Entrepreneurial Leadership Final

Ch6: beachhead market.

"Almost all first-time entrepreneurs find that ignoring market opportunities is difficult...believing that more markets increase their odds of success... In fact, such thinking will decrease your odds of success, because your new enterprise will lack the necessary focus to succeed.... A key determinant of success for entrepreneurs is their ability to both to select a market and to stay disciplined by deselecting the other markets.... By choosing a single market to excel in, your startup can more easily establish a strong market position and state of positive cash flows before it runs out of resources.... Your BEACHHEAD MARKET is where, once you gain a dominant market share, you will have the strength to attack adjacent markets with different offerings, building a larger company with each new following"

Chapter 9: Double-kinked demand curve.

"My competitors set my prices" Sweezy's kinked demand curve Gutenberg's double kink and empirical rules of thumb: Price must increase > 10% to squeeze sales - Price cut must be > 5% to influence sales

Ch5: modifications to BMC that lead to the Lean Canvas.

(1) Customer value proposition (What value do we deliver? What products and services are we offering? What problems are we solving or unmet needs/wants are we filling?). LC unique value priposition (2) Customer segments (Who are your most important customers. What segment of the market is most likely to be interested in your offering?) 3) Channels (How do customers learn about us? How do we reach them? Online? Brick-and-mortar? Salespeople? Direct mail/email? Etc.) (4) Customer relationships (How do you establish and maintain relationships with your customers?) LC unfair advantagre (5) Key activities (what will you do and what will you outsource or hire?- 2 PAGE drill) LC Solution (6) Key resources (how will you do it? This is operations planning and management-selling, making, stocking, relationship management systems, book-keeping, money management) LC key metrics (7) Key partners (As it pertains to 6 and 7, who will do what?) LC problem (8) Revenue streams (How are you going to make money? What are your total revenues) LC revenue structure (9) Cost structure (All the expenditures need to execute and run the busines model)

Chapter 10: 5Types of plans

(Table 10.6) (1) Business Model Canvas Useful for identifying gaps in the business idea. Its visual. 9 Blocks. (2) Business Brief A brief document outlining the company overview. Gives stakeholders (investors really) an at-a-glance understanding of the business. (3) Feasibility Study Tests the possibilities of an initial idea. Focuses on the size of the market, the suppliers, distributors, and so on. Identifies the essentials to make the business work. Entrepreneurs can assess if they have the time, energy, abilities, and resources. (4) Pitch Deck A presentation highlighting elements found in a feasibility study and a business plan. Has replaced the formal business plan in most venues. Needed for collegiate competitions, applications to accelerators, etc. Don't Forget Guy Kawasaki's 10-20-30 Rule: 10 slides, 20 minutes max, 30-point font minimum (5) The Business Plan Traditional investors and bankers require a traditional business plan. It is a work in progress. A traditional business plan usually consists of 20 to 40 pages. Includes the organization's mission and strategy. 200 Hours! The business plan takes the longest to create. Helps you gain clarity. Some entrepreneurs find writing a simple business plan a great exercise. Others believe writing a business plan helps you shape an idea into an opportunity. Growing support for the advantages of not writing a business plan. Based on untested assumptions. Business plan is the first step?: Outdated view. May not necessarily be relevant to the new entrepreneur. Some say plan comes after venture gets started.

Ch4 Stanford Design School's 5 Phases of Design Thinking

(Table 4.7), Empathy is getting out and talking to your customers directly Define is defining a problem statement from that empathy work Ideate is brainstorming lots of ideas that could help you solve the problem you identified Prototype is building a crude version of the solution that you want to test with users Test is getting out and testing with users

Ch6: TAM,SAM,SOM, and importance of market sizing

(Table 6.7) TAM, or Total Available Market: Total market demand for a product or service (e.g. all of the possible customers who visit donut shops or cafes in the US) SAM, or Serviceable Available Market: Portion of the Total Available Market that your product or service intends to target (donut market in Baton Rouge area) SOM, or Share of Market: Portion of Servicable Available Market that your company is realistically likely to reach (how much SAM market share can you capture) * Paradox: Investors don't buy it but must see it...prefer proof of concept with actual sales, i.e. the LAUNCH MARKET (proving you already have group of customers willing to buy) Benefits: (1) Allows you to calculates sales and profits. (2) Allows you to Identify growth opportunities. (3) Helps you pinpoints competitive threats. (4) Forces you to thinking about exit/pivot strategies (investors REALLY want to know this!). (5) Gives you a sense of market trends and how they impact your business (6) As proof for investors (well, evidence anyway).

Ch3: 4 strategies for idea generation

(book covered 7) analytical, habit-breaking, relationship-seeking, development strategies. (1) Analytical strategies: Generating ideas about how products can be improved. Mechanical analogies from nature are helpful here. (2) Habit-breaking strategies: Think about the opposite of something you believe, in order to explore a new perspective. Take the viewpoint of someone else: What would Napoleon, Lincoln, Steve Jobs, Someone I look up to, EC do? 3) Relationship-Seeking Strategies Consciously making links between concepts or ideas that are not normally associated with each other. Example: Make a list of words that are completely unrelated to the problem you are trying to solve. (2) Then list the characteristics of each item on the list. (3) Next, apply those characteristics to the problem in order to come up with ideas to solve the problem 4) Development Strategies Employed to modify or enhance existing ideas. Take the result of Relationship-seeking strategies drill 2) Each of you come up with 3 ways to make each better (more feasible and effective) I'll ask for your best

Chapter15: SAVE framework

(fig 15.3) (Solution, Access, Education, Value)

Digital Marketing: (2) Search Engine Optimization

(including Crawling, Indexing, Ranking), Search Engine Optimization: Used to help a website rank higher on search results and get organic (i.e. not paid traffic) online traffic. Search engines (1) Crawl or find information Crawlers find information that is publicly available on the internet (also known as search engine spiders). They visit each website and try to find out how many pages they have (text, images, videos). There are more than 140 trillion individual pages on the internet today and growing with thousands of new pages published daily! (2) Index or store/organize Crawling alone isn't enough to build a search engine, because the information has to be organized, sorted, and stored so that it can be processed by the search engine algorithms before it is made available to the end-user (i.e. the searcher). This process is called indexing. Google describes its index like the back of a really big book. Point: If your website is not in their index, it won't appear in any searches. This implies that the more pages you have in the search engine index, the better your chances of appearing In search. (3) Rank The third and final step in the process is for search engines to decide which pages to show in the SERPS and in What order when someone types a query. This is achieved through the use of search engine ranking algorithms. Put simply, these are pieces of software that have a number of rules that analyze what the user is looking for and what information to return. Google has at least 255 of them. The search engine matches the query words to the index pages. To appear in the top 5 positions of the SERP (search engine results pages), your website has to optimize for search engines using a process called Search Engine Optimization or SEO.

Ch.1: Ways to own a business

(starting, franchising, buying).

Ch4 (Design Theory): 7 skills of designers

(table 4.1). Seven Skills of Designers that Entrepreneurs Should Have: 1 Observation: Curious through different lenses, e.g. economics, biology, physics (mechanical) 2 Listening: "the best designers never assume they know what is best for the user" (IDEO's medical device for nurses p. 83) 3 Desire change: The best want to "improve upon" 4 Context and integration: I love the chair/room, room/house/house neighborhood (e.g. Wright, maps) 5 Solutions-driven: Observe and identify first, then solve 6 Consideration: You want a reputation for being "other-centered" (book looks at impact on people, environment, etc) 7 Unbound: "How Might We?" IDEO CEO Tim Brown says this is the one key phrase for sparking the design thinking process POINT: Identifying needs first, then developing idea/solutions and then taking action are what separate design/entrepreneurial thinking from conventional business thinking

Preliminary 10 keys for success (Small Business Economics review)

*** 1. Targeting customers and markets: You have to target because you have limited (a) money or financial resources (b) human resources. You can't set your net too wide. Business Strategy boils down to: Better offer? Better costs? Entirely new offer? Extremely expensive to educate on new offering 2. Ability to deal with change: With customers, employees, technology, financing rates, etc. Example: Jeff Bezos (Amazon): Wanted to be world's largest bookseller The current over-used phrase is "pivot," but the point is that most successful entrepreneurs started with one goal, noticed something else, and pursued it. Business Plans - Mistakenly conceived as road maps, but are really sales documents. We'll do a Busines Brief. That's enough to get you started. *** (3) Cost efficient and effective sales organization: Note: Entrepreneurs spend a lot of their time (1) raising money (2) selling Best advice I ever heard: "Write down three ways to make it easier for customers to do business with you" Example 1: How do they find you? How do you get your signal out with all of the noise? People's attention is the increasingly scarce resource being rationed. How do you get it? Website? SEO? SEM? Social Media? PR (e.g. writing an op-ed)? Open a store in the flow of customer traffic? Window signs? Mailings? Advertising? (church bulletins). It's tough! Example 2: How do they authenticate you? Customer reviews, third party accolades? Yelp, Trip Advisor, Amazon, Angie's List, etc. *** (4) Pricing Most New Firms Underprice Their Products PRICE DISCRIMINATION, or charging a different price for the dame good or service, means simply trying to garnish as much value as possible from each transaction. First-degree price (perfect) discrimination: Each customer is charged the maximum he/she is willing to pay (really only practical with auctions) Second-degree price discrimination: Charging a different price for different quantities, such as quantity discounts for bulk purchases, or two-part pricing schemes where additional purchases are priced lower. Less profitable but more practical (realistic) than 1st degree price discrimination. Third-degree price discrimination (segmented pricing): Charging a different price to different groups (segments) of consumers based upon age, gender, location, time of use, etc. *** (5) Proper Financing How do you raise money to get your business off the ground? Two flavors: Debt financing (borrowing money you promise to pay back with interest), and Equity financing (I'll give you part of the business). Debt financing is cheaper: Why? Example: I need $100,000 to start a business, which I eventually sell for $1,000,000. If I had used debt financing (i.e. borrowed the money) I would have to pay back the $100,000 plus whatever interest might have accrued. If I used equity financing (i.e. "give me $100,000 and I'll make you half owner) I payout $500,00. (6) Proper Financial Controls Thing I Learned # 1: "Never lose sight of the numbers" If you were giving these people your money, what would want to see? You can only manage what you monitor, i.e. actual cash flow and projected cash flow (income minus expenditures), working capital needs. Daily, weekly, monthly, annually? Think of a personal budget and how you plan to stay on track. (7) Leveraging IT Good IT systems used to give you an advantage, now they are minimum necessary to compete. New firms have an advantage because they aren't locked into anything and can choose newest and latest. What software do I need to track customers (CRM - Customer Relationship Management). Salesforce, Netsuite, Copper What about accounting/payroll/operations? (think Quickbooks) Do I need full-blown enterprise resource planning (ERP) software? ERP is business process management software that manages and integrates a company's financials, supply chain, operations, reporting, manufacturing, and human resource activities (SAP, Oracle, IBM, etc). (8) Leveraging HR You're HR is limited, don't hire people who can only do one thing? Find problem solvers, not buck passers. What can you outsource? (pay an outside firm to do?). Typically legal, CPA work, sometimes sales, administrative, etc. Don't hire people you can't fire, like friends and family Always check references ("Damned by faint praise" is the key here) THINK THROUGH COMPENSATION *** (9) Ensure Operational Excellence (Woolsey and Goldratt) "Sales are made on the street, profits are made in operations." Secret to customer satisfaction is consistency of experience, THAT should drive your operations TWO PHILOSOPHIES - The Guru Approach to Operations Management: Theory of Constraints: There is usually one particular part of a process or system that is weaker than others, and most effort should be put into improving that part. Like a bottleneck. Think Garden hose, chain, etc. - The Anti-Guru Approach to Operations Management You cannot improve a system if you cannot do not understand every component of it (you should be able to work every job). The Simplest Approach Might be the Best Use Checklists! (10) Avoid the major mistakes Examples: Underestimating Cash Needs Overestimating ability to get customers (again, who's your first customer?) Always spell out worst-case scenario and expect (prepare for) it

*** Ch5: Three Big Questions.

1, What is my Why? Why is the world a better place because of my business? Look at yourself 2. What is Your Core? Core: The single thing that you will do better than anyone else that will be very difficult for others to copy (thisis a look inward at assets that will be difficult for anyone to replicate, not a benefit). Other steps are dominated by primary market research and viewing the world through your customer's yes, but this step is primarily focused inward. One great core is sufficient. Look inward at your firm.

Preliminary: Thomas T. Nagle's 10 Price Sensitivity Drivers

1. Perceived substitutes effect: buyers are more price sensitive the higher the product's price relative to its perceived substitutes (Woolite compares itself to dry-cleaning, not detergent). 2. Unique value effect: Buyers are less price sensitive the more they value the unique attributes of the offering from competing products (KFC Original Recipe, Coke's secret formula, etc.) 3. Switching cost effect: Buyers will be less price sensitive the higher the costs (monetary and nonmonetary) of switching vendors (e.g. once you've learned a particular software, Turbo Tax, Oracle) 4. Difficult comparison effect: Customers are less price sensitive when they have difficulty in comparing alternatives (try buying the identical car or cell phone plan at two different shops) 5. Price-Quality effect: Buyers are less sensitive to a product's price to the extent a higher price signals better quality. People "blink" price and quality (Aside: 0=quality, 9=cheap) 6. Expenditure effect: Buyers are more price sensitive when the expenditure is larger. That's the economics of search, you spend more time price-shopping cars than table salt. 7. The end-benefit effect: The larger the end-benefit, the less price sensitive the buyer (auto safety commercials with kids/families; LifeLock and identity theft; Etrade and "getting even," etc.) 8. Shared-cost effect: When you spend someone else's money on yourself, you are not prone to be price conscious. Business travelers and expense accounts; shared dinners, etc.) 9. Fairness effect: People are less price sensitive when they perceive fairness in price differences. Ex. Charging less for using cash versus charging more for using a card. Which seems fairer? 10. Inventory effect: Buyers are less price sensitive when they can store goods (carry an inventory). Ex. Stocking up on a good deal; perishable nature reduces price sensitivity.

Ch1: (practicing entrepreneurship) 7 Traits of entrepreneurs,

1: Entrepreneurship is not reserved for startups You can also buy a business or franchise "Intrapraneurship" (Corporate entrepreneurship) is harder, you are usually a cog in someone else's vision 2: Entrepreneurs do not have a special set of personality traits 3: Entrepreneurship can be taught. It's a method that requires practice Why reinvent the wheel? It's learning like any field. 4: Entrepreneurs are not extreme risk-takers (they are great risk managers). But all real business decisions do require an "entrepreneurial leap of faith." 5: Entrepreneurs collaborate more than they compete. Every interaction requires collaboration 6: Entrepreneurs act more than they plan. But don't forget Eisenhower: "Planning is essential, plans are worthless" 7: Entrepreneurship is a life skill. "The only one looking out for you is you" "The principle of reciprocity doesn't apply to institutions/organization" Seven Skills of Designers that Entrepreneurs Should Have: 1 Observation: Curious through different lenses, e.g. economics, biology, physics (mechanical) 2 Listening: "the best designers never assume they know what is best for the user" (IDEO's medical device for nurses p. 83) 3 Desire change: The best want to "improve upon" 4 Context and integration: I love the chair/room, room/house/house neighborhood (e.g. Wright, maps) 5 Solutions-driven: Observe and identify first, then solve 6 Consideration: You want a reputation for being "other-centered" (book looks at impact on people, environment, etc) 7 Unbound: "How Might We?" IDEO CEO Tim Brown says this is the one key phrase for sparking the design thinking process

Ch5: (Building business models): 4 parts of business models and how they tie into the Business Model Canvas (BMC)

4 parts business models: (1) Offering Identifies what you are offering to a particular customer segment. Customer value proposition describes what products your business offers. The "value" part of the CVP: How much your product or service is worth to customers. (2) Customers Individuals or businesses willing to pay for what you are offering. Ex. From book: Bryan Bitticks, franchise owner of Great Clips hair salons, created a virtual online experience. (3) Infrastructure Inclusive of all the resources an entrepreneur must have to deliver the CVP. This is work! (4) Financial viability. Defines the revenue and cost structures a business needs to meet its operating expenses. and lean canvas and how tie together (omit other)

Preliminary: Big 4-allocative efficiency,

Allocative efficiency = The optimal allocation of productive means to desired ends (producing those goods and services consumers desire most) who's valuations (how much people are willing to pay) exceed their cost of production. Think of allocative efficiency as the "Goldilocks" outcome: Not too little, not too much, but just the right amount...of everything! And think of the market process as always "tending toward" allocative and productive efficiency By following the signals of profit and loss, free markets provide people with the goods and services they want - allocative efficiency - and do so without using more scarce resources than necessary - productive efficiency.

Chapter 8: Developing Networks and Building Teams.

An entrepreneur is required to interact with investors, potential employees, etc. In a networking group of about 40 people, the leads you could obtain is almost incalculable. Most(78 percent) startups benefited from informal networking. There are three main advantages to networks: Private information Access to diverse skillsets Access to power (people who can make decisions and control resources). Networking events: Relationships can be forged on mutual personal interests. The skill of networking can be learned. Good networkers will listen and show interest What are the rules? Don't sell! Try to help others.

** Ch6: My customer segments and segment validation matrix.

An important building block of BMC and Lean Canvas. The starting point Users. Influencers (or opinion leaders). Recommenders. Economic buyers. Decision makers. Saboteurs: Usually in B2B, but anytime there is a team, e.g. husband and wife-there could be a saboteur

Chapter 12: Bootstrapping and Crowdfunding for Resources; Bootstrapping

Bootstrappping: "Pull yourself up by your own bootstraps." It means "Lift yourself by your own effort." A third of small businesses have begun with less than $5,000 Procures resources without long-term external financing. Financing: Could be from cash from your savings, your salary, etc. Sweat equity: Increase in value or ownership interest. The entrepreneur who bootstraps needs to be clear about product and goals. Be mindful of the cash flow: To keep your business afloat. Bootstrapping: Friends, family, your own savings and credit cards Often called "pre-seed" (no revenues yet) or "seed" stage, and the people investing are often called "Angel" investors. Increasingly groups of them get together called "incubators" (once going, "accelerators" help fund growth).

Chapter 9: Break-even calculations.

Breakeven analysis can also help set price. The formula is: Breakeven units = Fixed costs / (sales price per unit - variable cost per unit).

Digital Marketing: (4) Content Marketing,

Content Marketing: Goal is to reach potential customers through use of content. Content published on website and then promoted through social media, email marketing, SEO or even PPC campaigns. Ex. LinkedIn in message: "Click here to receive my 5 best investment ideas for Q42020!" Here LinkedIn is the social media used to promote content (my "5 best investment ideas") posted on my website. Hopefully, the content is good enough to make them want to know more about me and my business. Note: The difference between a blog and a content marketing campaign is that a content marketing campaign has specific goals as to what to publish and when, who to target, and how to monitor the effectiveness of you campaign. Each week (or day) might have a different LinkedIn or other social media post. Main Content Marketing Tools: Blogs Ebooks Online Courses Information Graphics (e.g Pinterest) Podcasts Webinars

Chapter 9: Cost-led pricing vs. value-based pricing.

Cost-Led Pricing (most common in my experience) Involves calculating all the costs involved in manufacturing or delivering the product or service and adding expected profit margin Example: Total costs for making a cupcake Are $2.00 and you add a 50% markup, so your price is $3.00. Value-Based Pricing Involves pricing your product based on how it benefits the customer. All pricing literature argues for this approach Example: Start with price, estimate sales at various levels of promotion (advertising/marketing) expenses, then estimate costs) KNOW THIS! 1) Focus on a single segment (i.e. big-screen TVs buyers, not all TV buyers). If you have multiple segments, determine a suitable value-based price for each. 2) Compare the next best alternative: "What would this segment buy if my product owasn't available?" This "next best alternative" for target segment is the essential pint of comparison for calculating value-based price. Suppose competitor Charges $799. Doesn't work for truly new stuff. 3) Understand differentiated worth: Which of your products features are unique, i.e. differentiated, from competitor's. 4) Place a dollar amount on the differentiation: This last and most difficult step in calculating a value-based price is to estimate the dollar value of the differentiated features. "How much will big-screen TV shoppers pay for an extra 5 inches of screen size?" Add that amount (say $150) to $799 competitor's price. The value-based price of your wide-screen TV is $949.

Sample Digital Marketing Strategy

Covered in class Step 1: Website. Create a website that is fast and mobile-friendly Step 2: Perform SEO Audit and identify which areas need to be optimized for SEO. Step 3: Content Marketing: A) What kind of content to create for the website? (text and videos) B) When to publish it (publishing calendar) Note: Really worth thinking about. Regular? Occasional? C) How to promote it (social media channels, email, and PPC campaigns) Step 4: Social Media Marketing: Identify which social media channels are suitable for marketing your business (based on customer profiling!) and create a schedule for publishing content on those networks. Step 5: Email Marketing: Start building an email list using several CTA ("call to action") areas on your website and social media channels. Step 6: Pay-Per-Click Advertising: In parallel to the above activities set up a Google Ads campaign to target people searching for product-related keywords on Google and "REMARKETING" campaigns on Facebook to go after users that visited your website but did not convert (buy). Step 7: Video Marketing: (based on step 3) Publish videos on a dedicated YouTube channel, Facebook, Instagram, or any other platforms you are targeting. Step 8: Mobile Marketing: Consider creating a mobile app that can be downloaded from the App stores. Step 9: Measure and analyze results using Google analytics (installed and configured correctly ). Learn and pivot. My Advice: POC

Ch6: crossing the chasm,

Crossing the Chasm Transition between early adopters and the early majority. Crossing the chasm involves focusing your resources on the beachhead market. It is key to generating a larger following.

Ch4 problem and design thinking,

DESIGN THINKING PHASES: Inspiration = Design challenge and user needs Ideation = Potential solutions to meet needs Implementation = Prototyping and testing solutions Table 4.2 PROBLEMS: Entrepreneurs are either trapped by their own expertise and experience or they have no expertise and experience. Entrepreneurs are overwhelmed by the amount of data. Entrepreneurs are divided by different perspectives on the team. Entrepreneurs are confronted by too many ideas or ideas that are not innovative. Entrepreneurs lack feedback from users and may have the mentality of "if you build it they will come." Entrepreneurs are afraid of uncertainty and ambiguity. DESIGN THINKING Provides immersion in the user's experience Makes sense of the data by organizing it into themes, patterns, and surprises Builds alignment because data and insights from actual users or customers don't lie (Jaros) Encourages the emergence of fresh ideas and approaches, given the focus on customer inquiry and empathic understanding Offers user testing through very rough and early prototypes Delivers learning in action as experiments engage all stakeholders

Preliminary The "economic problem."

Economic problem what to do not how Unlimited wants, limited means (scarcity) "How to best build a bridge versus whether or not to build the bridge at all, given other wants" - Hayek

Ch6: What is an end-user profile and customer persona and customer journey map?

End user profile Creating an End-User Profile It is composed of six main items: Demographics. Psychographics. Proxy Product (what else buyer is likely to buy, e.g. Prius and solar panels) Watering Holes (bars, fitness classes, conferences, social media, soccer fields,etc.). Word-of-mouth Day in the Life (walk in their shoes for a day, e.g. Toys R Us story) Biggest Fears and Motivators (typically via interview) While a user profile provides a composite summary of a group of users, a persona describes a representative (but fictional) individual. customer persona Best done through real interviews with prospective customers! Key points for building a persona Demographics (age, gender, salary, location, education, family) Goals and challenges Value and fears Pain points or complaints Hobbies Where they get their news or other information Blogs they read Shopping preferences Apps used most frequently General lifestyle description Day in their life Work and/or school activities Relationship with friends Culture Relationship with technology How is free time spent? Social media usage Views on health and well-being Quotes from interviews Customer Journey Mapping Process Focuses on the buyer's experience (graduation party and market updates) Benefits of customer journey mapping: Clear picture of customer interaction. Clarifies what customers think. Confirms the journey of the customer. The risk of not doing customer journey mapping: Unsatisfied customers! -Identify three or four aspects of the customer journey. -Think about how you can resolve these problems. Back in the day: "The best marketing advice we ever heard, anywhere, was write down 5 ways to make it easier for your customer to Do business with you" - Jack Trout

Leadership

Everything covered in 11/16 lecture The Importance of People "Most organizations have access to similar production technology, similar suppliers, direct materials costs. So these are rarely a source of sustainable competitive advantage. The remaining directs costs, SG&A, overhead and corporate expenses are largely the "cost of people" (employees). These are the costs that provide opportunities for creating sustainable competitive advantages." Jack Welch Versus Reginald Jones (his predecessor) at G. E. (General Electric) Stack ranking, i.e, "Rank and Yank" - 20% of employees are at the top of the productivity curve - 70% are doing there jobs well but not excelling - 10% are hurting the company and should be fired Peter Drucker: "The Man Who Invented Management" Drucker: "The decency of the man [Jones] was remarkable...Within GE, Welch was respected and feared, Jones was loved. Krames: Which is better? [I meant who was the better leader, Welch, who was "respected and feared," or Jones, who was "loved"] Drucker: "Bluntly, Jones" Adam Grant: Givers, Takers, and Matchers How Do You Screen Out Takers? Negative impact of taker outweighs impact of a giver 3 to 1 "One bad apple spoils the bunch" Not so givers "One good egg does not make a dozen" It's about weeding out the takers: Keep the wrong people off the bus First impressions, i.e. "agreeableness" not reliable "Give the names of 4 people who's careers you have improved" Takers follow pattern of "kissing up, kicking down," so they treat pears and subordinates poorly. Pfeffer: How to do it - 2 things: (NOT perks/trinkets/gimmicks like nap rooms, ping-pong tables, bring-your-dog-to-work, slides, and certainly not company picnics!) Job control and autonomy (discretion) (2) Social network at work Peterson: 1. Personal Integrity: "live what comes out of your mouth," and make sure its not profanity! 2. Invest in Respect: "Professionalism is recognizing the expertise in others." 3. Empower others: Not doing (micro-managing) so says, "I don't trust you" 4. Measure what you want to achieve: Strategic and financial controls. 5. Create a common dream (mission and vision) - Remember don't say it and not do it (biggest moral killer) 6. Keep Everyone informed: Second biggest moral killer. Own bad news. Budgets reveal priorities. Communicate openly and often. 7. Embrace respectful conflict: That's normal, not "echo chambers." 8. Show humility: Competence, not power-hoarding or having a blame-deflecting Teflon coating and (weak) self-promoting. 9. Look for Win-Win: Keep it professional, not personal. 10. Fix breaches immediately: That means acknowledgement over denial. Trust comes with effort, not promise. Betrayal is difficult to reverse (true in any relationship) Aside: Strategy and Culture shaping behavior "Culture is how people behave when there are no rules" Esprit de corps: The common spirit existing in the members of a group and inspiring enthusiasm, devotion, and strong regard for the honor of the group. "Culture cannot be mandated by management; It must be modelled by leaders"

Ch6: (Developing your customers). Supply and Demand,

Fig 6.1 and 6.2, Market: Place where people can sell goods and services. Supply refers to sellers. Demand is the desire held by prospective customers for goods and services.

Chapter7: Testing and Experimentation

Fig 7.2, Think of an experiment like an investment: What's the minimal amount of time and money I can invest in order to test my idea? Entrepreneurs have many different types of experiments available The Six Steps of the Scientific Experimentation in Action (1) Ask lots of questions. (2) Carrying out background research. - Most successful entrepreneurs become experts. (3) Developing Hypotheses: - Without a clear hypothesis, it is impossible to abandon assumptions. (4) Testing the hypotheses by running experiments. (5) Analyzing the data. (6) Assessing Results: Once the accuracy of the data has been determined, it is time to draw conclusions. Real key to the scientific method: A falsifiable hypothesis, i.e. Entrepreneurial experimentation: Acting to learn (not confirmation bias!) Experimenting quickly: Better chance of refining ideas into viable opportunities. i.e. "get out there fast!" That's why the textbook says, "think like a scientist but don't act like one!"

Chapter7: Giff Constable's Truth Curve.

Fig 7.8 Interview Fast and inexpensive way to get insights from target customers before the experiment. Paper Testing Simple way to outline vison and to spot any mistakes. Can be carried out using techniques like Wireframe (or blueprint-pre storyboarding). Storyboarding or drawing the product you envision. Advertising This involves spreading the word about your business using brochures or social media. Directed toward target market and assessing the level of response. Button to Nowhere Used to test if your customers will click on a new feature on your website before building it. Great way of measuring user interest. Landing Page Include a particular call to action such as "click here for more information." Task Completion or Usability Testing Watching someone using your product to understand what works. Restaurants and new dishes, vacuum cleaner "test drives" in retail stores, etc. Prototype A prototype is an early and often crude version of a product. The crudest version is called rapid prototyping: A model made out of out of foam, wood, boxes, plastic, or other scrap-like material. Note: Most investors want to see a "working prototype" Different Types of Prototypes MVP-Minimum Viable Product: (just enough features to provide feedback/proof-of concept) Rapid Prototypes (usually a scale version) Mock-up Prototype (usually very rough) High Fidelity Prototype (close to the real McCoy). Lego Prototypes. Preselling A testing technique where you try to book orders for your product beforehand. (Everything from condominiums to seminars to concerts) Wizard of Oz: It is actually you behind the scenes manually providing the service Live Product and Business After the tests carried out, you have gathered enough insights and validation to launch your live product.

Chapter 12: Crowdfunding vs Crowdsourcing.

Figure 12.1: Crowdfunding = (4 types) patronage lending reward-based investor Crowdfunding: Raises cash for a new venture from a large online audience. Draws on small contributions from a large number of people. A democratized method of raising money for upcoming entrepreneurs. Approx. $34 billion was raised globally through crowdfunding in 2017. Crowdsourcing: Uses inexpensive labor from enthusiastic like-minded people (e.g. Wikipedia)

Chapter 13: Figure 13.3

Figure 13.3 the valley of death

Ch2 growth versus fixed mindset.

Figure 2.2

Ch3: Find, Search, Effectuate, Design.

Figure 3.3 1. DISCOVERY: Find and Search Assumptions The opportunity exists and is waiting to be identified Role of the entrepreneur Be alert to and scan the environment Level of experience and prior knowledge needed to identify Low Potential value of opportunity Lower Action orientation Risky 2. CREATION: Effectuate and Design Assumptions The entrepreneur creates the opportunity Role of the entrepreneur Take action, build, iterate Level of experience and prior knowledge needed to identify high Potential value of opportunity Higher Action orientation Uncertain

Ch4 IDEO

Figure 4.1 desireable viable feasible Table 4.2. Design Thinking as a Human-Centered Process Design thinking as a "social technology" PROBLEM DESIGN THINKING IMPROVED OUTCOME

Ch4 describe 4 areas of empathy map

Figure 4.5. Areas empathy map: do, say, think, feel, stakeholder Empathy is defined as "the feeling that you understand and share another person's experiences and emotions; and the ability to share someone else's feelings."do, say, think, feel

Chapter15: 2 Benefits of Brands,

How to build your brand Building a brand helps your customers understand what your product is. Choose a name. Design a logo. Spread the word. 1) Brand can be a "beacon" in a world where attention is the scarce resource being rationed 2) Brand can facilitate new product introduction domestically and globally

Ch3: (Creating and recognizing new opportunities). Idea classification matrix,

Idea class matrix

Chapter 8: Implicit Bias & Group Affiliations.

Implicit bias when forming impressions. Human Capital: Personal talent, intellect, charm/charisma, but mostly character Social Capital: Personal brand/reputation and network of relationships. Human capital leads to social capital

Chapter 8: Incubators and Accelerators,

Incubator: Helps early-stage entrepreneurs to refine an idea, usually through access to seasoned entrepreneurs (hence "incubation") Accelerator: Provides tailored support for existing startups thet are already off the ground, hence "accelerate").

Ch5: 3 Qualities of an effective CVP.

It is the value generated for the customer. The three qualities of an effective CVP = Better value than the competition. Measurable in monetary terms. It must be sustainable.

Preliminary Woolsey, Goldratt, Gawande.

Jean woolsey says work every part if want to understnat Goldratt find restraints Gawande wrote Checkbook manifesto

Ch5: 3 Laws of Marketing physics.

Know this: There are different Customer Value Propositions for different customer segments, i.e. Mass Market, Niche Market (bioScarf), Segmented Market (diversified market, multisided market for now) Slide on market segments from strategy 1. Overt benefit: I understand what the obvious benefit of this product is for the customer If high, probability of success (i.e. product or service actively in the market for at least 5 years) was 38% (vs 13% for low overt benefit score). 2. Real Reason to Believe: It's clear why this product can deliver on what it promises to do. If high, 42% probability of success (vs 18% for low). 3. Dramatic Difference: The overt benefit and reason to believe represent something new or novel to the world. If high, 53% probability of success (vs 15% for low). **When all three are strong, "Sales and Profits Explode".

Preliminary public goods,

Market Failure #1 = Public Goods Non-exclusion and Public Goods: Public goods are goods that everyone can enjoy without diminishing their value to others — non-rival consumption — and that producers cannot keep people from using whether they pay or not —nonexcludability. They might not be produced in a market economy, even though people value them by more than their cost, so allocative efficiency is violated! Such goods, e.g., national defense, may have to be produced (or at least contracted for) by the government, and paid for through taxation.

Preliminary externalities.

Market Failure #2 = Externalities Positive and Negative Externalities Externalities exist when parties external to a particular transaction are affected by that transaction. Externalities are due to ill-defined property rights that prohibit the achievement of productive and allocative efficiency. Since external effects can be positive or negative, it follows that there can be positive or negative externalities. Goods that produce benefits for third parties beyond those received by the immediate consumers and producers are under-produced. Activities that impose costs on third parties are over-done. Again, allocative efficiency is violated.

Digital Marketing: (8) Mobile Marketing,

Mobile Marketing: Reaching customers in the different mobile app stores like Google Play, Apple App Store, Amazon Marketplace, etc. They have thousands of apps and millions of users per day. "Download our app!" Note: Mobile marketing is not the same thing has having a mobile-effective version of your website. It's about creating an app and uploading the app to Google Play, or other app store for download by others.

Ch1: What justifies higher vs lower multiples.

More established higher earnings multiple Attributes that justify a HIGHER multiple: •A consistent historical record of growth and profitability •10+ years in business •Substantial hard asset value •Owner retirement •Absentee ownership •Stable management team in place •Long-term quality employees and customers •A broad diverse customer base •Apparent competitive advantages •Proprietary or exclusive products •Obvious opportunity for growth and/or obviously under-performing •Very clean books and records •Up to date assets and premises in superior condition •Highly favorable lease terms or ownership of real property •Desirable location •A high demand enterprise (manufacturing, distribution, or business to business service) •Favorable seller financing •Easy to understand motivation for selling Attributes of the businesses that justify a LOWER multiple within the range: •An inconsistent record of historical profitability •Less than 3 years in business •Little if any hard asset value •Owner critical to operations, professional practices, or consulting •Substantial involvement of family or partners in operations •Few employees or a high employee turnover •Small customer base •A few customers accounting for substantial percentage of revenue •No apparent barrier to enter the business •No clear opportunity for growth and/or improvement in operations •Questionable financial records •Out-dated assets in need of replacement or heavy maintenance •Obvious deferred maintenance or capital reinvestment •Premises in disarray and/or unsuitable for operations •Unfavorable terms on leases •Undesirable location •A low demand enterprise (retail, bar, restaurant, or personal services) •Unfavorable terms owner unwilling to finance, all cash required •Questionable rationale for sale

Digital Marketing: (5) Email Marketing,

Older now (because of social media) but still one of the most effective. Its not about hundreds of spam messages and hi-jiacking people's in-box! You use digital marketing to add leads to your email list (people ask to be added-that's a "call to action" feature on your website") and then through email marketing create sales funnels to turn leads into customers.

Digital Marketing: (7) Affiliate Marketing,

One of the oldest forms of marketing. You promote other people's products and get a commission when you sell or introduce a lead (e.g. insurance companies getting paid a commission for putting clients in other companies' mutual funds). That's could conflict of interest, by the way! Now companies like Amazon have affiliate programs that pay millions per month to websites that sell their products (i.e. an Amazon link). Others will get a commission for promoting your product but you get more. Ex. If your product costs $100 you agree to pay, say, $5 per lead or per sale. Affiliates are very hard to find: Example: (could be its own course!)

Digital Marketing: (3) Pay-Per-Click Advertising,

Pay-Per-Click: Set up PPC campaigns on Google, Bing, LinkedIn, Twitter, Pinterest, Facebook. Can segment based on demographics (age, gender, interests, location). Most popular PPC platforms are Google Ads and Facebook. Can set a monthly budget, usually paying per clic

Ch5: "What are your margins?"

People are Usually Referring to Gross Margins "We were not placing enough emphasis on cash and we weren't managing our margins well." Steiner now places a huge emphasis on something that is often overlooked by entrepreneurs: margins. He defines margins as the difference between revenues and expenses, and these are key indicators of success and excellent benchmarks to use when planning, according to him"It is the value The simplest way to measure the profitability of a product or service is by its gross margin: the sales price less the direct material and labor costs to produce it (COGS or Cost-of-Goods Sold), divided by the sales price (p-c/p). If, for example, your $25 widgets cost $20 to produce, your profit margin is 20 percent. For many companies, however, that is only a starting point. The gross margin calculation does not include overhead expenses like rent or equipment costs, or even selling expenses. The more of those costs you factor in--especially where they vary significantly from product to product or service to service--the more accurate a picture you'll get of your true profit margin. That's for talking to outsiders (potential investors, etc), for your own decision making use the Totals Approach.

Preliminary productive efficiency,

Productive efficiency = Producing those desired goods at the lowest cost, or with the fewest possible resources.

Chapter 9: Simple income statement definition.

Report that measures the financial performance of your business. Subtracts the COGS and operating expenses from the total revenue. The pro forma income statement is a projection of what the company could do. Also reflects depreciation and amortization of your company's assets.

Chapter 9: Revenue Models

Revenue: Income gained from sales. A revenue model identifies how the company will earn and generate profits "How will the business earn revenue, manage costs, and produce profit?" 10: Unit sales revenue model: Generating revenue by the number of items s(units) sold by the company (cars, song downloads). So physical and digital products. Variant is the razor-and-razor-blade model (razor is cheap, you make money on the blades) Advertising revenue model: Generating revenue by advertising products and services (Google AdWords is Google's largest source of revenue, charges advertiser fee whenever ad is clicked on). Another version is promoted or "sponsor/suggested" content ads which appear in the flow of content Data revenue model (generate revenue by selling exclusive data to third parties) usually generated from internet/social media activities, i.e. Facebook, Google, Amazon collect data directly form users. Intermediation revenue model (peer-to-peer): i.e. Broker model organization transactions between buyers and sellers (eBay, Airbnbn, etc). Licensing revenue model: Selling permission to other parties to use intellectual property (patents, trademarks, etc.). E.g. developing phone apps and licensing them to Apple. Franchise revenue model: Selling franchises of existing businesses.Franchisor helps with marketing, operations, financing. Subscription revenue model: Charging to gain continuing access to products and services (Angie's List, Consumer Reports, Blue Apron, Birchbox, Barkbox, Netflix). MRR. Everybody wants subscription or "recurring" revenue model. Professional revenue model: Professional services on time and materials contracts (CPAs, Layers, consultants, etc.). Better/cheaper clear strategy here. Utility and usage revenue model: Charges fees based on how often goods or services are used (aka pay-as-you-go model). Car rental companies. Freemium revenue model: Mixes free (mainly web-based) basic services with a premium or upgraded services available for a fee (magazines, SurveyMonkey) *Revenue models influence who your customers are and how you reach them. Important to have an understanding of what is driving both your revenue and your cost.

Chapter 9: Second and third-degree price discrimination.

Second degree price discrimination (quantity discounts) Third degree price discrimination (pricing according to segment)

Digital Marketing: (6) Social Media Marketing,

Social Media Marketing: Identify which social media channels are suitable for marketing your business (based on customer profiling!) and create a schedule for publishing content on those networks.

Chapter 9: General pricing strategies

Startup entrepreneurs struggle with how much to charge for products or services. The key to sustaining a new business is to create consistent revenue streams. Recall: Pricing schemes generally try to capture as much of the area under the demand curve as possible (competition led, loss leader, introductory offer, skimming, etc). Competition-led pricing: Copy the prices of other businesses. A loss leader: Offering a product or service at a below-cost price. Introductory offer: Encourage people to try your new product by offering it for free. Like Groupon. Essential IMO. Skimming: For new products or services. Psychological pricing: Encourage customers to buy based on their belief that product is cheaper than it really is (i.e. prices ending in 9, one-day only, employee pricing) Bundled pricing: Packaging a set of goods or services together. More factors than just buying or selling need to be taken into consideration. The first key revenue driver is customers. The second key driver is frequency. The third driver is selling process. The fourth driver is price. Cost Drivers Two different types of costs should be taken into consideration: (1) COGS (Cost of Goods Sold) COGS occur when a sale takes place. Include direct costs of producing the goods sold by a company (materials, direct labor). ( Operating Expenses. Operating expenses (indirect costs) are the costs of running your business, i.e. SG&A (selling, general and administrative) expenses. ** Probably easiest to think of cogs as variable costs and operating expenses as fixed costs Calculate prices that will help you decide which one is best for your business. The key to pricing is to ensure you make a profit.

Ch1: entrepreneurial method vs process.

Table 1.5 ENTREPRENEURSHIP AS A METHOD: A set of practices Phases of learning Iterative Creative Action focus Investment for learning Collaborative ENTREPRENEURSHIP AS A PROCESS: Known inputs and predicted outputs Steps to complete Linear Predictive Planning focus Expected return Competitive

Chapter 13: Angels vs VC's,

Table 13.1 Angel Investor: An individual who uses his or her own money to provide funds to a young start up that is run by neither friends nor family. Many have joined to form "Angel networks," like BAN or HAN or CTAN (Baylor Angel Network, Houston Angel Network, Central Texas Angel Network). Use personal capital to invest in an entrepreneurial venture. Often add significant value by providing skills, expertise, and lucrative contacts. Find on sites like AngelList. Venture Capitalist: Professional investor who generally invests in early-stage companies because of perceived long-term growth potential. Usually formed as limited parterships (LLP's - limited liability parterships). *"Angels are looking for companies that are scalable and capital efficient. We're not in a position to fund businesses that need $25 million - lots of capital - like venture capitalists invest" Angels want their money back sooner, in 3-5 years, not 8-10 years like and R&D intensive startup that a venture capital group might fund.

Chapter15: SMILE and SCRATCH test,

Table 15.2 SMILE = (qualities of a powerful name) SCRATCH = (off of list)

Digital Marketing: (1) Website Marketing

Table 15.4 (of the 10 mistakes, 5 I highlighted in class), Building Your Website Websites with crisp, clean designs are the most successful. Your website must be easy to navigate. Attracting an audience takes time. Evolves over time in line with industry fluctuations (Exactly!) Website is the focal point of all digital marketing campaigns. You should present your brand and product/service in the best possible way. Your website should be: Fast Mobile Friendly Easy to navigate

Preliminary McCloskey's "great enrichment."

The Great Enrichment occurred while global population increased from less than a billion in 1800 to over 6 billion today From 1800 to the present the average person on the planet has been enriched in real terms by a factor of ten, or some 900 percent. In the ever-rising share of places from Belgium to Botswana, and now in China and India, that have agreed to the Bourgeois Deal - 'Let me earn profits from creative destruction in the first act, and by the third act I will make all of you rich' "If allowing for improved quality of goods and services, such as in improved glass and autos, or improved medicine and higher education, it is a factor of one hundred. That is, the reward from allowing ordinary people to have a go, the rise at first in northwestern Europe and then worldwide of economic liberty and social dignity, eroding ancient hierarchy and evading modern regulation, has been anything from, to speak precisely about a very imprecise estimate, 2,900 to 9,900 percent." [note 1000% is a factor of 10, 10,000% is a factor of 100].

Chapter15: Engaging Customers Through Marketing; 4 P's,

The four Ps: Product, Price, Promotion, and Place. Newer marketing models extend the 4 Ps to 7 Ps: People, Packaging, and Positioning.

Chapter7: Advertising matrix

Tracing x Response Traceable (direct mail, mail order, Salespeople, website promo radio) Non-traceable (mass media, some Billboards, etc.) Traceable, Lagged Try it and net out effect of prior advertising 2nd Easiest Traceable, Immediate Try it and record results Easiest Non-traceable, Lagged Estimate what response (sales) would have been without ad after netting out effects of prior advertising and compare with what happened with ad Most difficult Non-traceable, Immediate Estimate what response (sales) would have been without ad and compare with what happened with ad 3rd Easiest

Chapter 13: Debt vs equity financing,

Two flavors: Debt financing (borrowing money you promise to pay back with interest), and Equity financing (I'll give you part of the business). Debt financing is cheaper: Why? Example: I need $100,000 to start a business, which I eventually sell for $1,000,000. If I had used debt financing (i.e. borrowed the money) I would have to pay back the $100,000 plus whatever interest might have accrued. If I used equity financing (i.e. "give me $100,000 and I'll make you half owner) I payout $500,00. Equity Financing: Sale of shares of stock in exchange for cash. Comes after bootstrapping. "Sometimes, entrepreneurs spend more time trying to raise money than actually working on the business." "The general rule of thumb is to avoid seeking investment for as long as possible, to give your enterprise time to grow and build value so you can secure a better deal from investors later on." Pre-seed stage: Usually convertible debt Seed-stage financing: Modest money paid to entrepreneurs to prove a concept. Startup financing: Usually R&D intensive funding programs to implement an idea (like biotechnology). Early stage financing rounds (ABC): Larger amounts of funds for companies with a product or service piloted. Mezzanine financing (complicated) Initial Public Offering (IPO)

Digital Marketing: (9) Video Marketing.

Video Marketing: (based on step 3) Publish videos on a dedicated YouTube channel, Facebook, Instagram, or any other platforms you are targeting.

Chapter7: Advertising response function.

Website, social media, local/regional newspapers and bulletins, radio ads, local cable television, handbills (my business broker friend), magazines, trade publications, direct mail, point-of-purchase displays in stores, bill-boards and signs, etc. Each vehicle can be judged according to 3 limitations: Either it (1) has low message recall , like radio ads (2) limited ability to target specific groups, like some local cable station TV commercials, (3) cost. Regardless of which vehicle you choose, try to remember AIDA: Attention, Interest, Desire, Action

Ch1: What should you expect to pay (sales and earnings multiples)

What expect to pay = (sales multiple) Firms are valued as a multiple of sales or a multiple of profits. According to BizBuySell, the average Sales Multiple is .6 times annual revenue. Example: If a business has annual sales of $100,000, It would be worth $60,000 (i.e. .6 X $100,000 = $60,000) - An established business with a good market position, with some competitive pressures and some swings in earnings, requiring continual management attention: a multiple of five to seven times current profits. - An extremely well-established and steady business with a rock-solid market position, whose continued earnings will not be dependent upon a strong management team: a multiple of 8 to 10 times current profits.

Chapter 9: pro forma definition.

When you see "pro forma" think "future expectations" The pro forma income statement is a projection of what the company could do.

Chapter 8: Aulet's 3H model for team selection

Who on your team is your lead "hacker"? (Hacker is the one who will make the product) Who on your team is your lead "hustler" (Hustler is the business person) Who on your team is your lead "hipster"? (Hipster is the one concerned with the customer experience and design). I look at it as product, operations, sales (where does your potential team member fit it?)

Chapter7: Four quadrant framework.

fig 7.8 problem solution organize outcome

Ch4 interviewing tips

figure 4.4, Interviewing: Important part of the inspiration stage to understand user needs. Feedback interviews: Post-purchase Need-finding interviews: Earlier pre-prototype Preparing for an Interview Who you really want to learn from is the key to deciding whom to interview. Ask one broad question, listen, then probe. Peeling the onion, i.e. ask "why?" Parroting: Repeating back what the person has said. You might have misunderstood it and/or they may revise upon hearing what they said

Chapter 8: Networking Advice

from chapter. Try to do things like this: -Use a product and offer concise, vivid, and helpful feedback -Introduce two people with a well-written email, citing mutual interest -Read a summary and offer crisp and concrete feedback Less effective because it appears self-serving (why? Its too easy): -Share a comment on something on Facebook, Twitter, LinkedIn, etc.

Chapter 8: Impression Management,

tableb 8.2 Impression Management: Paying conscious attention to the way people perceive you. Managing impressions others form of you. Implicit bias when forming impressions. Ronald Burt, University of Chicago, implicit bias- and when group affiliations become network obstacles