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Module Six Assignment

Emmanuel Mulenga

Graduate School of Business, University of Zambia

EBS 5021: Managing Innovation and Change

Dr. Maja Zelihic

26th June, 2022

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INTRODUCTION

A feasibility study is defined by Drury (2021) as an analysis that considers all of a project's

relevant factors—including economic, technical, legal, and scheduling considerations—to

ascertain the likelihood of completing the project successfully.

There are a number of factors that can affect the success or failure of a start-up venture.

Accordingly, this paper is an endeavour to look at factors that determine whether a project is

feasible or not; they will include the entrepreneur's personality and experience. Other factors

include the characteristics of the product, the characteristics of the market, as well as

financial factors.

THE ENTREPRENEUR'S PERSONALITY

According to the American Psychological Association (2014), personality refers to individual

variances in typical thoughts, feelings, and behaviour patterns, with sociability and irritability

being major areas of analysis.

There has been considerable research on the relationship between personality traits and the

success rate of startups. To understand the relationship between personality and

entrepreneurship, researchers began to study the influence of general personality traits (Big

Five personality traits) or specific personality traits (i.e., the need for achievement) on an

individual’s intention to start a new business or differences between entrepreneurs and

managers (Zhao et al., 2010).

It can be pointed out that the majority of research findings conclude that individuals with

higher risk preferences, extroversion, emotional stability, and conscientiousness are

associated with a higher probability of succeeding in their start-up ventures.

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THE ENTREPRENEUR'S EXPERIENCE

The entrepreneur's experience is another factor that affects the success or failure of a startup.

The experience of an entrepreneur can positively affect the chances of success for a startup.

Ying-yi (2021) argues that entrepreneurs with both practical and professional experience are

better critical thinkers as they are able to analyse things critically and come up with helpful

solutions, a characteristic which is very essential for the success of a startup. It is essential for

you to become successful. They are able to effectively navigate and manage challenging

business situations better than their less experienced counterparts.

In their study, Stam et al. (2008) found that entrepreneurial experience significantly

influences an entrepreneur's choice to open and run a new business again after experiencing

business closure. On the other hand, employment experience adversely affects the duration of

an entrepreneur's re-entry process. Stam, et al. The study found that entrepreneurs with less

experience tended to produce fewer ideas that were deemed novel when asked to assume the

role of a businessperson, whereas experienced entrepreneurs were able to maintain their

ability to generate creative ideas even when they were in salesman mode. (Ying-yi, 2021)

Having pointed out the importance of experience, it can, however, be argued that some

startups founded by inexperienced individuals have been able to succeed. For instance,

neither Bill Gates nor Steve Jobs had any company management expertise prior to co-

founding Microsoft or Apple. The same was true when Mark Zuckerberg started Facebook in

his Harvard dorm room.

PRODUCT CHARACTERISTICS

Selling a product or service that customers actually want is important. The market must be

willing and able to pay for what the company is selling, and this is the major aspect in

creating value for innovative ideas that are developed. If an innovative idea is of no economic

or social value, then it is likely to be a failed idea.

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It is important to note that having precisely specified consumer product qualities for every

single product has a positive impact on the success of any startup business venture.

Furthermore, Claessens (2018) contends that a startup business venture must have a thorough

understanding of its own product from all potential perspectives. It should also be as

knowledgeable as possible about products that compete with its own in the market.

According to the report by RocketSpace (2017), it is estimated that 42 percent of failed

startups surveyed attributed their failure to bad market fit. It's safe to assume most of these

companies did some kind of research before launching. Unfortunately, that research probably

did not cover a wide enough target market base to ascertain an accurate picture of demand.

Claessens (2018) outlined a number of product characteristics that are crucial to the success

of a startup venture. They include the exchange value, which entails that every product,

whether tangible or intangible, should have an exchange value and should be capable of

being exchanged between the buyer and seller for a mutually agreed consideration. Second,

the product should have differentiating features, which, from the marketing point of view,

means the need for the product to be differentiated from other products. Another important

characteristic of a product is its ability to provide consumer satisfaction. In other words,

products should have the ability to deliver value and satisfaction to consumers for whom they

are intended. Lastly, and equally important, is the business need satisfaction aspect of the

product. The product should also have the ability to satisfy a business need.

CHARACTERISTICS OF THE MARKET

Every firm exists and runs in an environment; no business exists or runs in a vacuum. It can

also be argued that the market determines the success or failure of any business, as it helps to

generate sales by creating a demand for a product or service. Moreover, it creates relevance,

brand reputation, and market competition.

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The ability of the company to comprehend the marketing environment in which the business

operates is always a prerequisite for an efficient and effective marketing plan. The

components of a marketing environment affect how people and businesses purchase and sell

goods and services. Sales and profit are two ways that marketing environment variables have

an impact on businesses, while businesses also have an impact on the environment through

their output (products and services). The organisation and the marketing environment have an

"inseparable" and "give and take" interaction.

Sheridan (2020) points out that market characteristics may vary by location, industry,

product, and market, but they usually include social influences, such as demographics and

culture, economics, and political and legislative trends. Businesses try to anticipate trends and

changes in the marketing environment to establish positions in new markets, withdraw from

shrinking markets, and introduce new products and services to emerging markets. When

businesses do not adapt to changes in the marketing environment, they often have trouble

keeping up with their competitors and eventually fail to survive.

Finally, it can be acknowledged that understanding the characteristics of the market is very

important for any start-up venture as it enables the company to identify with the needs of

their customers, especially regarding how consumers make decisions when purchasing

products, and eventually grow its market share through continued growth in sales and

revenues.

FINANCIAL FACTORS

Financial management is important for any startup venture because it helps the business see

and understand its profit. It also assists decision makers in effectively planning inventory and

establishing competitive prices. Having knowledge of financial factors also enables the

company to determine whether it has sufficient cash flow to sustain operations and make

decisions on buying assets. Furthermore, sound financial management enables the company
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to provide the financial reporting required by banks and investors to lend money or invest in

the business. Through a good understanding of financial factors, the company can also be

able to conduct sound financial analysis for better business forecasting and projections.

A startup company requires financing to begin operations, such as paying for office space,

new equipment, and advertising. Running a business necessitates having enough cash on

hand to pay employees' wages and suppliers on time.

Beaver (2020) stresses that financing has a strong correlation with innovation and the success

of most startups. Financial means and investments, whether from nongovernmental financial

support, R & D investments, or governmental support, are crucial to survival in the business

ecosystem. There is a general consensus that the more financial resources are made available

to a company and used in a prudent and strategic way, the more likely the company is to

improve its performance. He said that a study on Venture-Capital Financing and the Growth

of Startup Firms found that the presence of venture capital is linked to faster firm growth, that

financing events affect the growth path of startups, and that support for past growth is a

predictor of future growth. Hence the proposition that financial resources, amidst other

pertinent factors, are a key to start-up growth.

CONCCLUSION

This paper looked at factors that affect startup ventures. It has been established that the

personality of an entrepreneur has an effect on the success or failure of a business venture.

Individuals with higher risk preferences, extroversion, emotional stability, and

conscientiousness are associated with a higher probability of succeeding in their start-up

ventures. It was also stressed that experienced individuals are better critical thinkers and can

come up with helpful solutions during difficult times, a characteristic that is very essential for

the success of a startup. The paper also argued that startups should come up with products
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and services that meet market needs. The market must be willing and able to pay for what the

company is selling, and this is the major aspect of creating value for innovative ideas. With

regard to market characteristics, the paper stressed that the market determines the success and

failure of any business as it helps to generate sales by creating a demand for a product or

service. The importance of financial factors was also outlined. It was also pointed out that

sound financial management can help the company make sound decisions, such as with

regard to its operational costs. setting of competitive prices and forecasting profit outcomes.
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REFERENCES

American Psychological Association. (2014). Personality.

https://www.apa.org/topics/personality

Beaver, S. (2020). Small business financial management: Tips, importance and challenges.

Oracle NetSuite. https://www.netsuite.com/portal/resource/articles/financial-management/

small-business-financial-management.shtml

Claessens, M. (2018). Most important consumer product characteristics – what defines a

consumer product? Marketing Insider. https://marketing-insider.eu/consumer-product-

characteristics/

Drury, A. (2021). Feasibility Study. Investopedia.

https://www.investopedia.com/terms/f/feasibility-study.asp

RocketSpace. (2017). The 7 characteristics successful startups share. RocketSpace.

https://www.rocketspace.com/tech-startups/the-7-characteristics-successful-startups-share

Sheridan, K. (2020). How Do Elements of a Marketing Environment Affect Marketing

Decision-Making? Azcentral. https://yourbusiness.azcentral.com/elements-marketing-

environment-affect-marketing-decisionmaking-13406.html

Stam, E., Audretsch, D., & Meijaard, J. (2008). Renascent entrepreneurship. Journal of

Evolutionary Economics, 18(4), 493–507. https://doi.org/10.1007/s00191-008-0095-7

Ying-yi, H. (2021). How does experience matter for entrepreneurs? The Chinese University

of Hong Kong. https://cbk.bschool.cuhk.edu.hk/how-does-experience-matter-for-

entrepreneurs/

Zhao, H., Seibert, S.E. and Lumpkin, G.T. (2010), “The relationship of personality to

entrepreneurial intentions and performance: a meta-analytic review”, Journal of

Management, 36(2), 381-404.