Choosing a business partner: a framework for the entrepreneur

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This presentation explores a format for choosing a business partner by looking at a management model, successful traits of entrepreneurs and personality type.

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  • New ventures started with teamsGreater chance of survivalMore likely to attract venture capitalRealise higher overall returnsHave access to wider networks
  • Model developed by McKinsey from extensive research of the literature and over 85 interviews with successful women (and many men as well).Having a pool of physical, intellectual and emotional strength to drive achievementMeaning: finding your strengths and using them for your workManaging energy: knowing where your energy comes from and where it goesPositive framing: viewing your world constructively and being resilient when bad things happenConnecting: knowing who can help you growEngaging: finding your voice and taking risks
  • Choosing a business partner: a framework for the entrepreneur

    1. 1. Choosing a business partnera framework for the entrepreneur<br />
    2. 2. A new venture with a team is more likely to succeed<br />The lone entrepreneur is a popular myth<br />A team approach is proven more likely to succeed1<br />“What there is in our business is plenty of plans, plenty of entrepreneurs, and plenty of money. What there’s a shortage of is great teams.”2<br />John Doerr, partner in a Silicon Valley venture capital firm<br />Timmons, J & Spinelli, S 2007, New Venture Creation: Entrepreneurship for the 21st Century 7th ed., McGraw Hill Irwin, New York; Schutjens, V & Wever, E 1999, “Determinants of new firm success.” Papers in Regional Science, vol. 79, no. 2, pp. 135-153.; Baron, R & Markman, G 2000, “Beyond social capital: How social skills can enhance entrepreneurs' success.” Academy of Managment Executive, vol. 14, no. 1, pp. 106-116.  <br />Baron, R & Markman, G 2000, “Beyond social capital: How social skills can enhance entrepreneurs' success.” Academy of Managment Executive, vol. 14, no. 1, pp. 106-116.  <br /> <br />
    3. 3. So what makes a good entrepreneur?<br />Developed an approach that looks at the qualities of a good leader and a successful entrepreneur<br />Leadership and management models<br />Studies on successful entrepreneurs<br />Personality type<br />
    4. 4. Good leadership vital – and it’s a tricky balancing act<br />Meaning<br />Centered leadership: how talented women thrive1<br />Managing energy<br />Engaging<br />Impact: <br />Presence<br />Resilience<br />Belonging<br />Positive framing<br />Connecting<br />1. Barsh, J, Cranston, S & Craske, R 2008, “Centered leadership: How talented women thrive.” The McKinsey Quarterly, vol. 4, pp. 35-48.   <br />
    5. 5. A good social network gives your start-up a competitive advantage<br />People will help you out, proving the economic theories wrong1<br />A good network can get you opportunities not available on the market, or resources cheaply.2<br />Have to obey the laws of reciprocity3<br />Witt, P 2004, “Entrepreneurs' networks and the success of start-ups.” Entrepreneurship and Regional Development, vol. 16, pp. 391-412. <br />Baron, R & Markman, G 2000, “Beyond social capital: How social skills can enhance entrepreneurs' success.” Academy of Managment Executive, vol. 14, no. 1, pp. 106-116.  <br />Witt, P 2004, “Entrepreneurs' networks and the success of start-ups.” Entrepreneurship and Regional Development, vol. 16, pp. 391-412. <br /> <br />
    6. 6. Social networks are only built through excellent social skills<br />Vital for success once you are ‘through the door’<br />Venture capitalists place great weight on social skills1<br />Critical skills2:<br />Social perception<br />Impression management<br />Persuasion and influence<br />Social adaptability<br />1 & 2: Baron, R & Markman, G 2000, “Beyond social capital: How social skills can enhance entrepreneurs' success.” Academy of Managment Executive, vol. 14, no. 1, pp. 106-116.   <br />
    7. 7. Make sure you are compatible – the Myers-Briggs Type Indicator1<br />Extraversion<br />Introversion<br />Intuition<br />Sensing<br />Thinking<br />Feeling<br />Judging<br />Perceiving<br />1: Krebs Hirsh, S & Kummerow, J 1998, Introduction to Type in Organizations 3rd ed., CPP, Inc., Mountain View.  <br />
    8. 8. Soft skills are not enough, there’s an entrepreneurial skill-set too<br />Management or entrepreneurial experience is a predictor of success1<br />Need a generic set of hard skills in the venture2<br />1 . Schutjens, V & Wever, E 1999, “Determinants of new firm success.” Papers in Regional Science, vol. 79, no. 2, pp. 135-153.<br />2.  Timmons, J & Spinelli, S 2007, New Venture Creation: Entrepreneurship for the 21st Century 7th ed., McGraw Hill Irwin, New York.  <br />
    9. 9. Who’s in charge? Choose the right ownership structure<br />Democratic models mostly don’t work1<br />Whoever has ownership has the power2<br />Rewards need to be:<br />Differentiated<br />Performance based<br />Flexible3<br /> Timmons, J & Spinelli, S 2007, New Venture Creation: Entrepreneurship for the 21st Century 7th ed., McGraw Hill Irwin, New York. <br />Lansberg, I 2009, Succeeding generations: realizing the dream of families in business, Harvard Business Press, Boston.  <br />  Timmons, J & Spinelli, S 2007, New Venture Creation: Entrepreneurship for the 21st Century 7th ed., McGraw Hill Irwin, New York. <br />
    10. 10. Choosing a business partner<br />Start your venture with a team, you’re more likely to succeed<br />Does your potential partner have the skills to lead?<br />Do they have a useful social network?<br />Is it backed with excellent social skills?<br />Are your personality types complementary?<br />Do they have the right entrepreneurial skills?<br />Can you agree on who’s in charge?<br />

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