Bill Aulet is the managing director in the Martin Trust Center for MIT Entrepreneurship at MIT and also a senior lecturer at the MIT Sloan School of Management. The center is responsible for entrepreneurship across all five schools at MIT starting with education but also extending well outside the class room with student clubs, conferences, competitions, networking events, awards, hackathons, student trips and most recently accelerators. He teaches at least three different classes per year (introductory to advanced entrepreneurship classes) in addition to his responsibilities of running the center. His work has won numerous awards and most recently, in April 2013, Bill was awarded the Adolf F. Monosson Prize for Entrepreneurial Mentoring at MIT.
This book is a must read! A defined methodology with 24 steps who talks about the importance of Market Segmentation, creating personas, calculate the Total Addressable Market, how to quantify the value proposition, chart competition, design a business model and pricing framework, Lifetime Value and Cost of Customer Acquisition, Identify and Test Key assumptions, Define and create the Minimun Viable Business Product, among other important steps to check if your business idea is really worth pursuing.
I wish I had found this book years ago. It contains a clear 24-step process for creating a new business or product. There is no fluff in this book; no business book jargon, no attempt to upsell you to some consulting service, no BS at all. Just the 24 steps, with a clear description of each, an explanation that makes it obvious why the step is valuable, and several examples from real world companies of what that step might look like. Everything in the book is immediately actionable; you can even buy a workbook to help you work through the 24 steps.
The process defined in this book is considerably better than the ad-hoc, partial, poorly thought out process I had always used before. I finally understand many of the issues I've hit in the past and realize how I could've avoided many of them if I had followed the much more systematic process in this book. This book now sits on my desk as a reference, and I'll be following it for every new product venture going forward. I highly recommend it to every entrepreneur, product manager, and company leaders in general.
The book defines 24 steps, which can be loosely grouped into 6 phases. I'll go over the 6 phases and some of the key insights I got from each one.
1. Who is your customer?
- This consists of segmenting the market, picking a beachhead market, building an end-user profile, calculating the TAM for the beachhead, profiling the persona for the beachhead, and identifying the next 10 customers.
- Insight: pick a narrow target market when starting out. Even if your goal is to some day build a multi-billion dollar business, you typically do not want to start by taking on a multi-billion dollar market right away, as that will make almost everything harder: more competition, more complicated product to build, more customers to cater to, harder sales & marketing, less focus, and so on. Instead, start with a much more narrow beachhead market, and specifically pick the beachhead market as one you can dominate in a relatively short time period. The idea is to segment the larger market into a bunch of smaller ones and to pick one of those smaller markets where you can successfully deliver a product, the sales cycle is reasonable, competition is not too tough, and so on. If you can succeed in one small target market (typically, $20-100M/year), you can add follow-on markets later, and eventually grow to be big; but if you take on a big market right up front (e.g., $1B), you are far more likely to fail.
- Insight: systematically research your target market and end-user. I've always done this in a sloppy, half-assed way, and as a result, missed many key questions. This book defines a clear series of questions you want to answer about your target market and your end user. Answering these will require research and lots of time spent with customers; but if you skip it, you'll spend far more time building the wrong product for the wrong market. So spend the time up front to answer questions like, do the end users in your target market have funding? Are those users accessible to your sales force? Do they have a compelling reason to buy? Could you build a product that fully solves their problem? Who are the players (competition, partners)? What's the size of the market?
2. What can you do for your customer?
- This consists of figuring out the full life cycle for your use case, defining a high level product specification, quantifying your value proposition, defining your core, and charting your competitive position.
- Insight: be specific and systematic in defining your differentiator. You should be able to clearly describe it in words, quantify it (e.g., do it 80% faster), and visualize it. Doing that up front leads to a better product and gives you materials you can show directly to customers as part of sales and marketing.
- Insight: think through the entire lifecycle around your product and not just the part where the end-user is actively using the product. This includes asking questions like how will users discover the need for your product? How will they find your product? How will the analyze it? Acquire it? Install it? Use it? Determine they are getting value from it? Pay for it? Get support? Buy more? And so on.
- Insight: create a product brochure up front, long before you build the product itself. This will force you to see the product through your customer's eyes: what is the product? What are the key features and benefits? Why should I buy it? This brochure can be a great way to ensure you're building the right thing (if it's not in the brochure, you may not need it for the first release) and it may be useful for getting your team on the same page, getting feedback from customers, raising money from investors, and so on.
3. How does your customer acquire your product?
- This consists of determining the customer's decision making unit, mapping the process of acquiring a paying customer, and mapping the sales process.
- Insight: each customer consists of an end user and a decision making unit. The end user is the individual who actually uses your product. The decision making unit includes the champion (someone who wants to purchase the product), the primary economic buyer (someone with authority to spend money), and potentially influencers, vetoers, purchasing departments, etc (people who have sway over the primary economic buyer). Sometimes, the end user plays all these roles, but often, that's not the case (especially with B2B). Merely building a product that makes an end user happy isn't enough; you must also be sure that your sales process works for the decision making unit too.
4. How do you make money off your product?
- This consists of designing your business model, setting up a pricing framework, and calculating LTV and COCA.
- Insight: a business model is not pricing. It's the higher level framework that defines how your business extracts money from customers. The book has a list of common business models, such as: one-time up front charge plus maintenance; cost plus; hourly rate; subscription model; licensing; consumables; advertising; transaction fees; usage based; etc.
- Insight: most companies should aim to have a business model based on value, not costs. That is, instead of basing your pricing on costs plus markup, you should aim to extract a portion of the value you create for your customers. In the tech startup world in particular, the marginal cost of software is typically zero, so a business model based on cost won't work. On the other hand, software can produce a huge amount of value, so capturing some of that value can give you a very scalable business model, and one that aligns incentives well with your customers (the more value you give them, the more successful your business). The percentage of value that you capture varies, but 20% is a typical target.
- Insight: be systematic about figuring out your LTV, COCA, and other key metrics up front. Even if you have an amazing product and an effective way to sell it, if the unit economics don't work, you won't succeed as a business. The book includes formulas and resources to help do these calculations.
5. How do you design and build your product?
- This consists of identifying key assumptions, testing those assumptions, defining an MVBP, and showing that "the dogs will eat the food."
- Insight: don't skip the previous 4 phases! In many of my product ventures, I went straight to the "design and build the product" phase, and it cost me. Yes, it's a lot of hard work to identify the customer, their needs, how to acquire them, and how to make money from them, but the odds of launching a successful new product or business without doing those steps is quite low.
- Insight: build Minimal Viable Business Product (MVBP) to test your assumptions. This is slightly different than an MVP, in that it requires three core elements: the customer gets value from the product; the customer pays for the product; the product is sufficient to start a feedback loop where the customer can give you feedback to iteratively improve the product.
6. How do you scale your business?
- This consists of calculating the TAM of follow-on markets and developing a product plan.
I met Bill Aulet during an executive program in MIT. His lectures were around the ideas presented in this book.
The book is one of the best books I ever read on "start up" techniques, not only does it give you a step by step approach for a start up business, but it also opens your eyes and prepares you for challenges you would probably have struggled through in your first venture.
Interestingly, and unlike other books on the topic, the first few steps urges you to start with the customer in mind. It encourages the entrepreneur to delve deep into the customers needs and specify "the" best customer for your venture which can enable you to build a "beach head strategy" that would allow a quick and strategic expansion to other customers.
If you are willing to start a new company and enter into an entrepreneurial venture, then this book is for you. It's a road map of what you need to do and what you need to prepare for during your journey. I highly recommend it.
1) I met Bill at a lecture in Chicago put on by some MIT alumni. I got the book (much like some waffle fries) FOR FREE. I feel the need to disclose this so people don't think I'm shilling for Bill's book, and to kind of nerdbrag a little bit.
2) I stopped reading about 25% of the way through. Why? Because my business is not at the stage where I need his RIDICULOUSLY THOROUGH guidance. I wish I had this 3 years ago. So, I stopped reading because I am going to give it to someone else who will put it to use RIGHT NOW. I skimmed/speed read most of the rest.
That said, the parts I focused on were great. It has a lot of shades of "Startup Owners Manual" and "Lean Startup", which makes sense consdiering those are two seminal tomes of the Entrepreneurship world.
The book is presented beautifully. It's a combination of a graphic novel, coffee table book, and a technical manual. Leave it to MIT to make that work! It's punctuated by cartoons (tastefully, not cheesy) and visualizations. The production quality is top-notch.
I will loan any of my friends my copy, if you promise three things:
1) WRITE ALL OVER THE BOOK. Marginal notes, sketches, commentary, highlights, circles, dog-ears....beat it up. My books are a living library. They contain notes from the people I've lent to, as well as my own.
2) USE THE KNOWLEDGE OR GIVE IT BACK. No jokers. No paperback cowboys.
3) RETURN IT TO ME --OR-- pass it along to someone else who will abide by these rules and then return it back to you (or me).
great book hat shows the MIT approach: you have some innovation (technical or another type but that it relies on your knowhow and is not easy to be reproduced) and you need to commercialize it. The book guides through all the steps from selecting and finding the market, doing market research and finding the beachhead market to MVP and customer interviews.
I've been flirting with the idea of graduate school for a few years now, and decided to sit in on a couple MBA classes to help inform my indecision. One of these classes focused on tech entrepreneurship and the professor assigned readings from this book by Bill Aulet. I had never heard of the book before, and saw it was not well read on 欧宝娱乐 or Amazon. I decided to take a chance on it anyway.
After reading half of the book, I had to stop. Here's why: the title is a bit misleading. I thought I was going to get a Peter Drucker, classic management book about the discipline and work ethic of successful entrepreneurs of all types. Instead, the book is a manual, with illustrations to give it a casual feel and "ah-ha!" phrases that are in most business books. The case studies are very thin and mainly about just one startup the author was in. I was also disappointed the book was only about entrepreneurship for new products/tech innovation, and left out SMEs (small and medium enterprises) entirely.
While the book was a bit too light for my taste, it does give a useful and accurate outline of the typical tech entrepreneur's startup trajectory. A good book for the tech start up wannabe, but not necessary for people who want to become "disciplined entrepreneurs."
*Update* I read this book again, however, I went through the steps using detoolbox.com. It seemed informative, but I was still a little disappointed that some aspects of creating and developing the product and finding manufacturers was not mentioned. At times, it seemed a little dumb to go through this process with data that was not accurate.
I read this book for class, and it seemed like a good book if you want to start an entrepreneurship. The author seemed like he was very conceited of himself and MIT, which was something I didn't like about the book. I am currently going through these steps using detoolbox.com, so I will update my thoughts and rating after I have completed all the steps, and see how they worked.
I've partially read this on my iPad a few years ago. Now I listened to it on Audible while running... I went through it twice in a row, to be exact. Although you definitely cannot take the maximum out of this book by listening, it was a great way to familiarise myself with the content to come back to in the paper format.
I am yet to follow this step by step process in real life, but after having failed a startup, I only wish I had read this book earlier. So many things could have been prevented, but its part of the experience and pain the founders must go through to really learn from... We are all human in the end.
Are you an aspiring/experienced/failed founder? I am sure you will find something to learn from this book!
Overall, it's a very practical handbook with well-written and described steps. I liked the initial steps which were about market research, both primary and secondary, identifying the CLV, CAC and etc. However, the last sections of the book were very very general, in my opinion. If you want the follow the steps, you will have to dig deeper into the latest topics from the book.
Avanzando con mi meta de leer todos los libros de no ficci贸n que tengo en mi librero, le ha llegado la hora a Disciplined Entrepreneurship de Bill Aulet, libro que se ha convertido instant谩neamente en uno de mis libros favoritos sobre emprendimiento.
驴Por qu茅 me ha gustado tanto este libro? Sencillo, es un libro netamente acad茅mico que guiar谩 a los emprendedores a encontrar el 茅xito en sus negocios. Este no es un libro que propone una receta secreta, sino una gu铆a de 24 pasos que se deben seguir para fortalecer el modelo de nuestro negocio.
Si bien el autor deja claro que esta es una gu铆a enfocada en los emprendedores de temas relacionados con tecnolog铆a, ciencia e innovaci贸n, creo que los pasos pueden ser adaptados a otros modelos de emprendimiento, como los negocios locales o familiares.
Adem谩s, los ejemplos que se comparten en el libro ayudan a ilustrar cada uno de los pasos de una manera muy sencilla, facilitando la conexi贸n entre la teor铆a y la pr谩ctica.
En fin, he disfrutado de esta lectura. Si bien gracias a mi carrera ya conoc铆a una gran parte de lo expuesto aqu铆, resalto el valor que este libro provee a sus lectores.
I found this to be a bit of a dry read for something on the topic of the typically lively subject of entrepreneurship. Full disclosure, I listened to the book on audible and I found the reader to be a bit irritating to listen to so that may have influenced my rating somewhat. Overall, a pretty decent read for a templated step-by-step approach to new ventures.
Un buen libro que te detalla 24 pasos que debes de seguir y llevar a cabo para poder crear un emprendimiento. Te da muchos tips y ejemplos de como aplicar las t茅cnicas y conceptos que te da el libro.
Lo interesante del libro es que el autor es encargado del tema de emprendimiento en la universidad de MIT, y el proceso descrito en el libro es el mismo que siguen todos los alumnos que desarrollan proyectos ah铆. Por lo que te da bastante visi贸n de lo que est谩n considerando universidades que han investigado y probado bastante el proceso de emprender.
That's what happens when academics write books about startups. Mark my words: entrepreneurship, especially in it's early stages of company development is not sequential or structured. It's messy, chaotic and needs a ton of conviction to follow through.
Disciplined Entrepreneurship: 24 Steps to a Successful Startup by Bill Aulet was chosen by as one of the .
THE SOUNDVIEW REVIEW:
Human history has seen certain occupations lifted to a pedestal during a particular era. What explorers were to the Age of Discovery and artists were to the Renaissance, entrepreneurs now occupy places of highest esteem in today鈥檚 global marketplace. However, MIT professor and serial entrepreneur Bill Aulet takes a different view of the start-up. In his book Disciplined Entrepreneurship: 24 Steps to a Successful Startup, he鈥檚 not looking to knock down the entrepreneur鈥檚 pedestal but instead raise the masses to the same level.
If you鈥檙e currently entrenched in a large organization and thinking of striking out on your own, you might want to consult Aulet鈥檚 book before you start courting venture capital. Disciplined Entrepreneurship delivers compact doses of truth alongside the questions you need to answer to rapidly start and grow a business. Aulet is not afraid to take a hammer to some rock-solid myths, such as the belief that an entrepreneurial venture is commonly the work of a lone hero CEO.
The 24 steps in Disciplined Entrepreneurship are grouped into six themes. Each set of steps answers one of six questions: Who is Your Customer, What Can Your Customer Do For You, How Does Your Customer Acquire Your Product, How Do You Make Money Off Your Product, How Do You Design & Build Your Product, and How Do You Scale Your Business? All of the steps reinforce Aulet鈥檚 overarching theme that entrepreneurship can be taught. None of the questions can be properly answered without the reader first answering the question that Aulet suggests every would-be entrepreneur answer: What can I do well that I would love to do for an extended period of time.
If you are able to answer that question, you鈥檝e taken an important first step. Disciplined Entrepreneurship will help you put the right foot forward on all 24 steps that follow.
Soundview's 8-page Executive Book Summary of Disciplined Entrepreneurship is available
Neatly explained business concepts (e.g: cost of customer acquisition), managing and setting realistic expectations as an entrepreneur and lacing the perspective built from customer-end into one's venture form the basis for this instruction manual.
It did not certainly make me buy the idea of venturing into entrepreneurship but if I had read this from the angle of an entrepreneur, I would have appreciated this book much better. To me, the illustrations were attractive. The content being overly focused on beachhead market from the beginning put me off though.
This book is reserved only if you possess a mentality for entrepreneurship and would like to learn more of possible pitfalls along the journey that is well mapped to a reasonable extent. It is not the type that lures nor inspires.
This book is great! Aulet's system is a compendium of other lean and customer development business plan systems in their core. It's a didatic (Aulet is a MIT professor) step-by-step guide with cartoony ilustrations and real startup exemples to guide the entrepreneur inside you. These are a lot of useful tools and insights to go straight to the point on the things that matter before starting a business. It's a great and complete introduction which should be complemented by books that focus on each of the steps presented (if you really are serious about this), but that could also work on it's own. If you are starting a business or developing a new product and want some guidance, start here!
Forget The Lean Startup, this book lays out a more mature, systematic approach to building a business. The workbook that accompanies the textbook used in MIT's entrepreneurship courses, it accompanies their online courses, as well. If you only bought one business book, this should be it. It's also extremely valuable for conventional small businesses, not just high growth startups. Don't just read it, though! WORK through this and its corresponding textbook to get the most out of it.