The MIT Launch X Student(s)
Research shows that 90% of students are interested in becoming entrepreneurs, but 75% don’t know where to start.
Meanwhile, two-thirds of workers are unhappy with their jobs, having not explored or prototyped potential career paths that might allow them a more meaningful and coherent life.
Entrepreneurship is an effective means of prototyping multiple career options while building foundational skills and mindset that are necessary regardless of the career path chosen. Through starting a company, a founder can explore the real inner workings of an
- Entrepreneurship— what entrepreneurship is, the common hurdles to starting and how to overcome them, plus some examples of young entrepreneurs and the value of entrepreneurship education
- Ideation (Idea Development)— creativity exercises and brainstorming to come up with problems to solve and associated ideas, and filtering suggestion for choosing your top one
- Customers— determining who your customer is, what the market research methods are and their value, and how to interview
- Value Proposition— taking insights from customer interviews, and assessing how best to fill customer needs
- Strategy— determining competitive position, developing your MVP to test your assumptions about your customer
- Bringing It Together— finding how to reach your customer, and how to sell and pitch your offering, plus some suggested resources for continuing
What is an Entrepreneur?
Someone who pursues an opportunity regardless of any resource limitations
Entrepreneurs mitigate risks, but are not always inherently risk-loving. Entrepreneurs also range in types from technical background, to designers, to marketers — they need not be the “business” type. Ideas are also often overrated, since success is more often about execution and a combination of additional factors beyond just the idea. Entrepreneurship is the pursuit of opportunity beyond resources controlled.
What are the components needed to succeed in entrepreneurship?
Heart, head, hands, and home
Entrepreneurial success requires the passion and inspiration (heart), knowledge of the process and how to get things done (head), taking action by interviewing customers, prototyping, selling, and more (hands), plus having the community of mentors and colleagues for moral support and advice (home).
What is the 80/20 rule applied to startups?
80% of the results come from 20% of the effort / tasks
This rule applies across many aspects of business and life in general – 20% of customers typically supply 80% of the revenue / profits, 20% of the text of a book delivers 80% of the insights and lessons, and 20% of the effort and tasks that you can do for your startup will yield 80% of the results. The key to time management early in your company is to try to find these high impact tasks, and to avoid being a perfectionist about going for the remaining portion of the 100% results.
When should you seek investment?
When you have proved yourself some in the market
A potential investor will ask for too much of your business if you go to him or her with just an idea or team. Even if you have a prototype, there is still lot of risk to the investor, since they are not yet sure if there is customer demand. The more risk you can remove for the investor, the better reception you will have. Think about it from their perspective – how much confidence is there that there is demand for this? That it will work? And that someone else could not do it just as easily?
What is a customer need?
Customers have a need if they are not currently being served well enough.
Customers have a need if they are not currently being served well enough
What is a market gap?
Opportunities to appeal to new customers who aren’t currently being addressed
Customers who aren’t currently being addressed are gaps. Recent developments are trends. Under-served customers represent needs.
What are the two main categories to filter and choose an idea?
Personal Fit and Market Potential correct
The two key dimensions align with how investors assess a business – the entrepreneur themselves and how well suited they are for the business and market, or the fit (their passion, drive, skills, and experience in the field), and the market and business viability and value, or potential (the differentiation, traction, etc.).
Which is the preferred early market research method of the ones shown?
Interviews will give the most actionable insights, plus an understanding of the real needs and frustrations, assuming questions are structured in an open-ended way so as to not bias the interviewee.
Surveys cannot uncover needs or frustrations, since they will already have a hypothesis about the need to validate or not.
Google can be great for market sizing, but is not a means of validating needs and frustrations. The data is too general and often dated.
Focus groups are similar to interviews, but susceptible to group-think.
Which of the following is a good question to ask a potential customer during market research?
Can you walk me through your typical use of this product?
Open-ended questions that allow the interviewee to share stories are best, since this opens the opportunity to then dig further as you learn more about different needs and frustrations that may be of interest.
The other questions are leading, biased, and difficult to evaluate.
What are the important considerations in choosing a target customer market?
Large need or frustration
High willingness to pay for a solution
Moderate size — focused but with large potential
All of the above
What is a Customer Persona?
One customer in your target market
A tool to ensure company alignment
A person you can call for input when making company decisions
All of the above
What is a Value Proposition statement?
It tells the proposed pricing of your product
It tells the specific benefit you can provide for your target customer, and how you will deliver it
It is a statement of how you will create value for your investors
All of the above
The value proposition statement includes your specific customer, industry, promise of value, and strategy. It is your sales message of what you will do for your customer.
What is Entrepreneurial Strategy?
Your plan of creating and capturing value, and sustaining over time
Strategy is how you capture and sustain value. All companies have some competition, since customers are solving the need in some way today, even if that is just the need to be entertained. Strategy goes beyond the idea and is about executing and commercializing that idea.
What is Competitive Advantage?
Better meeting the needs of the customer along their top priority
A company should not seek to be better than competitors on ALL dimensions, since there will need to be trade-offs for the company to be sustainable over time. The key is to determine what matters most to the customers you are targeting and better meeting needs on those dimensions.
What is your MVP?
Minimum Viable Product
MVP is commonly defined is the Minimum Viable Product, though we also sometimes refer to it as the Minimum Viable Proof — how you will initially prove your offering. This varies some depending on whether you are developing a product, service, or app.
How do you develop an MVP?
Sketching it to make sure everyone is aligned
Determining the few features that will most easily impact the customer needs
Isolating what assumptions are new and need to be tested
All of the above
Ensuring alignment and keeping it simple are important
What is a method you can use to acquire customers when just starting your company?
Personal selling is a recommended strategy – pound the pavement – get out there and sell! The other listed strategies require existing customers to use, so cannot be part of your initial strategy. They are valuable later on, though, so being selective about the customers you target and about how to retain them is important.
Why is keeping customers important?
It is more expensive to find a new customer than to keep an existing one
Losing customers can cause a negative impact and work against you
They can provide positive reviews, referrals, and word of mouth
All the above
To whom might you give an elevator pitch?
Potential partners or suppliers
What important component do you need to include in your elevator pitch?
Your vision, introducing the company or framing the problem
You must include the vision and introduction to the company and problem you are solving. The other components may or may not be relevant depending on the specifics of your business. Since an elevator pitch is short, you do not want to overwhelm your audience with information, so keep it simple, and focus on getting people interested versus telling them everything they may want to know.