EMA CORE COURSE Suresh Bhagavatula

(TERM 3)
INTRODUCTION
PhD in Entrepreneurship from VU University in Amsterdam

Had my venture in Travels and Handicrafts

Helped rural women set up ventures (10 of them. Most failed)

Studied renewable energy for Masters degree in Germany but was

exposed to entrepreneurship during my practicum in Kenya
2
WHY THIS COURSE?
Origins of Ventures
why are some new ideas brought to market through existing
firms, and others through new firms?
FORTUNE 500 COMPANIES
What do the companies in these three groups have in common?

Group A: American Motors, Brown Shoe, Studebaker, Collins Radio, Detroit Steel,
Zenith Electronics, and National Sugar Refining.

Group B: Boeing, Campbell Soup, General Motors, Kellogg, Proctor and Gamble, Deere,
IBM and Whirlpool.

Group C: Facebook, eBay, Home Depot, Microsoft, Office Depot and Target.

(Ref: http://www.aei.org/publication/fortune-500-firms-in-1955-vs-2014-89-are-gone-and-were-all-better-off-because-of-that-dynamic-creative-destruction/)
 All of the companies in Group A were in the Fortune 500 in 1955, but not in
2014.

All of the companies in Group B were in the Fortune 500 in both 1955 and 2014.

All of the companies in Group C were in the Fortune 500 in 2014, but not 1955.

(Ref: http://www.aei.org/publication/fortune-500-firms-in-1955-vs-2014-89-are-gone-and-were-all-better-off-because-of-that-dynamic-creative-destruction/)
BUSINESS WORLD TODAY
Is extremely
volatile
 Only 61 companies in the
fortune 500 list in 1955 are
still on the list in 2014
 i.e. about 12%
 Life expectancy of a fortune
500 company was 75 years
Now it is 15 years!
INDIAN SCENARIO
Has been relatively stable thanks to licence raj and archaic policies.
Environment is changing rapidly
Flipkart
Caratlane
Amagi
Zoho
Ola/Uber
BigBasket
Dunzo
Ather
WHAT IS
ENTREPRENEURSHIP?

Pursuit of opportunity
disregarding the resources under
control
- Howard
Stevenson
SCENARIO

Two companies were developing an operating

system for low cost phones

One was a large company based out of USA and

other was a small startup based out of India

Both met at an event where the small company

showed its product to the large company
representatives
CONVERSATIONS WITH THE LARGE
COMPANY

I had a problem with my internal team where they couldn’t deliver what
we wanted…
 …for us, from a commercial, from a product viability stand point, I needed something that was able to solve that problem

as soon as I saw what Sunil (small company) had to show, he had a demo
running in his laptop I could immediately see it was addressing pretty
much all the things we were trying to address… and I said wow this is
perfect …
 I spent half an hour with him… then immediately called Sean. He also loved it right away. We were
intimately familiar with what we were lacking and what these guys were offering and so after the meeting
Sean and I had discussion, I said we need to encourage these guys…
THE QUESTION

How can a startup with no funding develop a product

better than a company with virtually unlimited resources?
This is the exciting part of entrepreneurship

In a recent book, Peter Theil says that entrepreneurship is like going from
Zero to One (creating something new)

This requires a completely different type of thinking

CREATING VALUE
Do you listen to music on your phones?

On what device you heard music for the first time?

How long do you think it took for the inventor to realise

that music is the market
0 TO 1
Edison offered the following possible future uses for the phonograph in North American
Review in June 1878:
1. Letter writing and all kinds of dictation without the aid of a stenographer.
2. Phonographic books, which will speak to blind people without effort on their part.
3. The teaching of elocution.
4. Reproduction of music.
5. The "Family Record"--a registry of sayings, reminiscences, etc., by members of a family in
their own voices, and of the last words of dying persons.
6. Music-boxes and toys.
7. Clocks that should announce in articulate speech the time for going home, going to meals, etc.
8. The preservation of languages by exact reproduction of the manner of pronouncing.
9. Educational purposes; such as preserving the explanantions made by a teacher, so that the pupil
can refer to them at any moment, and spelling or other lessons placed upon the phonograph for
convenience in committing to memory.
10.Connection with the telephone, so as to make that instrument an auxiliary in the transmission
of permanent and invaluable records, instead of being the recipient of momentary and fleeting
communication.
Market size

Value finding…
CAN ENTREPRENEURSHIP BE
TAUGHT?
WHAT ARE THE TRAITS
OF AN
ENTREPRENEUR?
WHAT IS THE PROCESS
TO BE AN
ENTREPRENEUR?
ENTREPRENEURSHIP
EDUCATION: HISTORY
Applied education in 1938 in Japan
Univ of Illinois offered course in 1948 on ‘small business development’
First course in Entrepreneurship was offered at MIT by Dwight Baumann in
1958
By 1970 there were 25 schools offering a course on entrepreneurship
By 1980 there were 150 schools offering such courses
Currently most tech/business schools offer courses on entrepreneurship
ENT EDUCATION IN INDIA
Early country to embrace entrepreneurship education
Started with McClelland experiment through NISIET (ni-msme)
NISIET has been offering courses since early 60s
Government has been funding EDP and ToT for EDPs through 700 organizations, prominent of
them being
 NIESBUD, ni- msme, EDII, KVIC, etc.

Entrepreneurship education in business schools is rather recent phenomenon through works of

Prof. Handa, Prof. Manimala, Prof. Ramachandran
 Canara Bank funded program on small business development at IIM B
ENTREPRENEURSHIP
TEACHING METHODS

Trait based entrepreneurship (McClleland 1964)

Entrepreneurship as a process (McMullan and Long, 1987)

Entrepreneurship as a method (Neck and Greene, 2011, Sarasvathy and

Venkataraman 2011)
TRAIT BASED
ENTREPRENEURSHIP COURSE
Identifies key abilities for entrepreneurs are
risk taking
need for achievement
internal locus of control

The courses work towards enhancing these skill sets

Many EDP courses promoted by the government agencies fall in this

category
LIMITATIONS
Trait based approach has not been fully able to explain
entrepreneurship

Not everyone with these traits become entrepreneur nor all

entrepreneurs have these traits

Most importantly does not take into account ‘and then what
happened?’
 ENTREPRENEURSHIP EDUCATION IN BUSINESS
SCHOOLS
Low and MacMilan (1988),Amit et al. (1993) and
Venkataraman (1997) identify
 Entrepreneurship to be interdisciplinary in nature
 Called for a process oriented approach

The process view extends the research of entrepreneurship

from firm creation to firm exit
 Identify an opportunity
 Developing the concept
 Understanding resource requirements
 Acquiring resources
 Implementation
 Exit

Curricula in business schools having been following this ‘process model’ in their teaching as well (Neck and Greene,
2011)
ENTREPRENEURSHIP EDUCATION IN BUSINESS
SCHOOLS…

While this approach is close to reality, it is said that

disproportionate time is spent on honing secondary research
Little time is spent on how to take smart actions in real life

Core to this approach is the development of a business plan

Some have started to question this BP process

In this process, the idea is of prediction and thoroughness of
preparation is primary
In real life entrepreneurship is chaotic, non linear and messy
AN ENTREPRENEUR’S STORY:
JUSTBOOKS
Accidental entrepreneur
Bookstore franchise - Whitefield
That not working out – lending library
Day job – could not spend time – hence technology
Customer response
Franchising
Growth

27
 ENTREPRENEURS’ STORY:
IMPULSESOFT/AMAGI
Had no idea about entrepreneurship
Started by making drivers for
bluetooth devices (Why not Wifi?)
Made bluetooth stereo headphone
Successful exit
Started another venture called Amagi
Contextual advertisements on TV

28
This cannot be explained by the BSchool promoted ‘process
approach’ of Business Plan

This is where the newer entrepreneurship thoughts come in

29
ENTREPRENEURSHIP AS A METHOD

Takes into account the messiness of entrepreneurship process and provides a

tool kit that can the students can put to use when ever they start their venture

This method” helps students understand, develop and practice the skills and
techniques needed for productive entrepreneurship (Neck and Greene, 2011)

Examples are Effectual Entrepreneurship (Sarasvathy, 2002), Lean Startup

(Riese, 2011) and Customer Development (Blank, 2010)
PROCESS VS CREATIVE
GREENE, 2011)
(NECK AND

Entrepreneurship as a process Entrepreneurship as a method

Known inputs and outputs Body of skills or techniques
Steps Toolkit
Predictive Creative
Linear Iterative
Precision Experimentation
Tested Practiced

31
CLASSROOM AS A PEDAGOGICAL TOOL

Traditional 90 min class has a limited role in helping students understand

entrepreneurship

While lectures and cases help in the initial parts of the education process,
they are limited to take the students to the next level of learning

The course that Steve Blank offers at Stanford and Berkeley has two
iterative components
 Class room interactions
 Customer interviews
CONCLUSION
Entrepreneurship course need to be different from other management courses

While it may not be possible to have a complete ‘apprenticeship’ or lab kind

of course

We should try to have a mix of both process and methods kinds of course