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The Revenue Model: An Entrepreneurship Framework

• Manufacturing involves converting raw materials or adding value to them.
• Manufacturers earn a margin by distributing goods into the market through a distribution system
• Retail involves creating an appropriate space and environment to display merchandise
• Retailers merchandise a collection of products, usually made by others, and earn a margin on items sold
• Dollars for Hours/Space/Access (DFH) charge a fee per unit and earn a margin on every unit sold
• Brokering involves earning a margin for making connections and facilitating transactions.
• Brokers do not usually take ownership or possession of the items being bought and sold
• Leveraging Intellectual Property involves protecting and selling/licensing intellectual property
• Leveraging Intellectual Property involves acquiring access to intellectual property owned by others to develop M/R/DFH/B

Connecting Core Competencies, Competitive Advantages, and Meaningful Messaging

• Core competencies are essential capabilities that make an organization valuable
• Core competencies contribute to customer benefits across markets and are hard to replicate and are not product-specific
• Competitive advantages make offerings more attractive than competing options and are tied to specific products or outputs
• Compelling messaging highlights competitive advantages derived from core competencies
• The flow of value creation moves from core competencies to competitive advantages to compelling messaging

Lifestyle vs. Growth Businesses

• Lifestyle Businesses are small, family/partner-owned businesses with slow growth
• Lifestyle Businesses typically have no investor funding but generate long-term income. Examples include retail, restaurants, lawyers, and plumbers
• Owners of lifestyle businesses control the business and can sell later
• Growth Companies are investor-funded businesses with fast growth and high risk
• The aim of growth companies is to sell in 5-10 years for profit, examples include software, medical devices, and electronics
• Growth companies are controlled by a Board of Directors
• 90% of startups are lifestyle businesses, while less than 10% get angel/VC funding. Some lifestyle businesses can grow into large companies

Top-Down vs. Bottom-Up Thinking

• The Top-Down Approach starts with industry-wide data and narrows down.
• A risk of the Top-Down Approach is that it overestimates demand without real customer validation
• The Bottom-Up Approach starts with real customer data and builds up. It based on actual demand and early traction

Three Types of Startup Markets

• Existing Markets: In this market type you compete with known players and win by offering better performance or meeting unmet demand
• New Markets: there are no direct competitors and customers may not understand the product; however, enables something entirely new or drastically reduces costs
• Re-segmented Markets
  • Low Cost: "Good enough" at a lower price
  • Niche: Premium solution for a specific audience

Feasibility Influence Model

• Framework for feasibility studies, focuses on testing ideas under an entrepreneur's control

Effective Messaging & Customer Development

• Common Top-Down Mistakes
  • Using generic slogans.
  • Focusing on awareness instead of conversion.
  • Overloading the message with company name, features, and broad themes

Key Messaging Principles

• Structure Matters:
  • Headline: should be benefit-driven
  • Visual: should be eye-catching
  • Support Copy: should provide a call to action
  • Signature: Use a logo
  • Contact Info: Include web, phone, and location
• Clarity & Presentation: Ensure the message is meaningful and well-presented

Improving with a Small Budget Includes

• Using your space.
• Partnering with complementary businesses.
• Leveraging others' interests to expand reach.

Essential Questions for Improvement

• Who exactly is your customer?
• How will you reach them?
• How will you measure success?

How to Fail Productively

• Fail small, fast, and cheaply
• Learn from failures early on

Starting Within Your Means Involves

• What you know
• Who you know
• Who you are
• It is false that you can separate ideas into good and bad with enough research
• There are only tested and untested ideas
• There is no perfect archetype for entrepreneurs

Fixed vs. Variable Costs in Early Ventures

• Fixed Costs are incurred whether you sell or not
• Variable Costs are only incurred when you sell something
• New businesses start by taking action and self-funding, selling to real customers
• There is no perfect time to start, you must begin with small steps
• Take one action per week to move forward and consider the max loss vs. minimum gain before taking the leap
• Opportunity Cost:
  • Being a student includes forgone income and time
  • Starting a business = costs, but not starting means missing out on connections, experience, and learning

Entrepreneurs Are Not Predictors

• Entrepreneurs shape the future instead of predicting it
  • Risk: Measurable.
  • Uncertainty: Unknown
• Think risk first, then maximize potential returns
• The future belongs to those who create it, not those who try to predict it

Sources Ideas Come From

• Search & Select (Existing Need)
  • A concept exists elsewhere but not here
• Opportunity Making (Created Need)
  • Entrepreneurs make opportunities through curiosity and action

Acting & Monetizing

• Consider who will buy the product and how it will make money
• Manage Uncertainty By Controlling Money, time, and effort
• The economy and Trends are two things we cannot control
• Avoid Learned Helplessness and focus on what you can control

Leverage Contingencies & Partnerships

• Turning Mistakes into Opportunities:
  • Jelly Belly → Belly Flops
• Partnerships Provide More Resources but
  • Don't over-rely on partners
  • Maintain control & independence in decision-making