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ENTREPRENEURSHIP 2, 1.06 (V) 1.5 Making the Leap

Hi, I'm Ethan Mollick. I want to talk to you about actually taking the leap to launching your own startup. So there is something about this idea of taking a leap that is both scary and compel I write or jumping off into your new startup in changing your life forever. Obviously, if you're taking this course, it's something you're interested in. So let me tell you the first advice I have if you're thinking about taking a leap which is, "Don't leap before you look." The whole world revolution in startup strategy that you're learning about in all of the lectures here is all about the increasingly powerful techniques, we have to do experimentation and lean startup techniques that I do experiment and figure out whether your startup idea is a good idea or not before you actually go and leap off into the unknown. So my first piece of advice for you is, make sure you've use those techniques to actually plan your business in advance to have done experiments, test assumptions, built MVPs because as much as you can before you actually end up putting your job to launch a company. Also consider your principal affordable loss. Studies of successful startup founders by Saras Sarasvathy at eVA, I've found that says all founders tend to think about affordable loss. How much can they afford to spend in terms of time and money to find out if their idea is a good one before they make the decision to go or not? So you should know in advance, how much effort you are willing to put in to figure out whether your startup idea is good or bad before you actually take the leap into the unknown? In general, test your ideas rigorously. The more you can do to reduce risk, the better off you'll be. The more informative you be in deciding on whether or not to launch. When you do launch, have more successful you're likely to be as a result. When you're actually going to take that leap? Think about the three categories of risk you have to worry about. So the first risk are known issues or known knowns. So there's a bunch of things that any founder needs to think about. How I deal with the potential cut to my income of leaving my job to launch a startup or not taking another job in return? How my partner and family feel? What are the emotional reactions going to beat his startup? What's going to happen to my job when I go? Will people in this industry want to hire me again? Do I want to change the industries entirely? How does this change my job hunt of the future? These are things that you should be able to nail down before you launch your company or at least think about in a deep way. So you should consider all of those questions. You also need to consider the known risks. Where are you going to get funding from? You don't know the exact to answer now. But do you have a plan to seek out funding from different funding sources? Are you going to apply the things you've learned in the lectures here to do that properly? Will your product actually work? Are you going to take the advice of all of the other professors talking here about, how to build a successful product, how to prototype, how to make sure that things are in place? When will you know the answer to these things? Do you have the money and time to get there? Then there's a bunch of hazards. Things that are unknown unknowns. Things that happen in life, but then you can't predict. How are you going to accommodate for these things in your startup company? So what happens if you get sick? What happens if there's economic downturn, or a boom, or a technology changes? So, these are not always easy things to plan for, but their categories you need to keep in mind. So how do you address these? For your known issues, you should have answers already. You should have a sense already about how you're going to deal with the income change. Have you saved up money in a side? What happens to your job when you go? For known risks, you should use all the techniques we have in the course to reduce those risks. So we have classes on, how to think about product development in a safe way? We have classes on how to end of courses and lectures on how to think about minimizing financial risks. You should go through those issues. For hazards, there's unknown unknowns like the idea that someone might get sick or you have take care of a family member. You have to leave slack. If you're so busy and you so worn out and you have no financial resources left for your startup, then these unknown unknowns might hit you in the head, and there's no possible alternatives. So you want to make sure that you have some cushion to rely on. Also, think about remembering escalation of commitment. If you start telling everyone, you're launching your startup company, you start putting resources into it. It becomes very easy psychologically to keep committing to a course of action. So make sure you're clear-eyed and using things like hypothesis testing and lean startups to think about whether your startup's going to fail or succeed, and make sure to be able to walk away or pivot if you're heading in the wrong direction. Remember, there's nothing certain here. I can't give you even with all these classes the guarantee of we succeed. I have some of the best entrepreneurs in the world that come out of the classes we teach here at Wharton. I can't tell you with certainty, but who's going to succeed or who's going to fail just when I see their pitches. Only later when they started succeed or fail, do I know who's made and who hasn't. So there's no certainty out there. You have to be ready to deal with that sort of risk. On the other hand, there's good news too. Startups are wonderful. So this is actually a graph from my research with Matthew Bidwell here at Wharton, where I surveyed every living Wharton alumni. What you can see here is the happiness level of Wharton alumni. That line at the top is the average happiness level of entrepreneurs, and every other dot is the happiness level and 95 percent confidence interval for every other industry at Wharton. Entrepreneurs, even when they fail or among the happiest people at Wharton. So there is satisfaction that comes out of doing this, there's freedom that comes out of this. So I can't tell you personally whether it's time to leap or not, but I can tell you that you know the things in this course to make sure you're prepared, make sure you're handling that there's known knowns and you know what's going to happen. Make sure you're planning for the unknown uncertainties, and make sure you leave slack for hazards, and then make sure you're starting your journey on the right foot. You know everything you need to have for taking these classes, so to try and launch this. I think that you will be able to plan out a path that leads you to happiness and success.



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Hi, I'm Ethan Mollick. I want to talk to you about actually taking the leap to launching your own startup. So there is something about this idea of taking a leap that is both scary and compel I write or jumping off into your new startup in changing your life forever. Obviously, if you're taking this course, it's something you're interested in. So let me tell you the first advice I have if you're thinking about taking a leap which is, "Don't leap before you look." The whole world revolution in startup strategy that you're learning about in all of the lectures here is all about the increasingly powerful techniques, we have to do experimentation and lean startup techniques that I do experiment and figure out whether your startup idea is a good idea or not before you actually go and leap off into the unknown. So my first piece of advice for you is, make sure you've use those techniques to actually plan your business in advance to have done experiments, test assumptions, built MVPs because as much as you can before you actually end up putting your job to launch a company. Also consider your principal affordable loss. Studies of successful startup founders by Saras Sarasvathy at eVA, I've found that says all founders tend to think about affordable loss. How much can they afford to spend in terms of time and money to find out if their idea is a good one before they make the decision to go or not? So you should know in advance, how much effort you are willing to put in to figure out whether your startup idea is good or bad before you actually take the leap into the unknown? In general, test your ideas rigorously. The more you can do to reduce risk, the better off you'll be. The more informative you be in deciding on whether or not to launch. When you do launch, have more successful you're likely to be as a result. When you're actually going to take that leap? Think about the three categories of risk you have to worry about. So the first risk are known issues or known knowns. So there's a bunch of things that any founder needs to think about. How I deal with the potential cut to my income of leaving my job to launch a startup or not taking another job in return? How my partner and family feel? What are the emotional reactions going to beat his startup? What's going to happen to my job when I go? Will people in this industry want to hire me again? Do I want to change the industries entirely? How does this change my job hunt of the future? These are things that you should be able to nail down before you launch your company or at least think about in a deep way. So you should consider all of those questions. You also need to consider the known risks. Where are you going to get funding from? You don't know the exact to answer now. But do you have a plan to seek out funding from different funding sources? Are you going to apply the things you've learned in the lectures here to do that properly? Will your product actually work? Are you going to take the advice of all of the other professors talking here about, how to build a successful product, how to prototype, how to make sure that things are in place? When will you know the answer to these things? Do you have the money and time to get there? Then there's a bunch of hazards. Things that are unknown unknowns. Things that happen in life, but then you can't predict. How are you going to accommodate for these things in your startup company? So what happens if you get sick? What happens if there's economic downturn, or a boom, or a technology changes? So, these are not always easy things to plan for, but their categories you need to keep in mind. So how do you address these? For your known issues, you should have answers already. You should have a sense already about how you're going to deal with the income change. Have you saved up money in a side? What happens to your job when you go? For known risks, you should use all the techniques we have in the course to reduce those risks. So we have classes on, how to think about product development in a safe way? We have classes on how to end of courses and lectures on how to think about minimizing financial risks. You should go through those issues. For hazards, there's unknown unknowns like the idea that someone might get sick or you have take care of a family member. You have to leave slack. If you're so busy and you so worn out and you have no financial resources left for your startup, then these unknown unknowns might hit you in the head, and there's no possible alternatives. So you want to make sure that you have some cushion to rely on. Also, think about remembering escalation of commitment. If you start telling everyone, you're launching your startup company, you start putting resources into it. It becomes very easy psychologically to keep committing to a course of action. So make sure you're clear-eyed and using things like hypothesis testing and lean startups to think about whether your startup's going to fail or succeed, and make sure to be able to walk away or pivot if you're heading in the wrong direction. Remember, there's nothing certain here. I can't give you even with all these classes the guarantee of we succeed. I have some of the best entrepreneurs in the world that come out of the classes we teach here at Wharton. I can't tell you with certainty, but who's going to succeed or who's going to fail just when I see their pitches. Only later when they started succeed or fail, do I know who's made and who hasn't. So there's no certainty out there. You have to be ready to deal with that sort of risk. On the other hand, there's good news too. Startups are wonderful. So this is actually a graph from my research with Matthew Bidwell here at Wharton, where I surveyed every living Wharton alumni. What you can see here is the happiness level of Wharton alumni. That line at the top is the average happiness level of entrepreneurs, and every other dot is the happiness level and 95 percent confidence interval for every other industry at Wharton. Entrepreneurs, even when they fail or among the happiest people at Wharton. So there is satisfaction that comes out of doing this, there's freedom that comes out of this. So I can't tell you personally whether it's time to leap or not, but I can tell you that you know the things in this course to make sure you're prepared, make sure you're handling that there's known knowns and you know what's going to happen. Make sure you're planning for the unknown uncertainties, and make sure you leave slack for hazards, and then make sure you're starting your journey on the right foot. You know everything you need to have for taking these classes, so to try and launch this. I think that you will be able to plan out a path that leads you to happiness and success.


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