we16 - diving into entrepreneurship

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  • 2025 Labs

    DIVING INTO ENTREPRENEURSHIP

    Melissa Liu CEO 2025 Consulting / 2025 Labs

  • 2025 Labs

    Why Diving into Entrepreneurship?

    Fear may be involved

    You can practice and planbut it still involves a leap of faith

    Done well, it may look easybut its actually a lot of work

    Its also uncertain you may crash and burn, you may fail, you may look like a fool in front of a crowd

    But it is exhilarating!

    I was a high school diver, but

    this is not me

  • 2025 Labs

    What is entrepreneurship?

    People may envision Uber, Twitter, AirBNB Not every new company starts and develops like these

    May be a technology company or not May be Angel/VC funded or not May be planned to become a $ billion company or not May be about a revolutionary new idea or not

    Entrepreneurship = The act of starting (and building) a new company that did not previously exist

  • 2025 Labs

    Data on entrepreneurship and women-owned business

    Women own 36% of all businesses, according to US Census data from 2012, a 30% increase from 20071

    13% of all US adults are involved in entrepreneurship2 Female entrepreneurs start companies with less capital than male

    entrepreneurs3

    In 2014, 15.5% of all US based startups receiving VC funding had at least one female founder, up from 9.5% in 20094

    Virtually all net new jobs created in the U.S. between 1980 and [mid-2000s] were created by firms that were five years old or less5

    2 Forbes, U.S. Entrepreneurship hits record high, 2013

    1 Forbes, Why The Force Will Be With Women Entrepreneurs in 2016 , 2016

    3 National Womens Business Council, Access to Capital by High-Growth Women-owned Business, 2014 4 TechCrunch, Female Founders on an Upward Trend, according to CrunchBase, 2015 5 CNN, U.S. economy wont grow fast until we unleash entrepreneurship, 2016

  • 2025 Labs

    Getting started some initial milestones Before you start, you need:

    Iterate, build, re-plan, manage from here

    Legal Entity and Filings Now you have a business!

    Start-up Financing Enough $ to get started

    Start-up Team Resourcing Whoever you need to be able to sell something could be just you

    Product: Something to Sell Product or service you can sell

    Company Presence Collateral to make your company look legit web site, business cards, etc.

    Bank Account Place for you to take payments and pay bills

    Sales You working on selling something to someone

    Taxes and Corporate Filings Reporting of the state of your company for taxes and legal filings

    Real business

    Can take money

    Can sell

    Have revenue

  • 2025 Labs

    Getting started some initial milestones Before you start, you need:

    Iterate, build, re-plan, manage from here

    Legal Entity and Filings Now you have a business!

    Start-up Financing Enough $ to get started

    Start-up Team Resourcing Whoever you need to be able to sell something could be just you

    Product: Something to Sell Product or service you can sell

    Company Presence Collateral to make your company look legit web site, business cards, etc.

    Bank Account Place for you to take payments and pay bills

    Sales You working on selling something to someone

    Taxes and Corporate Filings Reporting of the state of your company for taxes and legal filings

    Real business

    Can take money

    Can sell

    Have revenue

    Getting to sales does not mean that you have a viable business model

    ... or that you can ever achieve viability with your current plans and directions

    But it is a start You will learn from your experiences to here, and you can

    evolve your business from that point We will come back to the business model topic

  • 2025 Labs

    Mall Map: simple overview of a business

    Product or Service something to try to sell

    Revenue Model Cost Model

    Customer Acquisition

    Legal Entity and Filings

    Presence: Marketing, Web, Media

    Organization, Hiring, Contracting

    Cost of Doing Business Revenue Generating Product Related Costs

    * Area of legal complexity

    May take iteration to

    get to a viable

    business model

    Business Model: Drives your profit

    Financial Management

    IT, Operations, etc.

    * You are here (maybe)

  • 2025 Labs

    What is a legal entity?

    Sole Proprietorship

    You own the business as an individual

    Its bank account is your personal bank account

    Its debts are your personal debts

    No corporate veil for liability

    Incorporated Business

    Business has been incorporated into an entity distinct from its owner(s)

    C Corp LLC Non-profit 501(c)3 S Corp

    Business has its own bank account attached to the business name

    Protection of corporate veil (usually)

  • 2025 Labs

    Business Models: Product vs Technology Example 1: Software

    Product Customers Revenue Model

    Packaged software (Office or Intuit - traditional)

    User/Purchasers of the software

    Businesses OEMs (pre-installed PC)

    $ per package sold Site license, volume discount

    Subscription Software (e.g., Office 365, Intuit

    Online)

    User/Purchasers of subscriptions

    Can also be businesses

    $ per time period of subscription

    $ per period per user, etc.

    Free Software (e.g., Google Docs,

    Facebook)

    Purchasers of ads Purchasers of data

    $ per eyeballs or time watched, etc.

    Can be differentiation between what you are building vs what you are selling. The same thing could be sold through different models

  • 2025 Labs

    Business Models: Product vs Technology Example 2: Radio

    Product Customers Revenue Model

    FM Radio Advertisers Ad revenue

    Sold by duration, peak times, etc.

    Sirius XM Subscription purchasers /

    listeners Car manufacturers?

    $ per time period of subscription

    Pandora Companies that buy ads Consumers who pay for a

    subscription

    Freemium (ad-supported) Subscription-supported

    (ad-free)

    Customer = The person who pays. Others are users, listeners, readers fans who help you attract paying customers

  • 2025 Labs

    Some key decisions Goods vs Services

    Physical goods: inventory, shipping logistics, sales tax, manufacturing and/or assembly time, etc.

    Services: labor logistics, retention Companies can be both gds and svcs R&D companies: Can be either, also

    have up-front cost of development

    For-Profit vs Non-Profit Most businesses are for profit Non-profit public benefit companies

    have many regulatory requirements For-profit entities: C-corp, S-corp,

    LLC, sole proprietorship Pass-through vs corporate tax

    Sole Founder vs Partners

    For some people, its better to have partners

    Complementary critical skills Partnerships dont always work and

    sometimes dissolve It can be ugly!

    Initial Customers

    Ideal if you have a starting set of customers to work with

    Easy way to create a track record of doing business

    Customers = Paying (lots of people willing to try out for free)

    In-source / Out-source / Skills

    What you (and partners) can do vs what you need help with

    E.g., outsource web site, logo creation, manufacturing, etc.

    Cost vs internal skill-sets Skills you want vs skills you dont

  • 2025 Labs

    Recap: Product development in a startup environment

    Expect to iterate on: products customers revenue model

    You might find that you can sell to happy customers and lose money doing it May need to iterate on your business model Lower product cost, higher sales price, different market, volume/

    scale, etc.

    Some companies get pretty far with an unproven or bad? business model This works if you are well-funded; not everyone has this option

  • 2025 Labs

    We interrupt this story for a few tidbits

    Steve Blank, Not All Those Who Wander Are Lost Story about the marketing guy who feels hes meeting goals

    because he has made a bunch of calls (activity-based metric) Goal in startup marketing is not activity-based its actual sales

    Guy Kawasaki, Pioneer Summit 2015 All you need is someone to build it, and someone to sell it.

    Everything else is bullshit

    Stay focused on selling, and the things you need to do to enable it. Those are your most critical activities.

  • 2025 Labs

    Customer acquisition some market traits

    Cost Sensitivity: Customers own money or OPM

    (Other Peoples Money) Budget constraints

    Sales Lead Time: Size of the organization &

    bureaucracy Legal/regulatory oversight and

    controls

    Individual characteristics within a market will vary Wealthy consumers vs not Small, growing businesses vs large

    struggling businesses

    But a market overall will tend to have some characteristics

    Cost Sensitivity

    Sales Lead Time

    Consumer

    Large (stable)

    business

    Individual customer characteristics vary

    Small business

    Govt

    Well-funded startup

    Non-profit (LT varies)

    Disclaimer: This is the experience of a two-time entrepreneur, not a marketing professional

  • 2025 Labs

    Customer acquisition / marketing / sales What you might see

    Social media

    ad placement