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
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Week1 Lecture1
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I. Myth of the great leader
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- 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
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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
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(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)
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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
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