Introduction to Entrepreneurship and Technology-Based Ventures by dux15396

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									                                   BACHELOR OF
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Introduction to Entrepreneurship and
     Technology-Based Ventures
                                                                                       BACHELOR OF
                                                                                       INNOVATION™




                The empires of the future are the
                empires of the mind.
                               Winston Churchill
               Summary
                What enables global capitalism?
                The entrepreneur provides the creative force in order for
                capitalism (free enterprise) to work. Entrepreneurs strive
                to make a difference in our world and contribute to its
                betterment. They are also motivated by achievement,
                independence, and the accumulation of wealth.




Chapter 1: Summary                                  Technology Ventures: From Idea to Opportunity
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                An entrepreneur is a person who undertakes the
                creation of an enterprise or business that has the
                chance of profit (or success).




Chapter 1: concept                                  Technology Ventures: From Idea to Opportunity
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                       For an entrepreneur, a challenge is a call
                       to respond to a difficult task and the
                       commitment to undertake the required
                       enterprise.

What are the key elements to
overcoming a challenge?
The Elements of Overcoming a Challenge

      •Able to deal with a series of tough issues
      •Ability to create solutions and work to perfect them
      •Can handle many tasks simultaneously
      •Resiliency in the face of set-backs
      •Willingness to work hard and not expect easy solutions
      •Possess well-developed problem solving skills
      •Able to learn and acquire the necessary skills for the tasks
       at hand

Chapter 1: Table 1.2                              Technology Ventures: From Idea to Opportunity
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          An opportunity is a
          favorable juncture of
          circumstances with a good
          chance for success or
          progress. It is the job of
          the entrepreneur to locate
          new ideas and to put them
          into action.
                                     Thus, entrepreneurship may be
                                     described as the identification and
                                     exploitation of previously unexploited
                                     opportunities.




Chapter 1: concept                                 Technology Ventures: From Idea to Opportunity
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An Attractive                                                                            Finding the Right
                                                 •   Timely

Opportunity                                      •   Solvable                            Opportunity
                                                 •   Important
                                                 •   Profitable
                                                 •   Favorable Context




                                                         The
                                                        Sweet
                                                         Spot
                     •    Like to do the tasks                           •   Skilled at the needed
                                                                             tasks
                     •    Like the challenge
                     •    Committed to do what is
                          necessary


Interests,
Passions,
Commitment                                                                                 Capabilities & Skills

Chapter 1: Figure 1.1 - Finding the Right Opportunity                              Technology Ventures: From Idea to Opportunity
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          Entrepreneurial Capital
          EC = Ecomp x Ecomm
                 ► Ecomp = Entrepreneurial competence is the ability to:
                      1) to recognize and envision taking advantage of
                         opportunity and
                      2) to access and manage the necessary resources to
                         actually take advantage of the opportunity


                 ► Ecomm = Entrepreneurial commitment is a dedication
                 of the time and energy necessary to bring the enterprise to
                 initiation and fruition.

Chapter 1: Entrepreneurial Capital                    Technology Ventures: From Idea to Opportunity
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Economic Value = Opportunity x Entrepreneurial Capital

After T years the market value is:
       MV     = M x C x EV
              = M x C x Ecomp x Ecomm

           where:
                 M = management efficiency and effectiveness
                 C = context




Chapter 1: Economic Value                       Technology Ventures: From Idea to Opportunity
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                     The intellectual capital of an organization is
                     the talents of its people, the efficacy of its
                     management systems, the effectiveness of its
                     customer and supplier relations, and the
                     technological knowledge employed and shared
                     among its people and processes.




Chapter 1: concept                                 Technology Ventures: From Idea to Opportunity
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                                                   Economy
                                                    Economy
     Natural Capital
                                                                        Beneficial
                                                                        Outputs



     Financial Capital                           Entrepreneurs as
                                                     agents of
                                                     progress
                                                                        Undesired Waste
                                                                        Outputs
      Intellectual Capital



Chapter 1: Figure 1.2 – A Model of the Economy                      Technology Ventures: From Idea to Opportunity
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 Inputs                                                  The Firm                                         Outputs

  Raw Materials
  Components &
  Modules                                                                                        Products
                                           Transformation Based On:
  Financial Capital                         Intellectual Capital                                       &
                                            Entrepreneurial Capital
                                                                                                  Services
  Physical Assets

   Technologies




Chapter 1: Figure 1.3 – Transforming available inputs into desired outputs   Technology Ventures: From Idea to Opportunity
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                   THE FIRM'S Intellectual Capital
                 The Firm’s INTELLECTUAL CAPITAL
          Human Capital
        Human Capital Organizational Capital
                        Organizational          Social Capital
                                               Social Capital
                            Capital

                                                   Workers and
               Society
                                                   Associates

                                  Firm's
                                 Mission
              Market               and               Customers
                                 Purpose


                                                                      A firm’s theory of its
            Technology                              Competitors       business is how it
                                 Suppliers                            understands its total
                                                                      activities, resources
                                                                      and relationships.


Chapter 1: Figure 1.5                                       Technology Ventures: From Idea to Opportunity
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                       What is Dynamic Capitalism?
Dynamic Capitalism is the process of wealth
creation characterized by the dynamics of new,
creative firms forming and growing and old, large
firms declining and failing.


    What is Creative Destruction?

                     Creative Destruction is the entrepreneurial
                     activity of destroying old models and creating new
                     models of doing business.


Chapter 1: concept                                 Technology Ventures: From Idea to Opportunity
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               Principle 1
               The entrepreneur develops an enterprise with the
               purpose of creating wealth and prosperity for all
               participants – investors, customers, suppliers,
               employees, and themselves – using a combination
               of intellectual and entrepreneurial capital.


            What other purposes can there be?
            If not focused on wealth, are they really
            entrepreneurial?



Chapter 1: Principle 1                              Technology Ventures: From Idea to Opportunity
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                In the field of observation, chance only favors minds which
                are prepared.
                                        Louis Pasteur

               Summary
            How can an entrepreneur identify and select a
            valuable opportunity?


               The choice of an opportunity and the decision to act is a
               critical juncture in the life of an entrepreneur. With the
               decision to act, the entrepreneur prepares a business
               summary for the venture that is used to test the new
               venture with potential investors, employees, and
               customers.

Chapter 2: Summary                                   Technology Ventures: From Idea to Opportunity
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Six steps to               Identifying the Opportunity
Acting as an
entrepreneur
                         Determining the Entrepreneur’s
                            capabilities and interests


                           Evaluating the opportunity


                        Deciding to act on the opportunity
                               or look elsewhere                 If you are
                                                                 uncomfortable
                                                                 You’ll just have to
                        Writing a summary of the concept
                                                                 fake-it till you make it !

                          Testing the summary and the
                        concept with potential customers
                                  and investors


Chapter 2: Figure 2.1                                        Technology Ventures: From Idea to Opportunity
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          Types of Opportunity:
          Opportunity Pull:
                     the size of the opportunity attracts opportunity
                     seekers to attempting to exploit it.
          Example:
                     A drug to mitigate the effect of Alzheimer’s disease.




Chapter 2: concept                                    Technology Ventures: From Idea to Opportunity
                                                                                        BACHELOR OF
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          Types of Opportunity:
          Capability Push:
                     a new technology or capability causes a search for
                     new applications.
          Example:
                     Digital Television




Chapter 2: concept                                   Technology Ventures: From Idea to Opportunity
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Nine Categories of Opportunity:
      1. Increasing the value of a product or a service
      2. New applications of existing means or
  technologies
      3. Creating mass markets
      4. Customization for individuals
      5. Increasing reach
      6. Managing the supply chain
      7. Convergence of change
      8. Process innovation
      9. Increasing the scale of the firm



Chapter 2: Table 2.1               Technology Ventures: From Idea to Opportunity
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          The Attractiveness of an Opportunity:


                             w1Y  w2 I  w3W  w4 R  dt
                         N
          EA =       
                     0

          Where:
                             Y = income
                             I = independence
                             W = work effect
                             R = risk


 What did this mean to you when you read it?

Chapter 2: concept                                          Technology Ventures: From Idea to Opportunity
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          Evaluating an Opportunity: Sources of Discontinuities
          I. Society
                  Aging Society
                  Lifelong Education
                  Food and Population
                  Regulation
          II. Technology
                  Innovation
                  Disruptive Technologies
                  New Knowledge
          III. Markets
                  Deregulation
                  Supply Chain disruption




Chapter 2: Table 2.2                            Technology Ventures: From Idea to Opportunity
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Characteristics of                                                  Characteristics of
Entrepreneurial Teams                                               the Context
• Positive attitudes towards independence,                          • Timeliness
  achievement, and innovation                        100%           • Favorable industry conditions
• Acceptance of risk and demanding work effort                      • Future conditions appear favorable
• Capabilities matching the needs of the venture
• Willing to make the commitment required
• Passionate about the opportunity
                                                     50%




                            50%                                              100%
       100%                                          0%          50%



                                                                        Characteristics of
                                                                        the Opportunity
                                                     50%    • Novelty of the product
                                                            • Potential for sustainable long-term success
Resources                                                   • Potential for good return on investment
 • Capable of securing access to the                        • Potential for a growing market
human, financial, and physical                              • Good risk-versus-reward balance
resources required by the opportunity                       • Customers are known and responsive
                                                     100%


 Chapter 2: Figure 2.4 – Evaluating An Opportunity          Technology Ventures: From Idea to Opportunity
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  The Elements of a Business Concept Summary

  • Explain the problem or need and identify the customer.

  • Explain the proposed solution and the uniqueness of the solution.

  • Tell why the customer will pay for the solution.




Chapter 2: Table 2.14                            Technology Ventures: From Idea to Opportunity
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  The Elements of the Business Story

  Background
    Describe the current situation, the characters, and the
          problem.
  Challenge
    Describe the challenges and conflicts that impede a coherent
          plan to solve the problem.
  Resolution
    Portray a solution to the challenges and the problem and how
          the venture will succeed by resolving the problem.




Chapter 2: Table 2.15                        Technology Ventures: From Idea to Opportunity
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  The Elements of an Executive Summary

         1.   Business Concept: The problem and the solution
         2.   Market, Customer, and Industry
         3.   Marketing and Sales Strategy
         4.   Organization and Key Leaders
         5.   Financial Plan: Four years of summary results
         6.   Financing and Key Allies Required




Chapter 2: Table 2.17                             Technology Ventures: From Idea to Opportunity
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  Principle 2
     The capable entrepreneur knows how to identify, select, describe,
     and communicate an opportunity that has good potential to become
     a successful venture.




Chapter 2: Principle 2                       Technology Ventures: From Idea to Opportunity
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           Success in any enterprise requires the
           right product, methods, and workers,
           and each must complement the others.
                          Joseph Burger



  How do successful entrepreneurs create a compelling business
  design for their new ventures?




  To design a new business, the entrepreneur must cogently and clearly
  describe the customers and their needs and how the new venture will
  satisfy those needs. The entrepreneur must be able to explain the
  VALUE to the customer (not the company)!


Chapter 3: Summary                                  Technology Ventures: From Idea to Opportunity
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     Example of a vision for an innovative firm

          We strive to preserve and improve life through the innovation of
          biomedical devices while supporting, training, and inspiring our
          employees so that individual ability and creativity is released
          and rewarded. Our goal is to be a leader in the industry by
          2006 and be widely known throughout the world.



Chapter 3: Table 3.1                              Technology Ventures: From Idea to Opportunity
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     Elements of a vision

     Clarity:     Easily understood, focused.
     Consistency: Holds constant over a time period, but adjustable
                  as conditions warrant
     Uniqueness: Special to this organization
     Purposeful: Provides reason for being



Chapter 3: Table 3.1                          Technology Ventures: From Idea to Opportunity
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                                 A mission statement is a description of the
                                   course of action to implement the vision.


   Possible Elements of a mission statement

   • Core Values                                       • Competitive Advantage
   • Customers and/or Stakeholders                     • Values Provided to Customer
   • Products                                          • Markets or Industry


     Checkout the dilbert mission statement generator online




Chapter 3: Table 3.3 Elements of a Mission Statement          Technology Ventures: From Idea to Opportunity
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                 The Value Proposition defines the company
                   to the customer.

                     What types of value can can
                      company offer?



Chapter 3: Concept                               Technology Ventures: From Idea to Opportunity
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                       The Value Proposition defines the company
                         to the customer.
Five values offered to a customer
1. Product: Performance, quality, features, brand, selection,
               search, easy to use, safe
2. Price:      Fair, visible, consistent, and reasonable
3. Access:     Convenient, location, nearby, at-hand, easy to find,
               in a reasonable time
4. Service:    Ordering, delivery, return, check-out
5. Experience: Emotional, respect, ambiance, fun, intimacy,
               relationships, community




Chapter 3: Table 3.6                              Technology Ventures: From Idea to Opportunity
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           Example of a value proposition:
             Intel offers product as their primary value and
             service as their secondary value.

                     The Unique Selling Proposition is a short
                       version of firm’s value proposition.
                     Can you suggest some from the book?




                     Example:

                            Intel has a USP:

                            The best product with great service.

Chapter 3: concept                                 Technology Ventures: From Idea to Opportunity
             Elements of A Business Model
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      Customer Selection            Who is the customer?
                                     Is our offering relevant to this customer?

      Value Proposition             What are the unique benefits?

      Differentiation and Control   How do we protect our cash flow and
                                      relationships?
                                     Do we have a sustainable competitive advantage?

      Scope of Product and          What is the scope of our product activities?
       Activities                    What activities do we do and which are
                                      outsourced?
      Organizational Design         What is the organizational architecture of the
                                      firm?

      Value Capture for Profit      How does the firm capture some of the total value
                                      for profit?
                                     How does the firm protect this profitability?

      Value for Talent              Why will good people choose to work here?
                                     How will we leverage their talent?


Chapter 3: Table 3.8                                          Technology Ventures: From Idea to Opportunity
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Dell Computer Business Model

•     Customer Selection: High Relevance
      Four Segments: Corporate, Government, Education, Consumer.
•     Value Proposition: Unique Benefits
      A customized computer at a good price with great service readily accessible via phone
      or the Internet.
•     Differentiation and control: Sustainable competitive advantage
      Customized products via a direct sales channel on the phone or Internet with strong
      service and customer relationships.
•     Scope of Product and Activities
      Desktop, laptop, and servers.
      Strong supply chain management.
•     Organizational Design
      Divisional organization for each customer segment.
•     Value Capture for Profit
      Opportunities for cross-sell and up-sell. Avoid price as the key value and focus on
      service and accessibility.
•     Value for Talent: Learn, Grow, Prosper
      Training, Learning, and Career Opportunities.




Chapter 3: Table 3.9                                         Technology Ventures: From Idea to Opportunity
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Identify and State the Firm’s Core Competencies

Example:
        The core competency of Google is the design and operation of an
internet search engine.




Chapter 3                                    Technology Ventures: From Idea to Opportunity
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Competitive Advantage:
The competitive advantage of a firm is its distinctive factors that give it a
superior or favorable position in relation to its competitors.

A sustainable competitive advantage is a competitive advantage that
can be maintained over a period of time – hopefully, measured in years.




Chapter 3: concept                               Technology Ventures: From Idea to Opportunity
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The market value of a firm is:

             MV = CA x D
                          CA = competitive advantage
                          D = duration




Chapter 3: Market Value                                Technology Ventures: From Idea to Opportunity
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              Sources of Competitive Advantage
              Source                        Example
              Efficiency - Low Costs        Alcoa
              Product Innovation            Intel
              Quality - Reliability         Mercedes
              Customer Responsiveness       Dell
              Manufacturing Innovation      Toyota




Chapter 3: Table 3.11                     Technology Ventures: From Idea to Opportunity
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Principle 3

The vision, mission, and value proposition, and business model embodied
within the business design firm and powered by a sustainable
competitive advantage can lead to compelling results.




Chapter 3: Principle 3                       Technology Ventures: From Idea to Opportunity
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      VENTURE CHALLENGE

      1) Create a brief vision statement for your
      venture.
      2) State the value proposition for the venture.
      3) Create a draft business model for the venture
      using the elements of Table 3.8.
      4) What are your venture’s core competencies
      and competitive advantage?


Chapter 3: Venture Challenge          Technology Ventures: From Idea to Opportunity
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DVD Videos

“Don’t Write a Mission Statement, Write a Mantra”
           Guy Kawasaki (Garage Technology Ventures)
“Innovate in Technology and Business: The Founding of
Google”
           Larry Page (Google)



Chapter 3: DVD Videos                 Technology Ventures: From Idea to Opportunity

								
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