The document discusses different types of startups and funding sources for startups. It contrasts small businesses, which focus on finding a profitable business model with existing teams and revenues under $10M, with scalable startups, which are designed for rapid growth to over $100M annually and require risk capital. It argues entrepreneurship education should focus on customer development, business model testing, and agile development rather than traditional business plans. The goal of a startup is to search for a scalable business model, then transition to execution once product/market fit and a repeatable sales model are established.

1. Educating Entrepreneurs Who? What? Why? Steve Blank Stanford Technology Ventures Program

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. 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. 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. Some Definitions

6. Small Business Startups Small Business Startup

7. Small Business Startups Small Business Startup - Business Model found - Profitable business Existing team < $10M in revenue

8. Small Business Startups 5.7 million small businesses in the U.S. <500 employees They employ 99.5% of our workforce Small Business Startup - Business Model found - Profitable business Existing team < $10M in revenue

9. Scalable Startup Scalable Startup Large Company >$100M/year

10. Scalable Startup Scalable Startup Large 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 Startup Large 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 Small Business Startup - Business Model found - Profitable business Existing team < $10M Scalable Startup Large 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 Small Business Startup - Business Model found - Profitable business Existing team < $10M Scalable Startup Large Company >$100M/year Total Available Market > $500m Company can grow to $100m/year Known business model Focused on execution and process X X X

14. The Transition Scalable Startup Large Company Transition Founders depart Professional Mgmt Process Beginning of scale

15. Startups Search, Companies Execute Scalable Startup Large Company Transition Business Model found Product/Market fit - Repeatable sales model - Managers hired - Cash-flow breakeven - Profitable - Rapid scale - New Senior Mgmt ~ 150 people The Search for the Business Model The Execution of the Business Model

16. E-School instead of B-School

17. What’s A Startup? Scalable Startup Large Company Transition 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 Startup Large Company Transition Business Model found Product/Market fit - Repeatable sales model - Managers hired - Cash-flow breakeven - Profitable - Rapid scale - New Senior Mgmt ~ 150 people You fail if you remain a startup!

22. Durant Versus Sloan Scalable Startup Large Company Transition

23. Entrepreneurship School Scalable Startup Large Company Transition Entrepreneurship School Hypothesis testing Business Model testing Customer Development Agile Development Metrics Venture Finance Hands-on

24. Business School Versus Entrepreneurship School Scalable Startup Large Company Transition Hypothesis testing Business Model testing Customer Development Agile Development Metrics Venture Finance Hands-on Execution Accounting Products Engineering Management Administrative Business School Entrepreneurship School

25. Business School Versus Entrepreneurship School Scalable Startup Large Company Transition Courses Entrepreneurial Management Creativity and Innovation Technology Entrepreneurship Patent Law for Entrepreneurs Global Entrepreneurial Marketing Entrepreneurial Finance Business School Entrepreneurship School Courses Managerial Finance/Accounting Managing Groups and Teams Financial Accounting Operations Modeling for Optimization Global Value Chain Strategies