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New Enterprises · Lecture 11 of 12 · 4:29

Lecture 11: From Passion to Idea or Technology

Study guide

What this lecture covers

This short talk addresses a question every aspiring founder faces: once you have a team and a passion, how do you decide which idea or technology to actually pursue? Bill Aulet lays out a checklist of personal and team factors to weigh before committing to a direction.

It sits early in the course's discussion of forming a venture, right after the topic of building a founding team. After watching, you should be able to evaluate a potential business idea against your own team's knowledge, assets, and reputation, rather than choosing based on technology alone.

Key ideas

Knowledge: you should understand the technology, market, or industry you're entering; necessary but not enough on its own.
Capability: a specific skill or expertise your team has that gives you an edge, such as deep experience in a particular industry.
Connections: knowing the right people in an industry is a real asset, not something to dismiss as trivial.
Financial assets: how much capital your team has determines which markets are realistic, since some industries have a high cost of entry.
Name recognition: whether people in the target market know and will respond to someone on your team; tied to credibility.
Past work experience: a separate factor that can also feed into capability, knowledge, and connections.
Passion: you need to genuinely want to work on the idea for years, or you're unlikely to stay motivated as an entrepreneur.
Commitment: the strongest predictor of success Aulet sees when selecting founders for accelerator programs; being fully committed tends to beat having better technology.

Before you watch

This lecture assumes you've already thought about forming or joining a founding team, since it builds on that discussion.
Useful to watch when you're choosing between multiple possible venture ideas rather than after you've already committed to one.

Check your understanding

Why does Aulet describe knowledge as necessary but not sufficient when choosing an idea?
How do connections and name recognition differ as factors, even though both involve other people?
Why might financial assets rule out certain markets for a given team?
According to the lecture, why does commitment often matter more than having the best technology?

Vocabulary

aspiring (adjective): Wanting to become something in the future.
Every aspiring founder must decide which idea to pursue.
founder (noun): A person who starts a new company.
A founder needs to choose a direction before building the company.
venture (noun): A new business, especially one that involves some risk.
Starting a venture requires picking the right idea to work on.
checklist (noun): A list of items to check or think about before deciding something.
Aulet gives a checklist of eight factors to weigh.
weigh (verb): To think carefully about the importance of different things before deciding.
You should weigh your team's knowledge before choosing an idea.
commit (verb): To decide firmly to do something and stick with it.
Don't commit to a direction until you've checked these factors.
capability (noun): A specific skill or ability that lets you do something well.
Deep industry experience is a capability that gives your team an edge.
edge (noun): An advantage over other people or competitors.
Specialized knowledge can give a startup an edge over competitors.
asset (noun): Something valuable that a person or company owns or has.
Financial assets determine which markets a team can enter.
dismiss (verb): To decide that something is not important and stop thinking about it.
Don't dismiss connections as trivial; they are a real asset.
trivial (adjective): Not important; not worth much attention.
Good connections are not trivial in business.
capital (noun): Money that a business has available to spend or invest.
How much capital your team has affects which markets are realistic.
cost of entry (noun): The amount of money needed to start competing in a particular market.
Some industries have a very high cost of entry.
name recognition (noun): How well-known a person's name is to others.
Name recognition helps people trust your team faster.
credibility (noun): The quality of being trusted and believed.
A well-known name on the team adds credibility.
predictor (noun): Something that gives a good idea of what will happen later.
Commitment is the strongest predictor of startup success Aulet has seen.
accelerator program (noun): A short program that helps new startups grow quickly with mentoring and support.
Aulet selects founders for an accelerator program based on commitment.
genuinely (adverb): In a real, honest way, not pretending.
You need to genuinely want to work on the idea for years.
motivated (adjective): Having a strong reason or desire to keep working hard.
Without passion, it's hard to stay motivated as an entrepreneur.
sufficient (adjective): Enough on its own to achieve something.
Knowledge alone is necessary but not sufficient to choose a good idea.

Chapters

0:00 <Untitled Chapter 1>
1:41 Financial Assets
2:11 Name Recognition
3:41 Commitment

From the YouTube description

MIT 15.390 New Enterprises, Fall 2013
View the complete course: http://ocw.mit.edu/15-390F13
Instructor: Bill Aulet

Discussion of a method that you can pursue to go from passion to idea or technology, and key questions that you should ask yourself as you make that leap.

License: Creative Commons BY-NC-SA
More information at http://ocw.mit.edu/terms
More courses at http://ocw.mit.edu

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