Educating Entrepreneurs Who?  What? Why? Steve Blank Stanford Technology Ventures Program
News From Silicon Valley Source: Dave McClure 500hats.com Small VC Funds  ($50-250M) Union Square Ventures First Round Cap...
News From Silicon Valley Small VC Funds  ($50-250M) Traditional VC Funds  (>$250M) Angels &  Incubators ($0-10M) Seed Fund...
News From Silicon Valley <ul><li>Internet startups - $500K is the new $5M </li></ul><ul><ul><li>Driven by the top of the p...
Some Definitions
Small Business  Startups Small Business Startup
Small Business  Startups Small Business Startup <ul><li>-  Business Model found </li></ul><ul><li>- Profitable business </...
Small Business  Startups <ul><li>5.7 million  small businesses  in the U.S. <500 employees </li></ul><ul><li>They employ 9...
Scalable  Startup Scalable Startup Large Company >$100M/year
Scalable  Startup Scalable Startup Large Company >$100M/year <ul><li>Total Available Market > $500m </li></ul><ul><li>Comp...
Scalable  Startup Scalable Startup Large Company >$100M/year <ul><li>Total Available Market > $500m </li></ul><ul><li>Comp...
Very Different Startup Curriculums  Small Business Startup <ul><li>- Business Model found </li></ul><ul><li>- Profitable b...
Silicon Valley Startup Curriculum Small Business Startup <ul><li>- Business Model found </li></ul><ul><li>- Profitable bus...
The  Transition Scalable Startup Large Company Transition <ul><li>Founders depart </li></ul><ul><li>Professional Mgmt </li...
Startups Search, Companies Execute Scalable Startup Large Company Transition <ul><li>Business Model found </li></ul><ul><l...
E-School  instead of B-School
What’s A Startup? Scalable Startup Large Company Transition <ul><li>Business Model found </li></ul><ul><li>Product/Market ...
Teach the Business Model  Not  the Plan <ul><li>No  Business  Plan  survives first contact with customers </li></ul><ul><l...
Emphasis On Hypotheses Testing
How Do Startups  Search  For A Business Model? <ul><li>The Search is called Customer Development </li></ul><ul><li>The Imp...
Startups Don’t Last Forever Scalable Startup Large Company Transition <ul><li>Business Model found </li></ul><ul><li>Produ...
Durant Versus Sloan Scalable Startup Large Company Transition
Entrepreneurship School Scalable Startup Large Company Transition Entrepreneurship School <ul><li>Hypothesis testing </li>...
Business School Versus Entrepreneurship School Scalable Startup Large Company Transition <ul><li>Hypothesis testing </li><...
Business School Versus Entrepreneurship School Scalable Startup Large Company Transition <ul><li>Courses </li></ul><ul><li...
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Educating Entrepreneurs. Who? What? Why?

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Educating Entrepreneurs. Who? What? Why?

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