MIT ENTREPRENEURSHIP

Accelerate your business with these expert tips on "MIT Entrepreneurship" - take a look and discover this TIP!

Methodology developed by the Director of the Martin Trust Center for MIT Entrepreneurship, Bill Aulet. Methodology by which Both first-time and experienced entrepreneurs can bring their products or services to market efficiently by following a 24-step guide. 

It is about 24 steps that an entrepreneur must take to minimise risks and succeed or fail very quickly if the idea is not viable. Each of the steps rigorously assesses whether a customer benefits from the product or service offered by looking at aspects such as: market segmentation, user or customer profiles, product or service, etc. ..... 

These are the 24 steps of MIT Entrepreneurship:

# 1. Segment the market

Recommends making a  brainstorming on customers and markets potential markets. Narrowing the list from six to twelve main markets and making a primary research with them. This process identifies multiple potential business opportunities. When you have the list, point to the need to make a research analysis This helps you to know which markets are best for your idea. The aim is not to come up with the perfect idea but to present a range of market opportunities before deciding where to focus the business.. To this end, he recommends talking directly to customers.

# 2. Selecting a starting market

It is necessary to choosing a single market to start with. Then segment it further until you have a well-defined and homogeneous market opportunity that meets the three recommendations of a market. For Aulet the greatest ally is the ability to concentrate.

# 3. Profile the end-user

You have to start defining the customer and for Aulet it is very helpful if you have someone in your own founding team who fits this profile as it allows you to not be based on assumptions. In fact, he recommends that if you do not have one, you should hire one. He points out that the definition of the profile, in which age, sex, motivations and fears, among other categories, should be determined, should be the basis on which to build the company and not on the skills and interests of the entrepreneur.

# 4. Calculate market size

The size of the available market measures annual income you would gain if you had 100% of market share. It is only used for the first initial market. This is a bottom-up analysis in which you show how many potential customers you have identified from the previous research. and extrapolate them to a wider market.

# 5. Describe the initial market character

This process provides you with specific details of your customer within the initial market. You are not selling to someone who meets your end-user profile, but you are selling something to a specific individual. The whole team must understand the character. For Aulet it is very important to understand the purchasing criteria. in order of priority. It is necessary to understand what motivates the customer, not only from the rational point of view but also from the emotional y social.

# 6. Product Lifetime Use Case

A visual representation of the shelf life of the product has to be created to see how long the product will last.ow it fits into the value chain and what barriers to acquisition may be encountered. Do not just show the customer how to use it because you will not have a sufficiently accurate picture to understand how to use it. what obstacles may arise when trying to sell it to the target customer.

# 7. High-level product specification

It is necessary to visually show the product The team and potential customers can achieve convergence in the way they understand what the product is and what are the key features of the product. advantages that customers receive. At this point it is still at a high level because not too much detail or a physical product is given, which allows a quick overhaul without the need to invest too much time and resources in this early product phase. For this purpose, he recommends making a brochure with features, functions and customer benefits clarifies the product offer and is a complement to the images that have already been created.

# 8. Quantifying the Value Proposition

It should be geared to the maximum character priority. It is necessary to first outline the current status in a way that the client understands, using the product life case. It then shows the possible state if the product were to be used by indicating where the customer receives value based on the customer's highest priority. It is best to make a visual diagramThe customer can easily see the quantified value proposition and show it to others for validation. If done well, Aulet says, it will be of immense value throughout the process.

# 9. Identifying your next 10 customers

Interview your next ten customers ensures that the character description and other assumptions remain valid for more customers. This and the possible restructuring that arises from them enables move forward with confidence towards the new company plan.

# 10. Define your essence

Defining the approach comes first. You have to spend a lot of time looking at the company from the inside, in contrast to the other steps, which focus mainly on the customer. Aulet points to the focus, what the company offers that the competitors do not have, what will protect you most and best in the future and what you will work on again and again to develop and improve more and more. From there, you should not change it without thinking it through, the focus must be stronger and stronger. If it changes a lot it is a bad sign because it is not being built well. You can change it if you discover that there is something that customers value more and that entrepreneurs do better.

# 11. Establish your competitive position

It needs to be defined because it is a quick way to validate the product against competitors' products including the customer's criteria and based on the top two priorities of the character. If you are not in the top right hand side of the resulting graph you should re-evaluate the product or at least the way you present it. It is also an effective way to communicate the qualitative value proposition to the target audience in an effective way.

# 12. Determine the unit of customer decision making

The next step is to see how the customer will purchase the product. To sell it, you need to understand who makes the ultimate decision to buy it, as well as who influences the decision. Consider the champion and the primary payer, but do not ignore the people who have veto power and the people who have a veto power. influencers.

# 13. Make an outline of the customer acquisition process.

It is necessary to determine the acquisition process of a paying customer and identify other obstacles that could hinder the ability to sell the product. From overly long sales cycles to unforeseen regulations and hidden obstacles.

# 14. Calculate the total available size of the next market(s)

It's about validating that there is a bigger market and reaffirming to all team members and investors that your company has an opportunity for growth. great potential in both the short and long term.

# 15. business model

It is a decision to which time must be devoted. The decisions taken will have an important effect on profitability, calculated according to two key variables for entrepreneurs: long-term value of an acquired customer and cost of acquiring a customer. Do not focus on prices as the business model has much more influence on profitability. Choose a model that provides advantage over competitors because they will not be able to easily change their model to imitate yours.

# 16. Set your pricing policy

The price is to determine how much value the customer receives from your product and in capturing the fraction of that value for the firm. Costs are irrelevant in determining the pricing structure. Aulet points out that you can price your first customers higher than later ones, but you need to be flexible and offer special discounts and exceptions to attract the first testers and lighthouse customers. It ensures that prices will change continuously.

# 17. Calculates the long-term value of an acquired customer

This is the profit that a new customer will provide on average, discounting the high acquisition cost per customer of capital faced by a new customer. startup. We have to be realisticThe long-term value of an acquired customer, not an optimistic one, when calculating the LTV and to know the underlying factors behind it in order to be able to work on increasing it. The long-term value of an acquired customer must be at least three times the acquisition cost per customer of capital.

# 18. Draw a diagram of the sales process to acquire a customer.

Outlining the sales process is a first reflection on how to enter the market, although the strategy will be refined over time. It is also about how an inexpensive, long-term strategy will be put in place to win customers. The sales process includes raising awareness, educating the customer, organising and processing the sale. The sales process determines the cost per customer acquisition, one of the variables that shows the profitability of the company.

# 19. Calculates the cost per acquisition of a customer

At this point the most important steps in determining whether the company's financial data will work have been completed. Value-per-sale and cost-per-customer-acquisition analysis can kill many start-ups. by identifying problems at an earlier stage in the process, but more often it highlights the importance of closely monitor the key factors that make a company successful. It provides you with a simpler scoreboard than financial results and allows you to make fine-tuning and refining business. It sets you on a more transparent path to success.

# 20. Identify your key assumptions

This is the first part of the validation process of primary market research where customers are expected to take specific actions, which will take place in the next step. Before testing the key assumptionsit is necessary to divide them into their different partsso that each scenario represents a concrete and limited idea which can be demonstrated in practice in the next step through a experiment designed for this purpose. Focus on dividing up the key assumptions, because if you fail to assess an assumption because you are afraid that it will be difficult to prove, you will have failed to take into account a factor that is particularly important for the health of the company.

# 21. Test the key assumptions.

Testing key assumptions such as cost forecasts and the interest of lighthouse customers allows to be better prepared to sell the product because it complements the strategy based on the primary market research that has already been done. The convergence of market research with the practical results of the experiments makes it possible to be prepared to be able to fit together the pieces of a first initial product to sell to customers.

# 22. minimum viable product of the company. 

This step is a systems test of a product that really brings value to the customer. The paying customer can use and initiate the feedback loop which will help to interact with the customer to make better and better versions of the product.

#23. Demonstrates that "dogs will eat dog food". 

It is necessary to carry the minimum viable product customers to see if they will use and pay for the product. Collect data to see if they are using it and how engaged they are as users. Determine whether they, or someone connected to them, will pay for the product and also recommend it to the word of mouth. Then collect them over time, analyse them and look with particular interest for underlying trends and factors that explain them. Be honest and based on real data, and be sure that you are not in an abstract logic.

#24. Develop a product plan

You need to plan ahead so that you can broaden your vision and not get too stuck in the initial market, which is only the first step of the enterprise. You have to expand further of it. It gives a long term vision that keeps you focused on achieving your goals and in think aheadThis is especially true for product and organisational design. Not too much time should be wasted on this as you still need customers to buy or else you will run out of money to enter adjacent markets. Plans will change when the initial market is better known.

If you have a business opportunity very innovative and with a lot of uncertainty type startup, I recommend that you take a look at this MIT method.

MIT METHOD

It details 24 very interesting phases grouped into 6 groups:

1. Who is your customer?
2. What can you do for your client?
3. How does your customer purchase the product?
4. In what way monetise your product?
5. How to design and manufacture your product?
6. How to make the company scalable?

Phases or steps to boost your project. During the mentorDay acceleration programme we carry out these steps:

• I identify all the segments (+) possible that share the same need. Brainstorming the most creative and wide-ranging as possible.
• Test PMV (+) in each segment: I try to make 10 sales in each segment and compare the results with the customers achieved (preferably signed and collected contracts).
• I find the segment where I can grow the fastest.
• I concentrate all my resources and commercial efforts on this segment... sell, sell, sell (+).
• I avoid temptations by not getting distracted by other customer segments, I learn to say no to segments that do not interest me now, I keep these new customers for the future.
• I fall in love with the chosen segment and its needs and, improving the solution by seeking maximum differentiation with the competition, I use the innovation (+)technology, creativity, thinking outside the box...
• I eliminate activities that do not add value to the customer. (see key activities).
• Valid for all channels (+) and discover the ones with the highest ROI for that segment.
• I invest in commercial resources, involving myself as much as possible.
• I discover bottlenecks that can stunt my growth, and I anticipate to avoid them. (lack of funding can be a bottleneck).
• Create a engine of growth (+), I automate the sale (+).
• I am looking for the scalability (+) of the model: automation, software development of more activities.
• If I no longer grow in my chosen segment, it is only after I have tried everything that I can diversify to the next customer segment...

The mentorDay acceleration programme covers all the main stages that a new company has to go through from Idea to Market Launch and beyond. valley of death as soon as possible. Laying the groundwork for financial support during the launch process.

IN EACH OF THESE STAGES, WORK IS CARRIED OUT ON KEY ASPECTS:

Stage of your project according to the technology:

• Concept or market research stage.
• In development, but not tested with users.
• Users have tested the Minimum Viable Product (MPV) or are about to do so, or the product has been tested in the desired environment.
• The product is in the pre-commercialisation phase.
• The product is already sold and I would like to expand it.