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Introduction To New Business
Ventures
PROFESSOR BALAGOPAL VISSA
INSEAD
1, Ayer Rajah Avenue
Singapore 138676
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Office: (65) 67995382
Hand phone: (65) 94244573
Email: balagopal.vissa@insead.edu
These notes are intended to support class discussions. They should not be considered a comprehensive set of issues to be dealt with.
Welcome!
Something about me
Bala Vissa
Ph.D. from London Business School
Research focuses on new venture team
dynamics and networks, Business Groups and
entrepreneurship in emerging economies
Work experience:
7 years with Unilever plc and HCL in India
2 years experience in corporate entrepreneurship
Now, something about you
Please take 5 minutes to fill in the
questionnaire (whether registered or
not)
• Pair up with another person whose first name
starts with the same letter as yours or is one
letter away
– e.g. John can pair up with Jane, Ian or Kate
• Explain your favorite new venture idea to your
counterpart
• Your Task: Introduce your counterpart to the
class in under 2 minutes focusing on:
– His/her name and background
– His/her favorite new venture idea
– Is he/she seeking team members
– His/her relevant prior experience
Sensing an opportunity & executing
flawlessly, time after time …
“She’s always in your face
isn’t she. I don’t get it. What
is it about her? She’s not a
great dancer or singer.”
Michael Jackson
“As America turns prim and proper, radical Madonna, always ahead of trends,
has been penning children’s books, dressing demurely in Laura Ashley florals,
and exalting motherhood”
Madonna: The serial entrepreneur?
1983 1988 1989 1995 1996 2003
“Like a Virgin”
“Desperately Seeking “Like a Prayer”; “Sex”; “What it feels like for a girl”
“In Bed with Madonna” “Evita”
Susan”
Positioning Music, sex and new age
Music, sex appeal Music,sex and controversy
Ambition; Relationship Relationship with Warren New producers;
Leveraging with Prince; Marriage to Beatty – played in several New staff; Guy Ritchie,
Resources Sean Penn, ability to movies, ability to spot trends
spot trends ability to spot trends
Discipline Discipline, Discipline (with a softer
Growth and Building and using Breaking alliances; face?)
change alliances; Creating Controversy; Self-development;
Manipulating the press Film experience Motherhood; Move to
London; Guy Ritchie
So, what is entrepreneurship?
Pursuing opportunities without regard
to resources currently controlled
In this course, we are interested in a
specific aspect of entrepreneurship
Building a high growth
venture
Common problem: How to start?
« I always wanted to create a company…There
were times I didn’t sleep when I was an employee
just because I didn’t know how to go about starting
something. I wanted to start something , I wanted to
be an entrepreneur, but I didn’t know what to do, I
didn’t know how to build on my knowledge and
expertise. What could I do? It’s easy to say –
everybody wants to be an entrepreneur. The
question is, how do you go about it? »
- Entrepreneurial INSEAD Alumnus
New business ventures
You want to build a business:
How do you go about building a business?
What resources do you need?
How do you acquire & manage them?
How do you change your management
style as the venture grows?
New business ventures
You are working with start-ups:
How do you judge the prospects of an
entrepreneurial venture?
How can you anticipate potential
problems?
How can you help the venture team build
the business?
Course objectives
Learn how to turn opportunity into
revenue-generating business
Experience the entrepreneurial process
Meet practice
Work with start-ups
Get your feet wet...
Discover / develop your entrepreneurial
potential
What not to expect
A “boilerplate solution”
Logically, there cannot be one
Legal details on how to start a business
Talk to a lawyer in the country where you
wish to incorporate
Deep industry expertise
Go find the experts!
Ideal course outcome
« From the beginning, we had known that the New
Ventures course would require a great deal of work.
So we had decided to select a project which was
potentially feasible, although at the time that didn’t
necessarily mean we were going to go through with
it. We worked hard on the project, and by the end
of the course, after we had tested the idea with
many people, seen the success of others… and got a
better knowledge of the business, we became
convinced that it was a real opportunity. »
- Paul Chantler and Thor Gudmundsson, MBA ‘92
Surviving projects
Su
bm R
itt aw
1000
10000
1
10
100
al id
4 for ea
H f
In ou und
-d r r s
ep ev
th ie
a w
O nal
ff ys
e
D rs m is
ev
elo ade
pm
Success curves
Su ent
cc
es
s
Venture success curves
ventures
Entrepreneurial
Large Firm NPD
Liabilities of newness and
smallness
General knowledge only
Inadequate managerial knowledge
Inadequate financial management abilities
Conflict, worry, inefficiency during founding
period
Few relations with outside individuals and
organizations
Initial lack of trust
No stable ties with customers
Sources: Stinthcombe (1965), Thornhill and Amit (2001)
There are many sources of risk
Science/idea/
service Competition
Market
Business
Models Economic
regime Exit
environment
Management
Culture
Finance
Source: Advent International
GLOBAL PRIVATE EQUITY
Focus on risks related to
“Organizing”
>>>CONVERTING OPPORTUNITY TO AN OPERATING BUSINESS<<<
Module 1: Module 2: Module 3: Module 4:
The Entry Organization Post-
Entrepreneurial and Positioning Design Startup choices
Mindset
Session #1 & #2: What Session #4 & #5: Session #7 & #8: Using Session #12: Letting
do Entrepreneurs Do? Business Models, Entry Personal Networks Go of Your Baby
Strategy & Positioning Strategically
Session #3: Session #6: Aligning Session #9: Building a Session #13: Coping
Opportunity – The well Powerful Partners World Class Team with Failure
spring of enterprise
Session #10: Herding Session #14: Summing
Cats? Managing the up: Does Learning
Start-up team before Doing help?
Session #11: Managing
for Cash Flow
Entrepreneurship is all about
shifting the odds to your favor
Risk
versus
Reward
