HOW TO START A VENTURE? - SESSION 8
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HOW TO START A VENTURE? - SESSION 8

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MAIN TOPICS:
- What is specific to start-up strategy?
- WooRank A & B
- Internet startups
- About strategy

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This session is part of a 10-weeks course given to master students of the SOLVAY BRUSSELS SCHOOL OF ECONOMICS AND MANAGEMENT by professor Olivier WITMEUR.

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HOW TO START A VENTURE? - SESSION 8 HOW TO START A VENTURE? - SESSION 8 Presentation Transcript

  • www.solvayentrepreneurs.be HOW TO START A VENTURE? SESSION 8 (out of 10) START STRATEGY This session is part of a 10-weeks course given to master students of the SOLVAY BRUSSELS SCHOOL OF ECONOMICS AND MANAGEMENT by professor Olivier WITMEUR.
  • Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR •  What is specific to start-up strategy? QUESTIONS AGENDA RESOURCES •  WooRank A & B •  Internet startups •  About strategy Desired Outcomes of the Session 2
  • Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR GEST-­‐S421  -­‐  Introduc2on  to  Entrepreneurship  -­‐  2014  ©  Olivier  Witmeur   3   WooRank A & B 3
  • Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR INTERNET START-UPS #1 4
  • Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR Web start-ups have three potential types of revenue models CONCEPT WOORANK The user doesn’t actually pay for the content or service he uses: he is subsidized, typically through advertising and affiliation programs There are two categories of premium revenue models for web start-ups: transaction (sale) and subscription (rental) models This is a hybrid revenue model: it consists in giving away something for free and then trying to up-sell the users •  Advertising •  White Label •  Do-it-yourself tool •  Marketplace •  Shutting down the free Freemium Feels-like-Free Premium 5 Source: Chai, Potdar and Chang, 2007; Enders, Hungenberg, Denker and Mauch, 2008; Anderson, 2010
  • Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR Most of the new software solutions sold are SaaS because it’s convenient but the subscription revenue model makes future cash flows less predictable SAAS SOFTWARE Software-as-a-Service offers many advantages ü  One-time fee ü  Use on one computer ü  Not available on mobile devices ü  Free trial not available ü  Installment required ü  Some updates are automatic ü  Less likely has supplemental apps ü  A new version requires a new purchase ü  Mobile synchronization requires additional software and often costly ü  Subscription fee ü  Use on any computer via internet ü  Available on many mobile devices ü  Free trial often available ü  Installment not required ü  Al updates are automatic ü  Most likely has supplemental apps ü  Users are always working from the latest software version ü  Mobile synchronization may require additional software, often free TRADITIONAL SOFTWARE 2010 2011 2012 2013 2014 2015 2016 CAGR SaaS growth 10.75% 13.46% 16.22% 19.82% 23.72% 27.94% 32.80% 19.5% 6 Source: Bill4Time; Gartner
  • Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR Inbound marketing enables web start-ups to drive high quality prospects to the company’s website at a very low cost •  Traditional intrusive form of marketing •  Expensive •  Finding customers OUTBOUND MARKETING INBOUND MARKETING CONCEPT EXAMPLES •  Permissive form of marketing •  Cheap •  Getting found by customers Print ads Blogs, eBooks, white papers Television ads Viral YouTube videos Cold calling Search Engine Optimization Trade shows Webinars Email blasts Feeds, RSS WOORANK MARKETING Outbound marketing is paid whereas inbound marketing is earned 7 Sources: Halligan, 2009; Godin, 1999
  • Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR ABOUT STRATEGY #2 8
  • Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR Mintzberg and Waters (1985) identified 8 kinds of strategies Depending on the ability a company has to predict or control its environment, it will have to adopt a strategy formation process that is more or less emergent Pure Deliberate Pure Emergent PLANNED STRATEGY The goal of the organization is reached without distortion through control of the stakeholders IDEOLOGICAL STRATEGY Organization members share a common vision, which rules their behaviour ENTREPRENEURIAL STRATEGY The owner imposes his vision, which he can redefine if he changes his mind UMBRELLA STRATEGY Management provides general guidelines that rule the behaviour of the actors PROCESS STRATEGY Management doesn’t control the content of the strategy but he defines its formation process UNCONNECTED STRATEGY A subgroup operates without falling under the same control hood as the rest of the organization CONSENSUS STRATEGY Strategy formation comes out of the convergence of opinions of the actors IMPOSED STRATEGY The environment dictates the strategy of the organization and it can only consent 9
  • Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR Deliberate and emergent strategies craft the realized strategy 10 Source: Mintzberg and Waters, 1985 There is a continuum of strategies, which differ by the relative importance of the emergent and of the deliberate in their formation
  • Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR There are 3 main risks to learning from the emergent No strategy Lost strategy Wrong strategy The organization does not look at the big picture anymore and evolves without central direction Learning can drive an organization away from its original strategy, even though it was working perfectly Incremental changes made by an organization throughout its learning process can little by little put it in a situation that no one ever wanted POTENTIAL RISKS Organizations must find the right balance between design and emergence without falling into the extremes, considering the uncertainty of the environment 11
  • Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR The VC2 framework enables to represent company position on value creation and value capturing on a 2x2 matrix Creating and capturing value simultaneously looks like a sustainable route to Heaven 12 Source: Hawawin, Subramanian and Verdin, 2004
  • Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR Here (a suggestion) Unique Positioning: •  Market niche: FOCUS •  Core business: FOCUS Risk reduction •  Low BREAK-EVEN •  Development STAGES What is strategy? 13
  • Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR 14 NEVER STOP WONDERING & ASKING!
  • Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR A real passion for entrepreneurship education and entrepreneurs. •  Student entrepreneurs: 2x •  Full time entrepreneur: once, in a team of 5 •  Coach: 500+ projects over the last 20 years •  (Advisory) Board member in multiple new ventures •  Policy making: 2x •  Director of Solvay Entrepreneurs •  PhD in entrepreneurship in 2008 •  … never as an investor My wife (as Colombo), no kids, one dog (Vicky). 15 Olivier Witmeur (Belgian, 46)
  • Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR Solvay entrepreneurs is the entrepreneurship center of the Université Libre de Bruxelles. We support entrepreneurs through the development of their venture, from an idea to a successful and sustainable business. 16 Solvay Entrepreneurs
  • Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR Let’s keep in touch! 172014%©%Olivier%Witmeur FOLLOW US ON LinkedIn.com/company/ Solvay-Entrepreneurs in Facebook.com/ SolvayEntrepreneurs f Twitter.com/ SolvayStart t SolvayEntrepreneurs.be www YouTube.com/user/ SolvayEntrepreneurs Foursquare.com/ SolvayStart