we16 - diving into entrepreneurship

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

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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

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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

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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

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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

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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)

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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)

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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

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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

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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

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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

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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.

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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

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Customer acquisition / marketing / sales What you might see

Social media

ad placement