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Unformatted text preview: Case studies book on Entrepreneurship and Innovation & Business creation and management Case studies book on Entrepreneurship and Innovation & Business creation and management © STARTENT, 2011 Authors: Alejandro Garcia Berra, Alicia Bolivar Cruz, Carmen Inés Ruiz de la Rosa, Carlos Fernández Hernández, Carolina Malheiro, Daniel Pavlov, Desiderio Gutiérrez Taño, Emanuele Sandri, Emilio Paolucci, Ewa Helienek, Francisco J. García Rodríguez, Kostas Galanakis, Leo Italiano, Lorela Corbeanu, Lucía Dobarro Delgado, M. Pino Medina Brito, Manuel González de la Rosa, Maya Hoveskog, Michelle Perello, Milena Marinova, Milena Kirova, Nádia Lemos, Panikkos Poutziouris, Paraskevi Gkiourka, Rosa M. Batista Canino, Sandy Nascimento, Skevos Evripidou, Svilen Kunev, Timea Czirner Editors in chief: Svilen Kunev, Kostas Galanakis, Paraskevi Gkiourka Editors of the issue: Svilen Kunev, Kostas Galanakis, Paraskevi Gkiourka, Martin Seviour Manuscript editor: Svilen Kunev Prepress: Ruse University, Svilen Kunev Design of covers: Silvia Georgieva Publisher: Ruse University ISBN – 978-954-712-517-9 Format – В5 Copies – 500 Printed – May, 2011 Bulgarian-Romanian Chamber of Commerce and Industry 26 Alexandrovska Str., Royal City Center, fl. 4, office 15 7000 Ruse, Bulgaria T.: +359 82 50 76 06/00359 82 58 97 44 F.: +359 886 897 744 [email protected] Centro de Empresas e Inovação da Madeira | BIC Madeira Caminho da Penteada, Madeira Tecnopolo – 1º Andar 9020-105 Funchal – Madeira, Portugal T.: +351 291 723 000 F.: +351 291 720 030 [email protected] Fundación Empresa - Universidad de La Laguna Avda. Trinidad, s/n. Aulario Antigua Torre de Químicas planta 0. Campus Central ULL 38204 San Cristóbal de La Laguna, Gran Canarias, Spain T.: +34 922 319 200 F.: +34 922 319 197 [email protected] Fundación Canaria Universitaria de Las Palmas - FULP C/ Juan de Quesada, 30 35001 Las Palmas de Gran Canaria, Spain T.: +34 928 458 020 F.: +34 928 457 478 [email protected] Instituto Tecnológico de Canárias S.A. Sede de Tenerife Plaza Sixto Machado, 3 38009 Santa Cruz de Tenerife, Spain T.: +34 922 56 89 00 F.: +34 922 56 89 13 [email protected] Politecnico di Torino Corso Duca degli Abruzzi, 24, 10129 Torino, Italy T.: +39 011 564 6666 F.: +39 011 564 6329/ 0039 011 564 6319 [email protected] University of Ruse ‘Angel Kanchev’ 8, “Studentska” St, 7017 Ruse, Bulgaria T.: +359 82 888 465 F.: +359 82 845 708 [email protected] Nottingham Trent University Burton Street, Nottingham, NG1 4BU, United Kingdom T.: +44 (0) 115 941 8418 [email protected] University of Cyprus 75 Kallipoleos Street P.O. Box 20537 CY-1678, Nicosia, Cyprus T.: +357 228 92 700 F.: +357 228 92 701 [email protected] Union Européenne de l’Artisanat et des Petites et Moyennes Enterprises (European Association of Craft, Small and Medium-Sized Enterprises) Rue Jacques de Lalaingstraat 4 B-1040 Brussels, Belgium T.: +32 2 230 75 99 F.: +32 2 230 78 61 [email protected] Table of contents CHAPTER 1. FIRST STEPS Case 1.1. Move Interactive - Money is not enough ................................................................................................. 9 Case 1.2. Astrotour Isla Bonita, S. L...................................................................................................................... 16 Case 1.3. The Eszter Hangos cosmetic studio: Finding the right approach to promotion ..................................... 27 Case 1.4. A small IT company faces big competition............................................................................................ 30 Case 1.5. A technician decides to open his own business...................................................................................... 33 Case 1.6. The University of Ruse: following the 3GU concept............................................................................. 36 Case 1.7. The beginning is half the battle: The Hive support ................................................................................ 48 CHAPTER 2. INTERNATIONALIZATION Case 2.1. ForWeb Software – a micro company but a global business ................................................................. 56 Case 2.2. The British Romanian consultancy: Is networking important?.............................................................. 60 Case 2.3. Hydrogen Power Co. .............................................................................................................................. 63 Case 2.4. Automotive Components Co. ................................................................................................................. 66 Case 2.5. Financial services Co.............................................................................................................................. 75 Case 2.6. Engino - Play to invent TM ...................................................................................................................... 78 Case 2.7. Consultancy services in the field of education: The case of “Cambridge Studies Ltd.”........................ 84 CHAPTER 3. INNOVATIVE DEVELOPMENT Case 3.1. Wow! Systems – From Madeira to the world… .................................................................................... 88 Case 3.2. Tomorrow options – Remote monitoring in healthcare ......................................................................... 93 Case 3.3. MadeinLocal.com................................................................................................................................... 96 Case 3.4. Oikos Energy Services: making the most of oportunities and generating value in hard financial times .............................................................................................................................................................................. 101 Case 3.5. Subbabel: Subtitling the future............................................................................................................. 106 Case 3.6. Mobilife Technologies: Technology for a social purpose.................................................................... 117 Case 3.7. Augmented Reality Co. ........................................................................................................................ 122 Case 3.8. The risk of introducing a new product: “Building mixtures” Ltd. ....................................................... 126 Case 3.9. How to develop, manufacture and market a technologu product in an outlying European region: The case of “Dobontech”............................................................................................................................................. 130 Page | 5 Case 3.10. Genesis PHARMA: The Development of an Entrepreneurial Giant.................................................. 134 Case 3.11. In the horizon of authenticity: Oleastro Enterprises Ltd. .................................................................. 148 CHAPTER 4. SOCIAL IMPACT Case 4.1. Duos Cuidados (Double Care): Building business competitiveness through social action.................. 154 Case 4.2. Building a global business, planting a local ‘seed’: The case of Neemland Ecosystem SARL........... 158 Case 4.3. Te Ayudo reflects ................................................................................................................................. 167 Case 4.4. Regenerate: A fashion entrepreneur has a flair for fighting poverty.................................................... 174 Case 4.5. Centaurs and Entrepreneurs in the Bulgarian Equine Industry: The Case of Novex Horse Riding Club .............................................................................................................................................................................. 178 Case 4.6. 3iDS: R+D sustainable ......................................................................................................................... 186 CHAPTER 5. GROWTH AND EXPANSION Case 5.1. View to Success: knowing when to let go! .......................................................................................... 193 Case 5.2. Pulse Student Network Limited: Be there - the rest will happen ......................................................... 200 Case 5.3. Electrical Motors Co............................................................................................................................. 203 Case 5.4. NIK-05 Ltd: Development of Managerial Infrastructure in the business model of a pellet producer . 211 Case 5.5. The development of a winning business model: The case of ihavemoved.com .................................. 226 Case 5.6. A micro consultancy with a European business: The case of “Europa Consultancy” Ltd................... 237 Page | 6 PREFACE Entrepreneurship and entrepreneurial education are considered two important and determinative issues in the advancement of societies. In reality, both concepts need to be interconnected, as they are the mechanisms for boosting the bet on innovation, creativity, employment and economic growth. Therefore, entrepreneurship education must be encouraged, and true stories of entrepreneurs can be examples to young people. This book, which is part of the STARTENT project, can be used as a source of examples and materials in the field of education for entrepreneurship in Europe and to foster entrepreneurial interest and talent among young individuals. Case studies incuded in the five chapters aim to be an innovative and practice-based teaching material on entrepreneurship for higher education, in particular by using real cases and experiential learning. Cases refer to existing companies and particulatly to local ones in order to provide students with role models at local level with which they can easily identify themselves. The case studies relate to different business sectors, and concern different entrepreneurial stages such as start-up, growth and management of a company. In this respect, case studies are selected to address real problems that would-be entrepreneurs or young entrepreneurs will have to tackle with, such as lack of capital, access to markets, opportunity recognition, etc. Particular attention is devoted to display case studies on innovative or technological sectors that can be more easily used in entrepreneurship education. The STARTENT project – which had its origin in an application to the European Commission, DG Enterprise and Industry (under the call “Entrepreneurial culture of young people and entrepreneurship education”) by a consortium of 10 partners of eight EU Member States, (Belgium, Bulgaria, Cyprus, Italy, Portugal, Romania, Spain and the United Kingdom) – aspires to develop alternative resources for the teaching of entrepreneurship at the higher education level and, simultaneously, develop mechanisms/systems to encourage the entrepreneurial culture of young people in Europe. With its comprehensive set of actions, the STARTENT project is addressed to young people in general, wouldbe entrepreneurs, new entrepreneurs and academic and non-academic entrepreneurship educators. Page | 7 CHAPTER 1. FIRST STEPS 1.1. MoveInteractive! (CEIM – BIC Madeira) 1.2. Astrotour (FEUL) 1.3. The Eszter Hangos cosmetic studio: Finding the right approach to promotion (UEAPME) 1.4. A small IT company faces big competition (UEAPME) 1.5. A technician decides to open his own business (UEAPME) 1.6. The University of Ruse – following the 3GU concept (RUSE) 1.7. The beginning is half the battle: The Hive support (NTU) Page | 8 Case 1.1. Move Interactive - Money is not enough Sandy Nascimento, CEIM – BIC Madeira Abstract – Rogério Varela was a teenager when he started to modify videogames and distribute them on the Internet. This ‘hobby’ brought recognition for his skills and he began to be talked about by people in the videogames world. It was just the first step to building a business. Rogério and his brother Roberto, who had management and multimedia knowledge, got together and decided to create a new videogame, called Ugo Volt. and their own business- MoveInteractive. Keywords – technology, venture capital, investments, financial support, videogame industry, entrepreneurship Background of the firm/Business idea “My brother [Rogério Varela] is self-taught. When he was 17 years old, he began to modify videogames that already existed in the market and put them on the Internet. Later, his Tomb Raider adaptations were among the world’s top downloads. That’s how we came up with the idea to create Ugo Volt, a videogame about Lisbon in the year 2055, in conditions of global warming,” explains Roberto Varela, MoveInteractive’s CEO. Roberto and Rogério Varela are two Portuguese brothers with entrepreneur spirit. Because of Rogerio’s ideas and skill in modifying existing videogames, by changing the characters and, scenarios, adding new chapters, etc., the two brothers decided to create a new videogame and, therefore, start their own business. So, in 2001 MoveIntercative was created (initially under the name GraficWeb) with the main objective of producing videogames for international markets. MoveInteractive´s first idea was the production of the game Ugo Volt (also known by its original title ‘Flow – Prospects of Mayhem’) an action/adventure videogame for personal computers and consoles, in which Ugo Volt is the main character. Figure 1– Ugo Volt, the main character of the videogame ’Flow – Prospects of Mayhem’ Page | 9 In the early days, MoveInteractive had only limited financial resources (Roberto and Rogério had to seek financial help from their family to start the business) and so the business depended on the dedication of its founders. A year later, MoveInteractive won the Madeira Business Innovation Award, promoted by CEIM/BIC Madeira (Business Innovation Centre Madeira)1, which gave them the opportunity to open an office in BIC Madeira’s incubator and to enjoy a package of services that helped them when things were difficult at the beginning. The promoters, Roberto and Rogério, also applied for SIPPE-RAM (an EU grant for SMEs managed by the Madeira Regional Government), that was available at that time on Madeira Island and which gave them the possibility to get €142,000. As the creation of a videogame always demands the usage of the most innovative technology, Roberto and Rogério decided to use this money to acquire new technology, like the ‘Gypsy Motion Capture System’. Until then, videogame development was done through algorithms, which made production slower. However, the new system made production faster and more precise, because it allowed real movement to be captured, which enriched the videogame. So, with this new acquisition, MoveInteractive was ready to produce a demo of their Ugo Volt project. With the increase in work and responsibilities, Roberto realized that he should follow his brother and work full time for the company. So he left his job in a training firm where he had financial security and stability. “I decided to take this step because with so many things to do for the company [MoveInteractive] it just wasn’t sustainable working for others. The decisive factor in this decision was the fact that the partner was my brother with whom I have always had a lot of empathy. I believed in his potential.” Over the next year the brothers worked hard and, in November 2003, Roberto and Rogério presented the demo at the videogames producers and publishers fair - Game Connection (in Lyon, France). In searchof a business opportunity, the brothers met with several publishers at the event. Although their reactions were quite positive they were surprised that the technological platform used to produce the demo was already outdated. However, Ugo Volt was a very ambitious project, with many special features and details, and the publishers remained interested in the product. They asked for a second demo so they could see other features that weren’t included in the first one. The second demo Ugo Volt had had some success with the publishers. Roberto and Rogério’s dream was becoming reality. Now they just needed to produce the second demo asked for at the Lyon fair and show just how good their videogame could be. So, despite their limited financial and human resources, the brothers made an extra effort to produce the second demo. While the demo was in production, the possibility arose for MoveInteractive to establish a partnership with Dynamedion, a German music and sound effects producer well-known in the videogame industry. Dynamedion decided to support the Ugo Volt demo for no profit, with their services being payed for only if MoveInteractive succeeded in obtaining financial support from a videogame publisher. When it was complete, the second demo was presented to the publishers who had received the first so well at the fair. But this time, the reaction was different. Although the demo received positive feedback on its production there was criticism of the technological platform used, which was still very outdated. Of course, human and financial limitations meant that the demo had taken a long time to produce so the technological platform used was no longer ‘cutting edge’. 1 CEIM/BIC Madeira (Business Innovation Centre Madeira) – established in 1997, BIC Madeira is an instrument for regional development to support entrepreneurial innovative projects in Madeira Region (Portugal). – Page | 10 So, with no more money to invest in their project, Roberto and Rogério Varela decided that MoveInteractive should look for other work in the multimedia market, which would allow them to make some extra money and keep their dream alive. This was the strategy chosen to save the company. They created a new multimedia department within MoveInteractive which provided the following services: TV and broadcast, design and 3D animation, motion capture, 3D simulation for real estate projects using animated videos, interactive visits to building projects, environmental awareness videos and corporate videos and promotional campaigns. RTP, the Portuguese public television channel, was among the customers of the company's multimedia services. Figure 2. Image from the videogame Where could they get more capital? In 2005, four years after MoveInteractive was created, the idea was in the open; the demo had been well received by publishers, but feedback on the technological platform had been negative. However, the Varela brothers still had the knowledge, focus and the courage to continue with their dream. Only one little thing was missing: the money! To create a videogame like Ugo Volt, the company needed much more capital. So, where could MoveInteractive find the money to support their dream? “We realized immediately that an ordinary bank would not invest in our project, so venture capital was something that attracted me as a manager because that was the way to make the leap and find the money for what was needed,” recalls Roberto. Venture capital was the solution found to support the production of the Ugo Volt prototype, which would showcase the videogames’s specific features and hopefully attract a publisher. With this financial support the company wouldn't need to spend time doing other work, as they had with the recently established multimedia department. They would be able to invest in and focus on the videogames, particularly the development of the prototype. Page | 11 Initially, Roberto and Rogério contacted ‘BanifCapital’2, who were managing the Madeira Capital Fund (a regional venture capital scheme), but this institution was very slow to respond. From their experience, the brothers knew that technology doesn’t stand still but is permanently changing, so after two months, they decided to approach another institution. “BanifCapital had already taken two months to respond, so I presented our project in an elevator pitch at the European Venture Capital Congress. I had 5 minutes to present our work to an audience of national and Europ...
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