4thClass-EntrepProcessStudentFinal10042011

4thClass-EntrepProcessStudentFinal10042011 -...

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Unformatted text preview: Innova&on to Market (A) Del Foit October 4, 2011 dfoit@ucsd.edu Agenda •  Review of previous class content nuggets •  The Entrepreneurial Process For Classroom Use Only - Del Foit Pondering “To succeed in life in today's world, you must have the will and tenacity to finish the job."  ­ ­ Chin ­Ning Chu, Chinese ­American business consultant and author For Classroom Use Only - Del Foit Last Class Nuggets For Classroom Use Only - Del Foit Entrepreneurship Defini&on •  Entrepreneurship—a way of thinking, reasoning, and acting that is opportunity obsessed, holistic in approach, and leadership balanced for the purpose of value creation and capture (This definition of entrepreneurship has evolved over the past two decades from research at Babson College and the Harvard Business School and has recently been enhanced by Stephen Spinelli, Jr., former vice president for entrerpreneurship and global management at Babson College and current president of Philadelphia University) For Classroom Use Only - Del Foit The Opportunity •  •  •  •  •  Screen and Choose opportuniMes with great care Good opportuniMes have risks and problems Eliminate problems early during opportunity screening Investors (FFF, Angels, Venture Capital) Perfect deal has yet to be seen For Classroom Use Only - Del Foit One Source of Ideas  ­> Innova&ons? •  Technology Transfer and Intellectual Property Services hUp://invent.ucsd.edu/index_flash.htm For Classroom Use Only - Del Foit Entrepreneurial Results •  Value: –  CreaMon –  Enhancement –  RealizaMon –  Renewal •  For: –  Owners –  Stakeholders –  All ParMcipants For Classroom Use Only - Del Foit Entrepreneurial Requirements •  Willingness to take risks –  Personal –  Financial –  Calculated •  Shi^ the odds of success •  Balancing risks with rewards For Classroom Use Only - Del Foit Not Just for Start ­ups •  It includes companies and organizaMons –  All types –  At all stages •  Can occur and fail to occur –  –  –  –  –  –  In old and new firms Small and large firms Fast and slow growing firms Private, not ­for ­profit, and public sectors All geographic points All stages of a naMon’s development For Classroom Use Only - Del Foit Classic Entrepreneurship – The Start ­up •  Raw startup company—an innovaMve idea that develops into a high growth company •  QualiMes of a startup company –  Strong leadership from the main entrepreneur –  Complementary talents and outstanding teamwork of team members –  Skill and ingenuity to find and control resources –  Financial backing to chase opportunity For Classroom Use Only - Del Foit Beyond Startups •  Giant firms of the past (IBM, Digital Equipment CorporaMon, Sears, AT&T) once thought to be invincible, have been reduced in size and scope by waves of entrepreneurial ventures. •  Large companies face shrinking payroll while new ventures add jobs. •  New entrepreneurial rivals are changing the pace of “business as usual.” For Classroom Use Only - Del Foit Leadership “People don’t want to be managed. They want to be led.”— Ewing M. Kauffman •  CharacterisMcs of giant firms –  Hierarchical in structure –  Leadership as managing and administering from the top down –  Rewards for “the largest” (assets, budgets, etc.) For Classroom Use Only - Del Foit The Fall of the Giants •  Slow to change archaic strategy (average 6 years) •  Slow to change outdated culture (average 10 to 30 years) •  Slow to recognize and incorporate: –  entrepreneurship, –  entrepreneurial leadership, and –  entrepreneurial reasoning For Classroom Use Only - Del Foit Corpora&ons are changing/adap&ng •  Launching experiments and strategies to recapture the lost entrepreneurial spirit •  Working to insMll the culture and pracMces of “entrepreneurial reasoning” •  Applying entrepreneurial thinking to invent their futures For Classroom Use Only - Del Foit Metaphors for Entrepreneurship •  •  •  •  •  •  •  ImprovisaMonal Quick Clever CreaMve Resourceful InvenMve Complex For Classroom Use Only - Del Foit Paradoxes of Entrepreneurship •  An opportunity with no or very low potenMal can be an enormously big opportunity. •  To make money you have to first lose money. •  To create and build wealth, one must relinquish wealth. •  To succeed, one first has to experience failure. For Classroom Use Only - Del Foit Paradoxes of Entrepreneurship •  Considerable thought, preparaMon, and planning, yet is basically an unplannable event •  CreaMvity and innovaMveness to prosper, rigor and discipline must accompany the process •  Bias toward acMon and a sense of urgency, but also demands paMence and perseverance For Classroom Use Only - Del Foit Paradoxes of Entrepreneurship •  The greater the organizaMon, orderliness, discipline, and control, the less you will control your ulMmate desMny •  Seed of self ­destrucMon & loss of leadership to upstart compeMtors •  Long ­term equity value vs. temptaMons of short ­term profitability •  Ambiguity, chaos, and uncertainty, building managerial skills For Classroom Use Only - Del Foit Higher Poten&al Venture – Think Big •  •  •  •  •  Don’t think too small Smaller o^en means higher failure odds Should not be a job subsMtute Concepts that change way people live, work, play, learn Odds for survival, growth, and a higher level of success, changes when the ventures reaches a size of 10 ­30 people with $2 ­$3 million in revenues For Classroom Use Only - Del Foit Increasing Odds of Success •  •  •  •  Venture Capital Private Investors Financial Backers Associates who add value For Classroom Use Only - Del Foit Value Crea&on – The Entrepreneurial Process •  It is opportunity driven •  It is driven by a lead entrepreneur and an entrepreneurial team •  It is resource parsimonious and creative •  It depends on the fit and balance among these •  It is integrated and holistic For Classroom Use Only - Del Foit Pondering “I didn't start it to make money, but what a lovely surprise."  ­ ­ Michael Buckley, YouTube host For Classroom Use Only - Del Foit Timmons Model of the Entrepreneurial Process – Exhibit 3.5 For Classroom Use Only - Del Foit Entrepreneurial Process is Opportunity Driven – Exhibit 3.6 For Classroom Use Only - Del Foit Understand and Marshall Resources – Exhibit 3.7 For Classroom Use Only - Del Foit Team is a Cri&cal Ingredient for Success For Classroom Use Only - Del Foit Entrepreneurial Team •  Leader •  Quality of the Team •  Fit and Balance For Classroom Use Only - Del Foit Sustainability as a Base •  Achieving economic, environmental and social goals •  Not compromising the same opportunity for future generaMons •  Driven by many factors •  Unique combinaMon of people, opportunity and resources For Classroom Use Only - Del Foit Pondering “First say to yourself what you would be; and then do what you have to do."  ­ ­ Epictetus, Greek philosopher For Classroom Use Only - Del Foit Next Class – October 6th  ­ Prepara&on •  Required Reading –  Roxanne Quimby Case Read pgs 119 – 125 •  Assignment –  Answer case preparaMon quesMons, page 119, in preparaMon for class discussion For Classroom Use Only - Del Foit ...
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