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Educating Entrepreneurs
  Who? What? Why?

           Steve Blank
Stanford Technology Ventures Program
News From Silicon Valley

                               Angels &
             TechStars        Incubators   Y-Combinator
...
News From Silicon Valley

             Angels &
            Incubators
             ($0-10M)

                            ...
News From Silicon Valley
•  Internet startups - $500K is the new $5M
  –  Driven by the top of the pyramid

•  Seed Funds ...
Some Definitions
Small	
  Business	
  Startups	
  


Startup	
                          Small	
  Business	
  
Small	
  Business	
  Startups	
  


Startup	
                               Small	
  Business	
  




               - Bus...
Small	
  Business	
  Startups	
  


     Startup	
                               Small	
  Business	
  




               ...
Scalable	
  Startup	
  


Scalable	
                                 Large	
  
Startup	
                                Co...
Scalable	
  Startup	
  


Scalable	
                                             Large	
  
Startup	
                      ...
Scalable	
  Startup	
  


      Scalable	
                                             Large	
  
      Startup	
          ...
Very	
  Different	
  Startup	
  Curriculums	
  
                                          	
  
    Startup	
               ...
Silicon	
  Valley	
  Startup	
  Curriculum	
  


X X X
  Startup	
                                            Small	
  Bus...
The	
  Transi0on	
  


Scalable	
                                   Large	
  
                         Transi9on	
  
Start...
Startups	
  Search,	
  Companies	
  Execute	
  

The Search for the Business Model                  The Execution of the B...
E-School instead of B-School
What’s	
  A	
  Startup?	
  

Scalable	
                                     Large	
  
                           Transi<on...
Teach the Business Model Not the Plan




         •  No Business Plan survives first contact with
           customers

 ...
Emphasis On Hypotheses Testing
How Do Startups Search For A
         Business Model?




•  The Search is called Customer Development
•  The Implementati...
Startups	
  Don’t	
  Last	
  Forever	
  


Scalable	
                                                Large	
  
           ...
Durant	
  Versus	
  Sloan	
  


Scalable	
                                   Large	
  
                         Transi<on	...
Entrepreneurship	
  School
                                       	
  

Entrepreneurship School


       Scalable	
       ...
Business	
  School	
  Versus	
  
                  Entrepreneurship	
  School       	
  

Entrepreneurship School         ...
Business	
  School	
  Versus	
  
                 Entrepreneurship	
  School       	
  

Entrepreneurship School          ...
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Educating Entrepreneurs

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Transcript of "Educating Entrepreneurs"

  1. 1. Educating Entrepreneurs Who? What? Why? Steve Blank Stanford Technology Ventures Program
  2. 2. News From Silicon Valley Angels & TechStars Incubators Y-Combinator ($0-10M) Maples Investments Seed Funds SoftTech (Clavier) ($10-50M) SV Angel (Conway) Felicis (Senkut) First Round Capital Small VC Funds Union Square Ventures ($50-250M) Sequoia Benchmark Traditional VC Funds (>$250M) Source: Dave McClure 500hats.com
  3. 3. News From Silicon Valley Angels & Incubators ($0-10M) Innovation is Seed Funds happening here ($10-50M) Small VC Funds ($50-250M) Traditional VC Funds (>$250M) Source: Dave McClure 500hats.com
  4. 4. News From Silicon Valley •  Internet startups - $500K is the new $5M –  Driven by the top of the pyramid •  Seed Funds providing entrepreneurial education –  Ycombinator, TechStars, SeedCamp, LaunchBox, etc •  Customer Development/Lean Startup adoption –  Methodology to test hypothesis and business model
  5. 5. Some Definitions
  6. 6. Small  Business  Startups   Startup   Small  Business  
  7. 7. Small  Business  Startups   Startup   Small  Business   - Business Model found - Profitable business -  Existing team < $10M in revenue
  8. 8. Small  Business  Startups   Startup   Small  Business   - Business Model found - Profitable business -  Existing team < $10M in revenue •  5.7 million small businesses in the U.S. <500 employees •  They employ 99.5% of our workforce
  9. 9. Scalable  Startup   Scalable   Large   Startup   Company   >$100M/year  
  10. 10. Scalable  Startup   Scalable   Large   Startup   Company   >$100M/year   -  Total Available Market > $500m -  Company can grow to $100m/year -  Known business model -  Focused on execution and process
  11. 11. Scalable  Startup   Scalable   Large   Startup   Company   >$100M/year   -  Total Available Market > $500m -  Company can grow to $100m/year -  Known business model -  Focused on execution and process •  In contrast a scalable startup is designed to grow big •  It typically needs risk capital •  These are what Silicon Valley means when they say “Startup”
  12. 12. Very  Different  Startup  Curriculums     Startup   Small  Business   - Business Model found - Profitable business -  Existing team < $10M Scalable   Large   Startup   Company   >$100M/year   -  Total Available Market > $500m -  Company can grow to $100m/year -  Known business model -  Focused on execution and process
  13. 13. Silicon  Valley  Startup  Curriculum   X X X Startup   Small  Business   - Business Model found - Profitable business -  Existing team < $10M Scalable   Large   Startup   Company   >$100M/year   -  Total Available Market > $500m -  Company can grow to $100m/year -  Known business model -  Focused on execution and process
  14. 14. The  Transi0on   Scalable   Large   Transi9on   Startup   Company   -  Founders depart -  Professional Mgmt -  Process -  Beginning of scale
  15. 15. Startups  Search,  Companies  Execute   The Search for the Business Model The Execution of the Business Model Scalable   Large   Transi<on   Startup   Company   -  Business Model found - Cash-flow breakeven -  Product/Market fit - Profitable - Repeatable sales model - Rapid scale - Managers hired - New Senior Mgmt ~ 150 people
  16. 16. E-School instead of B-School
  17. 17. What’s  A  Startup?   Scalable   Large   Transi<on   Startup   Company   -  Business Model found -  Product/Market fit - Repeatable sales model - Managers hired A Startup is the organization used to search for a scalable business model
  18. 18. Teach the Business Model Not the Plan •  No Business Plan survives first contact with customers •  A Business Model diagrams how a company creates, delivers and captures value •  Or in English: How a company makes money
  19. 19. Emphasis On Hypotheses Testing
  20. 20. How Do Startups Search For A Business Model? •  The Search is called Customer Development •  The Implementation is called Agile Development
  21. 21. Startups  Don’t  Last  Forever   Scalable   Large   Transi<on   Startup   Company   -  Business Model found - Cash-flow breakeven -  Product/Market fit - Profitable - Repeatable sales model - Rapid scale - Managers hired - New Senior Mgmt ~ 150 people You fail if you remain a startup!
  22. 22. Durant  Versus  Sloan   Scalable   Large   Transi<on   Startup   Company  
  23. 23. Entrepreneurship  School   Entrepreneurship School Scalable   Large   Transi<on   Startup   Company   -  Hypothesis testing -  Business Model testing -  Customer Development -  Agile Development -  Metrics -  Venture Finance -  Hands-on
  24. 24. Business  School  Versus   Entrepreneurship  School   Entrepreneurship School Business School Scalable   Large   Transi<on   Startup   Company   -  Hypothesis testing -  Execution -  Business Model testing -  Accounting -  Customer Development -  Products -  Agile Development -  Engineering -  Metrics -  Management -  Venture Finance -  Administrative -  Hands-on
  25. 25. Business  School  Versus   Entrepreneurship  School   Entrepreneurship School Business School Scalable   Large   Transi<on   Startup   Company   Courses Courses -  Entrepreneurial Management -  Managerial Finance/Accounting -  Creativity and Innovation -  Managing Groups and Teams -  Technology Entrepreneurship -  Financial Accounting -  Patent Law for Entrepreneurs -  Operations -  Global Entrepreneurial Marketing -  Modeling for Optimization -  Entrepreneurial Finance -  Global Value Chain Strategies
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