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