Principles and frameworks for entrepreneurial management
Entrepreneurial management is:
“A set of principles and frameworks that help startups identify a sustainable business model with the least amount of waste possible.” — Jon Worren, MaRS Entrepreneurship Programs
What is entrepreneurial management and why is it important? Nathan Monk, senior strategist in the information technology, communications and entertainment practice at MaRS, answered these questions in his Entrepreneurship 101 lecture last week, highlighting the best and most logical principles of entrepreneurial management for both first-time entrepreneurs and startups looking to take their companies to the next level in the most effective way possible.
The rules for building a startup are constantly evolving and at a rapid rate, but there are many solutions and insights that will allow you to steer clear from known pathways to failure. Nathan pointed to research from the “Startup Genome Report” that identified the top traits that successful entrepreneurs and startups tend to have in common.
It’s important to know that there is no one way to start a new company. “You do not need to just solve a pain or problem to be an entrepreneur,” explained Nathan. Startups can be formed around a technological breakthrough, a novel idea or, more simply, a passion for a particular market. For more on the latter, read Gary Vaynerchuk‘s book Crush It! about how to find what you’re passionate about and build a company around it.
The “Startup Genome Report” has proven to be a very effective model and is one that entrepreneurs should use to learn about entrepreneurial management practices that have worked for successful startups. Here are some key elements from the report that are worth considering.
- Startups that have helpful mentors, that track their performance metrics effectively and that learn from thought leaders raise seven times more money and have 3.5 times better user growth than those that do not.
- Solo founders take 3.6 times longer to reach scale stage.
- Balanced teams with one technical founder and one business founder raise 30% more money, have 2.9 times more user growth and are 19% more likely to scale prematurely than technical or business-heavy founding teams.
- Most successful founders are driven by impact rather than by experience or money.
According to serial entrepreneur and investor Michael A. Jackson, “scaling successfully is what separates eventual industry leaders from long-forgotten startups in the deadpool.” The most important guide to come out of this new thinking on entrepreneurship management is Steve Blank’s book The Startup Owner’s Manual. Other thought leaders to look to for guidance include Clayton Christensen, Eric Ries and Bill Aulet among others.
- The Business Model Canvas
- the book The Entrepreneur’s Guide to Customer Development
- Steve Blank’s “How to Build a Startup” course on Udacity, as well as his article “Why the Lean Start-Up Changes Everything” and his “Customer Discovery Checklist”
- Customer Discovery’s how-to videos
Watch the lecture video below for key takeaways to keep in mind during the startup process that are vital to the success of any new company.
Next lecture: Value Proposition, October 30, 2013
- Speaker slides: Introduction to Entrepreneurial Management
- Video: Separating Leadership from Management: Three Hot Tips for Startups
- Article: Developing your value proposition: An overview of customer discovery
- Article: Customer validation: Developing your business model
- Article: The Customer Development Model
- Workbook: Bottom-up sales forecasting for pre-revenue startups
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