wrong turn?
• In addion, an entrepreneur does not need to invent!
• No, you remain thoroughly focused on geIng to your desnaon • E.g., Steve Jobs iden$ed the computer mouse created by Xerox PARC and
commercialized it e7ecvely through Apple
• E.g., Larry Page and Sergey Brin used AdWords (which was created by Overture
The third school of though is the recommended one! Services, Inc) on their search results pages
 The Startup Realty What Makes Startups Succeed?
• The grim reality is that most startups fail

• There are $ve essenal elements that lead to successful startups

Idea Team BM Funding Timing Idea Team BM Funding Timing Idea Team BM Funding Timing

10 9 8 6 10 8 9 5 4 9 8 10 7 7 10

TEAM &
IDEA BUSINESS MODEL FUNDING TIMING Ranks over 10
Succeeded
Execuon [Based on a study by IdeaLab]

What Makes Startups Succeed? What Makes Startups Succeed?

Time 42%

Factors of
Team & 32% success
Execuon
across
Idea Team BM Funding Timing Idea Team BM Funding Timing Idea Team BM Funding Timing
Idea 28% more than
200
8 5 4 6 6 4 5 6 10 4 4 5 6 10 4 companies
Business 24%
Model

Failed Funding 14%

[Based on a study by IdeaLab] [Based on a study by IdeaLab]

What Makes Startups Succeed?
Factors In Success Across 200 Companies
45% 42%
40%
35% 32%
30% 28%
25% 24%
20%
15% 14%
10%
5%
0%
Idea Team Bussiness Funding Timing
Model

[Based on a study by IdeaLab]