Three critical processes that an entrepreneur must understand

An entrepreneur, whether a high school student or a recent college graduate or a seasoned professor, are all the same.  They have never been to the industry and never explored markets in detail.  It is important to understand three processes:

(1) The process of going from idea to a merchandise;
(2) The steps between a product and the buyer;
(3) The migration of a person's knowledge.

These three represent the flow of (1) objects; (2) money and value; and (3) person.  It is very important for a would-be entrepreneur to know where exactly he is, where his knowledge is, and where the industry and market is.

 

A person's maturation from book learning to career to business to creation-learning.

Migration from an idea to a merchandise.

Then it is important to understand the life cycles of a startup ...

Innovation is to build relationship and simplify life

After the CORE blog in wix, Add on points that I may forget
To solve a problem or satisfy a need is not necessary.  Like being a roast beef chef.

A founder builds relations.

A relation is to easy other people's life.  Make somethings simple.  Easy.

innovation = change x big
start = new biz x new company x founder transformation

Startup and innovation are both business domain, not knowledge domain.

Business is to provide value in exchange for cash tips.
Starting business is to build
A startup business is not a business yet.


is to survive
is to quit job

Surely Incident - from technology innovation and commercialization

The book "Surely Incidents" with the Chinese title of “一万个万一”, published by Tsinghua University press, is now available for on-line download of the PDF.

The author is Dr. Chang Liu.  He is especially interested in helping technology folks find a path to commercialization and startup.

Dr. Chang Liu

https://www.drchangliu.com/download-surely-incidents

https://www.drchangliu.com/download-surely-incidents

The Red Book of Startup - Startup 101

Startup 101

By Chang Liu

Table of Contents

Part I
The Core

Part II
The Process

Part III
Elements of startup design

Part IV
Essential business, humanity, economics, and philosophy

Part V
The Startup Tools
(for starting business, running business, and obtain funding)
Templates

Appendix and resources

The Teensharks startup video stories library
The book library
The dictionary and vocabulary
The pictorial cards gallery
The case studies library
The Q&A vault
The Quotes cards
Social media: youtube, instagram, pinterest, and Twitter.

The indexes
Important Tips #important_startup_tips  ☝
Hard rules #startup_hard_rules (important lessons earned on battlegrounds, veteran hacks)  ✌
The myth #startup_myth ☕
#startup_quotes

Starting up a business is to establish a business from new.  It is not just to startup a company.  The company only facilitates the business.  A startup business consists of three parts: (1) THE BUSINESS; (2) THE STARTUP; (3) THE FOUNDERS.  A founder is the chief builder - the founder build (1) the business and sale; (2) the company; (3) the offering; (4) the name.

 
TOC EXPANSION

Part I

The Core

Part II

The Process

Chapter 1: Cooking up a startup - the essential ingredients and steps

Four essential processes: Offering to Market to Customer; Curiosity to Product to Merchandise, Personal Knowledge to Experience to Maturity (link)

Other flows of larger scale: history, discovery, society, war, diffusion

The required elements of a startup
Managing the two jumps: focus to growth, early to mature

Chapter 2: Readiness evaluation
Startup Readiness Levels
Startup Personal Readiness
Startup Product Readiness
Startup Market Readiness
Startup Funds Readiness

Chapter 3: The learning and practice of startup skills

Business startup process (two lifetime in one)

Time axis

Chapter 4: Participate in the connection and flow

Business supply chain
The flow and transactions of money and value

Part III

Elements of startup design

Chapter 1: The frame work of design

Heaven, Earth, and Human

The Builder in Chief: Founders, Investor, Talents
Time, repeat and accumulation
The world refreshes itself.

[Link1]

Chapter 2: Beginning and End of Startup

The only element that matters: SALES

You can invent anything, but you need to steal a sale. The era of "make something and they will come" is over.

The startup process ends with a brand

The exit of various players

Chapter 3: Choosing a business to start

Types of business to start

Definition of a good business

Repeated sales and continuous operations

Chapter 4: Mixing the high and low, big and small

An idealistic person making money, and a technical person making sales

The mixing of dream, details, money and sweat

The elements that are rare and relative: Sales, Quality, and Talent

No one will buy anything.  The value to money exchange

Chapter 5: Business if Final Level of the Game

Business is war, not a war game

Business is survival, cash is survival, innovation is survival

Quality is only barrier you can count on
You are the chief builder: vision, trust, talent around you, money, and quality

Business is about collaboration. Business model - Ecosystem

Business is about extreme focus.

Business is about giving maximum joy.

Business is about relentless money and profit making.

Chapter 6:  The Elements and their connections

The elements and contradictions (dream and focus; focus and scaling)

The elements and confusions

The chains of elements

Chapter 7: You understanding yourself and managing your life

Personal career planning: livelihood and employment process

Managing the three opposite: Grand and Detailed, Focus and Grow, You and World

Innovation of world renewing itself, not you renewing
Startup is giving people what they want, not to make them pay for what you intend to sell

You are not the center of business (give what people want; give more to make money)

For the first three years, you are your worst enemy

Chapter 8: How do investors see your business and offering

#startup_quote Investors may not be as clever, but they are not fools

Investment and investors - what do they want and what do you want?

Chapter 9: Hard way is the only way to go, the easy way is a setup

Ideation fantasy busters

New is not the answer (novel and new; different and new)

Offering to satisfy a need is bad way to start

Getting rich should not be your motivation
Cleverness is not the answer

Chapter 10: The Long Haul Finisher: Rule of thumb target numbers as reference

The numbers from reliable sources

Part IV

Essential business, humanity, economics, and philosophy

Types of knowledge

Talent Equals Balance of Integrity, Skills, Aspiration

Catch All For Future
Hash tag collection
Index

Part V

The Startup Tools

(for starting business, running business, and obtain funding)

The entire startup is build on three preconditions: sales, quitting your job, and two people.  If not, it is called a hobby or prequel.

Templates for ideation

Tools for managing production of quality products
Tools for bringing your products to markets
Tools for enticing your customers to the same market

Business plan tools
Business model generation tools
Business choice tools
Product development tools
Startup school homework and quizzes

A brand is a name that you decide to own and monopolize, so that people can find you.

 A sale is someone else's livelihood you decide to steal.

The NEW in innovation is the new strategy for doing an old business much better (called a disruption).  The SECRET in innovation is the details of your method.   

Startup is not about participation and hope.  It is to monopolize a very well defined sector of business and provide maximum value to your customers but prevent others from doing the same.

Newly released title arts for the book Jow to design a startup business idea.

liu new book how to design an ideaHope you like the new book arts of how to startup up a business.

how to design a startup business idea.

Pictures of the Wuha Railway Station

I was there quite a few times before 2019. It is beautiful. Built by French company AREP.

Wuhan Railway Station Platform

Wuhan Railway Station

Wuhan Railway Station Platform picture

Wuhan Railway Station Atrium

Wuhan railway station structure.

Wuhan Railroad Station Platform at night

High speed trains at Wuhan Railway Station

Extra large panoramic view of wuhan railway station interior.

Wuhan railway station interior.

There is no ...

There is no accident.  There is no accidental success.

There is no "I guess", "I think".

It is all "work for money".

It is all based on choice, not chance.

It is all trust earning over long periods of time.

KNOWLEDGE. KNOWHOW.  RELATIONS.  VALUE.

ONLINESS.  ARTISTRY REPEATS. BRAND. QUALITY.

Never about Self.  Chance.

Always about: two lives, two parallel lifes (livihood and public service), choice. Scaling.
Two names: Your name and your business name.

Life creating another life.
People enjoy you so well they will pay.
You provide it so well that no one else can.

The Three Naive Thinking of Entrepreneurship

One: People will need what I give them.

Two: I will mark up for my profit.

Three: The business may grow.

What I like may suddenly become trending.

They randomly start.
They base on their own idea.
They don't choose or plan a business.

The Startup Success Rule of Thumb Odds

Any startup entrepreneur should understanding the following.

1. The ramp of learning is 2 years.  You are on your own financially.  If after the two years you cann't develop a sale or breakeven, you don't get a second life.

2. The successful running and growing of business takes 10 years.

3. The success rate from a lab or an idea is 10,000 to one.  And many companies that started eventually fizzle or struggle or die.

4. The USPTO find that 0.01% of patents filed are actually used.

5. If your new business is a small business, then it will be a small business when it grows up.

6. An average VC sees 1000 proposals before pulling trigger on one.  Don't be the 999.  An average founder sees 400 VCs before getting funding.

7. A company should spend 90% work on marketing ... marketing is relationship building so others ALLOW you to sell what you build.

8. If you start a wrong business, you must keep running this wrong business.

9. An investor asks for 3x return of his investment within 1 year.  Don't believe anything else he says to you.

10. A company should have first sale within 3 months ... otherwise it is called hoping.

11. Any company takes 22-24 months to gain traction. Within that period, you don't matter and no one knows.

11. Any product today takes 1 million US dollars or equivalent to be a quality item.

13. You only get rich by doing many business transactions ... go for the fat field.  If you enter the wrong market, you will not grow rich but you just do this for livelihood.

There is no latent needs.  There is no IPO waiting.

The only three things people need are: (1) Networking and relation; (2) Have fun. (3) Security.
The only thing business need is: Advertising.
Both will pay for some security at a discount.

The philosopher of entrepreneur

Keep in mind that

Everything you can try to do, is what the system ALLOWS YOU TO TRY.  

If you are not disrupting something big, don't bother starting up.

The marketing is the networking aspect ... it is 90% of the work of a product startup company.


If you cannot create you can not learn to create unless you learn through failing.  So, if you can not create, just do well with your job.

Don't just dream about the stars ... watch for pot holes.

A life's dream and meaning is buried in one grain of sand.  There is a universe in there.

You are NOT the exception.  You are just like everyone else.

There is nothing good or nothing bad about business.  Business is just business. Business is here before you were born, and will be here after you are gone.

Just because someone appreciate something does not mean he will buy it.  Just because you get a praise does not mean you deserve it.

The three elements of business: quality - audience - brand and loyalty.

The three elements of life: onliness - stand - build and serve.

No one should call it startup

It should be called business building.

Business building is more than an occupation, more than job, more than a offer.

It is about 

Relations and brand, becoming a friend and tradition

Personality

Value giving and charging price

Money and profit

Quality and value

Scaling and grow

Regular and frequent

Founder is chief builder. He will build

Business relations

Relations with business chain

Relations with end consumer

Offer

Barrier

Market sales profit

Company and team

Cash flow and business model

Founder needs vision and experience. Which are impossible to get from reading. Founders must lead through three major hurdles: QUALITY. SALES.  PROFITS.

Starting business is not doing business.  Someone good with business may not be able to start one and pay its comrades.  Startup is a (1) war; (2) a value proposition; (3) craftsmanship and quality; (4) ruthless management; (5) solve a problem; (6) guard own territory.

Business startup needs to be leaned, practiced, and executed.  Unfortunately most people are not able to learn in vacuum by reading, hence a failure is necessary.

Business startup takes 1 million dollars to start, 10 years to finish. Many people wants to hitch your ride.  It is 90% sales work and relation building, brand building acumen.  

Business is war. It is game.  It is learning through experience.  It is survival.  To build a business from scratch is the ultimate learning of life and world and self.

Should Co-founder Be Given Equity?

A lot of startup companies are better off with two people on board.  After all, the name "Company" literally means "more than one person".  When someone invite another person to be a cofounder, what are the points of discussions associated with equity share?

Here are a couple of major points to consider.

(1) Does the cofounder pay cash into the company coffer?
(2) Does the cofounder need to quit current job and forego salary?
(3) Does the cofounder need to take a pay cut from current level or industry standard?
(4) Should the cofounder be given private equity?

Keep in mind that a cofounder is important.  The founder is a status, a position, and a responsibility.  These three goes together.  The status means it is obviously a later badge of honor.  But the cofounder has to earn it with what he/she does for the company.  A cofounder should be a builder in chief - building the product, the sales channel, or something critical.

Later when the team goes to ask for funding from an investor, the investor WILL ASK this question "are both you working full time for the company".  It is important to keep this in mind.  If when you go to investor and one of you have not given up your job, it just looks bad.

A cofounder is not a high level employee.  A cofounder is a founder. 

Cofounder is not a gig.

The Professor's Education Through A Startup

I have been a professor doing research on advanced technology.  Only when I spend time in industry and in startup, did I realize the straight facts of innovation, startup, and business.

There is no guessing.  Everything is learning by making mistakes.  Either intentionally or accidentally.

There is business everywhere.  To make money is hard, to acquire talent is hard.

You must pick a business first, then choose what to invent.  You can not invent something and then go into business with it.

It is exceptionally difficult to make a profit.

No matter what you know, the only way to change the world is by vision and hustle.

Startup is the most lonely and uncomfortable thing anyone could try.  The reward could be amazing after you start a second time.

You are clever but not wise.  You must occupy a name with your repeated acts, and you must steal sales.  There is no shortcuts.

Idealistic people think
(1) I will make an offer - people will love it.  They will pay me.
(2) People will pay me, basically for my great work.  And I will make profit.

This is wrong.
People will pay me if I give them what they want.  They will pay me what they perceive as fair.  It is typically lower than cost.

Idealistic people think
If I think of something good to offer, I would get help, I would get buyers, and they would pay me.

This is wrong.  It is all based on "I intend to help".  No one really cares.  The world has enough.  If you want it, you push for it.  There is no real helpers or saviors.

The production log

Write book
The red book of startup
Teensharks Startup 101
Startup 101
Sure Startup, startup cookbook

Three videos a week - pinterest, instagram, youtube, blog

Finish the book in a week
The Red Book of Startup

Youtube

should I startup?

Self evaluation - are you ready for entrepreneurship

what VCs wants to see  (how investors see you)

Who should be my cofounder?  should I get a cofounder

veterans secrets
should I start
why you cann't get the ball rolling
Funding related

the dilemma of entrepreneur

will I get funding
how do I get funding

Straight startup vocabulary
BRAND: Grad, Use and Own a Name

Innovation, Invention, Startup, Entrepreneurship, Business, Company ... relations

hobby, interest, curiosity, startup, business

widget, gadget, invention, products, merchandise

The professor's disadvantage

Focus on the keywords: sales, want, focus. 

Focus on something extremely small first, think later. 

Hash tag basket and draft basket

When I was a professor, I did not know
- all my knowledge is only beginner knowledge
- people only invest in business, not ideas
- being rich is easy, as long as you do the hard things
- meaning of life is easy.  Focus and repeat.  Have vision and drive to it.
- industry is the center of universe. innovation is a business concept, not scholar concept.
- did not know the shortcut to business is
- ivory tower is the inner side of a sharp thingy.  the knowhow is more than knowledge.
- thing is only start of business.  inventor, gadget, imaginative are just for things.
- the first time failure is required.
- not ta shi 踏实

A professor thinks
I am clever
I am advanced
I am rare
I am everyone's teacher

The framework of designing a business

The frame work is the following three elements:

Heaven

Earth

Humans

Here they are used metaphorically.  Heaven represents nature and the universe.  Earth represent the business word.  Humans represents the customers, or end consumers.  What end consumers want to buy is governed by nature, and the provision of what they want is done through commerce and business.

The following three elements are the framework of a healthy company:

People

Capital

Goods

Here, PEOPLE represent the workers and managers.  CAPITAL (or Money) represent both the cash reserve and the cash flow.  A huge company with a lot of valuation on the stock market amounts to nothing if no one is buying their products and giving them cash.  And GOODS means the quality offering.

When a founder starts, he will likely have only one person, no money, no prototypes or artifacts, and no sales leads.  How to grow to a company with 1000 people who are happily reporting to work everyday and making things end consumers or customers want, that is the artistry of startup, that is what we teach in startup school.

In Chinese, the framework is referred as 天地人，人财物。A founder is not in this framework.  A founder is the chief builder, the chief fund raiser, and the chief sales starter.

A good business is a harmonious nice flow of business.  There are three elements that support the happiness:

Brand

Repeated acts

Growth

With this, the business enjoy love by its customers, being busy and occupied, and expecting more.

At the center of the framework is a magic element, called TIME.

You become famous by doing the same thing over and over.  You become rich by making small money but many many times.

Find out what people want.  The rest are details. 

The Top 3 Illusions of Startup Entrepreneur

The top three fantasies are

(1) If I make something, I would eventually find a buyer.  I can work hard.

(2) If I want to make something, I will find an investor who wants to support me.

(3) If I sell something, I will just add a portion for my profit.

These are extremely naive.  Let me explain.

If you make something, you will never find a buyer.  This could be because one of the following reasons:
(1) You won't make enough quality and hence can not control price against competitors;
(2) Dirty competitors will muddy the water in the channel.
(3) No one needs new things, really.
(4) People won't know you have something to offer, because the channel is so noisy.

These are but a few of the most common reasons.

Most people would say "I have an idea, I want to find an investor".  Well, today's investors are not dumb.  If you only show a promise, no one would bite.  People need you to show that you have validated the products and validated the sales, before they decide if your business can make them the desired returns.

The "I will add my profit on top" is a fantasy.  There are people with money who would gladly lose money to compete with you until you drop out of the scene.  There are people who would sell fake products and buy off all the bad scores from the web store management team.

If your offer is one of a kind special item, you may be able to sell a couple of items at your desired price, but that is it.

These three things are what many first time entrepreneurs all believe in.  They keep trying to find the buyer, find the investor, and find the profit margin, that do not exist at all.

The Core of a Startup

The Core of Startup

Dear Friend,

I am writing this to my former self living in 2010.  After having started and experienced, I wanted HIM to get it, clearly, quickly, convincingly.

Starting up a business means you, the founder, wants to have a business.  Because you can not buy a business or don't care about joining one, you need to start one.

A company is not a business yet.  A company will not automatically get business.  Honestly, a single person operating a solo entity is not even called a company.

Starting up is a multi dimensional, multi stage, multi phase, multi year, multi disciplinary engagement.  It is one of the most complex endeavor for a single human being.  It is a long journey of no return.  In this journey, you learn it all, and by personally failing.  Because it literally takes two lifetimes to start one business, no matter how small, very few people are blessed with the experience or success.

A startup is not a trial balloon or a vehicle of hope.  Startup is not to make something and then try to sell to people.  A startup company is not business yet, and a startup business is not a business yet.  These all remain to be proven.

A good business means continuous profitable sales.  The core of a business is sales.  Money-generating good business is rare and heavily competed - hence the phrase "there is nothing new under the sun".

A founder needs to build the offering, the company, the name, and the channel.  After you have those, you can try if people want to buy them.  If people don't want to buy, or you can not sell them profitably, then you don't have a business.  You had a run of curiosity.  You can be sure that no one will fund an expedition - both an expedition that you are not sure what you will get nor an expedition where you are sure what you will get.  It does not matter how good you prepare your motivational elevator pitch.

Startup is a skill that needs to be learned and practiced.  A clever or hardworking person is not enough.

To start up a business, you must know business, and you must know how to startup one.  And you must know yourself.  Further, you only learn the skills through personal experience, not just through books or conventional schools.

Starting up is ultimate learning, even if you are a professor or guru.  If you have read every book there is and have written books, you are still starting at ground level with everyone else.  Startup is a new set of skill.  You learn by personally experience (not by reading) and learn by failure.  Failure means you are trying hard enough.  If you want a business and fame and money, you must try hard and get out of the comfort zone.

There are investors out there.  Dumb or clever, they are extremely alert.  They only want to make money, no matter what they tell you.  They want their best interest, never yours.  They are not friends, nor eager benefactors. They are just potential investors.  Starting up is all YOUR business.  There is no one to help, only you helping others.

Because you don't have a lot of resources (e.g., money), you must start in advance and pick correctly. Ideally, you start when no one understand the vision and build diligently over 10 years.  Only then will your efforts be rewarded.  Vision is simple - it is earned by finishing a level once.

There is NO CHANCE SUCCESS.  Anything new takes a long time to be accepted or wanted.  Don't try to get lucky by acting on whims and logic guessing.  Building a new thing is just building a new thing, not starting up a business.  People generally don't need new things.  Starting up a business is offering new value in an old line of business through innovative and inventive method.

New business must sustain financial turmoils and copying/competition.  If possible, make sure your new business idea is not a small-business idea.  A small business remain small forever, but a new business must grow into a mature business at the end of the process.  If you want to do anything small, use your own money.  If you plant a watermelon seed, it will never grow into a tree.

If anyone utters one of the three phases, "I have an idea", "I was a good student" or "I don't like money", or "I want some extra income", run as far away as possible immediately.  You will waste a lot of energy trying to help or convert them.

Veteran Entrepreneur's Top Five Secrets for Making A Startup Business

A veteran entrepreneur is someone who have failed once.  They learned through their failures and direct experiences, and are much more familiar with the entire lifecycle of a startup and the characters of a business.  Veterans knows everything is hard, and they don't have any illusions or prayers of hope.  

Only direct physical experience constitute real learning.

Only learning through failures means you are learning and competing. 

A veteran business entrepreneur think about five elements:
(1) the eventually brand and what the name would represent;
(2) the barrier to prevent others from entering;
(3) the exit of founder and investor;
(4) the quality of the business;
(5) the establishment of channels.

A veteran startup entrepreneur never thinks about the startup.  They think about the business they are starting. 

Dr. Chang Liu in a mold factory in Guangdong Province, China.

 On the other hand, an amateur entrepreneur have no idea about the business and have only vague idea of the startup.  They don't plan the business out because they don't have the information.

If you don't think about the finish, the start itself is not very meaningful.  You have but one chance of deciding the positioning of a business, once you start.

A veteran entrepreneur knows the following three things are hard to get:
(1) Quality is hard;
(2) Profit is hard;
(3) Talent is hard to come by.

Other things that are hard to come by include channels (you must build the channel yourself).   

There is nothing that the world must have.  No one will help you.  You must walk through every single step yourself.

A veteran also does two opposite acts extremely well:
(1) They focus extremely tight on the start;
(2) They design a scaling and growth strategy that allows unlimited growth and ceiling.

In other words, a veteran does not reach the star in one step.

Veterans do two things in their design: Extreme Focus on Start and Long Growth in Subsequent Steps.

The following is a list of videos related to this topic.

The contents and videos are produced by TeenSharks Startup School, in collaboration with Seven Parallel Consulting.  We are veterans passionate about teaching the startup process.