Entrepreneurial Mindset Final

The Offering

What you sell, includes Customer Value Proposition (CVP) → why customers care

The Customer

Target market, how you reach and maintain relationships

Infrastructure

Resources needed (people, tech, suppliers, facilities)

Financial Viability

Revenue + cost structure, must cover expenses and generate profit

Customer Segments

Important Types: Mass Market, Niche Market, Segmented, Diversified, Multi-sided

Mass Market

Large group (Walmart)

Niche Market

Specific group (Whole Foods)

Segmented

Multiple groups with different needs

Diversified

Unrelated groups (Amazon)

Multi-sided

Two linked groups (ads + users)

Revenue Model

How a business makes money, includes what you sell, pricing method, how it's delivered

Common Revenue Models

Unit Sales, Advertising, Subscription, Freemium, Licensing, Franchising, Data, Intermediation, Professional, Usage-based

Licensing Revenue Model

a way of earning revenue by giving permission to other parties to use protected intellectual property (patents, copyrights, trademarks) in exchange for fees

Professional Revenue Model

provides professional services on a time and materials contract

Intermediation Revenue Model

methods by which third parties such can generate money.

Data Revenue Model

generate revenue by selling high-quality, exclusive, valuable information to other parties

Freemium Revenue Model

offers users a basic service for free and then charges a premium for upgrades or advanced features

Unit Sales Revenue Model

the amount of revenue generated by the number of items (units) sold by a company

Advertising Revenue Model

the amount of revenue gained through advertising products and services

Subscription revenue model

charging customers to gain continuous access to a product or service

Revenue Drivers

Customers, frequency, selling process, price

Cost Drivers

COGS (Cost of Goods Sold), Operating Expenses (marketing, salaries, admin)

Net Income Formula

Net Income=Revenue−COGS−Expenses

Revenue

Total sales

COGS

Cost to produce goods

Operating Profit

Revenue - operating costs

Pricing Strategies

Competition-led, Customer-led, Skimming, Introductory Offers, Psychological Pricing, Loss Leader

Cost-Led Pricing

Price=Cost+(Cost×Markup)

Break-even Formula

Break-even Units=Fixed Costs / (Price - Variable Cost)

What is Failure?

Business closes after not meeting goals/investor expectations

Effects of Failure

Pros: Learning, Motivation, Improved thinking; Cons: Financial loss, Emotional stress, Risk avoidance

What is Grit?

Ability to work hard + stay committed long-term, key for overcoming failure

Predictors of Success

Intelligence, Perseverance, Conscientiousness