UNI -100

Basics of EntrepreneurshipDemetris C. HadjisofocliManaging Director, Helix Business Incubator, Ltd.Director, Liaison Office University of NicosiaCoordinated Induction of Entrepreneurship Education in Schools

March 31, 201415:00 – 18:00

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Entrepreneurship & Car Paradigm Common: Wheel, Tires, Body, Engine

Definition - Systemic Entrepreneurship®______________________________________ Systemic Entrepreneurship® is a holistic approach to

entrepreneurship execution were the stakeholder environment allows the user to use general frameworks and principles in a modular way during the development of business leaders, business models, monetization strategies and while the corporate strategic objectives are met, to ensure that the end target of Economic, Political, Social, Legal, Environmental equality across the societal graph is reached.

Example of Systemic Entrepreneurship Developing agribusinesses in rural Africa, that strives to empower individuals

and communities It operates in several African countries. Researchers have introduced a system of vegetable

production that combines conventional farming with hydroponic technologies for healthy and high value crop cultivation

In partnership with the Sun International hotel group, a vegetable production network has been established, allowing local groups of farmers to produce vegetables for sale to top hotels serving the international tourism market This has led to the emergence of agri-entrepreneurs, and overall, the farmers benefiting

earned income of $1million annually since 2006. Beneficiaries include vulnerable groups like homeless, the visually disabled, widows and orphans

These are examples of the kind of systemic entrepreneurship that are needed. It takes a social problem and utilizes knowledge transfer to come up with a solution that is not about economic growth per se, but about human development

Definition - Social Entrepreneurship __________________________________ Social entrepreneurship is the process of pursuing suitable solutions

to social problems. More specifically, social entrepreneurs adopt a mission to create and sustain social value. They pursue opportunities to serve this mission, while continuously adapting and learning.

Possible Social Problems Unemployment among youth Poverty Civil Unrest Recession Closure of large number of SMEs

Productive Entrepreneurship

What is (Social) Entrepreneurship Social entrepreneurship is the process of pursuing suitable solutions

to social problems. More specifically, social entrepreneurs adopt a mission to create and sustain social value. They pursue opportunities to serve this mission, while continuously adapting and learning.

Possible Social Problems Unemployment among youth Poverty Civil Unrest Recession Closure of large number of SMEs Unproductive Entrepreneurship

Socially Productive Entrepreneurial Activities

Entrepreneurship_______________________________ Entrepreneurship is an agent of creative distraction

Individuals NOT Corporations are the driving force

Small agile companies as opposed to traditionally large companies

Knowledge intensive

Needs Policy shifts

What is the contribution to systemic societal development _________________________________

Entrepreneurship focuses Solely on economic growth Blind focus on straight forward monetization contributes to

scorch earth business models, business strategies, business systems

How does society as a whole contributes to the development of responsible business leadersEducationCultureValues discussion Ethics (not just business ethics but ethics in general)

What do we need Entrepreneurship to address?______________________________________ How do we address the issue of social and financial equality?

Society and quality of life should move forward in unison; not necessarily at the same level but in unison

The gap between social groups at worst should remain the same, but we should strive to shrink it (capitalism needs free willing customers)

Disparities, inequalities Entrepreneurship that brings economic justice, equality, environmental

sustenance Economic, Political, Social, Legal, Cultural, Technological, Environmental

Perspective social, economic, political, religious considerations Correlation between Entrepreneurship and Development

How is it to have an Idea and Start a Business?

What is the journey like?

Brainstorming

Perceptions

Realities

Key Steps Why is a product/service necessary?

What are the objectives for setting up a Company?

Formulate a basic idea and organize a brainstorming session

Research the needs/opportunities and set up a framework

Map how the company will operate and how it will benefit the stakeholders

Define Business Model and Business Structure

Key Steps Get support (talk about the idea)

Develop an executive summary and find someone who can help with building initial strategies/basic planning

Identify the resources needed and the resources available

Think about both Operational and Tactical Planning

Key Success Factors

The Planning, Tactical, and Strategic Vision should be globalized

Learn from others’ experiences but….. There isn’t a One Model Fits All approach Don’t build a business just for the sake of building

one– Cost/Revenue Planning is Vital– Don’t do it for non value added reasons– Have sustainability planning (running out of

money is the biggest problem that kills even great ideas)

Key Success Factors

Be honest when setting and communicating expectations

Continual internal evaluation with consideration of external factors

Continual communication with stakeholders

Be willing to pivot

What is Entrepreneurship Drive

The ability to identify new ideas

Passion, determination and the drive to try them out

Willingness to listen and learn

Have the character to know when it is time to pivot to a better version…

Characteristics of Entrepreneurship

InnovationCreativityScientific CuriosityCollaborationForward Looking

But Methodology to Success Can differ….

FOOTBALL

One Ball Tool

Same Objective Success

Different Approaches

What is a startup?

Usually it goes like…

Brother…. Whoa…. I have this idea that is Kick Ass…. If we build it everyone is gonna want it …. We made it!

And often seems to end like …..

GOOGLE, YAHOO, FACEBOOK…..

BUT, GUESS WHAT?

The reality is……

Nothing works Run out of money Nobody wants to buy Someone else did it Don’t have more time to work on this So and so on the team doesn’t do his share of

work

“”

94 out of 100 die…

STARTUPS ARE REALLY HARD AND THERE IS NO SECRET INGREDIENT THAT WILL HELP YOU TO SUCCEED

A good definition of startup

“A human institution designed to deliver a new product or service under conditions of extreme uncertainty”

Eric Ries

What are some of the Ingredients

VISION

MISSION

Vision

What is it gonna be?

So why we do our thing?

Vision

When Chester Carlson invented a way to make copies of paper docs IBM laughed at him

Then Xerox created copy machines and today “to Xerox” is a verb

Characteristics of a good Vision

Short

Easy to understand

Implemented quite fast (< 2-3 yrs)

Long lasting (decades)

Mission

What we do?

For whom?

MissionWang Laboratories

3 Billions in revenue in the 80sWord processing computers

Failed

Didn’t foresee general purpose computers

Startups

Everything but an exact science

“Don’t worry about failure you only have to be right once”

- Drew Houston

Most Successful entrepreneurs failed on average 6 times before getting some traction

Startup Myths

It Costs nothing to build

Get funded with some nice slides and a lot of passion

It’s all about the idea

Founders are all cool hippie college dropouts

Myth 1Start Ups are cheap

Lean or not, building something meaningful costs money and at some point savings run out

Funding Channels

Personal, Friends, FamilyIdea CompetitionsIn Kind SupportIncubators/AcceleratorsAngel InvestorsAgency FundingAngel/Small InvestorsVenture FundingBanks/Other Financial Institutions

Plan well ahead of when you need it, Otherwise you will be killed!

Myth 2“WOW them with your presentation and you’ll get money”

You are already underestimating the number of times you will be rejected and how long it will take you to raise some funds

Myth 3“The idea makes the difference” Ideas are easy – Implementation is hard

A great idea with:a great executiona great timinga great teamgreat perseverance

Maybe

Myth 4“A startupper is a cool hippie college dropout”

Profile of the average founder:

40yrs oldMarried with Children6-10 yrs work experienceBachelors or higher

How to make it?

Find your product/market fit before you run out of money

THAT’S IT

Solve a Problem

Start Up is not a linear path

Was everything you think you knew about your product and market wrong?

What if…

RJReynolds

Burned $450.000.000 to develop smokeless cigarettes but...

………. Smokers didn’t give a f**k about smoke … at that time

WebVan

Grocery home delivery Within a 30-min window

Time chosen by the customer but..

Didn’t consider that many working customers would like their groceries delivered at home and at night

They built the wrong capacity for the wrong time

WebVan

Burned $800.000.000

CNET named it the largest dot-com flop in history

Motorola

Burned $5.000.000.000 For satellite-based phone system that nobody wanted

Critical Point

You don’t invent product/service

You solve problems

Setup the right goals

How good/thorough do you know customer’s needs?

Does your product/service solve that need?

How much are they willing to pay for your solution?

How much is this problem a priority to the customer?

Does it solve a significant problem?

Customer Discovery Who can be the customers?

TargetProfile

Can they afford the product/service?

Can they access it?LocationLegalWeather

Go through the process

You’ll get plenty of doubt: Analyze data

It’s all about speed and control

Customer Segments

The People & Organizations targeted by the company

For whom are we creating value?

Who are our most important customers?

Not all customers are created equal

Value proposition Services and products that provide value to customer segments

Product Satisfies a new need/creates a needSolves a problemOffers better performanceIs more customizedCosts lessHas a better design

KNOW Numbers KNOW Markets WHAT is the Monetization of the Solution Who is the TEAM

Channels How does company reach customers to tell them about

value proposition?

Through which Channels Customer Segments can/want to be reached?

How are Channels integrated?Which ones work best?Which ones are most cost-efficient?How are Channels integrated with customer

habits/routines?

Customer Relationships

Types of relationships established between the company and customer segments

What types of relationships does the company have with customers?Direct or relying on othersCustomer facingLoyalty Schemes

Revenue Streams

Represents the income of the company for every customer segment

For what value are customers willing to pay?For what value do they currently pay? If they do!How are they currently paying?How would they prefer to pay?How much does each stream contribute to overall

revenue?

Key Resources Strategic assets that the company need to maintain its

business model

What Key Resources does the… Value Propositions require to be delivered?Distribution Channels?Customer Relationships?Revenue Streams?

Resources type: Physical, Intellectual, Human, Financial

Key Activities Strategic activities to deliver the value proposition, reach customers

and nurture relationships

What Key Activities does theValue Propositions require?Distribution Channels?Customer Relationships?Revenue streams?

Types of Key Activities: Production, Problem Solving, Platform/Network

Key Partners Define contractors and partners that are supporters/critics for

company’s business model

Who are the Key Partners?

Who are the key suppliers?

Which Key Resources is the company acquiring from partners?

Which Key Activities do partners perform?

Cost Structure

What are all the costs required for the company in order to have its business model up and running

What are the most important costs inherent in the business model?

Which Key Resources are most expensive?Which Key Activities are most expensive?Cash Flow is KingCost Rationalization? Why this/that Expense? How

does it Contribute?

Funding - Due Diligence____________________________________ The process through which investments are decided Detailed, Broad, Deep Has some fixed elements Has some local elements Need expertise to perform It is important and critical to the success of an

investor but it should not delay the process

Ideas will fail for sure; better chances are 2 in 50

Team____________________________________ Not everyone can become an Entrepreneur but

ALMOST everyone can be Enterprising ………..Teams that have GREAT Technologists Engineers Operations Legal

Individuals who are Agile and Flexible If someone is not an Entrepreneur but has those

qualities, put a GREAT Entrepreneur on their team Know what the team does not know – No Ego!

Position for Success____________________________________

KNOW A PITCHING EAR …. Not all money is created (or given) equally Not all investment people have the same philosophy,

psychology, interests, knowhow.. Not all cultures/ecosystems are the same

A pitching angle Tech, Business Model, Operations, Monetization…. ADJUST IT

Value Proposition_______________________________________

KNOW Numbers

KNOW Markets

WHAT is the Problem to be Solved

WHAT is the Monetization of the Solution

HAVE a TEAM

Tool Box – Major Points____________________________________ To the point Business Plan; Executive Summary (short & sweet) Only the “justified & confirmed” Facts; no blah blah!!! Sustainable Competitive Advantage Know your business inside-out Know what you don’t know

Avoid Tunnel Vision Syndrome Confirm the viability of your idea

Know and Respect your competition Think & Plan 2 steps ahead (market trends) Team with Chemistry & Know-How; Build a balanced team-gene pool Assess & know your cost Sales pipeline

Tool Box – Use of Funds!___________________________________

Why do you need the money? How will the money be used? Legitimate reasons

Grow Sales Product Development Marketing Recruiting Training Infrastructure

Tool Box – Transparency___________________________________

What are the controls which guarantee legitimate use of funds?

Established Audit processes

Weekly/Monthly reports

Knowledgeable/Functional Board of Directors

“”

YOUR TURN

Ask yourself

What are the emerging trends I notice?Am I willing to put the time and effort?Am I ready for sleepless nights and hardworking

days?Am I willing to Work hard, Learn, Listen, Kill ego?Do I have the support of people I care about?

What is your personality?

Critical to understand personal traits because certain characteristics fit certain jobsExtrovert / IntrovertFighter / Go getter / QuietLerner/Listener/Know it all

Know your strengths and weaknesses

Business Idea

Needs that will be satisfiedProblems to be solvedWho will buy? Customers? Target?Competitive differentiation

Team Engineer Developer General Business/Finance Marketing Lawyer Leader (could be one of the above) Interact, Share, Listen, Respect, Embrace, Never Walk

Alone

Have a Network

FamilySupportersKnowledge TransferExperience CouriersMarket ExpertsCoaches/MentorsFailure OwnersFile contact information

Rationalization

Think Logically and consider the factsNo Feelings or Intuition or Someone told meBe CreativeLook at the +’s

Ideation

Identify a Group or Problem you want to solve

How does your group behave? Where does it frequent?

Describe the activities of the groupWhat kind of problems/difficulties could they

have?What are the possible solutions

How are Ideas born?

Are they easy? Do they just come to us? Once we have the idea, is it easy to get to the

market? Set the right expectations It’s about passion, planning, hard work, commitment,

the overall environment, the team, the resources, perseverance

Tnx 4

UR Patience!

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