An introduction to entrepreneurship, startups, and innovation — for college graduates ready to take the leap.
Part 1
What is an Entrepreneur?
Investopedia
"An entrepreneur is an individual who creates a new business, bearing most of the risks and enjoying most of the rewards."
Stanford Online
"An individual or a small group of partners who strike out on an original path to create a new business… the entrepreneur assumes the greatest amount of risk associated with the project, this person also stands to benefit most if the project is a success."
Anon
"A person or group of people working to deliver a product or service from problem recognition to wide customer adoption in an environment of considerable uncertainty and risk."
What Do We Mean by Uncertainty and Risk?
Uncertainty
- Unclear demand size for the solution
- Incomplete understanding of what the customer needs
- No off-the-shelf technology for the solution
- Unclear price and willingness of people to pay
- Unclear cost information for delivering the solution
- Unclear competitive landscape
Risk
All of the uncertainties above — but with limited money, time, people, and equipment. Plus personal risk to the entrepreneur:
- Financial exposure
- Social acceptance
- Family relationships
- Personal health
Useful Character Traits of an Entrepreneur
Passionate
Future-Focused
Persistent
Risk-Taker
Disciplined
Focused Listener
Motivator
Leader & Coach
Part 2
What is a Startup?
"A company usually in the first stages of its development that wants to scale quickly… Young, innovative, collaborative, and focused on growth. This is contrasted with a corporation that is often established, slow-moving, large, hierarchical, and focused on productivity."
— HROS
"A company or project undertaken by an entrepreneur to seek, develop, and validate a scalable business model."
— Wikipedia
"A human institution designed to create a new product or service under conditions of extreme uncertainty."
— Eric Reis
Part 3
What is Innovation?
"Turning an idea into a solution that provides VALUE from the customer's perspective."
"Work that delivers new goodness to new customers in new markets and does it in a way that radically improves profitability."
"A new way of thinking or doing that, when executed, is highly valued by users and significantly changes the way things are done, bought, used, experienced, or made."
Invention vs Innovation, What's the difference?
🔬 Invention
Creating something new or doing something in a novel way.
Does not necessarily produce better outcomes for real people.
💡 Innovation
An invention that is implemented AND creates value.
Does not necessarily guarantee commercial success
Putting It All Together
Here's what separates the good from the great:
An OK Entrepreneur
Builds a product
A Good Entrepreneur
Solves a problem
A Great Entrepreneur
Builds a company
Part 4
Innovation at Scale
🏠 Small Business
A small company doing a well-known service can grow and support a family. Examples: restaurants, a family farm, a small printing company, a barber shop.
🚀 Innovative Startup
A startup doing something new and adding value to customers can grow large — but it needs investors, and investors need growth at scale.
Growth Comes From Value
Value to the customer — increased utility, joy, time, or freedom.
Returned value to the company — revenue, profitability, and sustainable growth.
Both must exist for a startup to truly scale.
The Importance of scale
Seed investors look for 50 to 100 times return on their initial investment. Many seeds fail to germinate, the one that does needs to cover all the costs of the duds and more.
Series A investors look for 10 to 50 times their investment over 5 to 10 years
Company valuation at sale or IPO is driven by year over year growth rate and how efficiently the company generates its revenue.
Scale and Value may not just be money…
Commercial Scale
For most companies, scale is defined by revenue. Generally, the larger the customer base, the larger the revenue, and the larger the potential profit. Value to the customer is seen as the increased utility, cost savings, joy, time, or freedom they get from using the product or service.
Mission-Driven Scale
Some worthwhile endeavors measure value not by money, but by impact on people or their environment. These still require innovation and dedication — and must scale to be considered successful. They are often funded by governments or other sponsors and have problem specific measures for success
Regardless of which path you choose, the fundamentals remain the same: innovation, dedication, and scale.
Innovation Cannot Be…
📦 Bought by the Kilogram
You can't simply purchase innovation off a shelf or order it in bulk.
⏰ Scheduled to Arrive
It won't show up at a specific time just because you planned for it.
📋 Written Down Beforehand
You can't fully define or prescribe innovation before it happens.
So You Want to Start a Business?