The New Business Road Test

TutorVista’s subscription model makes the business itself highly capital efficient, since the subscription is paid for by the customer before the tutoring costs are incurred. And by leveraging the low cost of teaching talent in India, gross margins are healthy, too. New customers turn profitable almost instantly, so external capital is needed only

Less is more. It’s usually far better to devote all one’s energies to the most promising path. If the path turns out to be blocked, then something will likely have been learned that can identify a more promising one. Probably one of the reasons you’re reading this book is that you’re trying to identify just what your best path is and whether it’s g

it encourages the customer to tell you things you do not know to ask and that they would not otherwise think to tell you, helping you learn what you don’t know you don’t know.

Is there a target market segment where we might enter the market in which we offer the customer clear and compelling benefits, or – better yet – resolve their pain at a price he or she is willing to pay?

These forces – five of them – are powerful determinants of the overall profitability of any industry, not a bad thing for an aspiring entrepreneur to know: threat of entry; buyer power; supplier power; threat of substitutes; competitive rivalry.

Entrepreneurs are renowned for finding new ways to segment markets that they serve, often behaviourally, thereby creating new segments that they can dominate.

the entrepreneur must be painstakingly clear about who makes up the target market that he or she seeks to serve, and they must show tangible evidence that the customers in that market will buy. Why will they buy? To obtain benefits other solutions don’t offer – faster, better, cheaper and so on. Without benefits – without pain relief or delight – t

‘I’ve made more money on Plan B than I ever made on Plan A.’12 In other words, the ability to combine tenacity with a willingness to change course – sometimes due to changes in the marketplace, fortuitous or otherwise – can make all the difference.

markets and industries are not the same things; both macro- and micro-level considerations are necessary: markets and industries must be examined at both levels; the keys to assessing entrepreneurs and entrepreneurial teams aren’t simply found on their resumés or in assessments of their entrepreneurial character.