Create unique value for customers & drive with disruptive innovation

JWI 575 New Business Ventures & Entrepreneurship, 7/28/13

I gained several pathbreaking insights from this week's learning. All of these are immediately applicable to improve my effectiveness in what I do at work where the business model is being challenged by many new disruptive forces including cloud computing, BIG DATA, mobile computing and social media.

I. Create a compelling value proposition
Jack and Suzy Welch's podcast taught me how to present value propositions - they must change the game and be transformative for the customer. The value proposition should be so compelling that the customer finds it relatively easy to make his or her decision to buy.

II. Create unique value for the customer (JWI 575, W4L1)
I learned the six key steps to create unique value for the customer:
(i) Start with the customer interest, problem and need: understand what the buyer is looking for
(ii) Know sources of value to customer: product or service; market pull or product push
(iii) Craft a unique value proposition
(iv) Understand where the firm sits in the value chain
(v) Identify a repeatable business model to capture significant value
(vi) Price it right based on: cost, demand, value, competion, profit and pricing objectives such as revenue, operations and patronage

III. Win with disruptive technology (JWI 575, W4L2)
I also learned how to look out for disruptive technologies that allow new ways of solving customers' problems and doing business. To win with a disruptive technology, I understand clearly that there are two key elements that matter: First, I need to find a technology that existing firms do not understand or appreciate fully yet. Second, I need to find a sector where the market share is not yet dominated by established firms.

IV. Leverage five elements of a business model (Kaplan & Warren, 2010)
To create a unique business model, I now understand that rigorous business analysis must be done to cover five vital elements: Value proposition, market segment, structure of the value chain, cost structure and profit potential, competitive strategy

The DQs helped us take specific firms and apply the concepts mentioned above to analyze what is special in the business models and what disruptive elements led to the success of firms. It was also wonderful to learn from the experiences of my classmates.

This has been a great learning experience for me.

Dr DP

CEO Training Part 2 - Forecasting, Virtual Teaming, Decision making

JWI 599 Capstone week3, 7/21/13

Got together with an outstanding cohort of diverse talents including general management, finance, marketing, production, HR, Quality and R&D. Elected as the General Manager of the team, I find the opportunity to serve as a coordinator a great fit for my talents. The DiSC representation in this team is well balanced. The Charter development was an outstanding experience that brought the team quickly together. Each team member is demonstrating very high level of commitment and excellence in tasks. Each meeting with this team elevates my thinking and helps me improve as a leader.

intense, challenging and exhausting in a good way
Dr DP, Chennai

Competitive Analysis - Assess, Anticipate, Compete to Win with a plan

JWI 575 New Business Ventures & Entrepreneurship, 7/21/13

This week we learned about assessing the competitive landscape, anticipating competitive moves as in a chess board game, developing a plan and competing to win.

Dr DP

Framework to evaluate new ventures - market, offering, team

JWI 575 New Business Ventures & Entrepreneurship, Week2 Summary, 7/9/13

This week we learned a framework for evaluating strong vs weak opportunities. Evaluate every promising new venture using 3 factors of success - market, offering, team.

Dr DP


I. Flying solo - A reality check (Welch, Business week 2007)
*********************************
First, Need a great idea that creates or fills a market need - the exciting product/service idea should change the market
Second, need great leadership - passion, bursting with energy

Entrepreneurship grants independence - but only after months/years of toil
New business will control your life
You may only have a customer of two in the beginning - you will need to work with their whims in the trenches, taking orders
You will be owned by the venture - you will become poorer before you get rich; torn between giving up control vs selling stock to raise money

AS the leader, you own all the outcomes, good and bad

II. Company man or Free Agent? (Welch, Business week 2007)
**********************************************************
Imagine your life 5, 10, 20 years out
What do you want to be ? independent contractor, company man or entrepreneur?
It all comes down to fit

Independent contractors
************************
Advantage for hiring companies: no benefits to be paid, no appraisals, no neuroses management, no HR/legal battles - just move on
Advantage for contracotrs: maximize earning power - work for multiple firms at once, work overtime or just as much needed, be own boss, no politics, 360 eval
Disadvantage for contractors: No insurance benefits, No vacations, No job security

Company man
************
- part of something bigger: comaraderie, with a room full of co-workers working together
- identity: belonging to an organization; fulfilled rather than overwhlemed or diminished
- thrill of building something, a product, service or team
- fun of laughing, debating, sweating it out with colleagues while competing for customers and profits
- energized by prospect of leadership: rise to be managers or CEO, strategic planning, budgeting

Entrepreneurship
****************
- Characteristics of both independent contractors, company types
- invent something, build and belong
- risky

III. Recession is a good time to start a new business (Welch, Business week 2009)
*************************************************
New idea - Do considerably more for less
Layoffs - Plenty of Smart and Hungry people available
Humility - recognition that livelihood depends on true team work, relentless productivity
Money - available for breakthrough ideas from VCs, regional banks

IV. What's the Big Idea? (JWI 575 W2L1 )
*************************
ABSOLUTELY MUST HAVE A GREAT IDEA before you start a company.
- must be superior
- validate: others should also think it is the greatest gift to mankind

Gauge the idea: Is it a big time winner or a dud ?
***************
- Iterative process: You won't always know in advance; just get out there and try things
- Invest time and resources: get some early customer engagement
- Dive in, assemble a great team, be responsive to changes in the marketplace
- move forward with a solid sense that you've got enough of a big idea

Before going all out, check the basics
(1) Know the history: how did the world come to this point of need? sequence of events, stakeholders in the value chain, orgs stuck in ways, customer expectation
*********************
(2) Know your customer:Analyze the market. Tell a story - a day in the life of one human being who is going to be happier as a result of the new big idea.
**********************            Learn all about this person and how she makes decisions.
            Tell people exactly how someone's life will change as a result of the product.
            Truly compelling big idea > simple to answer
            Sense and Respond - Read your customers' responses, quickly alter the vision to match the feedback obtained
(3) Know your competitors:  is anyone else doing it? lock on to a unique angle you bring to the solution. Market timing is key. Understand why you are in a position to win.
**************************
(4) Know the state of art:Understand ingredients necessary for your innovation. Is it feasible to build? what elements will you rely on to build your vision ?
*************************
(5) KISS: Keep it simple. Do not try to design a product that does everything for everybody. Focus the minimal amount of special value you can deliver. Nail that. Go from there.
*********
(6) Who cares ? Why?:
********************
Customer side - who might care about what you're developing?
Business side - who is committed to working with you to keep your idea moving forward
Adapt and Adjust with guidance from stakeholders.
Sense when change is needed, keep taking steps forward.
Not the strongest or most intelligent, but the one that is most adaptable to change

V. Analyze the market & Plan the Business (JWI 575 W2L2)
*****************************************
Who is going to buy this ? (everybody, it depends, not sure yet - these are weak answers)
How else are people satisfying their needs today ?
Business plan elements: who what where when why how of your potential business

(i) Size the market opportunity
********************************
Top down - estimate consumer spending on the issue; capture 1% of the market
Bottom up - estimate how much product you might successfully sell in a month
New Product category - Look at related markets and spending habits and technology-adoption history

Look carefully at what you will be replacing
Brand new product => initial sales roughly based on existing sales of substitutes; refine response with consumer response trial offers & repeat users
Recalibrate continually
If results lower than expected, modify product to appeal to larger segment of market

Conduct market research and segment the markets (refer to marketing class)

(ii) Pick your niche
**********************
major sea changes under way in society
educated guess about how people are changing their behaviors, which emerging technologies will profoundly affect people, what people buy and how they buy it

(iii) Know the story - learn all you can about the history of the market
**********************
    why does the opportunity exist now
    who has come before you and tried to solve it in other ways?
    what is the source of the problems you are trying to solve ?

(iv) Identify experts
**********************
who understands this market today ? what are they talking about it?
Who are the thought leaders ? - cite their opinions in justifying market need
Take time to listen to expert opinions on future of the market you want to enter

(v) Learn how to keep score
****************************
which metrics will you measure to determine if the market is adopting your solution ?
eg. 40% of my customers must become repeat customers
my customer base should double within 30 days
Establish next steps to take if product becomes a runaway success or not

(vi) Know how to keep ahead of competition
*******************************************
How will others respond to you ?
How will you in turn respond to them ?
Study how competitors react to the introduction of your product and whether their responses are consistent with your expectations


(vii) Pick the right market (size, dynamics)
*********************************************
Total Addressable Market: current user base + industry reports, census data, analyst projections, annual reports)
Initial Target Market: Focus on the group you are most likely to succeed

(viii) Understand Market Dynamics
**********************************
What do buyers spend now ?
Who do they spend it with ?
How do they make their spending decisions?
What features are important to them?
What overall values, quirks, tastes do they have ?

(ix) What are the trends ?
***************************
- is the market growing, how fast ?
- what makes the market grow ?
- is growth the result of overall expansion or customer switching ?
- why will people switch to your product or consider a new purchase ?
- what are product life cycles in the market and required technology investments to stay ahead of the curve?
- who has buying power in your industry's value chain ? eg. WalMart can dictate terms for price, quality, delivery schedule to manufacturers
- Do external factors influence the potential size of your market ?

(x) Look at market segments
****************************
Geography "NorthEast customers bought 60% more heating oil in winter 1999"
Industry "Financial services firms comprise 40% of the market for supercomputers"
Type of buyer "Early adopters seeking professional edge make up 40% of the market for Blackberry"
Distribution channel "30% of customers shop at WalMart at least once a week"
Market share " Coke owns 45% of market, Pesi 40%, assorted juice drinks own 15%"

CEO Training Part 1- Turn around an ailing company

Capstone, week1, 7/7/13

This is the most challenging class of the entire program. Application of all principles learned across courses is needed to survive the challenge. Working with diverse talents in our cohorts, we are thrown into the deep end of a corporate turnaround situation. What a treat !

Dr DP

Create something original and new - use proven entrepreneurial principles & also approach without any style

JWI 575 New Business Ventures & Entrepreneurship, week1 summary, 7/7/13

I think this is the class I have been preparing for all these years !
To create something original and new, I believe one needs to function simultaneously at two levels.

One, to understand based on mankind's past history, the entrepreneurial principles that work.
We learned a great deal about these concepts this week:
(i) Getting fired need not be the end of the world ! In fact, it could be a blessing in disguise to take control of one's destiny and start something wonderful. Companies forged in hell may have a greater competitive advantage.
(ii) With entrepreneurship, thinngs could get more difficult before turning around for the better.
(iii) Begin with a great idea. Refuse to hear "no" - dare to face adversity with a smile and remain standing. Thrive in uncertainty and ambiguity - improvise. Attract bright people to chase the dream with you.
(iv) To scale entrepreneurship, be open to learning - quickly identify non-performers and take action; balance tactical and strategic needs; humbly seek input from others; be the public face of your firm
(v) Think causally. Think effectually - living within means and letting goals emerge.
(vi) Improve the Entrepreneurial Self Efficacy (ESE) score - Recognize opportunities, Create vision, Encourage others, Get sufficient funds, embrace ambiguity & uncertainty, own the outcome => Play to win

Second, is to be open to new possibilities with a mind unburdened by the past knowledge.
To find something original and true
****************************
(http://www.jkrishnamurti.org/index.php)
To find something original and true, something timeless, you cannot come to it with the burden of memory, knowledge.
The known, the past, can never help you to discover the moving, the creative. No amount of technique or learning, no amount of attending talks and discussions,
can ever reveal to you the unknown. If you really see the truth of this, actually experience if for yourself, then you are free of all Masters and gurus,
of all teachers, saints, and saviors. Because, they can only teach you what is known, and the mind which is burdened with the known can never find what is unknowable.

Bruce Lee used JK's principle above to create Jeet Kune Do ("the way of no way"), an unpredictable style of martial arts that is superior to predictable styles of fighting.

Exciting week ! More detailed take-aways below.
Dr DP



JWI 575 New Business Ventures & Entrepreneurship, week1 summary, 7/7/13
***************************************************************

Week1 Lecture1
**************
I. Myth of the great leader
****************************
- heroic, larger than life persona
- works against all odds to overcome daunting challanges
- alone
- tireless inventors
- envision outcome: passionate vision of a product designed in their heads
- driven to achieve something: discovered an opportunity and stopped at nothing to make it happen
- determination
- lure of great personal wealth

Reality for entrepreneurs
- most wind up somewhere quite different from where they started
- rarely do they have an accurate picture in advance of the product they ultimately develop
- rarely do they just discover opportunities that are sitting waiting for a keen eye to notice

Entrepreneurs know how to interact with their environment and colleagues to collectively weave together resources to create an opportunity

II. State of American Innovation Jack Welch video
***************************
Never been better
3-5% => 20-25% of grads want to start their own game, own business
energy & brains matched with liquidity - incredible fertile soil
Entrepreneurship has never been better
Lots of money, less restrictions than in other places in the world, too few ideas

III. What to do with a New idea (Jack Welch video)
**************************
Lots of money in the US (unlike many other countries) - barrels of money
Too few ideas - dying to find people with new ideas
If you have idea, you must have patience to knock on doors, show your passion, sell like hell, get some capital to sell your idea
unregulated
you got to have ability to take no & punches in nose over and over again to sell it
it wont be an easy sell


IV. Misconceptions of starting a new venture
*****************************************

Triggers for decision to start something new
*********************************************
"you're fired"
couldn't get along with the boss
trouble fitting in and taking orders
his world's greatest idea for a brilliant product or service was not appreciated by his company

Realities of entrepreneurship
******************************
(i) Does not necessarily mean more Independence
myth - You can be your own boss and write all the rules.
Can be an exhilarating ride with potential for great rewards
But Entrepreneurs are accountable in a magnified way.
Big company - hide among a sea of workers, leave at 5 PM.
When running your own start up, you must make sure everyone is happy all the time - customers, employees, investors, vendors, stakeholders
Job will consume your life, around the clock, for many years to come

(ii) You'll get rich
**********************
- Frustration working for a low salary while making a jackpot for the distant owners
Stuck in a spot
Working for a company that is not well run and does not know how to align incentives and rewards to employees
Plenty of big companies where a lot of money can be made - so running to a small company is not necessarily the answer.
- you will get poorer before you get rich
- lot of sacrifices financially to get your company off the ground
- Dont start something with wealth generation as the primary goal

(iii) Recession is a terrible time to start a business
*******************************************************
Actually a downturn can be an excellent time to start the right business
Do more with less
hungry people are available to hire, with lot less arrogance
funding exists for good ideas
capitalize on the inevitable uptick in the economy

Take control of your own destiny during bitterly hard times
************************************************************
start during bitterly hard times
P&G - started during panic of 1837
GE, IBM, Eli Lilly, Merck, Hersheys, AT&T - Long depression 1873 - 1896
HP, TI, 20th century fox - Great depression 1920s - 1940s
Microsoft, FedEx, Apple - oil shock 1973 - 1976

Matt McCall, VC
****************
Companies forged in hell have much more durable and advantaged DNA coming out
******************************************************************************
When hair is on fire, customers and business partners are willing to try new or different approaches to address the pain
Entrepreneurs are highly focused on efficient use of capital + fulfilling customer needs
They get into great position to ride the upswing in economy

In a weak company, great people are more restless
They may be laid off. Easier to lure out of their previously secure jobs.
Talented, hungry people are out there - put them to work.
V. The Entrepreneurial Mindset
********************************
Goal-driven approach
means-driven approach

VI. Do you have what it takes to be an entrepreneur?
****************************************************
(1) Do you have a great new idea that makes your product or service compelling to customers in a way no competitor can match ?
*********************************************************************************
- tell a compelling story: why you are right person at right time with right product/service vs customer need
- credible and substantial experience with customer problem or product solution
- excited about bringing something new to market
(2) Do you have the stamina to hear "no" over and over again and keep smiling ?
*******************************************************************************
- resilience to deal with adversity
- crucial to be committed to your product's vision
- not everyone is going to agree with you from day one
- try over and over again to enlist people in your mission
- experience a lot of resistnace
- adapt with the feedback or stubbornly push ahead with something you know is right, even when others are saying no.
- be willing to get bounced around while still remaining optimistic
(3) Do you love uncertainty?
****************************
working on problems that have known answers; clear and predictable path and goals => steady eddy jobs; entrepreneurship not a good fit
flourish while improvising, conmfortable with uncertainty => entrepreneurship
(4) Do you have the personality to attract bright people ot chase your dream with you ?
******************************************************************************
- build a team that can work with you, share devotion to your dream
- get the very best people
- fight for them and win them over
- excite people about what you're working on

NET
Answer is YES - I do have the makings of an entrepreneur.

VII. Top10 Questions when pursuing a new idea
**********************************************
(1) What is the big idea? what is the ability of your product or service?
What are you replacing ? Articulate clearly to capture people's imagination
(2) Who cares? Why ?
How big is the problem? Tell a story. Measure and segment the markets to reach.
(3) Who is the competition ?
Whom do you worry about, how will they react?
(4) What is your product ? What makes it unique? Does it work yet ? Can you protect it?
(5) Who makes up your team ? What skills and experiences do you bring to the table?
Who else do you need? What are your complementary skill sets ?
(6) How will you make money ?
Of the many business models, which is right for your new venture ?
(7) Why will you succeeed ?  Map out scenarios.
How will the market respond to your product ? how will you respond to meet demand ?
(8) Why you could fail ?
Risk factors; how will you minimize cost of failure ?
(9) What are key milestones to validate the business?
What tests along the way will you look for to test if you're on the right course and you have a winning idea ?
(10) How much money will you need and when ?
Where can you get it? what are pros and cons of different sources ?

VIII. Why entrepreneurs dont scale (John Hamm, HBR, 2002)
***********************************
Core issue: Not being open to learning

Problem            Fix       
********        ***
Loyalty to comrades    Quickly identify non-performers & fire humanely
Tactical task focused    Balance competing priorities, clarify goals for employees to focus on ie. Long term strategic priorities
Single mindedness silo    Seen input from others, deepen understanding, make team members feel valued   
working in isolation    Be the public face of the company - Evangelize, Glad-hand, show up for interviews


IX. What makes entrepreneurs so entrepreneurial? (Saras Sarasvathy, 2001)
************************************************
They think effectually rather than causally.
They believe in yet to be made future that can be shaped by human action eg. UHAUL
Since human actions control the future they do not waste time trying to predict future.
They start with their means: who they are, what they know, whom they know
they focus and work with people who are engaged in decisions and actions that bring the idea into existence eg. vast number of UHAUL stakeholders

X. Patterns of Entrepreneurial Management
Personal Entrepreneurial skills assessment ESE Scale 83%
*******************************************
Developing New Product and Market Opportunities - High    Recognize Opportunities
Building an Innovative Environment - High        Encourage Others to try new ideas, initiate novel actions, own outcomes
Initiating Investor Relationships - Moderate        Get sufficient funds for startup
Coping with Unexpected Challenges - High        Deal with ambiguity and uncertainty
Recruiting Human Resources - High            Attract and retain key individuals       
Defining Core Purpose - High                Vision