Summary
Cases in Entrepreneurship course summary
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Summary of the course from the Lectures and additional information from the readings.
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Week 1 - Antecedents and Requirements for Growth● Assessing A startup/new venture with startup framework (Gruberet al)
● Understanding why new ventures grow (Gilbert et al)
● The growth momentum in early stages of small businesses (Lebrasseur et al)
1.Reading: The Lean startup framework (Gruber & Shepherd)
•Most popular contributions practitioner-oriented entrepreneurship
•New insight show new ventures are started
•Five main building blocks for a lean start-up
•A process-oriented creation of the new venture
Strategy:
-outward looking learning mindset
-first set of tools for the search, learning and validation of activities
-business model and developing and testing hypotheses
-Utilizing a Build-Measure-Learn Feedback loop in order to pivot
-finding potential different market domains
The 5 Building Blocks:
A. Finding & prioritizing market opportunities:
The market opportunity navigator
•Identify a portfolio of market opportunities
•Understanding the relative attractiveness/uncertainties per opportunity
•What Does that mean for a growth strategy to start-up and grow agile
B.Designing business models:
Business Model Canvas - 9 building blocks
The right-hand part: which value creating, for whom, how delivering and how
capturing value?
1.Customer segments: which customers are we serving?
2.Value proposition: a set of products/services that will help the customer to
get the job done
3.Channels: how does the customers want to be reached?
4.Customer relationships: how personalized in order to get, keep & grow
customers?
5.Revenu streams: what are customers willing to pay and how?
,The left-hand part: how are we going to do it? What Do we need to create value?
6.Key resources: which resources do we need to create value? Factories, A
brand, Intellectual property, ...?
7.Key activities: what do we need to do, what do we need to be good at?
Marketing, Sales, R&D, ...?
8.Key partners: partners who can leverage the business`model?
9.Cost structure: what are the core costs?
C.Validated Learning(incl. customer development)
Search:
•Customer Discovery
-Begin to construct/check your hypotheses in 9 key elements
-Check it in the field with customers, partners, vendors…
•Customer Validation
-Match product/service solution with customer problem?
(Product-Market fit?/Associatedtest of Ries)
•The Pivot
-In case of sudden changes
Execution:
•Customer Creation
-Creatingand user demand n scale
•Company Building
-Building the organisation to built your company for scale
-Transitioning from customer development into a functional organisation(rapid
execution & growth)
D.Building minimum viable products(MVP)
Agile Product Development
•To built the start-up's first product
-How much time, energy, resources is needed in 1st product for hypothesis
testing?
-A build–measure–learn loop with minimum of effort and development time
-MVP containsonly the critical features of envisaged product
-MVP has a tangible, sharable or understanding dimension
•MVP Development
-Planning, Analysis & Design, Testing& Evaluation
E.Learning to persevere or pivot
Pivot or Persevere?
,•A pivot
•A structured course correction to test a new fundamental hypothesis about
product, strategy
•Reach a sustainable, repeatable business model which allows growth
•Setting learning milestones to accumulate information for making pivot or
persevere decisions
•The greater the investments made the more difficult it will be to pivot
2. Reading: New Venture Growth: a review and extension (Gilbert et al.)
Most important measure of new venture growth are in terms of sales, employment
and market share.
● Sales growth provides evidence of how revenues of a venture change over
time and indicated the extent to which customers are increasingly accepting
the products or services
● Employment growth indicates that a change has occurred in the
organizational composition or strategy of the firm, which warrants an increase
in the number of individuals working for the firm. This can be due to expansion
in the scope of firm operations or an immediate increase in business. Venture
is equipped with human capital through which its objectives can be executed.
● Market share growth provides an indication of the acceptance of the venture’s
products or services in the market. It’s an external measure of venture growth
that depends in part on the state of competition in the firm’s industry.
•Entrepreneur Characteristics
Educational background ,related industry/start-up experience
Knowing to compose/manage a founding team
Resources:
Human & financial capital
Expertise and highly skilled workers
•Geographic location
Access to local resources & logistics
•Organizational structures & Systems
Functional specialization (Knowledge workers)
Formal internal planning
•Strategy
Focused on one single product
, Differentiation on quality
Internal /External Growth
Domestic vs Int’l markets
•Industry context
Understand the characteristics of the industry
Tracing the required resources
•Internal Communication
Vision, Mission, Objectives
How and where new Ventures Grow
Internal or External Growth
Internal: venture uses innovative product development or marketing practices to identify and
develop products to capture prospective audiences
External: place emphasis on acquiring firms competing in the same or complementary
market. Acquisitions enable firms to enhance their product or service offerings or extend
their reach into new markets without developing the competencies required to do so
independently.
- Purchasing an existing firm: you can benefit from its reputation and increase market
share
Domestic or international market focus
- Market penetration strategy → extensive advertising programs or partners that can
promote the firm’s products to the respective market.
- Market development strategy → pushes a firm to sell its products to new markets.
May require a firm to establish a new entity to service the new markets or partner
with another firm already selling to the desired market
Working with partners or leveraging the productivity and efficiency of current workers →
grow without increasing the number of employees
Certain growth considerations
- Internal and external growth use different sets of competencies and may require
different characteristics in entrepreneurs. E.g. internal growth through innovation may
include complex processes of creative design.
3. Reading: The growth momentum in early stages of small businesses
(Lebrasseur et al)
Role/Relationship Between Pre-start & expansion activities
Model of initial Stages of Growth Momentum in Small Business Start-ups
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