SessionplannerMGT440

SessionplannerMGT440 - MGT
440


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Unformatted text preview: MGT
440
 W.
P.
Carey
School
of
Business
 Entrepreneurship
 Session
Planner
 
 Use
discussion
questions
TO
PREPARE
for
class
and
write‐ups.

 Learning
points
are
THE
EXAM
QUESTIONS.
You
should
be
able
to
answer
them
 AFTER
each
session.
 
 Introduction
 
 Innovation
 
 Learning
points
 • Why
was
the
shift
to
open
innovation
model
possible?
 • You
 should
 be
 able
 to
 classify
 various
 examples
 of
 innovation
 in
 different
 industries
/
sectors.
 

 Business
plan
 
 Readings
 How
to
Write
a
Great
Business
Plan
 Seat
of
the
Pants
(posted
on
Blackboard/Readings)
 Case:
Heather
Evans
 Discussion
questions
 1. Be
prepared
to
discuss
the
four
elements
of
the
POCD
framework.
 2. What
is
structurally
attractive
/
unattractive
industry?
 3. Explain
the
expression:
Most
waste
too
much
ink
on
numbers
and
devote
too
 little
to
the
information
that
really
matters.
 4. What
are
the
benefits
of
preparing
a
business
plan?

 5. Evaluate
 the
 opportunity
 for
 Heather
 Evans
 (you
 may
 apply
 the
 POCD
 framework).
 6. Evaluate
Heather’s
efforts
to
date.
 7. Evaluate
her
business
plan.
 Learning
points
 • Under
what
conditions
may
it
not
be
advantageous
to
prepare
a
business
plan?
 • In
 the
 context
 of
 POCD
 framework,
 what
 is
 the
 main
 focus
 of
 business
 plan
 development?
 • Applying
 the
 POCD
 framework
 to
 the
 Heather
 Evans
 case,
 which
 elements
 seemed
deficient?
 1 Valuations
 
 Readings
 A
Note
on
Valuation
of
Venture
Capital
Deals
(focus
on
sections
1.1,
1.2,
2
and
5)
 Case:
Heather
Evans
(cont.)
 Discussion
questions
 1) What
is
an
appropriate
valuation
for
Heather’s
business?
 2) Evaluate
each
of
Heather’s
financing
alternatives.
 3) Who
should
she
approach
and
on
what
terms?
 
 Learning
points
 • You
 should
 be
 able
 to
 apply
 the
 valuation
 methods
 discussed
 in
 class.
 For
 example,
given
financial
information
(market
value,
revenues,
transaction
value
 of
 acquisition,
 stock
 price
 at
 IPO,
 etc),
 you
 should
 be
 able
 to
 come
 up
 with
 a
 range
of
valuations
for
a
company.
Or,
you
may
be
presented
with
a
mini‐case
of
 a
company
entering
a
deal
with
VCs.
You
should
be
able
to
calculate
valuations
 and
ownership
fractions.
 • Does
the
choice
of
“right”
valuation
method
constitute
the
most
important
factor
 that
drives
the
outcome
of
a
deal?

 
 Business
Model
/
part
1
 
 Readings
 Note
on
business
model
analysis
for
the
entrepreneur
 Case:
Zipcar
‐
refining
the
business
model
 
 Discussion
questions
 You
 are
 expected
 to
 ‘work
 out
 the
 numbers’
 for
 the
 case
 analysis
 to
 support
 your
 arguments.
Also,
please
bring
a
calculator
to
class
–
we
will
do
some
of
the
numbers
 in
real
time.
 1. Evaluate
the
Zipcar
opportunity
(you
may
apply
the
POCD
framework).

 2. Is
the
opportunity
big
enough
to
attract
‘value
adding’
investors?
 3. What
about
the
progress
that
Chase
has
made?
 4. To
the
best
of
your
ability,
analyze
Zipcar’s
business
model
(you
may
use
 fishbone
diagram).
The
following
calculations
may
help
your
analysis:
 • Based
on
May
2000
projections,
what
is
the
margin
(revenue
–
cost)
per
 car?
What
is
the
margin
per
member?
What
is
the
relationship
between
 number
of
cars
and
number
of
members?
 • How
do
the
projected
numbers
compare
with
the
actual
operating
data
in
 September
2000?
What
is
your
evaluation
of
the
business
model
based
on
 this
comparison?

 
 Learning
points
 • You
should
be
able
to
analyze
a
business
model
of
a
simple
venture,
identify
key
 2 underlying
assumptions,
and
suggest
adjustments.
 
 Business
Model
/
part
2
 
 Readings
 Note
on
business
model
analysis
for
the
entrepreneur
(cont.)
 Case:
Zipcar
‐
refining
the
business
model
(cont.)
 
 Discussion
questions

 5. What
actions
should
Chase
take
as
a
result
of
the
September
operating
results?
 6. What
is
the
strongest
argument
Chase
could
make
to
a
potential
investor
at
the
 Springboard
forum
about
the
attractiveness
of
the
venture?
 7. Explain
the
expression:
While
“time
is
money”,
for
the
entrepreneur
“money
is
 time”.
 Learning
points
 • In
 the
 Zipcar
 case,
 what
 was
 the
 main
 reason
 why
 their
 initial
 business
 model
 didn’t
work?
 • How
can
an
entrepreneur
know
if
the
business
model
will
work?
 
 Sources
of
financing
 
 Readings
 How
Venture
Capital
works
 Big
Love
(posted
on
Blackboard/Readings)
 Watch:
 The
Benefit
of
Picking
the
Right
VC,
 Venture
Capital
vs.
Customer
Funding,
 Funding
Choices
(links
to
the
video
clips
are
posted
on
Blackboard/Readings)
 
 Discussion
questions
 1. What
role
does
VC
play
in
funding
innovation?
 2. Be
prepared
to
explain
the
economics
of
venture
capital
as
an
industry.
 3. Research
the
portfolios
of
the
following
VC
firms
using
their
websites:
KPCB,
 Menlo
Ventures,
Trinity
Ventures,
Alta
Partners.
Are
there
commonalities
among
 the
particular
industries
on
which
they
focus
their
investments?
 4. What
did
you
learn
about
venture
capital?
What
are
the
trade‐offs
of
having
 venture
capital?
 5. Research
Angel
investing.
 6. Research
Corporate
Venture
Capital
investing.
 7. What
other
insights
did
you
have
about
funding
choices?
 
 Learning
points
 • How
do
VCs
mitigate
risk?
 • Are
VCs
driven
by
ideas,
people
or
industries?
Why?
 • By
 now,
 you
 should
 have
 already
 noticed
 that
 there
 is
 a
 potential
 conflict
 of
 interest
between
an
entrepreneur
and
venture
capitalists.
What
is
the
nature
of
 this
conflict?
 3 What
 are
 the
 advantages
 and
 disadvantages
 of
 having
 corporate
 investors
 (Corporate
VC)?
 Bootstrapping
 
 Readings
 Bootstrap
finance:
the
art
of
startups
 Case:
Rose
Hanna

 Discussion
questions
 1) Evaluate
 the
 entrepreneurs’
 efforts
 in
 establishing
 MicroSample
 company
 to
 date.
 2) Analyze
 the
 evolution
 of
 MicroSample’s
 business
 model.
 What
 were
 the
 key
 assumptions
and
how
did
they
change?

 3) What
is
bootstrap
financing?
 4) When
should
the
entrepreneur
bootstrap?
 5) What
do
you
think
about
the
entrepreneurs’
decision
to
bootstrap
MicroSample?
 
 Learning
points
 • What
are
the
advantages
of
bootstrapping
versus
external
equity
financing?
 • From
the
perspective
of
an
entrepreneur,
how
to
deal
with
the
trade‐off
between
 the
need
for
startup
and
growth
capital
and
preservation
of
founders’
equity?
 
 Projects
discussion
 
 Readings
 Developing
disruptive
ideas
 
 Discussion
questions
 1. Explain
the
‘disruptive
principles’.
 2. Come
up
with
your
own
examples
of
innovations
that
didn’t
necessarily
involve
 introducing
completely
new
products
or
technologies,
but
had
high
impact
and
 had
a
potential
to
generate
significant
economic
value.
 
 First­mover
advantage
 
 Readings
 First‐mover
disadvantage
 Case:
The
browser
wars
(1994‐98)
 
 Discussion
questions
 1. What
are
the
advantages
of
being
a
first‐mover?
 2. What
are
the
disadvantages
of
being
a
first‐mover?
 3. Give
two
examples
of
successful
companies
that
were
first‐movers
and
two
 examples
of
successful
companies
that
were
followers
or
late
entrants.
Does
 there
truly
exist
the
first‐mover
advantage?
 4. Evaluate
the
‘moves’
of
Netscape
and
Microsoft
after
the
browser
wars
begin
in
 • 4 1995.
 5. Was
it
advantageous
for
Netscape
to
be
the
first‐mover?
 6. Was
there
any
way
Netscape
could
win
the
browser
war?
If
no,
why?
If
yes,
how?
 7. Why
is
it
important
for
an
entrepreneur
to
understand
the
advantages
and
 disadvantages
of
being
a
first‐mover?
 
 Learning
points
 • What
is
network
effect?
You
should
be
able
to
give
examples
of
industries
 characterized
by
network
effect.
 • Relate
the
Netscape
case
to
the
technological
vs.
market
evolution
framework
 (2x2
chart
we
discussed
in
class,
see
slides).
 • Did
Netscape
achieve
first‐mover
advantage?
 • What
should
an
entrepreneur
do
to
increase
the
odds
of
taking
the
advantage
of
 being
a
first‐mover
in
an
industry
with
network
effect?
 
 Entrepreneurial
team
 
 Readings
 Case:
Ockham
Technologies
‐
living
on
the
razor’s
edge
 
 Discussion
questions
 1) What
is
your
assessment
of
the
job
Jim
Triandiflou
has
done
getting
started
and
 assembling
key
human
resources?
 2) How
will
the
current
fund‐raising
efforts
affect
the
formation
of
Ockham’s
board
 of
 directors?
 What
 board‐related
 factors
 should
 Triandiflou
 consider
 when
 deciding
which
financing
offer
to
accept?

 3) Which
financing
option
should
Ockham
choose?

 
 Learning
points
 • What
factors
may
be
considered
when
splitting
the
equity
between
founders?
 • Why
 is
 the
 composition
 of
 the
 Board
 important
 when
 structuring
 a
 financing
 deal?
 • The
Board
can
be
a
crucial
resource
for
an
entrepreneur.
Explain
why.
 • One
 of
 the
 decisions
 that
 the
 entrepreneurs
 in
 the
 Ockham
 case
 had
 to
 take
 concerned
 choosing
 between
 VC
 and
 Angel
 investors.
 
 Which
 way
 did
 they
 go?
 Why?
 
 Startup.com
 
 In
class
 Documentary
film
“Startup.com”
screening
 
 Readings
 How
to
kill
a
great
idea
(posted
on
Blackboard/Readings)
 Interviews
with
Jonathan
Abrams
(posted
on
Blackboard/Readings)
 5 
 Discussion
questions
 1. Why
did
Friendster
fail?
 2. What
did
Abrams
do
differently
with
Socializr?
 
 (After
watching
“Startup.com”
in
class)
 3. What
did
Tom
do
wrong?
 4. What
did
Kaleil
do
wrong?
 5. What
would
you
have
done
differently?
 
 Learning
points
 • You
should
be
able
to
describe
‘Get
Big
Fast’
(GBF)
and
‘Get
It
Right
First’
(GIRF)
 strategies.
 • What
are
the
advantages
and
disadvantages
of
GBF
and
GIRF?
 • How
to
choose
which
strategy,
GBF
or
GIRF,
to
adopt?

 
 Disruptive
innovation
/
part
1
 
 Readings
 Meeting
the
challenge
of
disruptive
change
 Innovation
killers:
how
financial
tools
destroy
your
capacity
to
do
new
things
 Case:
Opening
Pandora’s
box
 
 Discussion
questions
 1. How
do
resources,
processes
and
values
affect
the
organization’s
ability
to
 change?
 2. Explain
how
financial
tools
(NPV,
DCF,
fixed
and
sunk
costs)
and
processes
 (stage‐gate
project
management)
described
in
the
reading
may
create
barriers
to
 innovation
in
an
established
company.
 3. Explain
how
top
executives’
incentive
system
can
be
a
barrier
to
innovation.

 4. Based
on
your
overall
knowledge,
what
are
other
barriers
to
innovation
in
an
 established
company?
 5. What
is
the
nature
of
innovation
introduced
by
Pandora?
Analyze
it
in
the
 context
of
different
industries
described
in
the
case.
 
 Disruptive
innovation
/
part
2
 
 Readings
 Case:
Opening
Pandora’s
box
(cont.)
 
 Discussion
questions
 6. Evaluate
Pandora’s
business
model.
 7. What
key
assumptions
does
Pandora
need
to
test
to
understand
if
its
business
 model
will
scale?
Will
it
become
profitable?
If
yes,
when
and
how?
If
not,
why?
 8. Is
there
a
network
effect?
What
are
the
strategic
implications?
 6 9. Should
Westergren’s
 investors
 stay
with
Pandora
and
provide
further
financing
 or
should
they
seek
an
exit?

 Learning
points
 • Why
is
it
important
to
an
entrepreneur
to
understand
the
concept
of
disruptive
 innovation?
 
 Founders’
dilemmas
 
 Readings
 The
founder’s
dilemma
 Case:
Evan
Williams
 
 Discussion
questions
 1. Compare
 the
 approaches
 Evan
 took
 to
 building
 Odeo
 and
 Blogger.
 What
 motivated
Evan’s
decisions?
 2. What
should
Evan
do
now?
 3. What
are
some
of
the
problems
and
opportunities
faced
by
serial
entrepreneurs?
 
 Learning
points
 • What
is
the
nature
of
the
Rich
vs.
King
dilemma?
 • Why
 is
 it
 important
 for
 the
 entrepreneur
 to
 understand
 the
 trade‐offs
 of
 being
 Rich
vs.
being
King?
 
 Growing
the
venture
 
 Readings
 A
note
on
managing
the
growing
venture
 Why
entrepreneurs
don’t
scale
 Plenty
of
Fish
(posted
on
Blackboard/Readings)
 
 Discussion
questions
 1) Why
do
management
issues
become
more
complex
when
a
venture
grows?

 2) Conventional
 wisdom
 states
 that
 a
 good
 entrepreneur
 is
 usually
 not
 a
 good
 manager,
 and,
 therefore,
 a
 leadership
 transition
 is
 inevitable
 as
 the
 venture
 grows.
In
other
words:
‘The
great
entrepreneur
must,
in
fact,
be
compared
in
life
 with
the
male
apis
mellifera.
He
accomplishes
his
act
of
conception
at
the
price
of
 his
own
extinction.’
Do
you
agree
or
disagree?
Why?
 3) The
 ultimate
 challenge
 of
 managing
 the
 growing
 venture
 is
 to
 establish
 the
 discipline
 within
 the
 organization
 while
 remain
 driven
 by
 and
 open
 to
 the
 opportunities
in
the
environment.
Explain
this
dilemma
and
its
implications
for
 managing
growth.
 
 Learning
points
 • What
is
the
main
driver
of
the
complexity
of
the
management
issues
of
a
growing
 venture?

 7 • • 
 Under
 what
 circumstances
 can
 the
 founder
 stay
 in
 the
 leadership
 role
 and
 successfully
lead
her
company
through
growth?
 What
is
scalability
and
what
are
the
management
challenges
associated
with
it?
 
 Harvesting
options
 Readings
 A
note
on
initial
public
offering
process
 Case:
Grand
Junction
 
 Discussion
questions
 1. Perform
a
brief
research
about
Cisco
Systems.
What
is
the
role
of
acquisitions
in
 Cisco’s
strategy?
Give
examples
of
its
recent
acquisitions.
 2. Prepare
 several
 different
 valuations
 (how
 much
 $$
 the
 company
 is
 worth)
 for
 Grand
Junction
based
on
the
information
provided
in
the
exhibits.
 3. What
 do
 you
 think
 of
 Charney’s
 final
 offer?
 Is
 it
 a
 fair
 valuation
 for
 Grand
 Junction?
Explain
your
reasoning.
 4. From
 the
 perspective
 of
 the
 senior
 management
 and
 Board
 of
 Cisco
 Systems,
 evaluate
the
final
offer.
Should
Cisco
accept
this
offer?
Why?
 5. Should
Grand
Junction
go
public
or
be
acquired?
Why?
Evaluate
the
issue
from
 the
 perspective
 of
 each
 of
 the
 stakeholders
 in
 Grand
 Junction
 (founding
 team,
 VCs,
employees).
 6. Consider
 the
 objectives
 of
 this
 potential
 acquisition
 from
 Grand
 Junction’s
 and
 Cisco’s
 perspectives.
 If
 they
 go
 through
 with
 the
 acquisition,
 what
 are
 the
 potential
problems
that
may
occur
during
the
post‐acquisition
process?
 
 Learning
points
 • In
class,
we
discussed
the
increasing
use
of
acquisitions
as
a
part
of
innovation
 strategy
 by
 established
 companies.
 For
 example,
 to
 obtain
 access
 to
 new
 products
 and
 technologies,
 to
 develop
 new
 capabilities,
 and
 to
 rapidly
 access
 new
markets.
What
is
the
implication
of
this
for
an
entrepreneur?
 • Considering
 the
 above
 role
 of
 acquisitions
 in
 corporate
 strategy,
 what
 are
 the
 most
important
assets
acquirers
look
for?

 • From
 the
 perspective
 of
 an
 entrepreneur,
 what
 factors
 should
 be
 considered
 when
evaluating
harvesting
options:
IPO
x
acquisition?
 • In
 class,
 we
 discussed
 how
 it
 is
 important
 for
 an
 entrepreneur
 to
 consider
 the
 acquiring
 company’s
 ‘acquisition
 capability’.
 Why?
 Acquisition
 capability
 refers
 to
 the
 ability
 of
 the
 acquiring
 company
 to
 conduct
 post‐acquisition
 integration
 and
achieve
acquisition’s
objectives.

 
 8 Dealing
with
uncertainty
 
 Case:
E‐Ink
‐
financing
growth
 
 Readings
 Discussion
questions
 1. What
 is
 the
 nature
 of
 the
 innovation
 introduced
 by
 E‐Ink?
 Analyze
 it
 in
 the
 context
of
different
industries
described
in
the
case.
 2. Evaluate
 the
 opportunity
 confronting
 E
 Ink.
 What
 would
 the
 cumulative
 cash
 flow
diagram
look
like
for
each
of
the
markets
they
might
decide
to
enter?
 3. What
do
you
think
of
their
3‐stage
approach
to
achieving
their
long‐term
goal?
 Be
 prepared
 to
 discuss
 the
 details:
 who
 are
 the
 customers,
 size
 of
 the
 opportunity,
distribution
channels,
risks,
etc.
 4. How
much
money
should
the
company
raise?
From
whom?
On
what
terms?
 5. What
should
Iuliano
and
his
management
team
do?
 
 Learning
points
 • What
is
the
purpose
of
staged
development?
 • What
are
the
advantages
of
staged
development?
 
 
 9 ...
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This note was uploaded on 01/07/2012 for the course MGT 440 taught by Professor Gary during the Fall '08 term at ASU.

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