ES038 PART 1 REVIEW

UNDERSTANDING CUSTOMER PROBLEMS

 ENTREPRENEUR VS ENTREPRENEURSHIP

ENTREPRENEUR
PROS CONS

▸ competitive advantage ▸ destroy rms and jobs

▸ products and services

▸ rms

▸ industries

▸ jobs

▸ wealth
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ENTREPRENEUR VS ENTREPRENEURSHIP

ENTREPRENEURSHIP

“ Small and large rms focusing on pro t and social enterprises seeking to
generate broader social and environmental bene ts, in the formal and
informal economy.”
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TWO DISTINCT TYPES OF ENTREPRENEURSHIP

SME VS IDE

Small and Medium Enterprise (SME) Innovation Driven Enterprise (IDE)

Focus on addressing local and regional markets only Focus on global/regional markets.

The company is based on some sort of innovation (tech,

Innovation is not necessary to SME establishment and
business process, model) and potential competitive
growth, nor is competitive advantage.
advantage.
“Non-tradable jobs”—jobs generally performed locally “Tradable jobs”—jobs that do not have to be performed
(e.g., restaurants, dry cleaners, and service industry). locally.

Most often family businesses or businesses with very little More diverse ownership base including a wide array of
external capital. external capital providers.
TWO DISTINCT TYPES OF ENTREPRENEURSHIP

SME VS IDE
continued…
The company typically grows at a linear rate. When The company starts by losing money, but if successful
you put money into the company, the system will have exponential growth. Requires investment.
(revenue, cash ow, jobs, etc.) will respond quickly in When you put money into the company, the revenue/
a positive manner. cash ow/jobs numbers do not respond quickly.
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OUR FOCUS

ES038 IS ABOUT

Innovation-Driven Enterprise (IDE)

TECHNOPRENEUSHIP

INNOVATOR VS INNOVATION

WHAT IS INNOVATION?

INNOVATION = INVENTION * COMMERCIALIZATION

INNOVATION VS INNOVATOR

WHAT MAKES A SUCCESSFUL INNOVATOR?

FACTORS THAT EMBARK ENTREPRENEURIAL CARRIER

PERSONAL FACTORS (10 DS)

Entrepreneurs have a vision of what the future could be like for them and their businesses. And, more important, they
Dream
have the ability to implement their dreams.
Decisiveness They don’t procrastinate. They make decisions swiftly. Their swiftness is a key factor in their success.

Doers Once they decide on a course of action, they implement it as quickly as possible.
They implement their ventures with total commitment. They seldom give up, even when confronted by obstacles that
Determination
seem insurmountable.
They are totally dedicated to their businesses, sometimes at considerable cost to their relationships with friends and
Dedication
families. They work tirelessly. Twelve-hour days and seven-day workweeks are not uncommon when an entrepreneur
Entrepreneurs love what they do. It is that love that sustains them when the going gets tough. And it is love of their
Devotion
product or service that makes them so effective at selling it.
It is said that the devil resides in the details. That is never more true than in starting and growing a business. The
Details
entrepreneur must be on top of the critical details.
Destiny They want to be in charge of their own destiny rather than dependent on an employer.
Getting rich is not the prime motivator of entrepreneurs. Money is more a measure of success. Entrepreneurs assume
Dollars
that if they are successful they will be rewarded.
Entrepreneurs distribute the ownership of their businesses with key employees who are critical to the success of the
Distribute
business.
FACTORS THAT EMBARK ENTREPRENEURIAL CARRIER

ENVIRONMENTAL AND SOCIOLOGICAL FACTORS

▸ Nurturing environment to facilitate the process

▸ Venture capitalist venture capitalists who understand how to select and nurture high-tech
entrepreneurs, bankers who specialize in lending to them, lawyers who understand the
importance of intellectual property and how to protect it, landlords who are experienced
in renting real estate to edgling companies, suppliers who are willing to sell goods on
credit to companies with no credit history, and even politicians who are supportive.

▸ Knowing successful entrepreneurs at work or in your personal life makes becoming one
yourself seem much more achievable

▸ Trade-off between the experience that comes with age and the optimism and energy of
youth. Perfect combo - a beginner’s mind with the experience of an industry veteran.
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FACTORS THAT EMBARK ENTREPRENEURIAL CARRIER

ENTREPRENEURAL PROCESS
INGREDIENTS OF A SUCCESSFUL NEW BUSINESS

9 FS + 1
Founders Every startup company must have a rst-class entrepreneur.

Focused Entrepreneurial companies focus on niche markets. They specialize.

Fast They make decisions quickly and implement them swiftly.

Flexible They keep an open mind. They respond to change.

Forever-innovating They are tireless innovators.

Flat Entrepreneurial organizations have as few layers of management as possible.

Frugal By keeping overhead low and productivity high, entrepreneurial companies keep costs down.

Friendly Entrepreneurial companies are friendly to their customers, suppliers, and employees.

Fun It’s fun to be associated with an entrepreneurial company.

Ferocious Fierce and unconventional game-changer and disruptor.

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NEW PRODUCT INTRODUCTION MODELS

TRADITIONAL MODEL

1. Concept

▸ Founders capture their passion and vision for the company and turn
them into a set of key ideas, which becomes the outline for the business
plan.

NEW PRODUCT INTRODUCTION MODELS

TRADITIONAL MODEL CONTINUED

2. Development

▸ Requirements speci cation (product,

marketing) —-> Building the product

Waterfall Development Model

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NEW PRODUCT INTRODUCTION MODELS

TRADITIONAL MODEL CONTINUED

3. Testing

▸ test the product and ensure that it works as speci ed.

▸ marketing develops a complete marketing communications plan including

branding activities and public relations.

▸ sales signs up the rst beta customers and begins to build the selected
distribution channel and scales the sales organization outside headquarters. 

▸ investors and board members start measuring progress by the number of

orders in place by rst customer ship.

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NEW PRODUCT INTRODUCTION MODELS

TRADITIONAL MODEL CONTINUED

4. Product Launch

▸ press event

▸ marketing launches a series of programs to create end-user demand.

▸ company hires a national sales organization; the sales channel has

quotas and sales goals.

▸ board begins measuring company performance based on sales

execution against its business plan

NEW PRODUCT INTRODUCTION MODELS

CUSTOMER DEVELOPMENT MODEL

1. Customer Discovery

▸ captures the founders’ vision

and turns it into a series of
business model hypotheses.

▸ then it develops a plan to test

customer reactions to those
hypotheses and turn them into
facts. 

NEW PRODUCT INTRODUCTION MODELS

CUSTOMER DEVELOPMENT MODEL

2. Customer Validation

▸ tests whether the resulting

business model is repeatable
and scalable.

▸ if not repeatable and scalable,

return to customer discovery.

NEW PRODUCT INTRODUCTION MODELS

CUSTOMER DEVELOPMENT MODEL

3. Customer Creation

▸ start of execution.

▸ builds end-user demand and

drives it into the sales channel
to scale the business

NEW PRODUCT INTRODUCTION MODELS

CUSTOMER DEVELOPMENT MODEL

4. Company Building

▸ transitions the organization

from a startup to a company

▸ focused on executing a
validated model.

NEW PRODUCT INTRODUCTION MODELS

SUMMARY

Traditional Model Customer Development Model

Waterfall (Linear) Agile (Iterative)

Cycle through each step of the process until you achieve

Plan makes no provision for moving backward. To do so
“escape velocity”— enough measurable progress in nding
would be considered a failure. 
the business model to propel forward to the next step.

“Do it right for the rst time, if you screw it up “We will have failures and we will screw it up
then everything is a failure.” several times before we get it right.”
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DELIVERABLES

ACTIVITIES
▸ Entrepreneurial Mind Test

▸ Open Forum

▸ Quiz