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Book Review: "Disciplined Entrepreneurship", by Bill Aulet

“Plans are nothing; planning is everything."

Dwight D. Eisenhower

I found this book laying on the shelf at Amazon Books in Georgetown, the first or second time that I've been there. What intrigued me about this book was the opinionated 24-step roadmap, which claimed to denote one path to entrepreneurial success. The graphics and layout were also pretty attractive too, and I think I'm kind of a sucker for that format.

What surprised me about this book what the checklist-like nature of what each step entails doing. I hate remembering to do things that I could otherwise put into a checklist (both at work and in personal life), and this kind of format appeals to me. You could take the advice written in this book and use it as a kernel to customize a checklist to your particular area of business. It also lists some hard numbers entrepreneurs should respect, for example:

  • For Software-as-a-Service (SaaS) business models, the ratio of the lifetime value (LTV) of a customer to the cost of customer acquisition (COCA) should be greater than or equal to 3:

    $$ \frac{LTV}{COCA} >= 3 $$

  • The actual COCA is usually 10-20x initial estimates.

In addition, the book also has some great general advice:

  • Optimize the ratio of LTV to COCA. If setting a particular price lowers your margin but dramatically decreases the length of your sales cycle, it may be worth the tradeoff.

  • Market segmentation is critical for price discrimination.

  • Select a beachhead market and build plans revolving how to tackle the total addressable market (TAM) in the future to maintain focus.

This book was a fun read, with pretty graphics and entertaining stories. It's also a hard-nosed look at the realities of entrepreneurship.