1: Context and role of entrepreneurship Flashcards
The 4 phases of The Industry Cycle
w protagonists of the Opportunity Space
1 Technology Pioneers -
Era of Ferment/ Disruption
2 Fast Follower Innovators -
Growth
3 Traditional Startups -
Consolidation
4 Business Model Innovators
Maturity
The 3 Technologies currently in the era of ferment
digitalization
VR
Big Data
Commercializing Technology timeline in 3 phases,
w typical durations & events
- invention
… 28.1 y area of ferment:
sci publications & patents
- commercialization
… 6.2 y growth:
spin-offs
- firm takeoff
… 8.0 y consolidation:
acquisitions
- sales takeoff
… maturity
the New Theory of Venture Evolution:
The 2 macro-determinants of New Venture Behavior
- Institutional:
Stakeholders expectations determine new venture behavior - Behavioral:
What founders decide to do is constraint by the information they have access to (bounded rationality)
the New Theory of Venture Evolution: main task of New Venture,
w def., nature
& 2 main methods
- Technology Ventures “search” for optimal technology-market fit
- Heuristic Task
(you don’t know the means nor the end goal) - Targeted Market Search =
contact lead users, map the market, determine the optimal pair - Technology Broadcasting =
communicate what you have to a wide enough audience
Factors in ability to Search for "Technology Push" application/opportunity identification : 5 features+ 2 methods+: 1/ 2-
5 features+:
+ openness to new experiences
+ market partnerships
+ tech knowledge of founding team
+ serial entrepreneurship experience
+ heterogeneous team backgrounds in
1) age
2) industry background
3) social level
4) …others
2 methods+:
+ market screening
+ pivoting
1/ conscientiousness –> traditional entrepreneurs
- in-depth market(ing) experience –> traditional entrepreneurs
- Technology partnerships
Indicators of performance for New Ventures:
1-
1+
- Financials do not indicate the performance
or potential of a new venture (they all lose money)
+ Need for developing non-financial metrics:
1) Users,
2) patents,
3) installed base
3 institutional factors influencing behavior of new venture:
How to convince
- venture capitalists?
- acquirers?
- potential shareholders?
3 features of phase 2
(growth = fast follower innovation)
w sub-features & 3 examples
- Vision on the Mass Market
– Upscaling Existing Products/Services to mass market products
through differentiation and/or low cost;
– Examples:
1. Ray Kroc & Mac Donald’s,
2. Richard Branson and Virgin Galactic,
3. Steve Jobs and iPod, iPhone and iPad - Customer Driven
- Technology
- Financial Commitment
- Technology Acquisition ready to Upscale
- Collaboration with Private Equity Partners and/or JV
Phase 4 (not 3): Business Model Innovation
def
4 examples
4 features
1 key business plan aspect
= the introduction of fundamentally different business models in existing industries - Examples: 1- Apple’s iTunes 2- Ryanair and Southwest 3- Amazon.com 4- AirBnB
- Unlike Dominant Designs, old Business Models continue to exist
- Business Models might be difficult to protect, if successful
- Business Models might cannibalize, usually start small
- implications for social identity
- roll-out plan!
