Disciplined Entrepreneurship

BILL AULET is the Ethernet Inventors Professor of the Practice of Entrepreneurship and the Managing Director of the Martin Trust Center for MIT Entrepreneurship. He is a globally recognized award-winning educator and author on entrepreneurship. Prior to joining MIT, he had a 25-year track record of success in business, from his start at IBM to his experience as a serial entrepreneur. He started and ran two companies and led a turnaround of a third where he directly raised over $100M and, more importantly, created many times that in shareholder value. He works around the world with entrepreneurs, small companies, large companies, and governments to promote innovation-driven entrepreneurship.

Preface xi

Introduction: News Flash: Entrepreneurship Can Be Taught! xv

Six Themes of the 24 Steps xxxi

Tracking Your Progress: the Disciplined Entrepreneurship (DE) Canvas xli

Step 0 Getting Started 1

Step 1 Market Segmentation 12

Step 1a Primary Market Research (PMR) 40

Step 2 Select a Beachhead Market 54

Step 3 Build an End User Profile 62

Step 4 Calculate the Total Addressable Market (TAM) Size for the Beachhead Market 71

Step 5 Profile the Persona for the Beachhead Market 83

Step 6 Full Life Cycle Use Case 101

Step 7 High-Level Product Specification 110

Step 8 Quantify the Value Proposition 120

Step 9 Identify Your Next 10 Customers 130

Step 10 Define Your Core 138

Step 11 Chart Your Competitive Position 150

Step 12 Determine the Customer’s Decision- Making Unit (DMU) 160

Step 13 Map the Process to Acquire a Paying Customer 169

Step 13a Windows of Opportunity and Triggers 185

Step 14 Calculate the Total Addressable Market Size for Follow-on Markets 194

Step 15 Design a Business Model 202

Step 16 Set Your Pricing Framework 215

Step 17 Calculate the Lifetime Value (LTV) of an Acquired Customer 225

Step 18 Design a Scalable Revenue Engine 240

Step 19 Calculate the Cost of Customer Acquisition (CoCA) 254

Step 20 Identify Key Assumptions 269

Step 21 Test Key Assumptions 275

Step 22 Define the Minimum Viable Business Product (MVBP) 287

Step 23 Show That “The Dogs Will Eat the Dog Food” 302

Step 24 Develop a Product Plan 313

What Else? Beyond the 24 Steps 323

Glossary 329

Acknowledgments 333

About the Author 337

Index 339