Technology Entrepreneurship - Short introductory course

Technology Entrepreneurship 20.04.-‐24.04.2015

teaching @ h;p://www.technikum-‐wien.at Short introductory course (including Business Model Canvas and Value

ProposiJon Design) MSc, Sergej Lugović, MBA Polytechnic of Zagreb, h#ps://twi#er.com/sergejlugovic

h#ps://www.linkedin.com/in/sergejlugovic h#p://www.slideshare.net/lugovicsergej

h#p://www.treasury.gov/about/educa<on/Pages/in-‐god-‐we-‐trust.aspx

•  “entrepreneurship is the process by which individuals pursue opportuniJes without regard to the resources they currently control”

•  proposed by HBS professor Howard Stevenson poin<ng that such a defini<on bridges the gap between “independent entrepreneurship” and “entrepreneurship within and exis<ng organiza<on”.

•  Professor Stevenson was a entrepreneur by himself in a way as he raised more then 440 M US$ for HBS in funding.

INC. ��

The 500, rujan, 2014 ��page 59

INC. ��The 500, rujan, 2014 ��page 78

INC. ��The 500, ��rujan, 2014 ��page 78





Preuzeto sa h#p://www.industrytap.com/the-‐industrial-‐internet-‐will-‐add-‐15-‐trillion-‐to-‐global-‐gdp-‐by-‐2030/2388

Preuzeto sa h#p://www.phibetaiota.net/2010/12/robert-‐garigue-‐the-‐next-‐long-‐wave-‐of-‐innova<on/

Preuzeto sa h#p://sloanreview.mit.edu/ar<cle/the-‐managers-‐guide-‐to-‐it-‐innova<on-‐waves/

h#p://ec.europa.eu/growth/smes/business-‐friendly-‐environment/performance-‐review/files/annual-‐report/infographics_en.pdf








Eric Reis (Lean start-‐up) “We are living through an unprecedented worldwide entrepreneurial renaissance, but this opportunity is laced with peril. Because we lack a coherent management paradigm for new innova7ve ventures, we’re throwing our excess capacity around with wild abandon. Despite this lack of rigor, we are finding some ways to make money, but for every success there are far too many failures: products pulled from shelves mere weeks a9er being launched, high-‐profile startups lauded in the press and forgo;en a few months later, and new products that wind up being used by nobody. What makes these failures parDcularly painful is not just the economic damage done to individual employees, companies, and investors; they are also a colossal waste of our civiliza7on’s most precious resource: the 7me, passion, and skill of its people.”

��

Extracts from��

Technology Entrepreneurship: ��Overview, DefiniJon, and DisJncJve

Aspects��Tony BaileW ��

Technology InnovaDon Management Review February 2012

BaileW, T. (2012). Technology entrepreneurship: overview, defini<on, and dis<nc<ve aspects. Technology InnovaDon Management Review, 2(2).


The technology entrepreneurship literature is dominated by a theme that focuses on iden7fying the antecedents (factors) of technology firm forma7on.


Another theme addresses the consequences of technology entrepreneurship. It focuses on how, why, and when technology entrepreneurship affects the socio-‐ economic development of a region.


Two other themes address what occurs inside small firms engaged in technology entrepreneurship and another theme focuses on the interdependence between small-‐firm ini7a7ves and the external infrastructure that contributes to science and technology advances.


The technology entrepreneurship literature has focused more on small technology firms than mid-‐sized and large firms. Scholarly work on technology entrepreneurship has not contributed substanDally to other fields such as economics, entrepreneurship, or management. BaileW, T. (2012). Technology entrepreneurship: overview, defini<on, and dis<nc<ve aspects. Technology

InnovaDon Management Review, 2(2).


Definitions

Organiza<on, management, and risk bearing of a technology based business (Nicholas and Armstrong; 2003; <nyurl.com/7tv9pdq) **************************************** Solu<ons in search of problems (Venkataraman and Sarasvathy, 2000; <nyurl.com/7ufaes4)


Establishment of a new technology venture (Jones-‐ Evans, 1995; <nyurl.com/7vfgww7) *************************************** Ways in which entrepreneurs draw on resources and structures to exploit emerging technology opportuni<es (Liu et al., 2005; <nyurl.com/6mgecu8)


Joint efforts to interpret ambiguous data, joint understanding to sustain technology efforts, and persistent, coordinated endeavor to accomplish technological change (Jelinek, 1996; <nyurl.com/783jc4n) *************************************** An agency that is distributed across different kinds of actors, each of which becomes involved with a technology and, in the process, generates inputs that result in the transforma<on of an emerging technological path (Garud and Karnøe, 2003; <nyurl.com/6pdm8bn)


New one proposed by Tony BaileW

Technology entrepreneurship is an investment in a project that assembles and deploys specialized individuals and heterogeneous assets that are intricately related (complex relaDonship) to advances in scienDfic and technological knowledge for the purpose of creaDng and capturing value for a firm.


Four elements of defini<on 1. UlJmate outcomes. Value crea<on and capture are iden<fied as two outcomes of technology entrepreneurship because the sources that create value and the sources that capture value may not be the same over the long run. 2. Target of the ulJmate outcomes. The firm is iden<fied as the target organiza<on for which value is created and captured. 3. Mechanism used to deliver the ulJmate outcomes. Investment in a project is the mechanism mobilized to create and capture value. A project is a stock of resources (i.e., specialized individuals and heterogeneous assets) commi#ed to deliver the two ul<mate outcome types for a period of <me. 4. Interdependence of this mechanism with scienJfic and technological advances. The individuals involved in a project influence and are influenced by advances in relevant scien<fic and technology knowledge. The project exploits or explores scien<fic and technology knowledge. External and internal individuals and organiza<ons co-‐produce the project’s outputs.


so defini<on proposed above: ...

Emphasizes that technology entrepreneurship is about crea<ng and capturing value for the firm through projects that combine specialists and assets to produce and adopt technology


Highlights the collabora<ve experimenta<on and produc<on of new products, new assets, and their a#ributes, which are intricately (complex) linked to scien<fic and technology advances and the firm’s asset ownership rights


Specifies that technology entrepreneurship may entail projects that search for problems or applica<ons for a par<cular technology, launch new ventures, introduce new applica<ons, and exploit opportuni<es that rely on scien<fic and technical knowledge provided that their ul<mate outcome is to create and capture value for the firm


Clarifies that technology entrepreneurship is not about the general management prac<ces used to operate small businesses owned by engineers or scien<sts or just about small businesses


Technology Ventures book •  Technology entrepreneurship is about crea<on of the venture that

capitalize on technological changes and that will have a significant impact.

•  It’s more about radical or transforming innova<on then new regula<on or restructuring of business processes.

•  By being radical and employing transforming innova<on into real life, may provide the entrepreneur with an important opportunity to make a produc<ve and significant contribu<on to the world, as we know it.

•  Entrepreneurs iden<fy and select opportuni<es that match their skills and interests they acquire and mobilize financial, physical and human resources; and they start and grow organiza<ons, cognizant of their broader context.

•  Entrepreneurs are mul<talented individuals who leverage their capabili<es and interests to pursue a par<cular opportunity, almost always with the help of a team.

Spiegel, M., & Marxt, C. (2011, December). Defining Technology Entrepreneurship. In Industrial Engineering and Engineering Management (IEEM), 2011 IEEE InternaDonal Conference on (pp. 1623-‐1627). IEEE.

•  Shane and Venkataraman stated that the arDcles examine “the process by which entrepreneurs assemble organizaDonal resources and technical systems, and the strategies used by entrepreneurial firms to pursue opportuniDes”


Phan described in the Journal of Business Venturing (2004) that “TE research occurs at many levels of analyses. At the individual level, the focus is on scien<st/entrepreneurs, venture capitalists, and other individuals that ini<ate and drive technological innova<on. At the organiza<onal level, the research is on the technological teams, structures, processes, and interorganiza<onal linkages that impact value crea<on. At the systems level, it is about the resources exchanged among different players in the ecology of value crea<on, which includes governing factors such as government technology and compe<<on policy, industry standards, and the economics of geographical loca<ons. The research is thus necessarily interdisciplinary and mul<level.”


Defining Technology Entrepreneurship Spiegel & Marxt

•  Technology Entrepreneurship inves<gates all ques<ons related to the successful forma<on, exploita<on and renewal of products, services and processes in technology-‐oriented firms. To do so researchers in TE apply different perspec<ves and levels of granularity to inves<gate the ques<on, how technology-‐oriented companies can build, sustain or expand their compe<<ve posi<on in an ever-‐changing environment. This includes new technology-‐based firms (NTBF’s) as well as incumbent technology-‐based firms (ITBF’s).


Entrepreneurship According To Drucker: Your 12 Keys To Success – Part 1

•  Those who perform love what they’re doing •  Successful entrepreneurs do not wait un7l “the Muse kisses them” and gives them a bright idea; they go to work

•  What is our business? •  Who is the customer? •  Neither studies nor market research nor computer modeling is a subs7tute for the test of reality

•  Measure innova7ons by what they contribute to market and customer h#p://www.forbes.com/sites/ericwagner/2013/05/07/entrepreneurship-‐according-‐to-‐drucker-‐your-‐12-‐keys-‐to-‐

success/ 02.05.2015

Entrepreneurship According To Drucker: Your 12 Keys To Success – Part 2

•  O9en a prescrip7on drug designed for a specific ailment ends up being used for some other quite different ailment

•  Innova7ve ideas are like frogs’ eggs: of a thousand hatched, only one or two survive to maturity

•  All one has to do is learn to say ‘no’ if an ac7vity contributes nothing

•  In the Next Society’s corpora7on, top management will be the company. Everything else can be outsourced

•  Most of the people who persist in the wilderness leave nothing behind but bleached bones

•  Finding and realizing the poten7al of a business is psychologically difficult

h#p://www.forbes.com/sites/ericwagner/2013/05/07/entrepreneurship-‐according-‐to-‐drucker-‐your-‐12-‐keys-‐to-‐success/ 02.05.2015

Rayport, J. F., & Sviokla, J. J. (1995). ExploiJng the virtual value chain. Harvard business review, 73(6), 75.

Blank, S. (2013). Why the lean start-‐up changes everything. Harvard Business Review, 91(5), 63-‐72.

What lean Start-‐ups Do Differently

Blank, S. (2013). Why the lean start-‐up changes everything. Harvard Business Review, 91(5), 63-‐72.

Quick, Responsive Development

Blank, S. (2013). Why the lean start-‐up changes

everything. Harvard Business Review, 91(5),

63-‐72.

Disciplined Entrepreneurship •  Formulate a Working Hypothesis

•  Assemble Resources •  Design and Run Experiments

the model can help entrepreneurs structure their thinking about managing the uncertainty inherent in trying

something new

Disciplined Entrepreneurship Magazine: Fall 2004 • Research Feature • October 15, 2004 • Donald N. Sull

A working hypothesis will contain implicit and explicit assump<ons about mul<ple variables — including technology, customer demand, compe<<ve response and the availability of resources — each of which is uncertain. KEEP IT FLUID BE SURE YOU HAVE THE RIGHT TO AN OPINION IDENTIFY DEAL KILLERS AND BIG BETS

Lugović, S., & Špiranec, S. (2013). Muta<on of Capital in the Informa<on Age: Insights from the Music Industry. The Future of InformaDon Sciences.

IHOP

Idea – Hypothesis – Opportunity -‐ Problem Market driven Technology driven

Create Value Capture Value

Business Model Canvas

Extracted from h#p://www.businessmodelgenera<on.com/downloads/businessmodelgenera<on_preview.pdf

The 9 Building Blocks



Different types of Customer Segments

•  Mass market •  Niche market •  Segmented •  Diversified •  MulJ-‐sided plajorms (or mulJ-‐sided markets)



Value could be created by:

•  Newness -‐ sa<sfy an en<rely new set of needs that customers previously didn’t perceive because there was no similar offering

•  Performance -‐ Improving product or service performance

•  CustomizaJon -‐ tailoring products and services to the specific needs of individual customers or customer segments





Categories of Customer RelaJonship

•  Personal assistance •  Dedicated personal assistance •  Self-‐service •  Automated services •  CommuniJes •  Co-‐creaJon



Types of revenue streams

•  Asset sale •  Usage fee •  SubscripJon fees •  Lending/RenJng/Leasing •  Licensing •  Brokerage fees •  AdverJsing




Types of Resoures •  Physical •  Intellectual •  Human •  Financial



Key Categories of Activities •  ProducJon - relate to designing, making, and delivering a product

•  Problem solving - coming up with new solu<ons to individual customer problems.

•  Plajorm/network - relate to plaworm management, service provisioning, and plaworm promo<on.



MoJvaJons for creaJng partnerships

•  OpJmizaJon and economy of scale -‐ formed to reduce costs, and oxen involve outsourcing or sharing infrastructure.

•  ReducJon of risk and uncertainty -‐ can help reduce risk in a compe<<ve environment characterized by uncertainty (compe<tors to form a strategic alliance in one area while compe<ng in another)

•  AcquisiJon of parJcular resources and acJviJes -‐ by relying on other firms to furnish par<cular resources or perform certain ac<vi<es



Costs work out •  Cost or Value Driven

–  Cost-‐driven business models focus on minimizing costs wherever possible

–  less concerned with the cost implica<ons of a par<cular business model design, and instead focus on value crea<on

•  Cost Structures –  Fixed costs -‐ remain the same despite the volume of goods or services produced

–  Variable costs -‐ vary propor<onally with the volume of goods or services produced

–  Economies of scale – increase output –  Economies of scope – increase scope


Apple iPod/iTunes Business Model



Positioning Value Proposition Design

extracted from h#ps://strategyzer.com/value-‐proposi<on-‐design

The Value Proposi<on Canvas has two sides. Customer Profile - clarify your customer understanding. Value Map - describe how you intend to create value for that customer. Fit between the two when one meets the other.



Customer Jobs •  FuncJonal jobs -‐ perform or complete a specific task or solve a specific problem

•  Social jobs -‐ describe how customers want to be perceived by others

•  Personal/emoJonal jobs -‐ specific emo<onal state

•  SupporJng jobs -‐ purchasing and consuming value (buyer creator or transfer of value)

•  Job context -‐ depend on the specific context in which they are performed. The context may impose certain constraints or limita<ons.


Customer Pains

•  Undesired outcomes, problems, and characterisJcs -‐ funcJonal (e.g., a solu<on doesn’t work, doesn’t work well, or has nega<ve side effects), social (“I look bad doing this”), emoJonal (“I feel bad every <me I do this”), or ancillary (supporJng) (“It’s annoying to go to the store for this”).

•  Obstacles -‐ prevent customers from even geWng started with a job or that slow them down

•  Risks (undesired potenJal outcomes) -‐ What could go wrong and have important nega<ve consequences


Customer Gains

•  Required gains -‐ gains without which a solu<on wouldn’t work

•  Expected gains -‐ basic gains that we expect from a solu<on, even if it could work without them

•  Desired gains -‐ gains that go beyond what we expect from a solu<on but would love to have if we could

•  Unexpected gains -‐ gains that go beyond customer expecta<ons and desires.



Products and Services

•  Physical/tangible - Goods, such as manufactured products.

•  Intangible - Products such as copyrights or services such as axer-‐sales assistance.

•  Digital -Products such as music downloads or services such as online recommenda<ons.

•  Financial - Products such as investment funds and insurances or services such as the financing of a purchase.


Pain Relievers

•  Pain relievers describe how exactly your products and services alleviate specific customer pains. They explicitly outline how you intend to eliminate or reduce some of the things that annoy your customers before, during, or axer they are trying to complete a job or that prevent them from doing so.


Gain Creators

•  Gain Creators describe how your products and services create customer gains. They explicitly outline how you intend to produce outcomes and benefits that your customer expects, desires, or would be surprised by, including func<onal u<lity, social gains, posi<ve emo<ons, and cost savings.


Fit You achieve fit when customers get excited about your value proposi<on, which happens when you address important jobs, alleviate extreme pains, and create essen<al gains that customers care about. As we will explain throughout this book, Fit is hard to find and maintain. Striving for fit is the essence of value proposi<on design.


Gains

Jobs

Pains

Product and Services

Gain Creators

Pain Relievers

The Value ProposiJon Canvas
