This is the approach to entrepreneurship Aulet emphasizes in his new book, “Disciplined Entrepreneurship” (Wiley), which is based on his teachings at MIT and more than 20 years of firsthand experience with startups.
The book lays out 24 sequential steps in the development of a company around a disruptive innovation — a process that Aulet and colleagues at the MIT Sloan School of Management have called “innovation-driven entrepreneurship.” These steps include clearly identifying the target customer; calculating the size of a market; charting the competition; quantifying a product’s value; mapping the sales process; and conducting experiments on customers’ buying habits.
It ends, Aulet says, with the creation of a viable commercial product. But Aulet acknowledges that even knowing the steps is no guarantee of long-term success. “This is not a magic algorithm,” he says, but rather a “framework to increase the odds and magnitude of success for a new venture.”
Ultimately, Aulet hopes the book will lead to a broader discussion about teaching entrepreneurship as a rigorous academic discipline.
“Entrepreneurship is something that can be taught — and is taught at MIT, and other institutions — and there are processes you can follow, a framework you can create, much like, say, teaching journalism and writing,” he says. “It just requires a significant amount of discipline.”
Blurring the lines between company and customer
Much of the book’s content derives from Aulet’s lesson plans for 15.390 (New Enterprises), the introductory entrepreneurship course he teaches at MIT with Howard Anderson, a senior lecturer. This class has been run at MIT for more than 25 years, churning out hundreds of startups — and, more importantly, many skilled entrepreneurs, Aulet says.
“In essence, I’m trying to take what MIT does so well — which is teaching entrepreneurship — and make it accessible to a broader group of people inside and outside MIT, so we can have a bigger impact on the world,” Aulet says.
Each chapter includes case studies from MIT spinoffs and projects, focusing on how these entrepreneurs have implemented the specific steps described in the book. It also includes detailed examples from one of the companies Aulet co-founded, SensAble Technologies, as well as others he’s been involved with.
While watching so many MIT startups, Aulet has seen entrepreneurs make a few common mistakes. The main one, he says, is not focusing enough on the customer. “Getting the product, customer and market to fit right is one of the two most important things when starting a company,” he says. “The other is recruiting, retaining and growing a great team.”
Indeed, more than half of “Disciplined Entrepreneurship” focuses primarily on customers. The book walks the reader through identifying and acquiring customers; analyzing customers’ decision-making process; estimating the cost of acquiring new customers; and estimating the lifetime value of customers.
“Everyone always wants to start with their technology, idea or product,” Aulet says. “They have a great invention and they’re going to push that out in the world. They think, ‘If we build it, they will come.’ Building it is rarely the problem — especially at MIT. Getting the customer to come and buy in a way that makes for an economically sustainable new venture is the problem.”
“Successful entrepreneurs are ones who start a company walking in their customers’ shoes,” he adds. “They understand their customer so well, they become their customer, and the line between customer and company becomes blurred.”
A platform to build on
At times, the book focuses on seemingly minor — yet significant and often-overlooked — aspects of business planning. One step involves building a persona for the target customer, which includes creating an entire personality. Two others center on identifying, and then testing, key business assumptions, using data gathered from specific customer actions.
In this way, Aulet says, the book serves as a rigorous alternative to “teaching through storytelling” — where entrepreneurs share their inspirational stories — and what he sees as the overly simplistic teaching methods found in some entrepreneurship courses, which emphasize one strategy to building a company.
Other entrepreneurs have praised the book for its practicality, attention to detail, and systematic approach. Jon Powell, owner of Innovative Waste Consulting Services in Gainesville, Fla., says the book stood out, in part, because it “parallels the decision-making process, where it’s not a linear path, it’s one of oscillation. You go a certain distance in the book, then go back and revisit and revise your thinking. And there’s enough detail, but it doesn’t bog things down.”
Still, Aulet warns, “there’s no magic bullet for entrepreneurship. … Unfortunately, entrepreneurship is not like physics, where there is a universal theory of relativity that explains the right answer, because every startup is different and the results are unique. It’s a much messier process, where having structure and a place to start can help provide direction in an otherwise very confusing and ambiguous environment.”