Riassunto Entrepreneurship

Location—> national policy (systems of innovation)

How to learn from the market: Inquiry, empathic design, creating new markets

Innovation life cycle 1:

• Fluid Phase: product innovations (performance-maximizing), uncoordinated process,

experimentation

• Transition phase: emergence of a dominant design that signals an industry shake out and a shift

in focus on high volumes (sales-maximizing) and low cost production

• Specific: product innovation rate declines; focus on low cost strategy, higher volumes and

production capacity

Innovation life cycle 2 ——>

Typologies of customers:

• Customers who generate profit

• Customers who will generate

sales growth

• Customers who allow

accumulation of invisible assets

Maturity vs Customer base

Creating new markets (market experimentation, scenarios, extrapolation of trends):

• Explore implication of a range of possible trends

• Ensure broad participation and information channels of communication

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• Encourage multiple source, debate and constructive scepticism

• Be prepared to change strategy in light of new and unexpected evidence

Scenario development

• Assess relevant context

• Identify critical indicators

• determine behaviour of indicators

• Identify key feature events likely to affect indicators

• Construct best, worst and likely scenario

Essential element of a forecast

• Quantitative factors (specific measure)

• Qualitative factors (scope of forecast)

• Time frame

• Probability

• Assumptions made

Criteria for choice of forecasting method

• Organisation’s planning horizon

• Rate of environmental change

• Availability of information

• Availability of resources

• Competence and willingness of managers

Delphi Method:

• Survey of expert opinion

• Analyse response

• Re-survey with feedback on first survey

• Note any convergence or divergence

• Repeat process as necessary or possible

Lean Startup

A startup is a temporary organisation formed to search for a repeatable and scalable business

model

A business model describes the rationale of how an organisation creates, delivers and capture

value (Business model =/= Business plan)

Repeatable: when you can sell “ the same” product or service in many different markets without

changes to the product/service (Big Mac)

Scalable: when the marginal cost of delivering your product/service decrease as sales increase

(software, apps)

Traditional product development: it is not suitable for a start-up context because it does not have a

known future

Lean Startup 3 main principles:

1. Outline your assumptions: instead of embroiling yourself in months of research and planning to

write an intricate multi-year business plan, focus on that what really matters, which is the first

day you will test your idea and assumptions with the market

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2. Listen to your customers (test your assumptions): Meet and talk to your prospects right away to

receive feedback from the market already in the idea definition phrase

3. Rapid & Iterative development (continue testing): Product/service development should respond

as quickly as possible to market’s feedback (customers or users that explicitly ask for a feature,

a change in the product)/ service or latent feedback (behavior for example: customers only use

a part, a single function of your product or service)

Build a test, build a prototype—> Measure results —> Idea/Hipothesis —>

A produce can fail but the team doesn’t fail!

Investors weighted ranking of accelerator decision drivers:

• 40% team: a good combination of technical competencies & personal skills is the most important

driver for success

• 30% market & competitive advantage

• 15% business model

• 15% quality of the pitch

Phase 1: customer development

PROBLEM - MARKET FIT

What: first of all we have to understand if

the assumed target does actually feel the

problem we’re addressing with our solution

How: in person interview with prospects (Ex.

Javelin Board)

Phase 2: product development

PRODUCT - MARKET FIT

What: Then we have to understand if our solution is ok for the market

How: with a prototype, in lean methodology called MVP (Minimum Viable Products)

MVP: is a product with just enough features to gather validated learning about the product and its

continued development

Javelin Board:

1. Problem: everybody in the team defines a problem that your idea solves and writes it down

from the customers’ perspective. The you decide in the team which problems you want to test

2. Customers: Everybody in the team defines a specific target that you assume has the problem

you addressing. Then you decide which ones to test. The target has to be specific! Be careful—

> there are users and there are customers (maybe who pays for your solution is not the main

“user”)

3. Riskiest assumption: the most important assumption that must hold for your business model to

be viable

Tips for live interviews:

• Neutral place

• At leat 15 min per interview

• Write down everything or record interview audio

• Always follow the same script (same 3 questions)

• You need to interview at least 6-8 persons for each test (iteration)

3 main question focusing on past behaviour:

Have you ever had this problem/ need in the last year/ month?

Tell me a story about the last time you had the problem/ need (direct and indirect competitors)

Were you happy with the solution you found?

Now, if you want, you can talk about your solution

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After the first test you will analyse results:

How many people had the problem? At least 60%, if less pivot: change problem or target or both

2-3 findings & insights about the problem, customer & idea you’re testing

What is a pitch? A tool to transform boring data into compelling stories. Your “story” should touch

both emotional & rational part of the brain

• Introduce yourself: get into the story as fast as possible. (Present your team at team at the end)

• Answer the why—> the problem: describe the pain of the customer and outline how the

customer addresses the issue today

• Answer the what with a single declarative sentence

• Solution—> Unique Value Proposition

• Answer the how providing use cases (customer journey)

• Competition (3-6 main competitors): products/ services that solve your same problem today

• Market dimension & trends: Size of target market ($) and Trend (growth: CAGR%)

• Monetization: one main revenue stream

• Milestones: road to success, product development phases

• Investment asked (no-more than 50K in Europe): how much money do you need and how you

will use it

• Team

• Inspirational end

Startup investment cycle FFF: friends, family and others

Angels: Experienced individuals, giving back, not a full

time job

Super angels: Experienced individuals, OPM (other

people’s money), definitely a full time job, lots and lots of

deals

Venture Capital’s seed funds: Carve outs, get in on the

action

New forms of financing: crowd funding: an open call, essentially through the internet, for the

provision of financial resources in order to support initiatives for specific purposes

Equity crowdfunding (Seedrs, AngelList, Corwdcube): customers as shareholder, product

validation, create brand advocates 5 di 8

Various types of crowdfunding:

Equity-based crowdfunding

Reward-based crowdfunding

Donation-based crowdfunding

Performance attribute and trajectory:

• Package of performance attribute

• Performance trajectory: rate at which a product’s performance improves

• Mechanical excavators: cubic yards of earth moved per minute

• Photocopiers: numbers of copies per minute

• Hard disk drive: storage capacity

Disruptive vs. Sustaining innovations

Disruptive technologies look financially unattractive to established companies. Managers keep

doing what has worked in the past

Sailing ship effect

Organizational issue:

• Firms learn successful solution to problems (routines, the way we do things here)

• Continuous refinement of such “solutions” to better accomplish stated, existing objectives

• Replicate routines across organization (McDonald)

• Stratedy pursued along the known trajectories

• Ossification of organisational structure around existing knowledge:

• Communication channels are built around existing technologies

• Information filters - enables firms to immediately identify what is crucial from what is not

• Problem solving strategies

• Structural inertia

• Norms, values, stories (cultural inertia)

The entrepreneurial process

Drucker “ Entrepreneurship is an act of innovation that involves endowing existing resources with

new wealth producing capacity”.

Rumelt “Entrepreneurship is the creation of new businesses. New business means that they do

not exactly duplicate existing businesses but have some element of novelty”

Low & MacMillan “Entrepreneurship is the creation of new enterprise”

Gartner “Entrepreneurship is the process by which new organisations come into existence.

Entrepreneurship ends when the creation stage of the organisation ends”.

Stevenson “Entrepreneurship is the pursuit of an opportunity without concern for current

resources or capabilities”.

Timmons “Entrepreneurship is the process of creating or seizing an opportunity and pursuing

it regardless of the resources currently controlled”.

Our view:

Entrepreneurship is a process or behaviour, not a person. It is an approach to management that

begins with opportunity. “The pursuit of opportunity beyond the resources you currently control”

Differences between markets and industries?

Market = buyers not products

Industries= sellers

So, market attractiveness =/= industry attractiveness

The 7 domains tool (they are not equally important nor are they additive):

Is the market attractive?

• Macro-level considerations—> the market size and potential= # of customers in the market,

aggregate money spent, # of units of relevant products

• Micro-level considerations: is there a target level where we can offer clear and compelling

benefits at a price that they are willing to pay? Are these benefits superior to other solutions?

product differentiation is crucial. (Size and growth of the segment)

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Is the industry attractive?

• Macro level considerations: threat of entry, buyer power, supplier power, threat of substitutes,

competitive rivalry

• Micro level co