MGMT 554 Essential Skills in New Venture Management Week 2 Dr. Young

MGMT 554Essential Skills in New Venture Management

Week 2

Dr. Young

MGMT 554Essential Skills in NVM

Entrepreneur and Enterpriser as change agents in new businesses or other organizations

Enterprisers:Enact change in any circumstance

Generalizablility of skills and abilities


We know that new businesses create jobs, create individual wealth, create innovation, increase overall philanthropy, etc.

Most businesses are small businesses (G & B)82% report sales less than $100,00085% employ less than 20 people

Given these facts, explain why large business dominant in economic impact

Largest 9% of US corporations control 97% of all corporate assets


Small businesses are the typical start for innovation and expansion into large and/or high-growth firms:

E.g., Amazon, Apple, Cisco, eBay, Microsoft, Oracle and others (see Exhibit 1.1)

Presuming that these business bring value to the economy and society, what other benefits does small business growth provide? Link life cycle to value, does this change your answer?


Give an example of blind variation and intentional variation.

What insights might these concepts hold for entrepreneurs or enterprisers?

Are these concepts relevant only for the emergence stage of a start-up?

Products/services often come from work toward something

But the result may not have been the original idea or purpose

Wife of scientist working on temperature resistant covers for rail trains…

Bell working on transmitter…

Several inventors working on concept…Edison worked from purchased patent some say…

Meant to develop new adhesive, but didn’t become solid enough…

colleague used it for personal use…

PC technology turned down by Hewlett-Packard, IBM and others…

Bette Graham developed a tempera paint to cover mistakes (1940’s) and called it “Mistake Out”…IBM rejected purchase opportunity…Gillette bought the co. in 1975 for $47.5 m…

A tonic from coca leaves created by Dr. Pemberton…mistakenly carbonated?...

An original attempt at a chocolate biscuit…


Which of Microsoft’s decisions were blind, which were intentional?


Kawasaki – Chapter 1

Make meaning – it’s your life

Make mantra – constant thoughts (don’t forget the visuals)

Get going – thinking realistically and concretely -- prototype



Prototyping is particularly important:

The business you plan may not be the business that is enacted or accepted by customers (link this to blind or intentional variation, G&B)



Gartner & Bellamy - Chapter 1

Think about a business and its main product or service.

Who are the stakeholders?

How might each stakeholder group define excellence?


Kawasaki

Think about your business in terms of needs and serving others – e.g. what you find important, what the world needs, etc.

You can make money any number of ways, but you can’t find daily fulfillment in the same number of ways


Can you do what you love, take full ownership, implement your ideas, and have potential for great wealth in any organization?

New ventures are attractive to many people across ethnicities, gender, ages…for a variety of reasons


Salary.com survey of small business compensation:

Average base salary approximately $141,000 to $395,000This survey includes CEO of small and medium-sized business and business owners

Forbes and other sources (c.g., executive pay watch www.aflcio.org/paywatch) report CEO’s of 500 largest corporations earn, on average, millions annually


Example – Society is changing, what do people need?

SSPDirect.com – 2003Mother/daughter team Myrna and Risa Arin

Sell computer hardware that helps seniors use technology (e.g., magnified screens, big keys, etc.)

From: Entrepreneur, May 2006


Example – I’m really good at it

Facebook – 2004, Mark Zuckerberg, a Harvard student (21) programming since the sixth grade

Developed online technology for students to use to share all types of information (pictures, profiles, etc). Now available on 2100 college campuses and 22,000 High Schools in the U.S.

From: Entrepreneur, June 2006


Example – I can do this better or different than my employer (and they won’t listen to me)

Kayak.com – 2004, Steve Hafner and Paul English

Steve Hafner was VP at Orbitz

Travel search engine (search only, no products), sells advertising space



Example – A huge part of the market is not being served

ColorsNW – 2001, Robert Jeffrey, Jr.

Regional (Northwest) magazine on multiculturalism. Sales projected to be $1.2 million in 2006.



Example – Those losers fired me

Bark Busters Franchise – 2004, Christie Price (54)

Former marketing executive dealt with unexpected layoffs by starting over



Example – I like it (it’s important to me)

OrganicBouquet.com– 2001, Gerald Prolman (46)

Has 27 years experience in natural/organic products industry.

Wanted socially and environmentally sound change. Online organic flowers. Pays growers a premium but competitively priced due to low marketing costs.

From: Entrepreneur, May 2006


What you know +

What you like +

What people need +

What people like +

… = Success


Get into pairs or groups of 3 people.

Take something that one of you has with you and brainstorm on how to improve the item to meet a need or better serve people.


Kawasaki

Define your business model – the process of how your business works from obtaining raw materials to reaching your customers.

Draw a business model for a local business you frequent.


Kawasaki - Weave a MAT

Milestone: broad objective such as “reach breakeven” or “finalize product specifications”

Assumptions: list those things that you don’t know (with data) but guess/hope/assume

Tasks: make a to-do list and do it


Kawasaki

When you get going:

-Think Big

-Find soulmates

-Polarize people (take a side, approach)

-Use prototype as market research



Positioning

1. Why did you start the business

2. Why should customers use your product

3. Why should people want to work with you


Kawasaki -

Be inspiring and energizingKeep statements positiveStay customer focused (vs. organization focused)

–We want to provide you with… vs.

–We want to be a market leader in…

Remember to “market to your employees”


Kawasaki

Some notes about the reading:

Not academic, see author’s background

Be careful who you get feedback from in the beginning


Most authors agree that understanding self and defining goals are important to success

Disposition, cognition, (Gartner & Bellamy) affect, etc. interact to drive enterprisers


What interesting points have you found from your article research?


For next time:

Read and understand the assigned readings

Work on the self-assessment packet by completing parts 1 and 2

Get your article summary together for next week if you didn’t present today

Documents

MGMT 554 Essential Skills in New Venture Management Week 2 Dr. Young