105th 1M/1M Strategy Roundtable for Entrepreneurs: Business Schools And Early Stage Entrepreneurship
I have written about this before on my Forbes column, but want to raise the question again: Are Business Schools Setting Up Entrepreneurs To Fail? The question has, over time, resulted in huge discussions, some defensive, some self-aware and some even solution oriented.
Nonetheless, in the last couple of years, the flow of first-time entrepreneurs who come out with the misconception that Entrepreneurship = Financing has not abated.
Folks, please understand a simple point: Business schools, when they teach you entrepreneurship, teach you about financing. Most business schools don’t have much insight into what goes on in the pre-validation and validation stages of the business and fail to underscore a simple fact: you do not get financing unless you validate your business first. Validation also means positioning your business in a crowded market, finding the gap and establishing your differentiated, defensible market position.
At 1M/1M, we have squarely focused on this simple gap that has been left open by most business schools. And we have decided to address the gap at $1,000 a year rather than the $85,000 a year that HBS would cost you. Even after you have your $85,000 a year MBA, it is very likely that you do not have the basics that would help a first-time entrepreneur navigate the turbulent waters of entrepreneurship. To plug that gap, 1M/1M is a perfect solution. [Read:MBA vs. 1M/1M: Let’s Do The Math]
At today’s roundtable we had three promising entrepreneurs who have been doing considerable work, but they have fundamental gaps in their understanding of what it takes to build a business, the options and constraints in front of them, and some of the flaws in their assumptions.
First, Jose Briones from Dallas, Texas, pitched SPOTS Online, a QuickBooks add-on product for companies that have to manage complex supply chains but are not quite ready to take on the expense and complexity of an ERP roll out like NetSuite. In addition, the customers best served by the SPOTS solution are those who do not keep inventory, but rather have to manage multiple suppliers after an order comes in.
The solution looks compelling, and Jose clearly understands the pain of his target segment. However, his TAM assessment seems overly optimistic to me. Jose had a number of questions on financing, and a good portion of the answer will lie in an accurate and defensible TAM analysis.
In addition, I had the feeling that the product is being scoped out without input from a critical mass of customers. Jose’s go-to-market strategy seems to follow a sequence-error that we often rectify in the 1M/1M methodology: build product first and then start talking to customers. No, Jose, you need to build your market while building your product – in parallel, not sequentially.
Then Jay Dias from Barrington, Illinois, presented Eventbin.com, a site where she plans to bring together discounts and coupons from numerous vendors, all targeted towards moms. Jay’s age band is 18-45. [Well, I hope 18-22 year olds are focusing on college, rather than being moms!]
Anyway, the discount and deals universe is incredibly crowded, and I did not see any competitive analysis or positioning from Jay. It would be very difficult to rise above the noise of this market and get any traction at all without an extremely precise positioning.
Jay does not have that yet.
Next Badrinarayanan V S, from Chennai, India, pitched DiaSof, a software-based solution for disease management of diabetes patients in India. Apparently, India has 50 million diabetic and another 40 million pre-diabetic patients. Badri’s solution is an email and SMS-based reminder service for them to take the tests and medications at the right time.
Badri presented the business as a consumer solution, with a go-to-market strategy where pharmacies sell pre-paid subscriptions. I don’t think that strategy would fly at all.
However, Badri has a pilot going with a diabetes hospital with 100,000 patients. The hospital has already purchased subscriptions for 1,000 patients and plans to roll it out to the entire patient population in short order. There are another 30 such hospitals focused on diabetes, and those seem to me like ideal candidates for the service.
Over the next twelve months, if Badri can bring these and other hospitals in as customers, that is a far more compelling go-to-market strategy, in my opinion. From there on, word of mouth would take effect, and consumers can buy subscriptions directly.
You can listen to the recording of today’s roundtable here. As always, I would very much like to hear about your business, so let me invite you to come and pitch at one of our free 1M/1M public roundtables. We will be holding future roundtables at 8:00 a.m. PST on the following dates:
Thursday, December 1, Register Here.
Thursday, December 8, Register Here.
Thursday, December 15, Register Here.
Thursday, December 22, Register Here.
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