Book Review | DISCIPLINED ENTREPRENEURSHIP: 24 STEPS TO A SUCCESSFUL STARTUP
Bill Aulet’s Disciplined Entrepreneurship: 24 Steps to a Successful Startup, deliberately explores, from general to details, how to operate, organize, and undertake the risks of business ventures. Whether for SME or IDE Entrepreneurship, Aulet primarily consolidates the work on product innovation and its market growth and provide effective business strategies for constructing startups. From his professional experience in MIT and IBM, Aulet introduces 24 entrepreneurial steps in six key themes: Who is your customer? What can you do for your customer? How does your customer acquire your product? How do you make money off your product? How do you design & build your product? How do you scale your business?
From Step 1 to Step 11, the book concentrates on how to understand and how to plan the business based on the target customers and markets. Before starting the entrepreneurial journey, Aulet identifies three crucial things that entrepreneur must possess, which is idea, technology, and passion. He states how every entrepreneur must have an idea that influence the society, a technology that accelerate the extension and growth, and, most importantly, a personal passion that massively impact the world. Step 1 for an entrepreneur is the market segmentation process. With specific ideas and technologies, one would brainstorm to recognize the broad spectrum of possible market opportunities. Step 2 discusses about prioritizing or narrowing the segments of product’s possible applications down to 6-12 most beneficial market opportunities. Like how SensAble Technologies processed through, direct researching of product industries and talking to potential customer greatly succor the process of market segmentation. Once the 6-12 market opportunities are firmly set, Step 3 explains about choosing only one segment to pursue and specify into further segments. Meanwhile, it is worthwhile to understand three conditions of defining market: that the customers all buy similar products, that they have similar expectations on product sales and value, and that there exists the power of “word of mouth.” Aulet emphasizes that there must be a primary market research in order to profile the end user and grasp the decision-making unit. Step 3 is considered as the cornerstone of a startup with detailed analysis of End User Profile and thorough the understanding of diverse target customers within a market segment. In Step 4, Aulet elaborates on precisely understanding the beachhead market value and its size. Aulet stresses that calculating the Total Addressable Market (TAM) clearly shows the direction of business and the bottom-up and top-down analysis additionally provide in-depth understanding of target customers. For instance, when MIT students founded OnDemandKorea, they discovered 800,000 more potential customers, fans of Korean culture, while researching and creating the End User Profile, which later successfully helped in controlling the website traffic. Therefore, Aulet insists that one can see the appropriateness of the business and can also prevent unnecessary mistakes in the future. Step 5 include choosing one end user as a Persona, defining a Persona, and making this Persona visible and tangible to every workers in the company to maintain same goal and focus to successfully lead the business. The book demonstrates how the Persona’s Purchasing Criteria in Prioritized Order is significant in understanding the customer’s psychological behavior, needs, and motivations. Step 6 then smoothly connects the previous study to more specific ways of how Persona perceives and influences the business. Furthermore, Aulet imperatively warns the entrepreneurs to observe the Full Life Cycle Use Case in the eyes of the customer and will eventually see the product’s appropriate and more accurate match to specific customers. From Step 7 to Step 11, Aulet explores through the concepts of what an entrepreneur can do for the customers. For example, he examines the high-level product specification for visualizing the representation of product, and he explains how to chart the competitive position. Step 8 and Step 10 is two crucial steps in quantifying the Value Proposition and determining the company’s Core. Aulet demonstrates the calculation of quantitative metrics and the product’s value that customer seeks or benefits from. Also, Aulet clarifies some examples of the Core like Network Effect, Customer Service, User Experience, and Lowest Cost. He highlights some examples of customer’s Decision-Making Unit (DMU) in Step 12 to see how the customer acquires certain products. He adds onto this by showing how to map the process and how to realistically estimate the sales cycle of a business. After a long preparation of attaining and analyzing a myriad of business information, Step 15 to Step 19 introduces the key factors in designing a business model (Customer, Value Creation and Capture, Competition, Distribution) and two concepts of Lifetime Value of an Acquired Customer (LTV) and Cost of Customer Acquisition (COCA). Aulet shows that the setting of pricing framework as well as Quantified Value Proposition and Business Model essentially answers the question, “How do you make money off your product?” Reaching to the most exciting discussion of designing and constructing the product, Step 20 pinpoints the initial identification of key assumptions, and the following 3 steps include the testing of assumptions and the setting of Minimum Viable Business Product (MVBP). In the last 24th Step, Aulet finalizes with the concept of expanding, scaling the business and further developing the Product Plan in different markets.
Disciplined Entrepreneurship: 24 Steps to a Successful Startup truly gives the step-by-step guide to put innovative thoughts into action. This book demonstrates its strength in providing a myriad of good examples he studied or experienced in his career. Also, brief introduction and summary in each step clearly conveys Aulet’s meaning and purpose of preparation. The graphics or visual representation and cartoon illustration consistently attract the readers and portray easier understanding of business’s real-life scene. However, some of the complex languages and business terms may confuse the reader since the book gives extensive information for the startup entrepreneur. Also, it would have been helpful if the book proceeded a little further to providing examples of successful venture cases and its development or growth. Despite many useful information and visual illustration, the overall content leans more toward the abstract concepts and business plans than the stories of risk and reward of venture capitalists. Still, the book is very detailed and professional and comprises numerous strategic examples to better comprehend the purpose of each step.
As studied in the Entrepreneurship class, many business terms and ideas were very familiar such as TAM, Value Proposition and Business Model. The book effectively teaches somewhat difficult management and marketing ideas in easily understandable way, so that the reader, even without business knowledge, can comfortably process through each step of the book. Because entrepreneurship covers such massive spectrum of business with numerous variations, the business strictly depends on which profession, interest, or expertise the entrepreneur plans. For example, the company Contract Cloud may not go through the same process as Disciplined Entrepreneurship explains since it is more service-oriented than product focused. Although service is for customers, the way Contract Cloud expanded its scale was distinct and very different from the explanation written in last few steps of the book. Overall, it is surprising to see how Aulet still consolidates and organizes such big entrepreneurship, from general to specific, in only 24 steps.
The unpredictable and risky journey of entrepreneurship is well-explicated, easily guided, and concisely outlined in the book, Disciplined Entrepreneurship: 24 Steps to a Successful Startup. As Jack Dorsey said, “Everyone has an idea. But it’s really about executing the idea and attracting other people to help you work on the idea, and Bill Aulet’s Disciplined Entrepreneurship combines powerful message and essential strategies to fully convey the idea of truly becoming an entrepreneur.