book

Disciplined Entrepreneurship: 24 Steps to a Successful Startup

by Bill Aulet

August 2013

Beginner

288 pages

6h 44m

English

Wiley

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NEWS FLASH—ENTREPRENEURSHIP CAN BE TAUGHT!
THREE WAYS TO START A NEW VENTUREHOW TO GO FROM “I HAVE A PASSION” TO “I HAVE AN IDEA OR TECHNOLOGY”FINDING A FOUNDING TEAM: ENTREPRENEURSHIP IS NOT A SOLO SPORTWHERE YOU GO FROM HERE

IN THIS STEP, YOU WILL:THE SINGLE NECESSARY AND SUFFICIENT CONDITION FOR A BUSINESSCREATE A NEW MARKET THAT YOU WILL DOMINATEWHEN “PAYING CUSTOMERS” LEAD YOU ASTRAYCOMPLEX PAYING CUSTOMERS: PRIMARY VERSUS SECONDARY CUSTOMERS AND TWO-SIDED MARKETSHOW TO DO A MARKET SEGMENTATIONHOW LONG SHOULD I SPEND ON MARKET SEGMENTATION?EXAMPLESUMMARY
IN THIS STEP, YOU WILL:HOW TO CHOOSE YOUR BEACHHEAD MARKETYOUR BEACHHEAD MARKET STILL NEEDS TO BE SEGMENTED FURTHEREXAMPLESUMMARY
IN THIS STEP, YOU WILL:WHY TARGET A SPECIFIC DEMOGRAPHIC?DOES YOUR FOUNDING TEAM INCLUDE SOMEONE IN THE END USER PROFILE?EXAMPLESSUMMARY
IN THIS STEP, YOU WILL:BOTTOM-UP ANALYSISTOP-DOWN ANALYSISFROM “HOW MANY END USERS?” TO “SHOW ME THE MONEY”WHAT SHOULD MY TAM BE?EXAMPLESSUMMARY
IN THIS STEP, YOU WILL:HOW TO CHOOSE AND PROFILE YOUR PERSONATHE PERSONA IS MORE THAN JUST AN EXERCISESHOULD I CREATE MULTIPLE PERSONAS? IF SO, WHEN?THE PERSONA HELPS YOU FOCUS ON WHAT TO DO—AND WHAT NOT TO DOEXAMPLESSUMMARY
IN THIS STEP, YOU WILL:WHAT TO INCLUDE IN A FULL LIFE CYCLE USE CASEEXAMPLESSUMMARY
IN THIS STEP, YOU WILL:CREATING A HIGH-LEVEL PRODUCT SPECIFICATIONTHEN, MAKE A PRODUCT BROCHUREEXAMPLESSUMMARY
IN THIS STEP, YOU WILL:ALIGNING YOUR VALUE PROPOSITION WITH THE PERSONA'S PRIORITIESKEEP IT SIMPLE: THE “AS-IS” STATE VERSUS THE “POSSIBLE” STATE WITH YOUR PRODUCTEXAMPLESSUMMARY
IN THIS STEP, YOU WILL:HOW TO COMPLETE THIS STEPIS THE CURRENT PERSONA VALID?DEALING WITH NEGATIVE FEEDBACKEXAMPLESSUMMARY
IN THIS STEP, YOU WILL:A FEW EXAMPLES OF COREHOW TO DEFINE YOUR COREWHAT ABOUT INTELLECTUAL PROPERTY? OR CULTURE?CORE IS DIFFERENT THAN COMPETITIVE POSITIONFIRST-MOVER ADVANTAGE IS NOT A CORELOCKING UP SUPPLIERS IS TYPICALLY NOT A COREEXAMPLESUMMARY
IN THIS STEP, YOU WILL:THE TOUGHEST COMPETITOR OF ALL: THE CUSTOMER'S STATUS QUOHOW TO CHART YOUR COMPETITIVE POSITIONEXAMPLESSUMMARY
IN THIS STEP, YOU WILL:PRIMARY ROLES IN THE DECISION-MAKING UNITADDITIONAL ROLES IN THE DECISION-MAKING UNIT (DMU)HOW TO DETERMINE THE DECISION-MAKING UNITEXAMPLESSUMMARY
IN THIS STEP, YOU WILL:HOW TO MAP THE PROCESSBUDGETING/PURCHASING AUTHORITYTIME IS OF THE ESSENCECONSUMER VERSUS B2BEXAMPLESSUMMARY
IN THIS STEP, YOU WILL:HOW TO CALCULATE BROADER TAMEXAMPLESUMMARY
IN THIS STEP, YOU WILL:A BUSINESS MODEL IS NOT PRICINGKEY FACTORS WHEN DESIGNING A BUSINESS MODELFREE IS NOT A BUSINESS MODELGENERALIZED CATEGORIES OF BUSINESS MODELSTHINK OUTSIDE THE EXISTING CATEGORIESSUMMARY
IN THIS STEP, YOU WILL:BASIC PRICING CONCEPTSEXAMPLESUMMARY
IN THIS STEP, YOU WILL:KEY INPUTS TO CALCULATE THE LTVHOW TO CALCULATE LIFETIME VALUEHOW TO CALCULATE THE LTV: “WIDGET” PLUS YEARLY MAINTENANCE FEEIMPORTANT CONSIDERATIONSSUMMARY
IN THIS STEP, YOU WILL:FOUR FACTORS ENTREPRENEURS OFTEN OVERLOOK ABOUT CUSTOMER ACQUISITION COSTSYOUR SALES PROCESS CHANGES OVER TIMEHOW TO MAP YOUR SALES PROCESSSALES PROCESS COMPARISONS: ZYNGA, GROUPON, LINKEDIN, FACEBOOKEXAMPLESUMMARY
IN THIS STEP, YOU WILL:WHY COCA MATTERSHOW NOT TO CALCULATE COCA: A BOTTOM-UP PERSPECTIVETHE RIGHT WAY TO CALCULATE COCA: A TOP-DOWN PERSPECTIVEHOW TO REDUCE COCAEXAMPLESSUMMARY
IN THIS STEP, YOU WILL:HOW TO IDENTIFY YOUR KEY ASSUMPTIONSEXAMPLESUMMARY
IN THIS STEP, YOU WILL:NOW THAT WE HAVE IDENTIFIED THE ASSUMPTIONS, LET'S TEST THEMEXAMPLES OF EASILY TESTABLE ASSUMPTIONS: STUDENT TEAMSSUMMARY
IN THIS STEP, YOU WILL:THREE CONDITIONS OF A MINIMUM VIABLE BUSINESS PRODUCTEXAMPLESSUMMARY
IN THIS STEP, YOU WILL:EXAMPLESSUMMARY
IN THIS STEP, YOU WILL:EXAMPLESUMMARY

Content preview from Disciplined Entrepreneurship: 24 Steps to a Successful Startup

STEP 16

Set Your Pricing Framework

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IN THIS STEP, YOU WILL:

Use your Quantified Value Proposition and Business Model to determine an appropriate first-pass framework for pricing your product.

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Now that you have settled on a business model, it is time to start coming up with a pricing strategy. Fine-tuning the strategy can have a huge impact on your earnings.

With a business model in hand, you can now make a good first estimate on your Pricing Framework, understanding that it will likely change as you continue through the 24 Steps. This step is the beginning of a pricing process, because you will likely end up with multiple price points and pricing strategies, and you will iterate as you experiment and get feedback from the market about price points. Whereas your Business Model is much less likely to change, price points are often subject to change based on market conditions. Some businesses even change pricing on a daily basis (e.g., gas stations) or, even more dramatically, on a real-time ...