TEACHING AND ENCOURAGING  ENTREPRENEURSHIP AND       INNOVATION      Belarus Universities     DR. KENT MILLINGTON         ...
TOPICS OF DISCUSSION•   Innovation•   Opportunity Recognition•   Managing Innovation•   Technology Commercialization•   De...
Entrepreneurship Risks and RewardsRisks:    •    Business Failure    •    Unpredictable Business Conditions    •    Long H...
Entrepreneurship Risks and RewardsRewards:   •   Financial   •   Emotional – building a business   •   Pride   •   Recogni...
ENTREPRENEURSHIP: THE ARTAND SCIENCE OF BUILDING VALUEART:   CREATIVITY; ENERGY; FEEL;        INSIGHTSCIENCE: ANALYSIS; ...
ENTREPRENEURSHIPIdentify a need or opportunityCreate a solution - InnovationImplement solution to create valueHarvest ...
Two Kinds of Entrepreneurship  1. Opportunity – based  2. Necessity – basedYoung people 25-34 are dominantparticipants in ...
Two Important Considerations for        Entrepreneurs • INNOVATION / CREATIVITY • OPPORTUNITY IDENTIFICATION
Continuum of InnovationImitative   Incremental   Evolutionary   Radical   RevolutionaryThe secret to innovation is uncover...
Continuum of InnovationImitative: copies something well-known and acceptedIncremental: small improvements; faster, better,...
The Creativity-Innovation-Entrepreneurship Chain                   Latest science and technology Creativity              I...
Types of Innovation1. Product: early stage of product life cycle,  innovations are frequent. As rate of product  innovatio...
Three Characteristics of OpportunityNewnessPotential Economic ValuePerceived DesirabilityOpportunity implies something ...
A Framework•Alertness•Social Network               Ideas•Prior Knowledge    -Of markets    -How to service markets    -Cus...
Basic Propositions Concerning             OpportunitiesProposition 1: Opportunities emerge fromchanges in knowledge, techn...
Product Opportunity GapSocial:Social and Culturaltrends, Historicaltrends                 Product                       Op...
Discontinuous opportunities: The source of radical innovation                 Adjacent                 Discontinuous      ...
… which create disproportionate wealth relative to adjacent                        opportunities            14%           ...
Managing Technology -    Discovery to ApplicationScientificDiscovery             Invention                         Innovat...
Sustaining vs. Disruptive TechnologiesSustaining technologies focus onimprovements of importance to existingcustomers. Exi...
Creating Competitive Advantage• Competitive Advantage  – Something that the firm does better than any of    its competitor...
Technology and Competitive         Advantage Technology              Competitive   ValueCompetitive   Advantage     Creati...
Major Strategic Questions• Should we create our own new  technology and innovations  internal to the firm?      OR• Should...
Dimensions of Internal             Innovation1. Goal of internal innovation is for the firm   to outperform its competitio...
Reasons for Using External Innovation:  1. The firm’s product line falling behind competitors.  2. A new competitor enters...
Technology S - Curve    PP   er   ro   fd   ou   rc   mt   a    n    c    e                     Time
The S-Curve of Technological Progress
S – Curve Strategy    PP   e                       3rd Technologyr   ro   fd   o              2nd Technologyu   rc   mt   ...
Managing Along the S – Curve    PP   e   Managing              3rd Technologyr   r   Growtho   fd   o                2nd T...
Management Implications•Technology shifts before investment recovery•Management focus often fragmented•Engineering strengt...
The Process of Technology CommercializationCommercializing New Technologies, Vijay K. Jolly, Harvard Business School Press...
Technology Commercialization Process             Imagining          Incubating Demonstrating Promoting                    ...
Technology Assessment1.   Understand Technology2.   Discover Possible Uses of Technology3.   Understand Markets for Uses4....
How Companies Develop1.Small Business Entrepreneurship – 95%+ of business2.Scalable Startup Entrepreneurship – receive mos...
Search for       Execution ofBusiness Model   Business Model
Build a Customer Development Process                Product Development Concept/        Product    Alpha/Beta   Launch/1st...
Customer Discovery: Step 1  Customer        Customer        Customer        Company  Discovery       Validation      Creat...
Customer Validation: Step 2      Customer    Customer     Customer   Company      Discovery   Validation   Creation   Buil...
“Pivoting” is changing a fundamental part of thebusiness model. It can be simple: recognizing that yourproduct was priced ...
Customer Discovery: Step 3Customer     Customer     Customer     CompanyDiscovery    Validation   Creation     Building– G...
Customer Discovery: Step 4  Customer     Customer      Customer    Company  Discovery    Validation    Creation    Buildin...
Nine Blocks of the Business Model       1.   Customer Segments       2.   Customer relationships       3.   Value proposit...
Business Model Canvas  Key                     Value                   Customer  Partners   Key          Proposition Custo...
Customer SegmentsMass Market: focus on one large group; i.e., consumerelectronicsNiche Market: specific segments; i.e., su...
Value Proposition: Five Key Values• Product: Performance, quality, features, brand, easy to use,  safe.• Price: Fair, visi...
Channels   Communication: marketing message, raising   awareness, customer evaluation   Distribution: delivering value pro...
Channel                Own                   Partner  Types                     Direct                Indirect            ...
Customer RelationshipsMotivations: Customer acquisition, customerretention, Boosting sales (upselling)        Personal Ass...
Key ResourcesPhysical: facilities, buildings, equipmentHuman: especially for creative industriesFinancial: sources of fund...
Key ActivitiesProduction: designing, making, deliveringProblem solving: consulting, services,hospitalsPlatform/network: so...
Key PartnershipsStrategic alliances between non-competitors andfinancial sourcesStrategic partnerships with competitorsJoi...
Revenue StreamsOne-time customer purchasesRecurring revenuesAsset sales, Usage fee, Subscription fees,Lending/Renting/Leas...
Cost Structure  Cost-driven model: minimize costs, low  prices, maximum automation, extensive  outsourcing, process innova...
Business Model Canvas  Key        Key          Value       Customer    Customer  Partners   Activities   Proposition Relat...
Business Model Canvas – SWOT AnalysisI   KP        KA      VP         CR         CSn    Strengthst                        ...
Business Model Canvas – Value Innovation  KP         KA        VP        CR        CS   - Costs                           ...
Business Model Canvas – Value Innovation  KP       KA          VP         CR           CS         Eliminate               ...
Apple iPod/iTunes Business Model What about your Company????
Business Model Canvas for Apple iTunes  KP          KA                VP         CR              CS                Hardwar...
ENCOURAGING ENTREPRENEURSHIP•   Show how to take part in the world•   Meet and know older entrepreneurs•   Access to techn...
ДзякуйJ. Kent Millingtonmilliken@uvu.edu
training of Professor Kent Millington (2)
training of Professor Kent Millington (2)
training of Professor Kent Millington (2)
Upcoming SlideShare
Loading in …5
×

training of Professor Kent Millington (2)

961 views

Published on

organized by HTP

0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
961
On SlideShare
0
From Embeds
0
Number of Embeds
240
Actions
Shares
0
Downloads
16
Comments
0
Likes
2
Embeds 0
No embeds

No notes for slide

training of Professor Kent Millington (2)

  1. 1. TEACHING AND ENCOURAGING ENTREPRENEURSHIP AND INNOVATION Belarus Universities DR. KENT MILLINGTON OCTOBER 2012
  2. 2. TOPICS OF DISCUSSION• Innovation• Opportunity Recognition• Managing Innovation• Technology Commercialization• Developing New Business• Business Model canvas
  3. 3. Entrepreneurship Risks and RewardsRisks: • Business Failure • Unpredictable Business Conditions • Long Hours • Product/Service compete on Price only • Imitation strategy
  4. 4. Entrepreneurship Risks and RewardsRewards: • Financial • Emotional – building a business • Pride • Recognition • Flexibility • Creativity
  5. 5. ENTREPRENEURSHIP: THE ARTAND SCIENCE OF BUILDING VALUEART: CREATIVITY; ENERGY; FEEL; INSIGHTSCIENCE: ANALYSIS; DISCIPLINE; SYSTEMATIC APPROACH
  6. 6. ENTREPRENEURSHIPIdentify a need or opportunityCreate a solution - InnovationImplement solution to create valueHarvest or other long-term strategy
  7. 7. Two Kinds of Entrepreneurship 1. Opportunity – based 2. Necessity – basedYoung people 25-34 are dominantparticipants in entrepreneurship.
  8. 8. Two Important Considerations for Entrepreneurs • INNOVATION / CREATIVITY • OPPORTUNITY IDENTIFICATION
  9. 9. Continuum of InnovationImitative Incremental Evolutionary Radical RevolutionaryThe secret to innovation is uncovering an unmet consumerneed and the filling it in an innovative, creative way.
  10. 10. Continuum of InnovationImitative: copies something well-known and acceptedIncremental: small improvements; faster, better, cheaperEvolutionary: new to firm but not to world (i.e., technologies in new places)Radical: technologies that give large performance improvements or lower costsRevolutionary: new to individual, firm, and the world Best Opportunities between Incremental and Radical
  11. 11. The Creativity-Innovation-Entrepreneurship Chain Latest science and technology Creativity Innovation Entrepreneurship • Production of novel • Refining, evaluation • Creation of value and useful ideas and first prototypes in the marketplace • Discovery of of the new ideas • Exploitation of opportunities • Evaluation of opportunities • Output: new ideas opportunities • Output: new product, • Output: prototype service, or process Needs in society and the marketplace
  12. 12. Types of Innovation1. Product: early stage of product life cycle, innovations are frequent. As rate of product innovation decreases, process innovation increases. (What we make)2. Process: makes manufacturing more efficient through automation, lowering costs. (How we make it)Product /Service innovation creates much morenew wealth than process innovation!
  13. 13. Three Characteristics of OpportunityNewnessPotential Economic ValuePerceived DesirabilityOpportunity implies something that has not existed orbeen available before, that can yield potential economicgains, and whose development is consistent with legaland/or moral standards of the society in which it occurs.
  14. 14. A Framework•Alertness•Social Network Ideas•Prior Knowledge -Of markets -How to service markets -Customer problems -Accumulation over time Example: Focus Media in Shanghai
  15. 15. Basic Propositions Concerning OpportunitiesProposition 1: Opportunities emerge fromchanges in knowledge, technology, economic,political, social, and demographic conditions.Proposition 2: Recognition depends onprevious experience which enables peopleto see links between previously unconnectedchanges, knowledge, or events.
  16. 16. Product Opportunity GapSocial:Social and Culturaltrends, Historicaltrends Product Opportunity Gap Technology: Emerging technologies Re-evaluating existing Economic: technologies State of the Economy, Level of Disposable Income, Changing Investment Opportunities
  17. 17. Discontinuous opportunities: The source of radical innovation Adjacent Discontinuous New Opportunities Opportunities Markets Exploit current assets Create new markets and capabilities and new products Status Quo Grow market Adjacent share and profit Existing Opportunities Markets (business expansion, Increase primary not new business market demand development) Existing Products/ New Products/ Technology Technology
  18. 18. … which create disproportionate wealth relative to adjacent opportunities 14% 38% Discontinuous 61% opportunities Adjacent 86% opportunities 62% 39% Type of new Business launch Revenues Profits Source: Chan & Mauborgne (1997)
  19. 19. Managing Technology - Discovery to ApplicationScientificDiscovery Invention Innovation Technology Application
  20. 20. Sustaining vs. Disruptive TechnologiesSustaining technologies focus onimprovements of importance to existingcustomers. Existing companies best withincremental innovation.Disruptive technologies create a new valueproposition, reach new markets and customers.New companies better at disruptive, radicalinnovation.
  21. 21. Creating Competitive Advantage• Competitive Advantage – Something that the firm does better than any of its competitors. – Goal: To have a sustainable competitive advantage • Requires that the advantage: – Must be valued by customers – Not easily duplicated by competitors
  22. 22. Technology and Competitive Advantage Technology Competitive ValueCompetitive Advantage CreationDynamics
  23. 23. Major Strategic Questions• Should we create our own new technology and innovations internal to the firm? OR• Should we acquire technology from external sources like acquisition or strategic alliances?
  24. 24. Dimensions of Internal Innovation1. Goal of internal innovation is for the firm to outperform its competition.2. Internal innovation involves many individuals, capabilities, and resources.3. Resources are critical to the innovation process. (Human, Physical, Financial)
  25. 25. Reasons for Using External Innovation: 1. The firm’s product line falling behind competitors. 2. A new competitor enters the market, which will change the dynamics of the industry. 3. The firm discovers its processes are not as efficient and/or effective as those of its competitors. 4. The firm believes its current products or processes are not going to be successful in the future. 5. Expansion into new markets and/or new products is achieved faster.
  26. 26. Technology S - Curve PP er ro fd ou rc mt a n c e Time
  27. 27. The S-Curve of Technological Progress
  28. 28. S – Curve Strategy PP e 3rd Technologyr ro fd o 2nd Technologyu rc mt a n 1st Technology c e Time
  29. 29. Managing Along the S – Curve PP e Managing 3rd Technologyr r Growtho fd o 2nd Technologyu r m Managingc a Transitionst n 1st Technology c e Time
  30. 30. Management Implications•Technology shifts before investment recovery•Management focus often fragmented•Engineering strength often misused• Marketing becomes a problem introducing new technology over the old one•Difficult to manage the ROI in importanttechnology.
  31. 31. The Process of Technology CommercializationCommercializing New Technologies, Vijay K. Jolly, Harvard Business School Press, 1997, p. 4
  32. 32. Technology Commercialization Process Imagining Incubating Demonstrating Promoting SustainingProduct Build products & Build markets Creating unique Proving product Buildplanning product ideas viability prototypes introduce to & improvesteps markets products Build initial DevelopBusiness Find resources to Find interested markets & build prototypes & market growthplanning people & money identify markets plan market strategies expansionssteps Resource Needs People Small Moderate Medium Large Physical None Moderate Medium Large Financial None Moderate Large Largest
  33. 33. Technology Assessment1. Understand Technology2. Discover Possible Uses of Technology3. Understand Markets for Uses4. Determine How to Deliver Value
  34. 34. How Companies Develop1.Small Business Entrepreneurship – 95%+ of business2.Scalable Startup Entrepreneurship – receive mostinvestment3.Large Company Entrepreneurship – innovation asvariants of existing core products; disruptive innovationdifficult.4.Social Entrepreneurship - innovation to solve socialneeds
  35. 35. Search for Execution ofBusiness Model Business Model
  36. 36. Build a Customer Development Process Product Development Concept/ Product Alpha/Beta Launch/1st Bus. Plan Dev. Test Ship Customer Development ? ? ? ?
  37. 37. Customer Discovery: Step 1 Customer Customer Customer Company Discovery Validation Creation Building• Stop selling, start listening – There are no facts inside your building, so get outside• Test your hypotheses – Two are fundamental: problem and product concept
  38. 38. Customer Validation: Step 2 Customer Customer Customer Company Discovery Validation Creation Building• Develop a repeatable and scalable sales process• Only earlyvangelists are crazy enough to buy
  39. 39. “Pivoting” is changing a fundamental part of thebusiness model. It can be simple: recognizing that yourproduct was priced incorrectly. It can be more complex:your target customer needs to change, the feature setis wrong, you chose the wrong sales channel or yourcustomer acquisition programs are ineffective.
  40. 40. Customer Discovery: Step 3Customer Customer Customer CompanyDiscovery Validation Creation Building– Goal is to create end-user demand and drive that demand into the sales channel.– Marketing message will be different based on the kind of market being entered and the customers being sought– Brand building and heavy advertising work in existing markets but not so much in new markets.
  41. 41. Customer Discovery: Step 4 Customer Customer Customer Company Discovery Validation Creation Building– Where the company transitions from informal, learning, and discovery to formal departments of Sales, Marketing, Business Development– Build departments to exploit early market success– Add employees to meet demand for products
  42. 42. Nine Blocks of the Business Model 1. Customer Segments 2. Customer relationships 3. Value propositions 4. Channels 5. Key Resources 6. Key Activities 7. Key Partners 8. Revenue streams 9. Cost StructureBusiness Model Generation, Alexander Osterwalder & Yves Pigneur,2010
  43. 43. Business Model Canvas Key Value Customer Partners Key Proposition Customer Segments Activities Relations Key Channels Resources Cost Structure Revenue Streams
  44. 44. Customer SegmentsMass Market: focus on one large group; i.e., consumerelectronicsNiche Market: specific segments; i.e., supplier-buyerrelationships like auto parts manufacturersSegmented: different needs and problems; i.e., banks andprofessional services (engineering, consultants)Diversified: unrelated segments; i.e., Amazon selling productsand providing computer servicesMulti-sided platforms: credit card companies; i.e., cardholders and merchants
  45. 45. Value Proposition: Five Key Values• Product: Performance, quality, features, brand, easy to use, safe.• Price: Fair, visible, consistent, reasonable.• Access: Convenient location, found in reasonable time.• Service: Ordering, delivery, return, check-out.• Experience: Emotional, respect, ambiance, fun, intimacy.• One value selected to dominate value proposition, a second to differentiate, and remaining three meet the industry norm.
  46. 46. Channels Communication: marketing message, raising awareness, customer evaluation Distribution: delivering value proposition Sales: places to purchase product or servicesFinding the right mix of channels is crucial to bringing a valueproposition to market.
  47. 47. Channel Own Partner Types Direct Indirect Sales Web Own Partner Wholesale Force Sales Stores StoresChannel Phases 1. Awareness: How to raise awareness of products? 2. Evaluation: How do customers evaluate products? 3. Purchase: How and where do customers buy? 4. Delivery: How do we deliver value proposition? 5. After Sales: How provide post-purchase support?
  48. 48. Customer RelationshipsMotivations: Customer acquisition, customerretention, Boosting sales (upselling) Personal Assistance Dedicated Personal Assistance Self-service Automated service User communities Co-creation of innovative products
  49. 49. Key ResourcesPhysical: facilities, buildings, equipmentHuman: especially for creative industriesFinancial: sources of fundingIntellectual: patents, copyrights,partnerships, customer databases
  50. 50. Key ActivitiesProduction: designing, making, deliveringProblem solving: consulting, services,hospitalsPlatform/network: software, networks,social media, brands, platform promotion
  51. 51. Key PartnershipsStrategic alliances between non-competitors andfinancial sourcesStrategic partnerships with competitorsJoint VenturesBuyer-supplier relationships to assure reliablesupplies
  52. 52. Revenue StreamsOne-time customer purchasesRecurring revenuesAsset sales, Usage fee, Subscription fees,Lending/Renting/Leasing, LicensingPricing considerations
  53. 53. Cost Structure Cost-driven model: minimize costs, low prices, maximum automation, extensive outsourcing, process innovation Value-driven model: value creation, premium values, personalized service, product innovationEconomies of scale Economies of scope Fixed costs Variable costs
  54. 54. Business Model Canvas Key Key Value Customer Customer Partners Activities Proposition Relations Segments Key Channels Resources Cost Structure Revenue Streams
  55. 55. Business Model Canvas – SWOT AnalysisI KP KA VP CR CSn Strengthst Weaknesseserna KR ClExt Opportunities Threatse C$ R$rnal Helpful Harmful
  56. 56. Business Model Canvas – Value Innovation KP KA VP CR CS - Costs + Value KR C C$ R$
  57. 57. Business Model Canvas – Value Innovation KP KA VP CR CS Eliminate Raise - Costs + Value KR C Reduce Create C$ R$ Cost Side Value Side
  58. 58. Apple iPod/iTunes Business Model What about your Company????
  59. 59. Business Model Canvas for Apple iTunes KP KA VP CR CS Hardware Lovemark Record Design Companies Seamless Switching Marketing Costs Music Mass Experience market OEMs KR C People Retail stores Brand Name Apple stores iPod hardware Apple.com iTunes software C$ R$ People Manufacturing iTunes stores Marketing and sales Large hardware revenues Some music revenues
  60. 60. ENCOURAGING ENTREPRENEURSHIP• Show how to take part in the world• Meet and know older entrepreneurs• Access to technologies and capital• Tax benefits and other incentives• Entrepreneurship education
  61. 61. ДзякуйJ. Kent Millingtonmilliken@uvu.edu

×