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Chapter 5- Entrepreneurship lecture International University- HCMcity

Chapter 5- Entrepreneurship lecture International University- HCMcity

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  • 1. Technology Ventures: From Idea to OpportunityChapter 5: Summary There’s a better way to do it, Find it! Thomas Edison How can an entrepreneur build an effective strategy based on innovation that will lead to a sound technology venture? An innovation strategy is structured to effectively commercialize new products and services for its customers. Using an idealized model of a window of opportunity, the entrepreneur can decide when to act. The entrepreneur needs to maintain a sense of urgency but avoid being too early or too late to market. Entrepreneurs establish and build a network of partners who work with them to achieve the new venture’s goals. Summary
  • 2. Technology Ventures: From Idea to OpportunityChapter 5: Concept Emergent industries: Newly created or newly recreated industries formed by product, customer, or context changes [Barney 2002].
  • 3. Technology Ventures: From Idea to OpportunityChapter 5: Table 5.2 Possible Advantages Possible Disadvantages • Create the Standard and the Rules • Short-Lived Advantages Are Competed Away • Low Cost Position • Higher Development Costs • Create and Protect Intellectual Property • Established Firms Circumvent or violate patents and intellectual property • Tie Up Strategic Resources • Cost of Attaining the Resources • Increase Switching Costs for the Producer • High Uncertainty of Designing the Right Product. If vision is wrong, then large costs to switch • Increase Switching Costs for the Customer • Customer is reluctant to buy when a large cost to switch may be incurred First Mover Potential Advantages and Disadvantages
  • 4. Technology Ventures: From Idea to OpportunityChapter 5: Table 5.1 TYPE OF INDUSTRY Mature Growing Emergent Revenue Growth Slow Moderate Potentially Fast Stability High Moderate Low Uncertainty Low Moderate High Industry Rules Fixed Fluid Unestablished Competitiveness High Moderate Low or None CHARACTERISTICS Three Types of Industries and Their Characteristics
  • 5. Technology Ventures: From Idea to OpportunityChapter 5: Figure 5.3 Complement: A complement to a product is any other product that makes the first one more attractive to the customer. The New Venture Customers ComplimentorsCompetitors Suppliers The Value Network
  • 6. Technology Ventures: From Idea to OpportunityChapter 5: concept Importance reflects the magnitude of the economic value of an invention. Radicalness measures the degree to which an invention, regardless of economic value, differs from previous inventions in the field. Patent scope describes the breadth of intellectual property protection for the invention.
  • 7. Technology Ventures: From Idea to OpportunityChapter 5: Table 5.3 The Factors that Influence the Entrepreneur to Exploit An Independent Invention 1. The Business Interests, Capabilities, and Experiences of the Entrepreneurial Team 2. The Characteristics of the Industry in Which the Invention Will Be Exploited 3. The Characteristics of the Invention a. Importance of the invention — Economic value and potential payoff b. Radicalness of the invention — differentiation of the invention from its predecessors c. The breadth of patent protection of the intellectual property
  • 8. Technology Ventures: From Idea to OpportunityChapter 5: Figure 5.6 The New Business Formation Process for an Invention
  • 9. Technology Ventures: From Idea to OpportunityChapter 5: Figure 5.7 Disruptive or radical innovations introduce a set of attributes to a marketplace different than the ones that mainstream customers historically have valued, and the products often initially perform unfavorably along one or two dimensions of performance that are particularly important to those customers. Current performance of the innovation Range of performance required in the mainstream market Expected Trajectory Now Time High Performance Low The Expected Trajectory of a Disruptive Innovation
  • 10. Technology Ventures: From Idea to OpportunityChapter 5: Table 5.4 Creativity is the ability to use the imagination to develop new ideas, new things, or new solutions. Six Resources for A Creative Enterprise • Knowledge in the Required Domain and Fields — knowing what is new • Intellectual Abilities to recognize connections, redefine problems and envision and analyze possible practical ideas and solutions • Inventive Thinking about the problem in novel ways • Motivation towards Action • Opportunity Oriented Personality and Openness to Change • Contextual Understanding that supports creativity and mitigates risks
  • 11. Technology Ventures: From Idea to OpportunityChapter 5: Figure 5.10 Describe The Problem Describe The Problem Evaluate and Test the Ideas Evaluate and Test the Ideas Build a Prototype and Show It to the Customer Build a Prototype and Show It to the Customer Intuitive Thinking, Brainstorming Intuitive Thinking, Brainstorming Insights, Ideas, Inventive Thinking Insights, Ideas, Inventive Thinking Incubation Period: Observe and Study the Problem Incubation Period: Observe and Study the Problem Start Reframe and Start Again The Creativity Process
  • 12. Technology Ventures: From Idea to OpportunityChapter 5: Table 5.5 The Elements of An Attractive Innovation Strategy • A well defined customer • A key customer benefit that is measurable in dollars • Short period until economic payback and positive cash flow • A high benefit to price ratio for the customer • A proprietary advantage that can be maintained or defended • The core competencies required to exploit the new technology are present or available to the new venture • Access to the necessary resources
  • 13. Technology Ventures: From Idea to OpportunityChapter 5: Figure 5.11 Strategy • Industry and Competitor Analysis • Expected Competitive Advantage Business Model • Vision • Target Market • Value Proposition Technology Factors • Feasibility • Performance • Manufacturability Expected Economic Results • Revenue • Profitability • Return on Capital • Time to Profitability The four steps to achieve a favorable technology innovation.
  • 14. Technology Ventures: From Idea to OpportunityChapter 5: Principle An innovation strategy builds on creativity, invention, and technologies, acting within a value network, to effectively commercialize new products and services for its customers.
  • 15. Technology Ventures: From Idea to OpportunityChapter 5: Exercise Many people expect a car with a hydrogen fuel cell will be common within 10 years. Use table 5.5 and figure 5.1 to describe the potential for fuel cell vehicles.
  • 16. Technology Ventures: From Idea to OpportunityChapter 5: Venture Challenge VENTURE CHALLENGE 1)Describe your venture in terms of timing of entry as illustrated by figure 5.1 2)Create a value network for your company as outlined in figure 5.3. 3)Create a partnership strategy as discussed in section 5.3. 4)Summarize your technology and innovation strategy.
  • 17. Technology Ventures: From Idea to OpportunityChapter 5: DVD Video DVD Video “Two Weird Ideas That Work” Bob Sutton (Stanford University)