Introduction to Entrepreneurial Management - Entrepreneurship 101 (2012/2013)


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Starting a new business is not the same as running an operating business. As Steve Blank puts it "a startup is an idea looking for a business model". Over the last decade a number of management practices have emerged that recognizes the particular challenges facing new ventures. In particular, Blank's Customer Development Model and the related "Lean" movement are increasingly popular with entrepreneurs of all sorts. This lecture introduces and define the key concepts of the new entrepreneurial management practices and illustrate how startups can utilize them at any step of their process.

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Introduction to Entrepreneurial Management - Entrepreneurship 101 (2012/2013)

  1. 1. Entrepreneurial  Management     Entrepreneurship  101   October  24  2012   Jon  E  Worren  
  2. 2. About  you  Idea?   Product?  Business?  
  3. 3. Established  pracBces  not  working   Share  of   Voice   Share  of   Mind   Share  of   Market  
  4. 4. The  Emergence  of  New  PracBces   2001   1911   Agile   2005    ScienBfic   Develo Customer   Mgmt   pment   Development   1948   2003     2009     Toyota   Lean   Lean   ProducBon   Thinking   Startup   System   Mvmt  
  5. 5. Entrepreneurial  Management         A  set  of  principles  and  frameworks  that  helps   startups  iden5fy  a  sustainable  business  model   with  the  least  amount  of  waste  possible  
  6. 6. ApplicaBon  Startup  Phase     Entrepreneurial   ExecuBon   Management   Business   Model?     TradiBonal   Search   Management     Growth  Phase  
  7. 7. Entrepreneurial  Management  PRINCIPLES  
  8. 8. ScienBfic  Management  •  Time    &  Work  Studies   (measurement)  
  9. 9. Toyota  ProducBon  System   •  Muda  –  EliminaBon   of  waste   •  Hansei  -­‐  learning   •  Kaizen  –  conBnuous   improvement   •  Jidoka  –  self-­‐learning    
  10. 10. Agile  Development  •  Customer  CollaboraBon  •  IteraBon  (short  Bme   frames)  
  11. 11. Lean  Thinking  •  GeneralizaBon  of  TPS  •  Increased  focus  on   “Value”  
  12. 12. Customer  Development  •  New  1:  De-­‐risking  a  new  venture  by  breaking  up  the   commercializaBon  process  and  prioriBze  business   problems  to  solve  •  New  2:  Focus  on  Customer  AcquisiBon     Customer   Customer   Customer   Company   Discovery   ValidaBon   CreaBon   Building  
  13. 13. Lean  Startup    •  Lean  Startup  =   Customer  Development   Build   +  Agile  development  •  Strong  build+  measure   Learn   Test   focus  •  Popularized  approach  –   created  Lean   Measure   Movement  
  14. 14. Entrepreneurial  Management  PROCESS  
  15. 15. Process   AssumpBons   Test  problem  Evaluate   AssumpBons   Measure  
  16. 16. Step  0-­‐  Describe  Idea  §  What kind of problem do you solve for the customer? Is this an important problem for these customers? ""§  Is there a big potential market for your idea? ""§  What is your competition and how do they solve this problem for their customers today? ""§  What is unique about your way of solving the problem?"
  17. 17. Step  1  –  Review  AssumpBons    •  Is  the  customer  problem  you  are  solving   validated  by  a  measurable  fact?    •  Are  you  able  to  idenBfy  which  customers  are   suffering  the  most  from  this  problem?    •  Do  you  understand  how  the  problem  impacts  the   customer  and  their  business?    •  Do  you  have  evidence  that  links  the  customer   problem  to  the  target  customer?    
  18. 18. Step  2  –Test  •  What  key  piece  of  informaBon  would  validate   or  invalidate  the  assumpBon?  •  Where  does  that  informaBon  reside?  •  What  is  the  best  way  to  gather  that   informaBon?    
  19. 19. Step  3  &  4  –  Measure  &  Evaluate  •  Is  the  customer  problem  urgent?  •  Is  the  problem  pervasive?  •  Will  customers  pay  to  have  the  problem   solved?  How  do  these  answers  measure  against  your  iniBal  assumpBons?    
  20. 20. 3  outcomes   Validate:  Confirmed   value  of  MVP   Iterate:  Change  your  Evaluate   product  features   Exit:  Don’t  spend   any  more  money!  
  21. 21. The  Pivot  Easier  when….   Harder  when…….  •  You  have  invested  liile   •  High  noise  to  signal   to  this  point   raBo  (  no  clear  •  You  are  gejng   feedback)   absolutely  no  tracBon   •  Next  step  is  unclear  Entrepreneurs  are  eternal  opBmists  –  choose  to  persist:  -­‐  Tweak  a  liile:  Our  next  version  will  take  off!  -­‐  Easy:  Our  next  campaign/trade  show  will  land  key  customers!  
  22. 22. The  quest  for  a  Business  Model  THE  3  STAGES  OF  THE  PROCESS  
  23. 23. The    3  stages  of  the  search  process   Customer  Problem   Product  SoluBon   Business  Model  
  24. 24. Business  Model  Canvas     Day Month Year No.Who are our Key Partners? What Key Activities do our Value Propositions require? What value do we deliver to the customer? What type of relationship does each of our Customer For whom are we creating value?Who are our key suppliers? Our Distribution Channels? Which one of our customer’s problems are we helping to solve? Segments expect us to establish and maintain with them? Who are our most important customers?Which Key Resources are we acquiring from partners? Customer Relationships? What bundles of products and services are we offering to each Customer Segment? Which ones have we established?Which Key Activities do partners perform? Revenue streams? Which customer needs are we satisfying? How are they integrated with the rest of our business model? How costly are they? What Key Resources do our Value Propositions require? Through which Channels do our Customer Segments Our Distribution Channels? Customer Relationships? want to be reached? Revenue Streams? How are we reaching them now? How are our Channels integrated? Which ones work best? Which ones are most cost-efficient? How are we integrating them with customer routines?What are the most important costs inherent in our business model? For what value are our customers really willing to pay?Which Key Resources are most expensive? For what do they currently pay?Which Key Activities are most expensive? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues? This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
  25. 25. Value  ProposiBon  •  What  you  offer  and  how  you  offer  it  to   customers    •  What  type  of  value  or  benefit  is  associated  with   your  offering  (e.g.,  cost  savings,  Bme  savings,   revenue  increase,  customer/employee   saBsfacBon)  and  how  much  of  it  the  customer   can  expect  •  How  the  value  is  generated    •  Why  it  differs  from  anything  else  on  the  market    
  26. 26. Examples  Winners   Google  Winners is a department Google is the world sstore that offers fashion largest search engineconscious consumers that allows internetthe latest brand names users to find relevantfor up to 60 per cent off.   information quickly and easily  
  27. 27. Final  two  slides  CONCLUSION  &  SUMMARY  
  28. 28. Summary  •  Startups  are  different   •  Test  for  customer  •  Search  is  about  learning   problem  first  •  Lean  is  about   •  Test  soluBon/MVP   minimizing  waste   •  Test  customer  •  CDM:  De-­‐risk  your   acquisiBon   venture  by  breaking  up   •  Human  element:  Give   the  process   someone  the  task  to   keep  you  accountable!  
  29. 29. Conclusion  •  Entrepreneurial  Management  offers  a  set  of   tools  and  processes  that  makes  the  process  of   starBng  up  more  manageable:  •  The  philosophy  brings  clarity  to  the  skillset   required  to  succeed:   –  Less  persistence  –  more  percepBon   –  Stack  the  odds  in  your  favour  –  rather  than  trying   to  win  against  all  odds   –  Commit  to  the  process  –  not  the  idea      
  30. 30. Thank  You!­‐toolkit