Course 2 Entrepreneurship, innovation and technology 06.03.2012 1
Me, myself & I Web: www.bogdaniordache.net Twitter: @bogdaniordache Email: bogdan.iordache@wembrio.com 2
Entrepreneur? Wikipedia definition: An entrepreneur is a person who has possession of a new enterprise, venture or idea and is accountable for the inherent risks and the outcome. 3
Entrepreneur? My (simplified) definition: Somebody working on its own projects. 4
What is innovation? Wikipedia definition: Innovation renews something that exists and not, as is commonly assumed, the introduction of something new. 5
What is innovation? My (simplified) definition: Some new stuff based on older stuff. 6
Types of innovation Discontinuous A new way of solving things Evolutionary Innovation in an existing market Disruptive Creating new markets by applying different set of values 7
Types of innovation in business Technological innovation Process innovation Distribution channel innovation Sales process innovation 8
Common mistakes and myths We have to be original My idea is totally new (so it's good) My idea is the best / the most valuable Good ideas are easy to implement I cannot tell you my idea 9
Truth is... Most start-ups are not new ideas Ideas are less important than execution Behind any valuable company lies tons of work One in ten start-ups goes longer then 5 years Overnight success usually takes 15 years 10
Vision without execution is hallucination Thomas Edison trepreneurship and tehnological management 11
Sources of innovation Clients? Other clients? More clients? New technologies Existing markets or products R&D 12
How can you foster innovation? Brainstorming Focus groups Big dream approach Checklist method Blue ocean strategy 13
Blue ocean strategy How to create and analyze disruptive innovation W. Chan Kim & Renée Mauborgne Harvard Business Press, 2005 http://www.blueoceanstrategy.com/ Romanian version: Strategia oceanului albastru Polirom, 2007 14
The Strategy Canvas Very important Important Medium Less important Unimporta nt Atribut 1 Atribut 2 Atribut 3 Atribut 4 Atribut 5 15
Blackberry Very important Important Medium Less important Unimporta nt Usability Platform Keyboard Security Price 16
Blackberry vs. iphone Very important Important Medium Less important Unimporta nt Usability Platform Keyboard Security Price 17
How can we go from innovation to real business? 18
Business model A repetable and scalable process that generates value Core-base value of an entreprise 19
Business model overview Online web service (press monitoring service) Some marketing & sales Website Client Profit 20
Business model key indicators Website visitor cost Medium contract period & value Some marketing & sales strategy Website Client Profit Conversion rate (%) Profit margin (%) 21
Business model valid model Expenses / client = Website visitor cost * Conversion rate Profit / client = Medium contract period * Medium contract value * Profit margin 22
Business plan A business plan relies on a business model and scales it Added information: Market analysis Marketing & sales processes Distribution channels & deals Future developments etc. 23
Business model vs. business plan A startup is searching for business model A company is executing a business model (according to a business plan) 24
For a startup, a business plan is irrelevant if the business model is not validated! 25
Stages of development Startup Company Business model development Scaling based on business plan 26
Stages of development Startup Company Business model development Technically possible Profitability Scaling based on business plan Scalability 27
Waterfall A startup = the small scale copy of a company 28
Iridium's epic failure 1987 1990 1990-1997 1998 1999 Started at Motorola as an internal project An individual company is created Launched 72 satellites First call via own network Bankruptcy Total cost: 5.2 billion dollars 29
Conclusion? Rapid changing markets require continuous business model iteration Steve Blank Stanford entrepreneurship professor 30
Customer development 31
Customer development What's the biggest market you can reach? Test the technology, test the product, test the use-cases, test the marketing/sales channels Focus only on the next step of development Don't do business plans when you're a startup! 32
The customer development guy Steve Blank Entrepreneurship professor at Stanford, Berkeley,Columbia Serial entrepreneur www.steveblank.com The Four Steps To The Epiphany (no Romanian version, thank God for Amazon) 33
Customer development method. 34
The Lean Startup approach 35
Financing your startup How much is it worth it? Based on potential, future market Follow the smart money Investment is not always needed! 36
Financing a.ro business Startup Company Business model development Technically possible Profitability Scaling based on business plan Scalabilit y Seed investment Higher risk Angel investment VC funding? Lower risk 37
Financing a.com business Startup Company Business model development Technically possible Profitability Scaling based on business plan Scalabilit y Seed investment Round A Round B Round C Higher risk Lower risk 38
Bootstraping Startup Company Business model development Technically possible Profitability Scaling based on business plan Scalabilit y Seed investment Round B? Round C? Higher risk Lower risk 39
Questions? Web: www.bogdaniordache.net Twitter: @bogdaniordache Email: bogdan.iordache@wembrio.com 40
Next Course Invited Speaker: Andrei Pitis Course name: Introduction to management Main topics: Define management Maslow hierarchy of needs Herzberg s motivation theory 41