Lecture 4: Three Ways to Start a Company

What this lecture covers

This short lecture describes the three types of people Aulet sees walking into MIT's entrepreneurship center: those who start from a technology, those who start from a known market problem, and those who start from a personal passion to found a company. It explains the trade-offs of each starting point.

Watching this helps you recognize which starting point applies to your own idea, and understand why passion alone is not enough to start a company.

Key ideas

• Technology push: starting with a technology and looking for a market to apply it to; gives an inherent competitive advantage but can be a hard search for the right market.
• Market pull: starting from a known industry problem without yet having the specific solution; lower market risk, but no built-in competitive advantage.
• Passion: wanting to be an entrepreneur, control your own destiny, and have an impact, without yet having a technology or market idea.
• Passion is not sufficient alone: people motivated purely by passion need to join a team built around a technology or a market idea to actually start a company.
• Team formation: passionate founders typically migrate into a team that already has a technology or an idea.

Before you watch

• Watch the earlier lectures on entrepreneurship and innovation types for context on the course's vocabulary, though this lecture can stand on its own.

Check your understanding

1. What is the key difference between technology push and market pull as starting points?
2. Why does technology push give a founder a competitive advantage that market pull does not?
3. According to the lecture, why is passion alone not enough to start a company?
4. Which of the three starting points would apply to a founder who has worked in an industry and identified an unsolved problem?