The New Generation U.S. Entrepreneurial Culture

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A presentation to PKU Guanghua EMBA class during their visit to UCLA Anderson in April 2011

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  • Witnessed the failure of dozens and dozens of startups. failure is part of the entrepreneurial processJames Cameron, Director of Avatar
  • The New Generation U.S. Entrepreneurial Culture

    1. 1. The new-gen U.S. entrepreneurial Culture<br />A speech given to EMBA class of 2011 from PKU GuangHua School of Management during their visit to UCLA Anderson<br />George Sun<br />
    2. 2.
    3. 3. I. Ready Fire Aim<br />
    4. 4. 1993<br />2010<br /><ul><li>MessagePad: first series of personal digital assistant devices developed by Apple in 1993. Introduced in March 1994. Abandoned in April 1995.
    5. 5. Ipad: not the 1st trial. introduced in April 2000. Huge Success. </li></li></ul><li>Failure<br />90% of startups fail within the first five years. <br />Fail Fast, Fail Early, Fail Cheap<br />Failure is an option, but fear is not.<br />
    6. 6. Ideas are just Multipliers<br />=<br />X<br />http://www.oreillynet.com/onlamp/blog/2005/08/ideas_are_just_a_multiplier_of.html<br />
    7. 7. Never Sell AN Idea TOO Early<br /><ul><li>Drug Development Process in the U.S. Equivalent to the growth of a business. Idea -> Prototype -> Validation -> Growth -> Exit
    8. 8. Ideas only are cheap.
    9. 9. With more validation, risk goes down, value goes up.
    10. 10. Prototypes, customer MOU, partnership with suppliers </li></li></ul><li>Cost of starting a business<br />Cleantech<br />Biotech<br />Semiconductor<br />Internet<br />Mobile<br />Software<br />
    11. 11. Bootstrapping<br /><ul><li>Why bootstrap: cannot find external money or no need for external money.
    12. 12. Benefits of bootstrapping: control of the company, less short-term pressure from investors, no pre-mature product launch, more focused on marking a profit.
    13. 13. Free resources are abundant: open source software, MBA interns, etc…
    14. 14. Bootstrap examples. SmugMug.com, online photo sharing service. bootstrapped their way to $10 million worth of revenue and 19 employees</li></li></ul><li>Case study of a real startup<br /><ul><li>Guy Kawasaki – UCLA Alumnus
    15. 15. No business plan. No external funding.
    16. 16. Took 2 months from registering the domain name to going live.
    17. 17. Outsourced the website development to foreign resources
    18. 18. Acquired by NowPublic.com on July 10, 2008 </li></li></ul><li>II. BE Flexible<br />
    19. 19. Planning is guessing<br />X<br />
    20. 20. Pivoting<br />Basketball . <br />To keep one foot in place while holding the ball and moving the other foot one step in any direction.<br />Business. <br />To change a startup’s business model based on validated learning<br />
    21. 21. Pivoting Cycles<br /><ul><li>Pivots:
    22. 22. Market segment pivot
    23. 23. Technology pivot
    24. 24. Revenue model pivot
    25. 25. Sales channel pivot
    26. 26. Metrics to Measure
    27. 27. Registered user
    28. 28. Unique visits
    29. 29. Downloads/Page views
    30. 30. Customer feedback
    31. 31. Sales
    32. 32. Speed
    33. 33. Many little changes
    34. 34. Testing multiple versions at a time.
    35. 35. Learn quickly
    36. 36. Goal: to find the product-market fit. </li></ul>Source: Eric Rieshttp://theleanstartup.com/<br />
    37. 37. Case Study<br />1st: Beamed payments from Palm Pilots. <br />2nd: Online Feature person-to-person payments for Auction sites. Acquired by Ebay. <br />3th: A universal online payment system with open API used by Walmart.com, Buy.com, Overstock.com, etc..<br />
    38. 38. III. Supports<br />
    39. 39. IP Protection<br />
    40. 40. Balanced Exit<br />M&A: an equally important exit as IPO in the US. <br />Different in China:<br /><ul><li>Less M&A, especially in the tech sector.
    41. 41. Less respect for intellectual properties.
    42. 42. Large companies choose to be a fast follower, killing startups prematurely. </li></li></ul><li>Full spectrum of investors<br />Risk goes down<br />Returns goes down<br />
    43. 43. Recommended Readings<br />Business Model Generation<br />by Alexander Osterwalder<br />The Four Steps to the Epiphany <br />By Steven Gary Blank <br />Rework<br />By Jason Fried<br />

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