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BILL AULET: Hi.

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My name is Bill Aulet.

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I'm going to talk about
disciplined entrepreneurship--

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24 steps to successfully
launching a new venture.

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What I'm going to start with
is, what is entrepreneurship?

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Because this term is
used all the time.

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It's bandied about.

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Everyone's for entrepreneurship.

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However, there's two
fundamentally different types

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of entrepreneurship that
I want to talk about.

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First of all, we have
entrepreneurship.

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We have what we'll call
SME entrepreneurship.

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SME stands for Small Medium
Enterprise entrepreneurship.

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These are fundamentally small
companies that will stay small,

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and they may have been
around for a while.

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They're focused
on local markets.

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They're often service
businesses that

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are servicing a
local opportunity,

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but they're not something
that's looking to go global.

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They know there's a need local.

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They want to address that.

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This could be a dry cleaner.

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This could be a nail salon.

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This could be a restaurant
or a pizza parlor

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as we reference in the paper
that Fiona Murray and I wrote.

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These are fundamentally
important companies

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to an economy and a region
because they serve a need.

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But relative to the
way they're made up

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is the system that
they create is

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one that shows kind of linear
growth, and then at some point

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it usually taps
out of the market.

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Now, this is an approximation
of what goes on.

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But that's what it usually
look like-- linear growth

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[INAUDIBLE].

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But you notice that if
this is cash flow here

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from the business, that there's
not a tremendous amount of cash

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flow out.

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Again, a simplification.

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However, when we go
to IDEs over here,

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which I will call Innovation
Driven Entrepreneurship

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or Innovation Driven
Enterprise Entrepreneurship,

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we have a fundamentally
different business.

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This one is looking
for global markets

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or super regional
markets to serve.

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And while this one
is usually owner--

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the owner is usually
maintaining control of it.

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This one is going
to require more cash

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because the dynamics of this
business look-- it loses money

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and then it's going to start
showing exponential growth.

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So there's this
negative cash flow here.

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This is cash flow on
the y-axis and this

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is time along the x-axis.

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It will initially
have to require

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some capital be put into it.

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But then if it works,
it will take off

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because it's got basically
unlimited markets.

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Underlying what
they're doing here

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is an innovation that's unique
that allows them to address

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much broader markets.

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So they're not just focused
on the local market but much

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broader markets.

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This is very important.

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If this is going to require
more cash, as I mentioned,

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while this is
owned by the-- this

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is controlled by the
family or the owner.

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This over here is going
to have shareholders

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and a bunch of other people.

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This is very important
difference here.

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Because while this business
is a very important business,

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the underlying
demographics for it--

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the underlying system
and training for this

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does not look the same as this.

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It's almost like you have
two sports, basketball

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and baseball.

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Sure you run into both.

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You jump in both.

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But-- and that's true of these.

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But Michael Jordan was a
great basketball player.

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He turned out not to be
great baseball player.

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All his training was for that.

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So likewise, there could
be some crossover here.

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But generally, there's
more risk in these.

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The people that are
trained for these

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are doing-- how to manage
multiple stakeholders, how

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to do an underlying innovation.

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In the next section, we're going
to look at what is innovation

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and define that more precisely.

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But the point of this is, two
types of entrepreneurship,

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Small Medium Enterprise
entrepreneurship,

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small companies
distributed geographically,

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and then Innovation Driven
Enterprise Entrepreneurship--

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companies that
might not make it.

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But then if they
make it, they get

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to grow and be very, very big.

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These end up-- you don't
need a lot of these

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to generate a lot of jobs.

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These you need a lot.

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These tend to be more clustered.

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These tend to not
be so clustered.