Educating Entrepreneurs
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The document discusses the differences between entrepreneurship education and traditional business school education. It notes that entrepreneurship education focuses on topics like hypothesis testing, customer development, business model testing, and agile development to help students search for a scalable business model. In contrast, business school education emphasizes execution, accounting, management, and administrative skills needed to operate large companies. The goal of entrepreneurship education is to teach students how to transition a startup into a large company through validating a business model and product/market fit.
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Educating Entrepreneurs
- 1. Educating Entrepreneurs Who? What? Why? Steve Blank Stanford Technology Ventures Program
- 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. 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. 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
- 6. Small Business Startups Startup Small Business
- 7. Small Business Startups Startup Small Business - Business Model found - Profitable business - Existing team < $10M in revenue
- 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. Scalable Startup Scalable Large Startup Company >$100M/year
- 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. 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. 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. 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. The Transi0on Scalable Large Transi9on Startup Company - Founders depart - Professional Mgmt - Process - Beginning of scale
- 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. E-School instead of B-School
- 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. 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. Emphasis On Hypotheses Testing
- 20. How Do Startups Search For A Business Model? • The Search is called Customer Development • The Implementation is called Agile Development
- 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. Durant Versus Sloan Scalable Large Transi<on Startup Company
- 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. 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. 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