Assignment 1 Forming an Innovative BusinessDue Week 4 and worth 2.docx

Assignment 1: Forming an Innovative Business
Due Week 4 and worth 260 points
Go to the Wall Street Journal’s Website and read “And the Most
Innovative Entrepreneur Is...”,
located here
. After reading the article, conceive an innovative idea for a
new product or service. Imagine that you are going to start a
business that offers that product or service.
Write a six to eight (6-8) page paper in which you:
Briefly describe your innovative idea.
Determine the business structure that would be the best choice
for your venture. Support your decision.
Create an outline of the stages in the entrepreneurial process
that you would need to follow when starting this business.
Determine the resources and tools you would need to be
successful at each stage.
Determine the market for your innovative idea. Include details
on regarding your potential customers, the predicted size of the
market, and the competitors that already exist in the
marketplace.
Create an action plan that describes how you would overcome
any foreseen barriers to your venture’s success.
Use at least three (3) quality academic resources in this
assignment. Note: Wikipedia and other Websites do not qualify
as academic resources.
Your assignment must follow these formatting requirements:
Be typed, double spaced, using Times New Roman font (size
12), with one-inch margins on all sides; citations and references
must follow APA or school-specific format. Check with your
professor for any additional instructions.
Include a cover page containing the title of the assignment, the
student’s name, the professor’s name, the course title, and the
date. The cover page and the reference page are not included in
the required assignment page length.
The specific course learning outcomes associated with this

assignment are:
Analyze the stages in the entrepreneurial process.
Examine the process of innovating and developing ideas and
business opportunities.
Analyze different innovative business models to determine the
best model for a specific venture.
Analyze the market, customers, and competition of
entrepreneurs.
Examine the process of developing a business plan and setting
up the company.
Use technology and information resources to research issues in
entrepreneurship.
Write clearly and concisely about entrepreneurship using proper
writing mechanics.
Grading for this assignment will be based on answer quality,
logic / organization of the paper, and language and writing
skills, using the following rubric found
Here s the article if your not able to open it:
And the Most Innovative Entrepreneur Is...
The winner of The Wall Street Journal's small-business
innovation competition thrived during the downturn by finding a
new direction—and new markets
By
Sarah E. Needleman, Vanessa O'Connell, Emily Maltby and
Angus Loten
November 14, 2011
Imagine this. You're coming off the best year in your company's
history, with record sales and seemingly smooth sailing ahead.
Then the industry implodes. Your sales drop 70%, and your
prospects seem even
If you're Quadlogic Controls Corp., of New York City, you
think fast, get creative and rewrite your business plan. And you
do it so well that you not only stay afloat but thrive in the teeth
of the recession—taking on dozens of new workers and setting a

record for revenue.
Quadlogic's nimble reinvention put it at the top of The Wall
Street Journal's Small Business, Big Innovation competition. In
July, the Journal invited entrepreneurs to share the ideas they've
used to survive the worst downturn in decades. Over the next
three months, more than 100 entries poured in, ranging from a
rubber-duck manufacturer in San Rafael, Calif., to a
consignment retailer in Tampa, Fla., and a Chinese-language
school in Riverside, Conn.
Their strategies for overcoming the harsh economy were just as
diverse—and could be a model and an inspiration for other
companies that face similar struggles. Some expanded their
offerings, adding goods or services to appeal to consumers with
less disposable income. Others tapped new markets to cater to a
larger demographic or an underserved niche. Some abandoned
their original business model and pursued an entirely different
venture.
Sayre Swarztrauber, left, and Doron Shafrir, two founders of the
winning firm, Quadlogic Controls
Bryan Derballa for The Wall Street Journal
The Journal's small-business staff narrowed the field to 10
finalists, and then a panel of editors—Vanessa O'Connell, Alan
Murray and Dennis Berman—chose an overall winner. Readers
also voted for their favorite.
So, what exactly did Quadlogic do to earn the top spot? Let's go
back to early 2009 for the answer. Times were good for the
company, which made energy-tracking products that let
different tenants in the same building manage and pay for their
own usage. The two remaining founders— Doron Shafrir and
Sayre Swarztrauber —had just put up the best revenue figures
the 27-year-old company had ever seen.
All of a sudden, though, the housing market was in shambles,
driving sales into the ground. So Quadlogic decided to stake its
future on a daring reinvention plan.

Messrs. Shafrir and Swarztrauber had learned from a business
associate a few years earlier that in developing countries,
energy theft was a major problem. The entrepreneurs had even
begun tinkering with a new product to prevent utility-metering
systems from being breached. Only it was far from complete,
and they hadn't yet identified any potential buyers.
The partners decided that their best move would be to ramp up
production of the experimental line and launch an intense
marketing push. "You have to place your bets," says Mr.
Swarztrauber, 56. "We saw our survival threatened and that
gave us the incentive to make it happen."
The gambit paid off. Within five months, Quadlogic Controls
signed a multimillion-dollar deal with a private utility company
in Jamaica, and a recovery was under way.
Today, Messrs. Shafrir and Swarztrauber say the company's new
line has a dozen customers, all in markets thousands of miles
away such as Jamaica, Mexico, Costa Rica and Ecuador. What's
more, demand for its original energy-tracking systems is close
to the level it was just prior to the recession, thanks in part to
an improvement in the commercial housing market.
The company has ballooned to roughly 90 employees from about
20 two years ago, and it's on track to post $20 million in
revenue this year, $5 million more than its previous high.
Messrs. Shafrir and Swarztrauber credit the turnaround they
pulled off to constantly keeping an eye out for new business
opportunities. While they say it's important to focus on proven
models of success, it's also critical to regularly set aside time to
investigate potential alternative sources of revenue.
"I always have a plan B and a plan C for just in case," says Mr.
Shafrir, 64. "You never know."
Here's a look at the other finalists in the competition, and what
they did to stay afloat.
CUT YOUR EXPENSES BY GOING D.I.Y.
Alejandro Velez and Nikhil Arora, co-founders of Back to the
Roots LLC in Oakland, Calif., have grown a business out of

other companies' trash. They manufacture grow-at-home oyster
mushroom kits filled with used coffee grounds. WSJ's Lauren
Rudser reports.
Alejandro Velez and Nikhil Arora seemed destined to launch a
company together. Before they had even met, they went to the
same teacher at the University of California, Berkeley's Haas
School of Business for advice on the same offbeat business
idea: growing gourmet mushrooms in used coffee grounds,
rather than pricier fertilizers and wood.
After the teacher brought them together, the new partners
approached neighborhood coffee shops offering to haul away
their waste free. In a fraternity kitchen, they grew their first
crop of mushrooms in a coffee can filled with discarded
grounds—and it worked.
"We got so jazzed about that first bucket," says Mr. Velez, now
24, who turned down a Wall Street banking job to co-found
Back to the Roots LLC with Mr. Arora in April 2009.
The company saw strong sales at a local Whole Foods and
nearby farmers' markets. But scaling up proved tricky. Even
though raw materials were cheap, other parts of the business
were getting expensive, and financing was tight. It didn't take
long before the partners outgrew an 800-square-foot warehouse
and payables were already much higher than receivables, Mr.
Velez says.
Alejandro Velez and Nikhil Arora of Back to the Roots LLC
Kristen Lokey
"We came to a crossroads in the business where we could have
tried to become regional mushroom farmers," says Mr. Velez.
"But we weren't mushroom farmers."
Instead, they used the technique to develop grow-your-own
mushroom kits, eliminating the need for a costly infrastructure.
The kits can produce 1.5 pounds of mushrooms in just 10 days.
Today, the company collects some 20,000 pounds of used
grounds from area coffee shops and repurposes them into
growing kits (as well as a separate product, $10 bags of

nutrient-rich soil). Whole Foods and Home Depot are now
stocking the kits, with deals in the works with SkyMall and
Wegmans. This year, revenue hit $1.1 million, up from
$240,000 in 2010.
"We're profitable after just two years," says Mr. Velez. "But
even better, we're reconnecting people with growing food
again."
GIVE THE CUSTOMERS WHAT THEY CAN AFFORD
Many small businesses in the housing industry grew with the
real-estate boom—and then went bust when the bubble burst.
Not Henrybuilt Corp.—thanks to some quick thinking by
founder and Chief Executive Scott Hudson.
The Seattle firm specializes in designing kitchens that range
from $30,000 to $100,000. Launched in 2001, the company
expanded quickly. In 2006, it opened a New York City
showroom, which doubled in size in just 18 months. By 2008,
the company was working on some 200 projects in the U.S.,
Mexico and Canada, and sales had tripled since 2004.
Scott Hudson of Henrybuilt Corp.
Lisa Elliot
In October 2008, sales came to a standstill. "Everyone was
canceling projects," says Mr. Hudson, 50. Over the next two
months, the company lost hundreds of thousands of dollars of
revenue, he says.
With clients shying away from the high-cost renovations, Mr.
Hudson launched a subsidiary in 2009 called Viola Park Corp.,
which provides clients with a modular option based on the
Henrybuilt designs. Rather than working with an architect,
clients use the company's software to configure and customize
the layout and design to their liking—a cheaper and quicker
process that costs roughly half what the Henrybuilt kitchens do.
"We listened to the market, rather than waiting to get back to
the old days," Mr. Hudson says of the strategy.
Since Viola Park launched, both businesses have collectively

grown about 10%. Viola Park now represents 20% of the
company's revenue and has doubled every year.
But the biggest benefit to the company has been psychological,
says Mr. Hudson. When things got tough, he laid off two of his
25 employees. But after Viola Park launched, the two divisions
grew to a combined 30 employees, who felt excited and inspired
amid the industry's turmoil. "It drove morale," he says. "We
created opportunity in a time when everything else was
contracting."
SEE A PROBLEM, SELL A SOLUTION
Shane Bauer started Laughingstock Design as a graphic-design
and custom greeting-card company in 2007. But the downturn
left fewer businesses and families able to afford its high-end
custom cards, which required a first-time outlay of at least $40
to create a graphic using a likeness of the recipient's head. His
Duluth, Minn., business needed a new revenue stream.
Shane and Jenny Bauer of Laughingstock Design
Camelot Photography
Mr. Bauer was inspired by a T-shirt on display in a department
store featuring the words, "Bite Me." He thought there might be
a market for shirts with positive slogans to counteract that kind
of negative message. "I thought, man, things are getting pretty
bad," says the 35-year-old.
So, he created Happy Space PositiveWear, a line of casual
clothing and accessories that pair his intricate graphic designs
with positive messages—such as a guitar with the slogan "Live
In Harmony."
Mr. Bauer now sells more than a dozen different designs, up
from six in 2008, and expects his business to generate about
$100,000 in sales this year. The success of the new products led
Laughingstock Design to open a retail store, Happy Space, in
April 2010, and to hire its first outside employees—two part
time and one full time.

TAKE YOUR IDEA AND KEEP TINKERING
Courtney Tudor of Madeira, Ohio, spends his weekdays
designing jet engines at GE Aviation. But on the side, he's
honing Mr. Bigshot Inc.—a company that tries to have some fun
with the stock market.
Courtney Tudor of Mr. Bigshot Inc.
Wanda Tudor
Mr. Tudor, 50, grew fascinated with the market while seeking
an M.B.A. at Xavier University, and wanted to capture in a
game the thrill of investing. In 2000, he created the company,
funded by the proceeds of his own stock investments and backed
up by financial data and market results for 45 years.
The idea: Players can go back in time to play the market
through rounds of investing. For instance, they might go to Jan.
1, 1969, and follow two companies (known by aliases) for the
year. Every quarter, they decide whether to sell or switch to
another company.
Mr. Bigshot started out as a board game, followed by a
downloadable computer version. But sales were meager. And
when the
real
market plunged in 2008, Mr. Tudor's source of capital dried up.
Then he got what he describes as his breakthrough idea: an
online multiplayer version that can be used to conduct a
"Massive Market Madness Tournament" with thousands of high
schools across the country.
His next steps are to conduct trial tournaments in a few area
high schools, incorporating the feedback from students and
teachers. Then he intends to hold a regional tournament in the
greater Cincinnati area.
To be sure, his big idea hasn't been tested. But it was recently
among those that took top honors in a business-launching
competition at Xavier, and as the prize Mr. Tudor will get
consulting services to help him move forward.

WHEN NOBODY'S BUYING, SCRAP YOUR PLAN
Mid-2009 was a scary time for Merrimac Dillon, founder of
Pillow Bar LLC. Some $400,000 in potential licensing
agreements for her custom pillow-making machine suddenly fell
through as customers became too nervous about the economy to
commit. To keep the company going, she realized, the business
model would need a risky overhaul.
Ms. Dillon, now 52, first designed and constructed the pillow
machine in her Dallas garage in 2007, after an extensive and
unfruitful search for the perfect bedtime headrest. For $12,500 a
year, she licensed the machines to high-end linens stores, which
used it to make customized and personalized pillows according
to their customers' sleeping positions and shoulder widths. The
pillows cost $195 to $295. By mid-2009, the company had made
about $400,000 in sales. It had placed eight machines in stores
and had a waiting list of 30 interested retailers.
Merrimac Dillon of Pillow Bar LLC
Pillow Bar
But the honeymoon didn't last long. The economy lagged as the
normally busy holiday season approached, and retailers were
less prepared to make capital investments—22 on the list told
Ms. Dillon they didn't have the cash.
"They wanted me to float it, and that scared me," she says.
"What if I float it and they can't pay? It really made us stop and
say, 'Now what?' "
Some retailers asked Ms. Dillon if she would offer ready-made
pillows. She didn't like the idea. The machine gave customers a
unique buying experience, she reasoned. They liked watching
the down feathers swirl in the machine, and the assembly
process.
But Ms. Dillon decided to give it a try. She started wholesaling
the 12 pillow varieties most commonly requested. And the
business took off. Ms. Dillon moved manufacturing operations
into a 3,500-square-foot work space with a loading dock. She
also opened an online store.

Today, the ready-made business accounts for 60% of sales. The
company, which now has four employees, will exceed $1
million this year, Ms. Dillon says. "We could move quickly as a
small company," she says. "We wouldn't be afloat if we hadn't
made the change."
CORE BUSINESS WEAK? ADD A NEW ONE.
When Dawn Cameron launched Sanctuary T, a small New York
City restaurant, in mid-2007, she naturally expected it would
take time for the business to turn a profit. But the former
banking professional never imagined the wait would last more
than two years, or that she would need to dip into family
savings to cover payroll.
Ms. Cameron, 37 years old, says she might not be in business
today if she hadn't branched out—and gotten help from her
employees. In the summer of 2008, she and her 15 staffers put
their heads together to create a line of four tea-infused cooking
spices.
Dawn Cameron of Sanctuary T
Aretha Choi/Barrel
Since money was tight, the seasonings needed to be prepared
and bottled by hand, with labels designed and printed in-house.
Ms. Cameron, at the time pregnant, visited a dozen local
grocery stores to drum up orders. She also pitched media outlets
for press coverage. "It was a very stressful but exciting time,"
she says.
Within a few weeks, efforts started to pay off. A buyer for one
specialty grocery store placed an order on the spot, and the New
York Times ran a story about one of the company's new spices.
Next, Ms. Cameron says she invested $10,000 on upgrades that
included beefing up the company's website, buying product-
liability insurance and adding new packaging with nutritional
information and bar codes.
As more wholesale orders came in, Ms. Cameron says some
local clients agreed to let her to run in-store demos. As a result,

she says, traffic to the restaurant and her online store increased.
Today, Sanctuary T's Dust-T spices are for sale in 19 grocery
stores in four states and Washington, D.C. Ms. Cameron expects
the business overall to post $1.2 million in revenue this year, up
from just $400,000 in 2008.
"It felt counterintuitive to try to grow the business in the face of
declining sales in a recession, but that's what it took to
survive," she says. "I'm glad we had the courage to do it."
FIND A NEW WAY TO BROADEN YOUR BASE
Brian Linton, 24, was on shaky ground when the retailers that
sold his company's coconut-wood jewelry suddenly halted
orders in late 2008. But he found inspiration in an unlikely
place—trash-strewn beaches.
His company, Sand Shack LLC, based in Philadelphia, had
taken off earlier that year. He had established a customer base
of small beachside boutiques and surf shops on the East Coast,
as well as one national retail chain, and had reached $150,000
in sales. The firm had a green streak, too—5% of the proceeds
were donated to environmental-education and conservation
organizations.
Brian Linton of Sand Shack LLC
Matt Soriano
After the financial collapse, however, "the only thing keeping
us afloat were a few key accounts," says Mr. Linton. A few
dozen boutiques out of several hundred were still ordering by
mid-2009. And the 5% donations were a burden on the
company.
Mr. Linton and his two employees brainstormed how to turn the
business around without losing its environmental mission. Their
concept? Instead of donating cash, the company would collect
one pound of trash—mostly on waterways and beaches—for
every product sold. Each cleanup involves a few hundred of
those small loads at once; the company says it has pulled in
40,000 pounds to date.

Mr. Linton moved core operations to a new division called
United By Blue, which sells hoodies, handbags and T-shirts.
The company, he realized, could be more competitive if it had
more items to offer, and it could build a stronger brand if its
merchandise sported the company logo.
The business model had instant appeal to a whole new retail
base—outdoor-industry stores, specialty clothing stores and
certain supermarket chains. Despite the dismal first half of the
year, sales in 2009 stayed flat.
Last year, sales hit $350,000. And this year they could double,
Mr. Linton projects. Now, United By Blue is going
international, thanks to interest from Japanese retailers. And the
company has caught the attention of a major auto manufacturer
that wants to launch a cross-promotional campaign by providing
cars for the company's clean-up efforts.
"The recession made us think in a different way," says Mr.
Linton. "Some companies throw money at a problem, but we
want to internalize it and solve it ourselves."
DON'T GET STUCK IN A DEAD END
Four years ago, Travelers Haven LLC, a Naples, Fla., real-
estate rental firm, found itself in the epicenter of the housing
crash. Demand in the rental market dried up and nearly drove
the fledgling company under.
Elia Wallen of Travelers Haven LLC
Jason Brown
"We could've gone down with the rest of the housing market
there," says Elia Wallen, 28, the firm's president. Instead, he
decided on a new direction—worker-relocation services.
As the recession set in and jobs became scarce, more Americans
were willing to follow jobs wherever they went and for however
long. Usually, corporate housing services and staffing firms
own properties or rent them long term, which means they can sit
empty for long stretches between tenants.
Travelers Haven offered to handle the task at lower cost. The

firm would use proprietary software to track the availability of
short-term rentals and match it with the needs of clients.
To better tap this emerging market, Mr. Wallen and a handful of
remaining employees pulled up stakes and moved to Denver.
Their time zone allows them to work within the 9-to-5 office
hours of staffing firms on either coast without having to start
too early or stay too late, he says.
Since leaving Florida, the firm has grown to 35 full-time
employees. Revenue rose to $10.8 million last year—doubling
from 2009 and up from an average of $1.3 million in 2007 and
2008. The company expects revenue to hit $20 million by the
end of the year. "We started off imitating every Tom, Dick and
Harry in the real-estate industry, where you earn a commission,
shake a few hands and that's it," says Mr. Wallen. "We took a
traditional model and turned it on its head."
SOMETIMES IT HELPS TO TURN DOWN WORK
Rebecca Geier, 42, and Wendy Covey, 37, were colleagues for
more than a dozen years at a marketing firm. In early 2008, they
got together to build Trew Marketing—a venture that they
hoped would bring them more balanced lives as well as new
challenges.
The agency got off to a strong start, but the recession took its
toll. By the end of 2008, prospective new work was thin for the
Austin, Texas, firm.
Rebecca Geier and Wendy Covey of Trew Marketing
Morgan Norris
The founders decided to narrow their focus, concentrating on
business-to-business projects in engineering and science
markets.
Their reasoning: It takes a lot of hands-on work to deal with
scientists and techies properly. If they were doing other types of
work, it would take their attention away from tech-oriented
clients. And their reputation might suffer as a result, costing
them recommendations and jobs.

That meant turning business down, including clients like a city
looking for help with economic-development projects and a
start-up that wanted to develop a website. Each of those jobs
could have comprised from 12% to 20% of Trew's sales, Ms.
Geier says.
They also put more of an effort into optimizing traffic to Trew's
website. That meant redesigning the site to match their new
focus, adding a blog and offering a free downloadable book,
"Smart Marketing for Engineers."
The result: Trew thrived during the recession. Revenue is on
track to grow a projected 194% this year over 2009. What's
more, the pipeline of work is healthy, and comprised of the kind
of technical marketing the firm is best at, Ms. Geier says.
By Sarah E. Needleman, Vanessa O'Connell, Emily Maltby and
Angus Loten in The Wall Street Journal's New York bureau.
They can be reached at
[email protected]
,
vanessa.o'
[email protected]
,
[email protected]
and
[email protected]
.
Grading for this assignment will be based on answer quality,
logic / organization of the paper, and language and writing
skills, using the following rubric.
Points: 260
Assignment 1:
Forming an Innovative Business
Criteria
Unacceptable

Below 60% F
Meets Minimum Expectations
60-69% D
Fair
70-79% C
Proficient
80-89% B
Exemplary
90-100% A
1. Briefly describe your innovative idea.
Weight: 5%
Did not submit or incompletely briefly described your
innovative idea.
Insufficiently briefly described your innovative idea.
Partially briefly described your innovative idea.
Satisfactorily briefly described your innovative idea.
Thoroughly briefly described your innovative idea.
2. Determine the business structure that would be the best
choice for your venture. Support your decision.
Weight: 15%
Did not submit or incompletely determined the business
structure that would be the best choice for your venture. Did not
submit or incompletely supported your decision.
Insufficiently determined the business structure that would be
the best choice for your venture. Insufficiently supported your
decision.
Partially determined the business structure that would be the
best choice for your venture. Partially supported your decision.
Satisfactorily determined the business structure that would be
the best choice for your venture. Satisfactorily supported your
decision.
Thoroughly determined the business structure that would be the
best choice for your venture. Thoroughly supported your

decision.
3. Create an outline of the stages in the entrepreneurial process
that you would need to follow when starting this business.
Determine the resources and tools you would need to be
Weight: 20%
Did not submit or incompletely created an outline of the stages
in the entrepreneurial process that you would need to follow
when starting this business. Did not submit or incompletely
determined the resources and tools you would need to be
Insufficiently created an outline of the stages in the
entrepreneurial process that you would need to follow when
starting this business. Insufficiently determined the resources
and tools you would need to be successful at each stage.
Partially created an outline of the stages in the entrepreneurial
process that you would need to follow when starting this
business. Partially determined the resources and tools you
would need to be successful at each stage.
Satisfactorily created an outline of the stages in the
starting this business. Satisfactorily determined the resources
and tools you would need to be successful at each stage.
Thoroughly created an outline of the stages in the
starting this business. Thoroughly determined the resources and
tools you would need to be successful at each stage.
4. Determine the market for your innovative idea. Include
details on regarding your potential customers, the predicted size
of the market, and the competitors that already exist in the
marketplace.
Weight: 25%
Did not submit or incompletely determined the market for your
innovative idea. Did not submit or incompletely included details
on regarding your potential customers, the predicted size of the
market, and the competitors that already exist in the

marketplace.
Insufficiently determined the market for your innovative idea.
Insufficiently included details on regarding your potential
customers, the predicted size of the market, and the competitors
that already exist in the marketplace.
Partially determined the market for your innovative idea.
Partially included details on regarding your potential customers,
the predicted size of the market, and the competitors that
already exist in the marketplace.
Satisfactorily determined the market for your innovative idea.
Satisfactorily included details on regarding your potential
Thoroughly determined the market for your innovative idea.
Satisfactorily included details on regarding your potential
5. Create an action plan that describes how you would overcome
any foreseen barriers to your venture’s success.
Weight: 20%
Did not submit or incompletely created an action plan that
describes how you would overcome any foreseen barriers to
your venture’s success.
Insufficiently created an action plan that describes how you
would overcome any foreseen barriers to your venture’s
success.
Partially created an action plan that describes how you would
overcome any foreseen barriers to your venture’s success.
Satisfactorily created an action plan that describes how you
would overcome any foreseen barriers to your venture’s
success.
Thoroughly created an action plan that describes how you would
overcome any foreseen barriers to your venture’s success.
6. 3 references
Weight: 5%
No references provided

Does not meet the required number of references; all references
poor quality choices.
Does not meet the required number of references; some
references poor quality choices.
Meets number of required references; all references high quality
choices.
Exceeds number of required references; all references high
quality choices.
7. Clarity, writing mechanics, and formatting requirements
Weight: 10%
More than 8 errors present
7-8 errors present
5-6 errors present
3-4 errors present
0-2 errors present

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