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  • Whether it's the classic lightbulb above our heads or a “Eureka!” moment, we imagine

  • ideas bursting out of creative people's brains -- like we all live in some cartoon

  • universe, and a lucky few of us get struck with inspiration.

  • Maybe you're wondering whether entrepreneurship is for you, because you don't think you've

  • had any great ideas, but just WAIT!

  • Because we can all get them.

  • Or maybe you have an idea and you're not sure what to do next.

  • How do you feed, water, and nurture this tiny seed so it grows into a whole business?

  • Don't worry, we've got you.

  • I'm Anna Akana and this is Crash Course Business: Entrepreneurship.

  • [Opening Music Plays]

  • Entrepreneurs aren't a special group of people gifted with all the good ideas.

  • They believe in themselves and the value of their idea enough to take a financial risk

  • to make it a reality.

  • Looking back at the people we now think of as great entrepreneurs, these people were

  • just looking to make life easier or better in some way -- from inventing the wheel to

  • dreaming up the dishwasher.

  • But what sparked their imagination?

  • What was their apple falling from a tree?

  • Innovative ideas can be traced to three main sources: our passions, our complaints, and

  • our egos.

  • Let's start with the exciting one: our passions.

  • If you weren't working at your current job or going to school, what would you do?

  • Many ideas come from us being excited about something and wanting to share it with the

  • world.

  • It could be Grandma's hot sauce recipe, video game walkthroughs, or upcycled yard

  • sale furniture.

  • Sometimes you start doing something as a hobby, like art.

  • But then you might get commission requests from people you don't even know.

  • So, if you take a risk, that hobby could become a full-time job.

  • Next, there are complaints.

  • There must be something that bugs you, whether it's tangled headphones or a lack of movies

  • directed by women.

  • Dropbox was founded because someone was annoyed they kept forgetting their thumb drive.

  • Under Armour was founded because someone got tired of their shirt getting so sweaty they

  • had to change it multiple times during one workout.

  • So if you've ever found yourself thinking, “Wow, I really wish someone would do something

  • about that,” guess what?

  • You can do something about it!

  • And, of course, there are the “I can do it betterideas.

  • Everyone has them!

  • Our egos are a great place to find innovation and motivation.

  • Maybe you visit the same coffee shop every morning and after the thousandth cup of hot

  • sludge, you are so done.

  • You could make a much better cup of coffee!

  • And the cups would be compostable!

  • And the tip jar would have a witty joke!

  • And you'd have fresh scones!

  • Let the outrage fuel you.

  • Think of something that needs freshening up.

  • Uber and Lyft looked at the taxi industry and saw something outdated and clunky.

  • So they made sleek apps with automated payments and directions.

  • Now, obviously, there can be overlap between these three motivations.

  • You might be able to make a better cup of coffee than the big chain in town -- that's

  • ego.

  • But that's only because you're into coffee and experiment with techniques andblends

  • at home -- that's passion.

  • And maybe that hobby started because there weren't any coffee shops in your neighborhood

  • -- that's complaint.

  • Whether or not you have an idea notebook filled to the brim, you do have experiences, opinions,

  • and a whole complicated life.

  • And these are the building blocks of entrepreneurial innovation.

  • So the first step is acknowledging you have an idea.

  • Step two is understanding the problem at the root of your idea.

  • Think of your idea as the beginning.

  • You may have your own experience of a certain problem, but by understanding what others

  • think, your idea can grow and affect more people.

  • So when you're chatting about that big chain coffee shop with your friends, listen to what

  • they say.

  • Have they been there?

  • What do they like?

  • What do they hate?

  • Maybe they complain, “That place is a health hazard and their service SUCKS.”

  • Or they say, “I never go there because I only drink tea.”

  • So, use that quick insight to make your idea better.

  • Maybe your coffee shop will focus on excellent staff training to ensure high quality coffee,

  • cleanliness, and customer service.

  • And you'll offer lots of teas alongside those artisanal lattes.

  • Even after you understand the problem, there's more talking to do.

  • Let's look at my latest big idea.

  • It's great, right?

  • But now that I've told you, I'm going to have to kill you!

  • Sorry, I got a little dramatic there.

  • When we have exciting new ideas, our first instinct is to squirrel them away so no one

  • can steal them.

  • But that's bad.

  • When we keep things to ourselves, we end up thinking shoe umbrellas are the next big thing.

  • We have to share our ideas with the people who are actually going to use the product

  • or service.

  • Otherwise, our solutions inherit our blind spots and biases.

  • They might not actually solve the problem, or they might only be useful for a few people.

  • Let's explore this in the Thought Bubble.

  • My friend Mary Cherry is deeply passionate about cream puffs.

  • She also happens to be allergic to gluten.

  • Mary was complaining that there were no cream puff bakeries in her whole city, so she launched

  • a gluten-free pastry shop called Dream Puffs on her block.

  • Now, Mary was so enthusiastic about bringing her dream to life that she didn't talk to

  • potential customers or even her friend and fellow cream puff connoisseur Paul before

  • launching.

  • She put in lots of time and money to set up her shop, complete with color-coordinated

  • mixers, a chic logo, and a few flavors of gluten-free cream puff recipes.

  • During the grand opening, Dream Puffs gets some buzz -- no soggy bottoms here!

  • But as the first week goes on, many potential customers don't actually buy her gluten-free

  • cream puffs.

  • Most of the people who show up have more than one allergy.

  • Mary's cream puffs are gluten-free, but all of her luscious fillings have cream -- she

  • didn't think about using dairy-free options for people with dairy allergies or lactose

  • intolerance.

  • And her non-basic flavors involve nuts like pistachios and almonds, but a lot of her potential

  • customers have nut allergies.

  • These are pretty huge setbacks.

  • So now Mary has to spend more time and money to develop new recipes and make sure that

  • the quality -- and her star-baker reputation -- is maintained.

  • And she has to retrain her staff.

  • If Mary had been willing to share her menu, she could have optimized her cream puff ideas

  • for potential customers before launching.

  • And she could've stirred up even more hype and brand recognition for Dream Puffs on her

  • opening day.

  • Thanks, Thought Bubble!

  • It's easy for us to judge a story, but who would you share an idea with?

  • Your mom?

  • Your trusted friends?

  • Everyone on your morning bus ride?

  • After all, a bus is just a limo full of friends you haven't met yet!

  • It depends on the idea, but generally at this early stage, we want to target two main types

  • of people.

  • First, customers who might have the problem we're trying to solve.

  • And second, people who can help us think through our idea.

  • We can also look to professionals who might be able to connect us to established entrepreneurs

  • in the field or available resources.

  • For example, we could look for a college campus with professors in entrepreneurship or entrepreneurial

  • consulting.

  • Or turn to entrepreneurial networking groups, like those in co-working spaces.

  • And in the U.S., we have Small Business Development Centers.

  • Around the world, you can check with your local government for similar organizations

  • that provide education and financing for budding entrepreneurs.

  • All these options are well-connected in the entrepreneurial community and it's their

  • goal to mentor, consult, and connect fledgling entrepreneurs.

  • Don't be afraid to reach out and ask for help!

  • BUT before we get carried away, we have to remember: we're still making sure our idea

  • is good and talking with potential customers.

  • This is NOT the finance stage.

  • We aren't asking people for seed moneyyet.

  • The next step in workshopping an idea is to think big about the fundamental pieces of

  • your business.

  • And a great way to do that is with a business plan tool like the Business Model Canvas,

  • a lean startup template created by a company called Strategyzer.

  • Ok cool, yeah, I'll fill that out in a second.

  • I'm just finishing page 22 of my business plan where I discuss exactly which bees will

  • provide the honey I use to sweeten the tea in my swanky cat cafe.

  • Hate to break it to you, but the days of 30-page business plans are pretty much over -- even

  • if someday you need financing from a bank or a venture capitalist.

  • Most lenders care about your story, proof your idea works and is wanted, an

  • understanding of your customers, and your financial plan, which often takes only 5-10

  • pages tops.

  • And the Business Model Canvas has sections for all those things!

  • Really, filling out a business plan or Business Model Canvas lets you collect all your thoughts

  • about your idea and visualize how your business might exist.

  • Let's explore the canvas using a little company you've probably never heard of:

  • Netflix.

  • For each section, we need to answer a key question.

  • We'll start with Value Proposition: What is the value we deliver to our customers?

  • Basically, why do they want whatever we're selling?

  • Netflix leverages technology for global audiences who want on-demand, customized entertainment.

  • Next, we move to the cluster for customers.

  • Let's think about our people in three pieces.

  • First, who even are they?

  • All the types of people interested in our product form the Customer Segments section.

  • In 2019, over 50% of Netflix's business came from subscribers outside the U.S.

  • They use internal algorithms to predict and offer certain programs to certain demographics.

  • Once we decide who our customers are, it's time to define the relationship in the Customer

  • Relationships section.

  • What type of relationship do our customers expect us to establish?

  • Netflix customers expect quality programming, good predictive suggestions, excellent customer

  • service, and high-end technology performance.

  • And then, through what Channels are we going to speak to them?

  • How are we reaching our customers?

  • Netflix uses email, streaming apps, and social media campaigns to communicate with customers

  • (they're even on SnapChat.)

  • Now that we know thewho,” we need to describe the infrastructure of our business,

  • which also has three pieces.

  • To start with the basics, what do we actually do?

  • These are our Key Activities.

  • Netflix licenses existing content and creates their own that they deliver through an online

  • platform.

  • And they do all the usual business things like sales and marketing.

  • After that, we have to decide what do we need to do those things?

  • These are our Key Resources.

  • Netflix relies on SO MANY resources to keep their massive wheels turning.

  • They have people making content including their in-house studios, engineers to make

  • sure their website and apps work, customer service to troubleshoot, attorneys to deal

  • with licensing, internal teams for promotion, and a global network of data storage facilities

  • -- to name a few.

  • Then, remember, we don't have to do this alone.

  • We need to look for Key Partners and ask: Who do we need to team up with in order to

  • deliver our value proposition?

  • Netflix partners with law firms, studios, agents of actors, and other companies who

  • want to co-promote products -- like Comcast Xfinity or T-Mobile.

  • Finally, after we've figured out the who and the what of our business model, we have

  • to think about the money.

  • Half of that is our Revenue Streams.

  • Where are we making money?

  • What are customers willing to pay for each product or service?

  • As of 2019, Netflix uses three membership subscriptions: Basic ($7.99/month), Standard

  • ($10.99/month), and Premium ($13.99/month).

  • Unfortunately, entrepreneurship isn't free.

  • There are Costs involved in doing Things for your People.

  • So where are we spending money?

  • For Netflix, examples of costs are employees, licensing and production fees for content,

  • servers for data storage, brick and mortar workplace locations, DVD production and mail,

  • and R&D.

  • Andthat's Netflix in a nutshell.

  • This is exactly the goal of the Business Model Canvas: to provide a framework for anyone

  • to break down the pieces of a business -- especially your future business!

  • Today, we grew the tiny seed of an idea into a full business model.

  • So remember that everyone has ideas, and the real work of an entrepreneur is in sharing

  • them and getting lots of feedback!

  • Next time, we'll figure out what you're worth.

  • And by that I mean, we'll delve into Value Propositions and how to make something that

  • potential customers will think has inherent value and is worth monetary investment.

  • Thanks for watching Crash Course Business.

  • If you want to help keep Crash Course free for everybody, forever, you can join our community

  • on Patreon.

  • And if you want to learn more about biases that affect how we do business, check out

  • our Soft Skills video about making decisions

Whether it's the classic lightbulb above our heads or a “Eureka!” moment, we imagine

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