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part 3: Global entrepreneurship class


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Professor Brian Butler. Class at university FBV in Recife Brazil

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part 3: Global entrepreneurship class

  1. 1. Global Entrepreneurship Developing Global Mindset for Entrepreneurs
  2. 2. Brian David Butler Teaching: Brian Butler is currently a professor with Forum-Nexus, which is co-sponsored by the IQS Business School of the Ramon Llull University in Barcelona, and the Catholic University of Milan. He teaches classes on International Finance and Global Entrepreneurship in Europe every July and January. LinkedIn/briandbutler Skype: briandbutler In Miami, Brian has taught Finance, Economics and Global Trade at Thunderbird’s Global MBA program in Miami. He previously worked as a research analyst at the Columbia University Business School in New York City.
  3. 3. Brian David Butler International: A global citizen, Brian was born in Canada, raised in Switzerland (where he attended international British school), educated through university in the U.S., started his career with a Japanese company, moved to New York to work as an analyst, married a Brazilian, and has traveled extensively in Latin America, Asia, Europe and North LinkedIn/briandbutler America. Skype: briandbutler Brian currently lives in Recife, Brazil where he is teaching classes on ―Global Entrepreneurship‖ at the university ―Faculdade Boa Viagem‖.
  4. 4. KookyPlan – wiki for Entrepreneurs
  5. 5. Global Entrepreneurship: developing the global mindset for entrepreneurs Class #3 Saturday April 10th, 2010
  6. 6. Outline to cover today 1. What is global entrepreneurship? 2. Tips for entrepreneurs 3. Global mindset - defined 4. Homework review ▫ 3 questions – print out spreadsheet - Review + student presentations ▫ Team projects – review guidelines - Find out who teams will be (anyone not on team yet?) - Team presentations – what countries? What products? 5. Finance section 6. Intl IQ 7. Assign homework
  7. 7. Global Entrepreneurship ―Fun things happen when you earn dollars, live on pesos, and compensate in rupees, but that’s just the beginning….‖ • Idea: ▫ Earn money in US dollars, Euros, Japanese Yen, British Pounds, Swiss Francs ▫ Living expenses in Brazilian Reais ▫ Business expenses in Indian Rupees, or Chinese Yuan (Renminbi) ―The 4-Hour Workweek‖, Expanded and Updated, Timothy Ferriss
  8. 8. Tips for Entrepreneurs Suggestions to consider…
  9. 9. Tips: The main benefit of your product should be explainable in one sentence or phrase. How is it different and why should I buy it? ONE sentence ―The 4-Hour Workweek‖, Expanded and Updated, Timothy Ferriss
  10. 10. Tips: Look for outside help ―I not only use all the brains that I have, but all that I can borrow‖. —WOODROW WILSON, President USA • Some of the world’s best-known brands and products have been borrowed from someone or somewhere else. ▫ The basis for the energy drink Red Bull came from a tonic in Thailand ▫ the Smurfs were brought from Belgium. ▫ Pokémon came from the land of Honda. ▫ The band KISS made millions in record and concert sales, but the real profit has been in licensing—granting others the right to produce hundreds of products with their name and image in exchange for a percentage of sales. ―The 4-Hour Workweek‖, Expanded and Updated, Timothy Ferriss
  11. 11. Scalable model Your business plan should target a ―scalable model‖. Remember this word, as it will be important later. Make sure your business plan is scalable (i.e, can grow bigger without restraints). Watch out for information and decision bottlenecks: (often the entrepreneur themselves) ―The 4-Hour Workweek‖, Expanded and Updated, Timothy Ferriss
  12. 12. Dream BIG Doing the Unrealistic Is Easier Than Doing the Realistic Ninety-nine percent of people in the world are convinced they are incapable of achieving great things, so they aim for the mediocre. The level of competition is thus fiercest for ―realistic‖ goals, paradoxically making them the most time-and energy-consuming. It is easier to raise $1,000,000 than it is $100,000. It is easier to pick up the one perfect 10 in the bar than the five 8s. ―The 4-Hour Workweek‖, Expanded and Updated, Timothy
  13. 13. Dream BIG Having an unusually large goal is an adrenaline infusion that provides the endurance to overcome the inevitable trials and tribulations that go along with any goal. Realistic goals, goals restricted to the average ambition level, are uninspiring and will only fuel you through the first or second problem, at which point you throw in the towel. ―The 4-Hour Workweek‖, Expanded and Updated, Timothy
  14. 14. Why waste a good recession? • Facebook and LinkedIn launched in the post- 2000 dot-com ―depression.‖ Other recession- born babies include Monopoly, Apple, Cliff Bar, Scrabble, KFC, Domino’s Pizza, FedEx, and Microsoft. • Lesson: don’t wait for the ―right time‖… launch today!! ―The 4-Hour Workweek‖, Expanded and Updated, Timothy Ferriss
  15. 15. The 3 “R’s” of entrepreneurship ▫ Risk ▫ Reputation ▫ Relationships  Who can tell me why these 3 are important for entrepreneurs?
  16. 16. The 3 “R’s” of entrepreneurship ▫ Risk  Calculated risk taking  Risk => return (potential)  Types of risk:  Social  financial
  17. 17. Culture of risk taking • Importance of "risk-taking" • Entrepreneurship is about taking risk. The behavior of the entrepreneur reflects a kind of person willing to put his or her career and financial security on the line and take risks in the name of an idea, spending much time as well as capital on an uncertain venture. • What are the cultural links between risk aversion and entrepreneurship? Are some cultures more likely to produce more risk takers (and hence entrepreneurs)?
  18. 18. “Culture of Risk & Entrepreneurship: • Cultural observation – American relation to risk in Silicon Valley: ▫ Failure = ―badge of honor‖ ▫ Not afraid to fail (fast) ▫ Note: in US, its common to brag about humble roots, humble beginning. ―rags to riches‖
  19. 19. Cultural “dimensions” important to consider for entrepreneurship • Individualistic vs. Collectivistic cultures ▫ Where do you see Brazilian vs. US culture with relation to individualist vs. collectivistic comparison? (example from class: group at Disney world) • Hierarchy – flat equalitarian vs. hierarchy ▫ Question: is it ok to publicly challenge your boss, or to chastise an employee? ▫ Can decisions be made by the lowest of employees? ▫ Do low-level employess think ―Im just as good as the boss‖? ▫ Famous Quote: ―we hold these truths to be self – evident that all men are created equal‖ Thomas Jefferson, US Declaration of Independence
  20. 20. Cultural “dimensions” important to consider for entrepreneurship • Acceptance of failure: ▫ Is it socially accepted to fail in your culture? ▫ Is failure celebrated (as a learning process) ▫ What historical role models of ―loosers‖ are apart of your national culture / history? ▫ Question: does national attitudes toward ―failure‖ have an impact on the level of entrepreneurship in the country?
  21. 21. Famous story taught to US students: • He failed in business in 1831. He was defeated for Legislature in 1832. His second failure in business was in 1833. He suffered a nervous breakdown in 1836. • He was defeated for Speaker in 1838 • He was defeated for Elector in 1840. He was defeated for Congress in 1843. Again, he was defeated for Congress in 1848. He was defeated for Senate in 1855. He was defeated for Vice President in 1856. He was defeated for Senate in 1858. Who was this “loser”?
  22. 22. Abraham Lincoln: He was elected as President in 1860. • And went on to become Americas ―best‖ president: • ―He successfully led his country through its greatest internal crisis, the American Civil War, preserving the Union and ending slavery. • Lesson: If at first you don't succeed, try, try again!
  23. 23. Culture of Entrepreneurship: • Culture of Abe Lincoln (see resume) – role models, heros, risk and failure • How is that different in other countries? Stigma of failure? Easy to start again? Funding? Bankruptcy?
  24. 24. Take risks – even if others don’t think you will succeed!! ―The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.‖ —GEORGE BERNARD SHAW, Maxims for Revolutionists ―The 4-Hour Workweek‖, Expanded and Updated, Timothy
  25. 25. The 3 “R’s” of entrepreneurship ▫ Reputation  Not just among your friends & family…  But, how is your reputation online?  If a future employer were to GOOGLE your name, what would he / she find?  Note: everyone in todays world has TONS of photos online they would rather employers not see (remember that spring- break vacation? Once content is online, its there forever!)  The goal is not to remove all traces of your past from online, but to make sure that there is enough professional material that will come FIRST.  So if an employer/ partner / business associate… if they were to google your name… what would they find? Are you giving off the right image? Are you MANAGING THAT IMAGE?
  26. 26. The 3 “R’s” of entrepreneurship ▫ Reputation  Investors invest in competent entrepreneurs  Business partners join reputable leaders  Employees risk working for an entrepreneurs if they believe in them  Reputation is essential  Embrace risk, don’t fear failure, but manage your reputation (online especially!!)  Build with online tools  LinkedIn  Blogs, networks  In a future class (coming soon) we will look at social media (online tools) that you can use to manage your online REPUTATION
  27. 27. The 3 “R’s” of entrepreneurship ▫ Relationships  With clients, bosses, teachers, alumni, networks  Entreprenurs must be the PR department, the marketing department, the sales department  You are the face of the company (so keep smiling)  Build your network of influential people, and ASK THEM TO HELP YOU!!  Maintain with online tools
  28. 28. The 3 “R’s” of entrepreneurship  Suggestion: actively try to take risk everyday (get into habit) + work to build your reputation + relationships  Future lecture … will cover social media talks
  29. 29. Tips: ―The most important actions are never comfortable.‖ ―The 4-Hour Workweek‖, Expanded and Updated, Timothy Ferriss
  30. 30. Become a decision maker: ―To have an uncommon lifestyle, you need to develop the uncommon habit of making decisions, both for yourself and for others.‖ ―Stop asking for opinions and start proposing solutions. Begin with the small things.‖ ―The 4-Hour Workweek‖, Expanded and Updated, Timothy
  31. 31. Become a decision maker: If someone asks, ―Where should we eat?‖ ―What movie should we watch?‖ ―What should we do tonight?‖ or anything similar, do NOT reflect it back with, ―Well, what do you want to … ?‖ Instead…Offer a solution. Stop the back-and-forth and make a decision. Practice this in both personal and professional environments. Here are a few lines that help (my favorites are the first and last): ―Can I make a suggestion?‖ ―I propose …‖ ―I’d like to propose …‖ ―I suggest that … What do you think?‖ ―Let’s try … and then try something else if that doesn’t work.‖ ―The 4-Hour Workweek‖, Expanded and Updated, Timothy
  32. 32. Global Mindset definition
  33. 33. What is the “global mindset”
  34. 34. But…. Good for global entrepreneurs?
  35. 35. NO! Prefer: Think Globally…. Act Globally • Pay attention to what is going on globally ▫ Opportunities, threats, inspiration • Take action globally ▫ Launch companies, products, services…. With Global Potential!!!
  36. 36. Challenge of course: • Learn to develop ―global mindset‖ • Objectives: ▫ Increased International IQ ▫ Awareness of opportunities, trends ▫ Awareness of business models (from other side of world) ▫ Interest in international Travel
  37. 37. Defining Global Mindset
  38. 38. Defining Global Mindset ―Developing a global corporate mindset (and a group of global managers as its main flag bearers) has become a key prerequisite for successfully competing and growing in worldwide markets.‖ more: eloping_a_global_mindset.htm
  39. 39. Defining Global Mindset
  40. 40. Example – Case study of Global Mindset • Local furniture designer / producer ▫ High price locally ▫ Wants to look abroad for market • Advice: don’t just think about making products here to sell abroad. ▫ First Step– design locally – make prototype locally, but mass-produce the products wherever cheapest (perhaps India) and sell to biggest market (perhaps USA). ▫ Advanced: build global design team (perhaps in New York/ Milan), with production wherever cheapest, selling to global markets
  41. 41. Another Example – Case study of Global Mindset • Purse designer from Sao Paulo • Hires Italian design team • Produces in China • Sells in USA ▫ Earning US dollars (strong currency) ▫ Lives in Brazil (weak currency)  Result? Lives very well!! 
  42. 42. Why Does Global Mindset Matter? • Forces ▫ ―The increasing complexity of the global environment, ▫ the continued flattening of organizations ▫ and the blurring of boundaries • Impact: ▫ We need leaders who can collaborate with people from all parts of the world. • Benefits: ▫ Find opportunities others are missing ▫ Understand global competitors and customers.
  43. 43. How to develop “global mindset” • Travel • Watch international news - BBC, CNN • Read international newspapers, blogs ▫ Example: read in English. Learn about local business models in USA, consider copying model in Brazil. ▫ As you read Business Week… think about ―Localization‖: Would it work here?
  44. 44. Read international Business news
  45. 45. How to develop “global mindset” • Find foreigners in your home town, and go to dinner with them • Eat at foreign food restaurants • Join networking group with foreigners • Ask questions: ▫ ―what do you have in your home country that is great?‖, ▫ ―what do you miss most from home?‖ ▫ ―what problems do you see here that you wish you could fix?‖ ▫ ―what is missing here that you remember from home?‖ ▫ ―what types of businesses do you remember from home, but don’t find here?‖….. Etc..
  46. 46. How to develop “global mindset” • Join online networking groups ▫ Facebook, linkedin ▫ Ask same questions ▫ Travel abroad ▫ Travel in your home country ▫ Travel in your home city / state ▫ ** try to see the local through the eyes of the foreigners
  47. 47. Developing Global Mindset • 1. Learn a language (Category advantage: Skills) ▫ multilingualism is an essential element of an international career. ▫ Having basic comprehension and conversational abilities in one language is the beginning step. ▫ Take a class. Join a language club. Teach yourself online (see . ▫ Make your goal to add a minimum amount of fluency in one language. As you build your fluency in one language, start adding more languages to your skill sets.
  48. 48. Developing Global Mindset • 2. Join an international club or group (Category advantage: Community Involvement) ▫ They say that you are a reflection of who you surround yourself with. ▫ If you want an international career, start going to places where there are international people. ▫ Build your global competencies by discussing and exposing yourself to international politics, economics, culture and history. ▫ Meet the local Swedish Chamber of Commerce. Join the International Students Club. Have dinner with the local French Cuisine Connoisseurs. ▫ If there is no group that you gravitate towards, start one yourself. • See Recife International Society – meeting each month in Recife
  49. 49. Developing Global Mindset • 3. Study abroad (Category advantage: Education and Professional Experience) ▫ Enrich your educational experience by doing your course work in another country. ▫ Not only are you building your cultural awareness but you are also exposing yourself to an international lifestyle. ▫ Transitioning to an international lifestyle is something that requires the right kind of personality. ▫ Your marketability as a future expat increases because you have already experienced life in another country.
  50. 50. Developing Global Mindset • 4. Do an international internship (Category advantage: Professional Experience) ▫ Kick off your international career by doing an internship abroad. ▫ Your internship experience gives you a competitive edge in the marketplace as a young professional that has exposure in the workforce as well as living abroad. ▫ Similar to a study abroad experience, companies want to know that you can handle the pressures that an international transition poses. ▫ By interning abroad, you have already proven yourself capable of excelling as an international professional, even if it is an internship.
  51. 51. Developing Global Mindset • 5. Build your network with international professionals (Category advantage: Skills, Community Involvement) ▫ Nothing is more important for an international profession than their network. ▫ Most international opportunities arise because of you word-of-mouth exposure into the international market. ▫ Start by joining a LinkedIn group or follow some key people on twitter involved in international hiring. ▫ The more people that know your international career goals, the easier it will be to find a job or opportunity.
  52. 52. Links – good online references…
  53. 53. Online tools • Resources and Tools • Startup News • Startup School • TechCrunch • Mashable • GigaOm • O'Reilly Radar • Domain Name Search • Red Herring • Startupping • HBS Working Knowledge • STVP Educators Corner • Reddit: Startup • Business, Startup, Web 2.0 • Technorati: Startup • Digg: Startup
  54. 54. Online guide from YCombinator: • How to Start a Startup. Build something users love, and spend less than you make. • Hiring is Obsolete. The market is a lot more discerning than any employer. • How to Make Wealth. To get rich you need to get yourself in a situation with two things, measurement and leverage. • Why to Not Not Start a Startup. All the reasons you aren't doing it, and why most (but not all) should be ignored. • A Student's Guide to Startups. Starting a startup could well become as popular as grad school. • Ideas for Startups. The initial idea is not a blueprint, but a question. • Why Smart People Have Bad Ideas. A hacker who has learned what to make, and not just how to make, is extraordinarily powerful. • The 18 Mistakes that Kill Startups. If you avoid every cause of failure, you succeed. • The Hardest Lessons for Startups to Learn Some things about startups are kind of counterintuitive. • How to Fund a Startup. Venture funding works like gears. • The Hacker's Guide to Investors. Hackers don't know how little they know about this strange world. • How to Present to Investors. Explain what you're doing and why users will want it. • The Equity Equation. You should always feel richer after trading equity. • The Venture Capital Squeeze. Why not let the founders have that first million, or at least half million? • The Other Road Ahead. You may not believe it, but I promise you, Microsoft is scared of you. • What Business Can Learn from Open Source. There may be more pain in your own company, but it won't hurt as much. • What the Bubble Got Right. Even a small increase in the rate at which good ideas win would be a momentous change.
  55. 55. Homework review #1 3-questions
  56. 56. In class assignment • Each student to select one (problem, or trend)… AND one ―localization‖ idea to the class • Class discussion, review, and feedback  But, first… lets take a look at the assignment…
  57. 57. Homework #1 3-questions exercise – AGAIN – try to improve 2nd time! • Identify at least (1) major problem, (1) major trend, and (1) transferrable idea in: • (a) locally – Recife • (b) locally – Brazil • ( c) globally – some other part of world, or worldwide • Due Saturday March 20th – Maximum 1 page – word document – submit by email to :
  58. 58. 3-questions exercise – AGAIN – try to improve 2nd time!
  59. 59. Tip: look for “problems” Creating demand is hard. Filling demand is much easier. Don’t create a product, then seek someone to sell it to. Find a market—define your customers—then find or develop a product for them. Be a member of your target market and don’t speculate what others need or will be willing to buy. ―The 4-Hour Workweek‖, Expanded and Updated, Timothy Ferriss
  60. 60. Trends • Analyzing trends to find opportunities: ie. ▫ Goals: Awareness of global trends, global business models ▫ Possible Trends = wherever there are changes, risks and opportunities ▫ Look for changes in  technology, communications, capital markets, regulations, consumer tastes, credit availability, technology and more; and how they create opportunities for entrepreneurs
  61. 61. ―The future is here. It’s just not widely distributed yet. ― —WILLIAM GIBSON, author of Neuromancer; coined term ―cyberspace‖ in 1984 ―The 4-Hour Workweek‖, Expanded and Updated, Timothy
  62. 62. Trends in Technology (to think about) • Mobile • Social • Tv + internet (screen convergence) • Service on cloud • Digital natives -born between 1980 and • Always on • 3-D • More… can you add to this list??
  63. 63. • Tech Trends to watch Clean-tech • Cloud Computing • computing becomes a utility • Crowd-Sourcing : Using the power of groups • Blogging as a business • online video • Software as service • semantic web • Mobile Web • making technology affordable • VoIP • IPV6: • Convergence of Internet and television • Ultra Mobile PC's • custom fabrication • Developer Platforms (for social networking companies) • Peer to peer • Data Portability • Information overload • Putting computing technology in everything
  64. 64. Localization • Localization and replication locally: ▫ Localization of foreign business models and technology, or ▫ Finding local business models to replicate abroad
  65. 65. Localization ▫ Pay attention to:  cultural differences,  regulatory differences,  consumer behavior,  tastes, taxes  income levels, and more  ** these elements should ALL be apart of your TEAM project!!  …in the process of evaluating localizing strategies
  66. 66. And now…. • Time for presentations…. • Each student to select one (problem, or trend)… AND one ―localization‖ idea to the class • Class discussion, review, and feedback • Good luck! 
  67. 67. Homework review #2 Group projects
  68. 68. Homework #2 Group Project • Pick your group (3 students) • All groups must deliver the following ▫ Proposed product/ service ▫ Proposed 2 countries ▫ Outline of major issues (cultural, technological, political, economic…for why it may / or may not work) ▫ Due: Saturday 27th 10am ▫ Word document 2 pages max ▫ submit by email to :
  69. 69. Country Analysis • The first step, of course it to conduct a thorough country analysis, including culture, political risk, product adaptations, and more... ▫ Country Analysis ▫ international marketing ▫ political risk assessment ▫ Value Chain ▫ International perspectives ▫ international strategy See links to: KookyPlan, the Wiki for Entrepreneurs
  70. 70. Country Analysis • PEST analysis: for market research - looking outside the company to get a feel for the marketing environment • PEST analysis (marketing environment) ▫ Political/Legal ▫ Economical, Competition, Infrastructure, Geographic,. ▫ Social/Cultural ▫ Technology See links to: KookyPlan, the Wiki for Entrepreneurs
  71. 71. Country Analysis • Political ▫ factors include areas such as tax policy, employment laws, environmental regulations, trade restrictions and tariffs and political stability. • Economic ▫ factors are economic growth, interest rates, exchange rates and inflation rate. • Social ▫ factors often look at the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. • Technological ▫ factors include ecological and environmental aspects and can determine barriers to entry, minimum efficient production level and influence outsourcing decisions. Technological factors look at elements such as R&D activity, automation, technology incentives and the rate of technological change.
  72. 72. TEAM PROJECT • This team project is designed to provide you with a sound understanding of how entrepreneurs that engage in international business apply the concepts discussed in class to make real-life business decisions. Your team assumes the role of consultants that will advise the chosen company on some critical issues related to expanding into a new market. Teams will be made up of 3-4 students each. • Students will be asked to market a good or service from one country to another country. The project must include the following sections:
  73. 73. TEAM PROJECT I. Product and Company Selection • Select a product or service that at least one members of the team has a specific knowledge about and is currently marketed in a foreign country. Describe the product, the manufacturer, and the international business orientation of the firm. II. Market Analysis • Research the possibility of bringing that product/ service to another country (localizing the foreign business). Elaborate a market analysis in which you examine the competitive, economical and political environment that will impact the future success of your product and company there. Focus on the aspects of these environments that are most relevant to your company and product.
  74. 74. TEAM PROJECT III. Market Entry Strategy • After selecting a product and analyzing the target market, evaluate the different market entry strategies available. Assume that the company does not merely want to export its product to the given market, but has plans to develop a more strategic approach to entering this market. IV. Location • As part of your analysis in part III, make sure to suggest one or more particular cities or regions that will play a role in your proposed strategy. Describe the advantages of the proposed locations in terms of operations and distribution among others. • The project report should be between 6 and 8 pages long (Font: Arial, 12; Line Spacing: 1.5).
  75. 75. Factors to consider • Successful global entrepreneurship needs to take into account the: ▫ culture, ▫ political and legal environment, ▫ economic system and development, ▫ technology environment, and ▫ the overall infrastructure.
  76. 76. More Homework Sorry!
  77. 77. Homework 3-questions exercise – modified • Identify (1) transferrable idea ABROAD, and analyze if you think it could be brought to BRAZIL • Consider (P.E.S.T) factors 1. Political 2. Economic 3. Social 4. Technological ▫ Based on these 4 areas… do you think the foreign business model would work / not work in Brazil? Why? Why not? • Due this Friday by midnight (before next class) – Maximum 1 page – word document – submit by email to : • Be prepared to present your analysis in Class (with class review)
  78. 78. International IQ moment Great stuff abroad you should know exists!
  79. 79. Phang-nga Province, Thailand. islands now known as James Bond Island attract 007 pilgrims to this day.
  80. 80. Follow the 007 trail… • Licence to travel: jet-setting with James Bond • No one makes travel look so effortlessly suave as good old 007. Get on board the adventure with these Bond-themed destinations • Do you like your travel shaken or stirred?