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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
A hands-on, practical roadmap to get from great idea to successful company In Disciplined Entrepreneurship: Startup Tactics, renowned entrepreneur and Executive Director of the Martin Trust Center for MIT Entrepreneurship Paul Cheek delivers an actionable field guide to transforming your one great idea into a functional, funded, and staffed startup. Building on the ideas presented in the bestselling Disciplined Entrepreneurship, the author delivers a startlingly complete and comprehensive set of solutions you can implement immediately to advance your company to its next stage of growth. This is not a theoretical book. You'll find ground-level, down-and-dirty entrepreneurial tactics--like how to conduct advanced primary market research, market and sell to your first customers, and take a scrappy approach to building your first products--that keep your firm growing. These tactics maximize your impact with limited resources. You'll also discover: * Effective marketing tactics specific to early startups that go beyond cookie-cutter digital MarTech solutions * Tactics for designing and testing your product concepts yourself before investing limited resources in developing a fully functional product * Methods for equity distribution that minimize conflict and maximize investor return An invaluable resource for founders and entrepreneurs, Disciplined Entrepreneurship: Startup Tactics will also benefit any professional working at an early-stage startup or launching new products looking for concrete solutions to the most common and difficult problems faced by young companies and the people who work in them.
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Veröffentlichungsjahr: 2024
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Table of Contents
COVER
TABLE OF CONTENTS
TITLE PAGE
COPYRIGHT
DEDICATION
FOREWORD
ACKNOWLEDGMENTS
INTRODUCTION TO TACTICS
Next Frontier of Entrepreneurship Education
Context of Theory, Practice, and Tactics
Rooted in First Principles
Investing in Individuals, Not Startups
Founder-Led Everything: Wearing Many Hats
It's Never Too Late to Leverage These Tactics
Field Manual No. 22-100
Experimentation Mindset: Get Your Lab Coat
Tactical Stages
How to Use This Book
Output
Notes
STAGE 1: Foundations
TACTIC 1: Goals
In This Tactic, You Will:
Breaking Down the Vision
Why New Ventures Need Goals
Setting the Right Goals
Methodologies
Tracking Goals with Metrics and KPIs
Value of Assigning Ownership
Accountability: Recurring Check-in Meetings
Activities and To-Do Lists
Reevaluating at Regular Intervals and Resource Changes
EXAMPLE
Summary
Note
TACTIC 2: Systems
In This Tactic, You Will:
Goals Are Only as Good as the Systems
Must-Have Systems for Startups
Finding Flexibility: Startup versus Corporate Tools and Systems
Keeping It Simple
Planned Obsolescence
Signs It's Time to Transition
Avoid Overinvesting in Trials
Applying Metcalfe's Law: Building Alignment on Tools and Systems Among Your Team
Summary
Note
STAGE 2: Market Testing
TACTIC 3: Market Research
In This Tactic, You Will:
PMR Never Ends
Focus on Qualitative PMR
Putting the Process in Place
Maintaining Your Pool of Participants
Expanding Your Pool of Participants
Virtual Watering Holes
Optimizing Outreach with Experiments
When It's Difficult to Find PMR Subjects
Interviewing
Observational PMR
Immersive PMR
Keeping Records and Taking Notes
Quantifying Qualitative Research
Quantifying PMR with Surveys
Incorporating Additional Secondary Market Research
Next Steps
Summary
TACTIC 4: Assets
In This Tactic, You Will:
Building a Brand
Explaining What You Do and How You Do It
Website
Social Profiles
Content Generation
Leveraging Generative AI
Summary
Note
TACTIC 5: Marketing
In This Tactic, You Will:
Overall Marketing Strategy
Mousetrap Model
Goals of Early-Stage Digital Advertising
How to Approach Digital Advertising
Digital Advertising Metrics
When Nothing Works
Tips and Tricks
Beyond Digital Advertising: Other Means of Marketing
Summary
TACTIC 6: Sales
In This Tactic, You Will:
“What Does Your Pipeline Look Like?”
Building a Lead List
Writing Compelling Content
Outreach with Experiments
Compounding Communication Mediums
Outbound Sales Metrics
Beyond Outbound Outreach: Sales for Startups
Summary
Notes
STAGE 3: Product Development
TACTIC 7: Product Roadmap
In This Tactic, You Will:
Product Vision and Strategy
Roadmap Timeframe
What Belongs—and What Doesn't
Tying the Product Roadmap Back to Organizational Goals
Summary
Note
TACTIC 8: Design
In This Tactic, You Will:
Migrating from Inquiry Mode to Advocacy Mode
Starting with a Sketch
Low-Fidelity to High-Fidelity
Value of Sharing Low-Fidelity Designs with Customers
Components and Templates
Building Clickable Prototypes for Software
Avoiding Minute Details
Summary
TACTIC 9: User Testing
In This Tactic, You Will:
PMR versus User Testing: One and the Same
Sourcing Participants
Building a Script
Live Observed Testing
Unmonitored User Tests
Unmonitored Observation
User Testing Metrics
Beyond the Tests Themselves
Summary
Notes
TACTIC 10: Engineering
In This Tactic, You Will:
Early Approaches to Technical Talent
Levels of Technical Depth
Leveling Up Beyond the MVBP
Software Architecture
Case Example: Dignitize
Summary
STAGE 4: Resource Acquisition
TACTIC 11: Legal
In This Tactic, You Will:
When to Incorporate
Entity Structure
Considerations for the Team
Equity Split
Representation
Legalese: A Startup Glossary
Legal Documents
Summary
TACTIC 12: Finance
In This Tactic, You Will:
Startup Finance versus Corporate Finance
Basic Startup Financial Literacy
Financial Model Outputs
Path to Profitability
Beyond Modeling: Ongoing Monitoring with Finance Tools
Banking
Summary
Note
TACTIC 13: Pitch Deck Design
In This Tactic, You Will:
Audience Identification
Story Over Slides
Revisions
Slide Design
Critical Components
Tips and Tricks
Summary
Notes
TACTIC 14: Fundraising
In This Tactic, You Will:
Milestone-Based Financing
Sources of Funding
Running a Fundraising Process
Building the Lead List
Generating Leads
Fundraising Assets
Follow-up and Urgency
Diligence Goes Two Ways
More than Money
Optimizing Your Time Raising Money
Summary
Notes
TACTIC 15: Hiring
In This Tactic, You Will:
Determining Who You Need to Hire
Hiring versus Outsourcing
When to Hire Generalists and Specialists
Writing the Job Description
Sourcing Candidates
Interviewing
Compensation Considerations
Benefits
Setting New Hires up for Success
Creating Culture
Summary
NEXT STEPS
Workbook: Personal Skills Scorecard Post-Assessment
Putting Together the Puzzle
Staying Scrappy: Order of Operations
Iterating on Your Experiments
Course Correction
Leading Your Team: OTC
Changing Hats
Finding Balance While Building a Business
Bonus Tactic: The Update Email
We Need More Entrepreneurs
EDUCATOR MATERIALS
INDEX
END USER LICENSE AGREEMENT
Guide
Cover
Title Page
Copyright
Dedication
Foreword
Acknowledgments
Introduction to Tactics
Table of Contents
Begin Reading
Next Steps
Educator Materials
Index
End User License Agreement
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Praise forDisciplined Entrepreneurship Startup Tactics
“Disciplined Entrepreneurship Startup Tactics is a game-changer for founders. In my career, I have spent significant time working in startups, especially as employee #10 at Jumia, the largest e-commerce company in Africa. When I started the venture development process all over again for a new startup (Bumpa), the Tactics course at MIT helped me stay grounded, providing the right focus and strategy I needed to execute. It gave me the skills and knowledge to thrive as a founder and helped the venture succeed early. This book will help you do the same.”
—Omolara Ajele-Awoyemi, Co-Founder and Operating Partner, Fast Forward Venture Studio, and Advisor, Bumpa
“This book goes beyond the usual clichés and dives deep into the real-world challenges and opportunities that startups face. The approach within can truly make a difference in your entrepreneurial endeavors. An essential addition to any entrepreneur's toolkit!”
—Paul English, Co-Founder and CTO, Kayak
“Disciplined Entrepreneurship Startup Tactics is an indispensable guide for entrepreneurs looking to build and scale their ventures. This book provides a systematic approach to startup success, from market testing to fundraising and hiring. It's a must-have resource for any founder striving to create lasting impact.”
—Brad Feld, Partner, Foundry, and Co-Founder, Techstars
“Disciplined Entrepreneurship Startup Tactics has revolutionized my approach to entrepreneurship. This book offers practical tactics and actionable advice that have helped my team and me take a more systematic approach to building our business, Memorable AI. Tactics have truly helped us organize our startup around solid foundational principles, test our hypotheses more effectively, and hire the right people. I often refer back to these learnings when discussing with my co-founder and team. Having leveraged the Tactics course at MIT, I can say confidently that following this framework increases the odds of success for any venture. It's a must-read for any founder.”
—Camilo Fosco, MIT and Founder, Memorable AI
“Having witnessed the journeys of over 3,000 startups as the founder and long-time CEO of MassChallenge, I can confidently say that Startup Tactics is an indispensable resource for entrepreneurs building new ventures. Whether you're a first-time founder or a seasoned entrepreneur, this book will help you navigate the complexities of building a successful startup.”
—John Harthorne, Founder, MassChallenge, and Founder and Managing Director, Two Lanterns Venture Capital
“From the outside, HubSpot might seem like a smooth up and to the right story. It belies what actually goes on inside. The best way I'd describe HubSpot is two steps forward followed by one step back followed by two steps forward followed by one step back, etc. Disciplined Entrepreneurship Startup Tactics provides an experimentation framework helpful for determining what your next two steps forward should be and what to do when you need to take one step back. Startup Tactics is such a valuable continuation of the entrepreneurship lessons we learned at MIT when we were starting HubSpot.”
—Brian Halligan, Co-Founder and Executive Chairman, HubSpot
“As a founder who has experienced the ups and down of starting and scaling a company firsthand, I highly recommend Disciplined Entrepreneurship Startup Tactics. Based on first principles thinking, it shares practical and actionable guidance for founders at every stage and is a valuable resource for anyone striving to build a successful startup.”
—Drew Houston, Co-Founder and CEO, Dropbox
“Disciplined Entrepreneurship Startup Tactics offers a fresh perspective on entrepreneurship, emphasizing founder-led skills through a rigorous, systematic approach. I highly recommend it to aspiring entrepreneurs and students who are looking for a framework to develop their strategic and execution skills. From goal setting to hiring, this invaluable book is a comprehensive guide that equips entrepreneurs with the tools they need to succeed.”
—Mo-Yun Lei Fong, Executive Director, STVP, Stanford Engineering Entrepreneurship Center, Stanford University
“As a co-founder of Care.com, scaling the organization from start-up stage through five rounds of funding and IPO, I gained a strong appreciation for the entrepreneurial process. Disciplined Entrepreneurship Startup Tactics is a resource that will be incredibly helpful to entrepreneurs at any stage. This book provides an action-oriented framework for startup success. Having spent the past 10 years teaching entrepreneurs I know that this book will help founders learn the skills they need to be successful.”
—Donna Levin, CEO, Arthur M. Blank School for Entrepreneurial Leadership, Babson College, and Co-Founder, Care.com
“As the founder and managing partner of OpenView Venture Partners, I have consistently emphasized the importance of disciplined entrepreneurship in building successful startups. Disciplined Entrepreneurship Startup Tactics aligns perfectly with this philosophy, offering practical guidance and actionable tactics that are crucial for founders looking to achieve sustainable growth. With its insightful content, this book empowers entrepreneurs to make informed decisions, drive innovation, and unlock their full potential, making it an invaluable resource for anyone seeking entrepreneurial success.”
—Scott Maxwell, Founder and Managing Partner, OpenView Venture Partners
“In my book, That Will Never Work, I share our story of taking Netflix from an idea to one of today's leading entertainment brands. That process was not simple, but it is a process that can be learned. I highly recommend this book for its actionable strategies in setting goals, developing products, and financing new startups.”
—Marc Randolph, Co-Founder and CEO, Netflix
“Entrepreneurship requires a diverse skill set, and Disciplined Entrepreneurship Startup Tactics provides the training and knowledge needed to excel in today's startup ecosystem. This book offers practical tactics that empower founders to make progress efficiently and effectively. A must-read for aspiring entrepreneurs and innovation-driven startups and one that I highly recommend to students and entrepreneurs.”
—Matt Segneri, Bruce and Bridgitt Evans Executive Director, Harvard Innovation Labs, Harvard University
“As co-founder of BitSight and a fellow instructor alongside Paul in the course that inspired this incredible book, I am thrilled to endorse Disciplined Entrepreneurship Startup Tactics. Witnessing countless students apply the framework presented within these pages to achieve remarkable success and become entrepreneurs, I can attest to its transformative power. Paul's systematic approach, honed through years of teaching and practical application, equips founders with the tools they need to navigate the unpredictable waters of entrepreneurship. Whether you're a first-time founder or a seasoned entrepreneur, this book is a must-read for anyone aspiring to build a thriving startup with discipline and resilience. With a perfect balance of theory and real-world application, Paul's expertise shines through, making the book an engaging and practical resource.”
—Nagarjuna Venna, Co-Founder, BitSight, and Lecturer, MIT Sloan School of Management
15 TACTICS TO TURN YOUR BUSINESS PLAN INTO A BUSINESS
DISCIPLINED ENTREPRENEURSHIPSTARTUP TACTICS
PAUL CHEEK
Executive DirectorMartin Trust Center for MIT Entrepreneurship
Copyright © 2024 by Paul Cheek. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.Published simultaneously in Canada.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 750-4470, or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at http://www.wiley.com/go/permission.
Trademarks: Wiley and the Wiley logo are trademarks or registered trademarks of John Wiley & Sons, Inc. and/or its affiliates in the United States and other countries and may not be used without written permission. All other trademarks are the property of their respective owners. John Wiley & Sons, Inc. is not associated with any product or vendor mentioned in this book.
Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Further, readers should be aware that websites listed in this work may have changed or disappeared between when this work was written and when it is read. Neither the publisher nor authors shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.
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Library of Congress Cataloging-in-Publication Data is Available:
ISBN 9781394223350 (Cloth)ISBN 9781394223367 (ePub)ISBN 9781394223374 (ePDF)
Cover Design and Illustration: Marius UrsacheAuthor Photo: Brian Tortora
To my grandfather Donald J Fager, who founded MLMIC Insurance Company to protect both healthcare providers and patients and led it through an acquisition by Berkshire Hathaway. He exemplified living life with a strong raison d'être and remains an inspiration to me.
And, as I've written this book, my wife, Callie, and I welcomed the next generation. To Kyla, my daughter, our future entrepreneur!
FOREWORD
I LOVE THIS BOOK, and you will too.
This beautifully continues the ethos of the Disciplined Entrepreneurship books and takes it to a new level.
In my books, I presented a systematic view of what to do, why to do it, and when to do it. There was some guidance on how to do it, but not enough. The easy answer is that it could not all be fit into one book. The even more truthful answer is that it took a ton more work to do this. Paul has done that work.
In the MIT way, Paul has not just developed materials but he has tested them with hundreds of entrepreneurs and humbly iterated the materials over and over again to refine them to be more concise and, most of all, to ensure the tactics work. What you have here is the end product of this multiyear process.
What makes this different from other books and so special to me? Let me give you the reasons for my love:
Systematic:
Everything is based in logic and considers the full system.
Comprehensive:
From Foundations to Market Testing to Product Development and finally Resource Acquisition, it touches the bases of what an entrepreneur needs to execute upon.
Actionable:
There is no value unless the knowledge herein can be put into action. It starts with
Tactics,
which takes you down to where the rubber meets the road, and he delivers on this promise.
Accessible:
Not only is this fun to read, but he has broken it all down so it's not overwhelming—you don't feel like you're reading an operator's manual for an aircraft carrier. The illustrations are a wonderful way to summarize key points and make them not just easily understandable but also memorable.
Integrated:
Metcalfe's law states that connectivity creates exponential value. The connections are not only designed into his advice but made explicit.
Proven:
As mentioned previously, this material has been tested in many different environments as you see by the examples, and refined. You are not getting version 1.0.
In summary, it is an engineering approach to entrepreneurship that has been desperately needed. Yes, entrepreneurship is a mindset, but that mindset is not effective unless it is coupled with the necessary execution skills. Those skills come about by getting good guidance, which is what this book provides in spades.
To say I am excited to see the book coming out is an understatement. Never have entrepreneurs been more important to society and our future. We need more and better ones who are connected by a common language so they can continue to develop. Fortunately, now with this book, they have never had better materials to support them in excelling in this craft going forward. Read on—you will never regret it.
—Bill Aulet
Author of Disciplined Entrepreneurship;
Ethernet Inventors Professor of the Practice
of Entrepreneurship, MIT Sloan School of Management;
and Managing Director, Martin Trust Center for MIT Entrepreneurship
ACKNOWLEDGMENTS
I MUST START BY thanking my students. This book would not be possible without them—or it wouldn't be nearly as good. I have had the opportunity to work with thousands of students both here at MIT and around the world. My work with them has led to the revisions that make this book so rigorous. Not only have my students helped me to refine the contents within but they make my job so rewarding.
I am also deeply indebted to Bill Aulet, who has opened up many of the opportunities that have led me to publish this book. His work in Disciplined Entrepreneurship is the foundation for Startup Tactics. I remember the first time we discussed Tactics and since then he has pushed me to develop more and more content to help us work towards our mission at the Trust Center of advancing the field of innovation-driven entrepreneurship.
Speaking of the Trust Center, our leadership at MIT, including the chair of MIT Corporation, MIT's board of trustees, Mark Gorenberg, and our president, Sally Kornbluth, have demonstrated their commitment to entrepreneurship and their support of our work at the Trust Center, which serves as a significant source of motivation to continue pushing the boundaries of entrepreneurship education. And our leadership at MIT Sloan—including Dave Schmittlein, Michael Cusumano, Nelson Repenning, Scott Stern, our founder Ed Roberts, and partners in the MIT School of Engineering led by Anantha Chandrakasan—have been incredibly supportive of my work and the development of the course upon which this book is based. The course, Venture Creation Tactics, is one that I am fortunate to lead alongside my co-instructors, Nagarjuna Venna and George Whitfield, who have been incredibly influential in the development of what we now refer to as “Startup Tactics.” None of this would be possible without our amazing team at the Trust Center past and present. Many thanks to my colleagues Andy Acevedo, Neelesh Bagga, Mac Cameron, Alicia Carelli, Carly Chase, Elaine Chen, Trish Cotter, Kit Hickey, Alfredo Garcia, Christine Hsieh, Mona Jones, Macauley Kenney, Amrutha Killada, Jenny Larios Berlin, Kosta Ligris, Tommy Long, Leah Lovgren, Ylana Lopez, Stephanie MacConnell, Erin Martin, Nick Meyer, Susan Neal, Magali Paoli, Will Sanchez, Devon Sherman Daley, Navroop Singh Sehmi, Ben Soltoff, Doug Williams, and Greg Wymer. Special appreciation for Dip Patel, former Trust Center Entrepreneur in Residence, for his inspiration and contributions to the Tactics framework. I also wish to thank our entire teaching faculty at the Trust Center who lead the variety of courses in our portfolio.
Our many collaborators at MIT have helped me to move the development of Startup Tactics and other related entrepreneurship initiatives forward, including Jinane Abounadi, Marty Culpepper, Oli de Weck, Benoit Forget, Sherwin Greenblatt, Marissa Gross, Jeffrey Grossman, Paula Hammond, John Hart, Dan Hastings, Peter Hirst, Travis Hunter, Ali Jadbabaie, Ann Marie Maxwell, Lesley Millar-Nicholson, Murat Onen, Alisia Pajevic, Asu Ozdaglar, Jacquelyn Pless, Bob Pozen, Reza Rahaman, Leon Sandler, Joel Schindall, Don Shobrys, Zoltán Spakovszky, Akshit Singla, Alula Sherifew, Alfred Spector, Anne White, and Rob Whiting.
And of course our wonderful collaborators at other institutions. Rowena Barrett, Glen Murphy, Graham Fellows, Peta Ellis, and the rest of the QUT Entrepreneurship team at the Queensland University of Technology in Brisbane, Australia, who ran a concurrent Tactics course with their students. Daniela Ruiz Massieu, of ITAM, who joined our Tactics course at MIT during her sabbatical and has provided invaluable input into the content development. Jeff Larsen and the Dal Innovates team at Dalhousie University for enabling me to experiment with the Tactics content in several of their programs. And Charlie Tillett, who has kindly shared his financial model template with our students and readers of this book.
Much of what I have learned about entrepreneurship stems earlier in my professional career and has been enabled by my family, who have provided tremendous support—especially my wife, Callie. Much of this book is based on my learnings through my entrepreneurial journey founding and building new ventures alongside Calum Barnes, Vikram Chabra, Vanessa Coleman, Braden Golub, Bay Hudner, Rob Ianelli, Monil Kothari, C. Todd Lombardo, Sacha Nacar, Joe Nigro, and Patrick Todd. I regularly use examples from our experiences together to help my students and without you these experiences wouldn't exist!
You would not be reading this book without those who believed in it before it existed. Specifically, the lead illustrator Marius Ursache, who somehow always knows exactly how to communicate the key points in fun cartoons, contributors Matt Volpi, Kelly Talbot, Anastasia Lysenko, and publishers Shannon Vargo, Deborah Schindlar, Leah Zarra, and Gabby Mancuso of John Wiley & Sons. They all believed in this book from the beginning and helped to bring it to publication.
Thank you all!
INTRODUCTION TO TACTICS
Our society is creating more problems in the world around us than solutions. This fundamental challenge is best addressed by entrepreneurs driven by passion, vision, and opportunity. Entrepreneurs, of course, aren't just startup founders. Entrepreneurs are also found in corporations, academic institutions, government, nonprofits, NGOs, and elsewhere as both founders and employees. Entrepreneurs are vital to our society's forward progress, but they must maximize their limited time and money, and stay scrappy. This book will help you, as a current or future entrepreneur, do precisely that.
In this book, I'll share tactics based on my experience as a successful entrepreneur, insights I've gained from other entrepreneurs, and through my experiences as an entrepreneurship educator at the Massachusetts Institute of Technology. These are tactics I've used when building my businesses and that I've found most effective from my work with thousands of startup founders around the world. I'll teach you these skills and demonstrate how to use them through a systematic approach. These entrepreneurial skills will enable you to make a greater impact in the world as a startup founder or in your organization by creating new things using the existing resources already on hand. Won't your boss be excited to hear that?
The proof points and learnings you gather from early go-to-market tactics will help you sell to additional stakeholders—whether that's a new engineer you want to bring on board or an investor you'd like to raise money from. These potential stakeholders have many opportunities to choose from, so you must develop and present evidence to prove that your opportunity is the most compelling.
While certain specifics might not directly apply to every industry, these tactics are meant for any entrepreneur and are particularly of use during the early stages of any venture. This mindset and approach will help you evaluate and hone your early go-to-market approach. Even engineers and product developers will come away with a completely new view of taking a nascent concept to market.
You will find examples within that are simple and can be easily digested, but this book is not a one-size-fits-all approach. It is up to you to take what you learn from this book and apply it in the development of your business.
Because you already have your own specific expertise, I will share with you three promises that we make to participants from around the world in our Entrepreneurship Development Program at the Trust Center. As you read this book:
You will learn something you already know.
You will learn something you didn't know.
You will get as much out of this book as you put into it.
With that in mind, know that this book is designed to expand your entrepreneurial mindset, skillset, and mode of operating for everything you do.
Next Frontier of Entrepreneurship Education
During my years working in the Martin Trust Center for MIT Entrepreneurship, I have taught more than 5,000 students and advised more than 500 startups. Some students I work with weekly for years, while others I've met with just once in their journeys.
Of course, this represents a tiny fraction of the entrepreneurs around the world working on solving big problems. They, too, can benefit from the content we teach at MIT, so I've taken as much material as possible that I cover during office hours, workshops, and classes and included it in this book.
When I first began working with student entrepreneurs at MIT, I found myself constantly revisiting the same topics during one-on-one office hours. These conversations typically boiled down to students asking for help on how to build a product, raise money for their startup, and recruit early technical talent, including technical co-founders. More often than not, I encouraged these entrepreneurs to pump the brakes and instead focus first on getting traction with customers. This isn't just a delay tactic, but rather a necessary and prudent change to the order of operations.
No one wants to invest their money or bet their career on a product without confidence in its potential and some facts and data to support that assumption. And, contrary to what many first-time founders may think, you don't need a pile of cash or a hot-shot CTO to test out some hypotheses and get a sense of whether you're on the right path to finding product-market fit.
The reality is that startups need meaningful traction to justify moving forward with hiring and fundraising. Sales represent that traction, but you also need something to sell, which means you, the founder, must wear a lot of hats. That requires training in a variety of skills and functional areas. You can learn these skills and go to market before hiring anyone or productizing anything.
These topics were so popular among students that I began offering workshops. The demand for these proved so great that I then turned them into a full course on venture creation tactics, which is the foundation of the book you're now reading.
My work at the Trust Center, which manifests in this book, is based on lived experience out in industry as an entrepreneur. I recount my experiences co-founding three companies and advising countless others. Now I have the opportunity to share these experiences with you. I reveal details of how we systematically built these businesses. There is no magic power that I or anybody else has. I simply followed the process of applying these tactics.
Context of Theory, Practice, and Tactics
Entrepreneurship has traditionally been taught through theory and practice. Theory is the strategy with a long time horizon, which doesn't change frequently. Practice covers the frameworks and concepts representing first principles and fundamentals. Both are necessary for any and every entrepreneur.
But entrepreneurs who have learned the theory and practice have been left hanging. Far too often they don't have the opportunity to learn steps for taking a systematic, structured approach to learning the tactics of entrepreneurship. Tactics help entrepreneurs acquire the necessary skills to turn their business plan into an actual business.
The integration of theory, practice, and tactics is what leads to highly effective venture development. Entrepreneurs increase their odds of success when their tactics are tied directly to their strategy. Should you ever find yourself on historic Market Street in downtown Charleston, South Carolina, in the US, pop into Church and Union restaurant. Inside your eyes will adjust to the dim light of the old church building and be drawn to the ceiling. Look up and see if you can find this quote:
Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.
A local artist hand-wrote this on the ceiling of the restaurant in 2021, but these words actually date back 2,500 years to when Chinese military strategist Sun Tzu wrote The Art of War, and in fact the whole text is painted across the ceiling. Tzu makes this point to emphasize that you must have both strategy and tactics together. In the context of entrepreneurship, strategy is your business plan and tactics are more concrete steps and actions taken to get you where you need to go.
Rooted in First Principles
Anyone can build a business by learning and applying the tactics presented in this book. While these tactics can help you get started, it's important to recognize they're all designed to be rooted in the first principles of entrepreneurship. These are business fundamentals that—if overlooked—lead to a less efficient, less valuable business. After spending years studying entrepreneurship fundamentals, I can confidently say that a thorough understanding of them is required to execute these tactics with excellence.
Each tactic is related to the entrepreneurship fundamentals described in Disciplined Entrepreneurship, the book authored by fellow MIT faculty member, co-instructor, and friend Bill Aulet. If you haven't already familiarized yourself with Disciplined Entrepreneurship, you will surely find the methodology helpful. Disciplined Entrepreneurship presents 24 steps to a successful startup. These steps start by addressing the question “Who is our customer?” and proceed with the various components required for a strong business plan.
The 24 Steps are incredibly helpful for building a business plan and they can be expanded upon with tactics to gather larger-scale evidence that a business opportunity is real and empower you with the related skills necessary to turn your plan into action. Regardless of whether you built your business plan using the 24 Steps, you will find that these tactics can be used to verify your work thus far.
If you did leverage the 24 Steps, you can take the plan developed and begin to execute. Not every step maps one-to-one with a tactic. There is a one-to-many relationship. Each tactic relates to multiple steps from the 24 Steps. We'll walk through these tactics so that you can confirm your findings and get a paying customer. For example, putting these tactics into practice will enable you to further validate your Persona from Step 5, ensure your customer Lifetime Value (LTV) from Step 17 is actually greater than your CoCA from Step 19, sign up your Next 10 Customers beyond those from Step 9, and more. Data-backed, and all without a full “product.”
Throughout this book you will find helpful reminders of relevant steps from Disciplined Entrepreneurship to help you as you relate the tactics back to the first principles of entrepreneurship.
Investing in Individuals, Not Startups
Our data at the Martin Trust Center for MIT Entrepreneurship supports the educational approach to teaching individuals rather than simply helping them start companies. Throughout this book you will learn the entrepreneurial skills needed to start new ventures and increase your odds of success.
Research conducted by Professor Daniela Ruiz Massieu, Managing Director of the Instituto Tecnologico Autonomo de Mexico (ITAM) Entrepreneurship and Innovation Center, and her collaborator from ITAM, Professor Claudia Gonzalez-Brambila, demonstrates the impact this approach has on entrepreneurs.1 They analyzed the first ten years of startups that came through MIT's startup accelerator at the Trust Center, MIT delta v.
We were incredibly excited to learn from their report that those 181 startups have raised $1 billion and 61% are either still operating or were acquired. While a number of factors play into a startup's long-term viability and companies founded by MIT students have a number of innate advantages, this rate significantly outpaces the industry average and is a testament to our model's real-world success.
Due to our investment in the long-term entrepreneurial success of these individuals, we're even more pleased to see what they've done with those learnings beyond those delta v startups. This same cohort of entrepreneurs have founded an additional 130 companies after delta v, which have raised not $1 billion, but $2 billion.
One of my goals when developing these tactics was increasing the number of qualified applicants to our delta v accelerator by equipping founders with tools to test out their hypotheses and find traction before applying to and joining the program. We're seeing results already, as the tactics help bridge business plan theories to real traction for more and more of the young businesses applying to delta v in the past few years.
One such example is Livvi, co-founded by Madeleine Cooney and Anisha Quadir. Using the tactics in this book, they secured a 1,500-plus waitlist of potential customers before applying to delta v. This impressive traction increased our confidence in their plan and we welcomed them to the program, where they could follow their vision with greater conviction thanks to these early signals of product-market fit.
The tactics in this book may not always directly relate to the specific challenges you're currently facing as you launch your venture and once you reach scale, and they may be less applicable in some cases. But they form a solid foundation for executing any startup vision or even a new product launch and may come in handy down the line with your current business or during another future entrepreneurial adventure, supporting you in your long-term development as an entrepreneur.
Founder-Led Everything: Wearing Many Hats
As entrepreneurs at MIT, we begin by doing what all good engineers do: we define our terms. So what exactly is a tactic?
tactic (noun)
an action carefully planned to achieve a specific end
Founders must execute a variety of actions to build a successful business. Entrepreneurs with professional experience in one functional area often specialize there, and it is important for entrepreneurs to have a specialty. Mine, for example, is engineering. But it is my familiarity with business fundamentals and with each functional area that makes me so effective in the early stages of launching new ventures.
Because entrepreneurs deal with the entirety of the business during its critical early stages, they need to feel just as comfortable whiteboarding data flows as they are cold-calling prospects and giving an elevator pitch to a venture capitalist. No one brings all those skills to the table, but these tactics create the scaffolding for the versatile leader you will become.
For example, one topic entrepreneurs raise often is “founder-led sales,” which is grounded in the notion that the organization's founder is always selling what the organization has to offer. This remains true often until the organization has scaled to hundreds of employees. Even then, the largest deals are often still closed by the founder.
While founder-led sales is a critical component for new ventures, I would argue that it's founder-led everything that makes the difference. Before adding dedicated resources, the founder is responsible for executing in each functional area, which means founders need the skills to drive every aspect of their new business forward. As resources are added, it becomes the founder's responsibility not to execute or apply the tactic themselves, but instead to effectively communicate with those responsible for the tactic.
Each tactic will provide you with the experience to execute and communicate effectively:
These tactics enable entrepreneurs to improve their odds of success in the early days of building a new venture, which enables them to solve our world's biggest challenges. These tactics help founders in the earliest stages of launching a new venture execute in each of the functional areas necessary to get the traction needed to acquire resources to scale the business. Ultimately these newfound resources will enable founders to transition their role from that of a generalist to that of a specialist: an entrepreneurial leader.
It's Never Too Late to Leverage These Tactics
These tactics will prepare you to be scrappy whether you're just starting your first company, you already have traction, you’re building your third company, or something else. We always need to be scrappy, even after raising a pile of cash or landing major customers. I recall a conversation with Hisham Anwar, the co-founder of BrightBytes. Before the company's acquisition by Google, Hisham and his team had raised over $50M in funding. Anwar told me that if he knew in advance all the things he eventually learned through the entrepreneurial process about how to maximize his resources he could probably have achieved the same outcome with just $5M. That doesn't just mean he could do it cheaper, but that he'd also have retained significantly more equity while reaching key milestones even faster.
But you're not behind if you've already started building. These tactics can help regardless of how far along you are in your current venture or haven't begun one at all.
One concrete example is Camilo Fosco, a PhD candidate at MIT in the Computer Science and Artificial Intelligence Laboratory (CSAIL). He joined my Venture Creation Tactics course at MIT to learn the entrepreneurship tactics needed to take his company, Memorable AI, to the next level. Memorable AI's team had already surpassed 20 people and they'd raised $3M+ before he enrolled in the class.
Memorable AI is an artificial intelligence company developing deep learning models to predict the impact of videos and image-based advertisements. Their software predicts the response that proposed advertisements will have, recommends improvements to increase effectiveness, and designs new potential advertisements.
