In the world of entrepreneurship, the concept of disciplined entrepreneurship has gained significant traction over the past decade. Bill Aulet, an entrepreneur and educator at MIT Sloan, introduced this disruptive idea in his book “Disciplined Entrepreneurship: 24 Steps to a Successful Startup.” In his updated version of the book, Aulet outlines six key themes that provide a roadmap for creating a sustainable innovation-based business.
Theme 1: Who is your customer?
Aulet emphasizes the importance of starting with the customer and working backward from there. By identifying a target market segment where you have the highest odds of success, you can focus your limited resources effectively. Conducting primary market research to understand the demographics and psychographics of your end user is crucial in determining the total addressable market size. Creating a persona for your beachhead market and validating it with the next 10 potential customers helps maintain focus and guide decision-making.
Theme 2: What can you do for your customers?
Describing the full experience of your persona and identifying opportunities for improvement is essential in creating specificity around your solutions and value proposition. Visual representations of your product, along with a clear summary of the value it creates for customers, are key in communicating your offering effectively. Determining your unique selling proposition and positioning relative to competitors’ alternatives helps differentiate your product in the market.
Theme 3: How does your customer acquire your product?
Understanding the decision-making process and influencers involved in acquiring your product is crucial in determining the cost of customer acquisition. Mapping out the short-, medium-, and long-term strategies for creating and fulfilling demand helps calculate the cost of customer acquisition over time. Identifying critical bottlenecks in the decision-making process is essential for streamlining the sales cycle.
Theme 4: How do you make money off your product?
Choosing the best pricing strategy aligned with stakeholders’ interests and estimating the net present value of total profits from a new customer are key steps in monetizing your product. Testing pricing frameworks and understanding the drivers of customer lifetime value are essential for sustainable profitability. Calculating unit economics helps assess the scalability and attractiveness of your business as it grows.
Theme 5: How do you design and build your product?
Testing key assumptions before heavy investments in product development, defining a minimal viable product, and obtaining quantitative metrics on customer adoption and value are critical in the product development process. Starting an iterative customer feedback loop with the minimum viable product allows for efficient resource utilization and validation of product-market fit.
Theme 6: How do you scale your business?
Calculating potential revenues from follow-on markets and developing a plan to add functionality for future market expansion are essential for scaling your business. Thinking ahead and having a long-term growth strategy in place ensures that your team is prepared to capitalize on opportunities beyond the initial beachhead market.
In conclusion, Aulet’s disciplined entrepreneurship framework provides a systematic approach to building a successful startup. By focusing on the customer, creating value, acquiring customers, monetizing products, designing efficiently, and planning for scalability, entrepreneurs can navigate the complexities of the business landscape with clarity and purpose.
