Entrepreneurship: Types, Process, and Lean Startup Methods

Entrepreneurship

An entrepreneur is a person who pursues an opportunity, often commercially driven, to bring a new product or service to market with limited resources and high risk. The process of creating a new business is entrepreneurship, also defined as organizing limited resources to capitalize on a business opportunity.

Characteristics of Entrepreneurs

Curious, flexible and adaptable, persistent, passionate, willing to learn, visionary, motivated.

Types of Entrepreneurs

• Intrapreneur: An employee who is tasked with developing an innovative idea or project within a company, with a bit less freedom and higher risk.
• Social Entrepreneur: Interested in starting a business for the greater social good and not just the pursuit of profits.
• Scalable Startup Entrepreneur: Business model where an organization is started based on a unique idea, to become an extremely profitable company.

Social Innovation

The process of developing and implementing new ideas, strategies, or interventions that aim to address social issues and bring about positive social change.

Startup

A startup is a company in the first stages of operations. The process of developing a product or company is based on the expressed desires of the market.

Validated Learning

Validated learning is the process by which companies assess consumer interest. The leading concern among aspiring entrepreneurs is acquiring funds.

Entrepreneurial Mindset

A mindset is a cognitive belief system consisting of interrelated beliefs.

Entrepreneurs focus on developing, designing, producing, marketing, and eventually selling a business with the end goal of financial profit.

Benefits of an Entrepreneurial Mindset

• Creates opportunities
• Promotes discipline
• Opens new paths

Venture

A venture is a startup enterprise that is formed with the expectation and plan that a financial gain will result from a small business with small capital, and then you start venturing to grow your business and capital.

Venture Capital: The money with which you start your business.

Types of Entrepreneurs

Business entrepreneurs, social entrepreneurs, serial entrepreneurs, lifestyle entrepreneurs, intrapreneurs, scalable startups.

Minimum Viable Product (MVP)

MVP, or minimum viable product, is the initial stage of creating the first workable version of your new business concept.

The Lean Startup Design Process

• Understand the problem
• Collaborative design
• Design and prototype
• Test and learn
• Iterate and refine

Five Principles of Lean Startup

• Entrepreneurs are everywhere
• Entrepreneurship is management
• Validated learning
• Innovation accounting
• Build-measure-learn

Pivot: A "structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth."

Lean Startup vs. Traditional Startup

Lean Startup: Find a problem, hypothesis, experiment, analyze results, market study, innovate, improvement, final version. Workers that can adapt and work quickly.

Traditional: Have an idea, launch, market analysis, hire specialists, study sales/profit, balance sheet.

• Customers don’t buy products; customers buy solutions to problems.

Lean Startups Focus On

• Customer acquisition cost
• Lifetime customer value
• Customer churn rate
• Product popularity (instead of income statements)

Entrepreneurs following this method test their hypothesis by engaging with customers, purchases, and partners to gauge their reactions about product features, pricing, distributions, and customer acquisitions.

Churn Rate

Churn rate is the annual percentage rate at which customers stop subscribing to a service or employees leave a job.

Benchmarking

Benchmarking is a process where you measure your company’s success against other similar companies to discover if there is a gap in performance that can be closed by improving your performance.

Benefits of Benchmarking

Competitive analysis, monitor performance, continuous improvements, planning and goal setting, encourage ownership, understand your business.

Benchmarking Process

Planning, collection of information, analysis of data, action, monitoring.