Introduction To New Business Introduction To New Business VenturesVentures

PROFESSOR BALAGOPAL VISSAINSEAD

1, Ayer Rajah AvenueSingapore 138676

---Office: (65) 67995382

Hand phone: (65) 94244573Email: balagopal.vissa@insead.edu

These notes are intended to support class discussions. They should not be considered a comprehensive set of issues to be dealt with.

Welcome! Something about me Bala Vissa Ph.D. from London Business School Research focuses on new venture team

dynamics and networks, Business Groups and entrepreneurship in emerging economies

Work experience: 7 years with Unilever plc and HCL in India 2 years experience in corporate entrepreneurship

Now, something about you

Please take 5 minutes to fill in the questionnaire (whether registered or not)

• Pair up with another person whose first name

starts with the same letter as yours or is one letter away – e.g. John can pair up with Jane, Ian or Kate

• Explain your favorite new venture idea to your counterpart

• Your Task: Introduce your counterpart to the class in under 2 minutes focusing on:– His/her name and background– His/her favorite new venture idea– Is he/she seeking team members– His/her relevant prior experience

“She’s always in your face isn’t she. I don’t get it. What is it about her? She’s not a great dancer or singer.”

Michael Jackson

Sensing an opportunity & executing flawlessly, time after time …

“As America turns prim and proper, radical Madonna, always ahead of trends, has been penning children’s books, dressing demurely in Laura Ashley florals, and exalting motherhood”

Source: The Straits Times, July 10, 2004

Madonna: The serial entrepreneur?

1989 1996 20031983 1988 1995

Positioning

Leveraging Resources

Growth and change

Music, sex appeal Music, sex and new age

“Like a Virgin” “Desperately Seeking Susan”

Ambition; Relationship with Prince; Marriage to Sean Penn, ability to spot trends

DisciplineBuilding and using alliances;Manipulating the press

“Like a Prayer”; “Sex”;“In Bed with Madonna”

Relationship with Warren Beatty – played in several movies, ability to spot trends

“What it feels like for a girl”“Evita”

New producers;New staff; Guy Ritchie, ability to spot trends

Discipline,Breaking alliances; Creating Controversy; Film experience

Discipline (with a softer face?)Self-development;Motherhood; Move toLondon; Guy Ritchie

Music,sex and controversy

So, what is entrepreneurship?

Pursuing opportunities without regard to resources currently controlled

In this course, we are interested in a specific aspect of entrepreneurship

Building a high growth venture

Common problem: How to start?

« I always wanted to create a company…There were times I didn’t sleep when I was an employee just because I didn’t know how to go about starting something. I wanted to start something , I wanted to be an entrepreneur, but I didn’t know what to do, I didn’t know how to build on my knowledge and expertise. What could I do? It’s easy to say – everybody wants to be an entrepreneur. The question is, how do you go about it? »

- Entrepreneurial INSEAD Alumnus

New business ventures

You want to build a business: How do you go about building a

business? What resources do you need? How do you acquire & manage them? How do you change your management

style as the venture grows?

New business ventures

You are working with start-ups: How do you judge the prospects of an

entrepreneurial venture? How can you anticipate potential

problems? How can you help the venture team

build the business?

Course objectives Learn how to turn opportunity into

revenue-generating business Experience the entrepreneurial

process Meet practice Work with start-ups Get your feet wet...

Discover / develop your entrepreneurial potential

What not to expect

A “boilerplate solution” Logically, there cannot be one

Legal details on how to start a business Talk to a lawyer in the country where you

wish to incorporate

Deep industry expertise Go find the experts!

« From the beginning, we had known that the New Ventures course would require a great deal of work. So we had decided to select a project which was potentially feasible, although at the time that didn’t necessarily mean we were going to go through with it. We worked hard on the project, and by the end of the course, after we had tested the idea with many people, seen the success of others… and got a better knowledge of the business, we became convinced that it was a real opportunity. »

- Paul Chantler and Thor Gudmundsson, MBA ‘92

Ideal course outcome

Success curves

Venture success curves

1

10

100

1000

10000

Raw id

ea

Subm

ittal

for f

unds

4 Hou

r rev

iew

In-d

epth

analy

sis

Offers

mad

e

Develo

pmen

t

Suc

cess

Sur

vivi

ng p

roje

cts

Entrepreneurialventures

Large Firm NPD

Liabilities of newness and smallness

General knowledge only Inadequate managerial knowledge Inadequate financial management abilities

Conflict, worry, inefficiency during founding period

Few relations with outside individuals and organizations

Initial lack of trust No stable ties with customers

Sources: Stinthcombe (1965), Thornhill and Amit (2001)

There are many sources of risk

Science/idea/service

Science/idea/service

ManagementManagement

BusinessModelsBusinessModels

FinanceFinance

MarketMarket

CompetitionCompetition

CultureCulture

Economicregime

Economicregime Exit

environmentExit

environment

Source: Advent InternationalGLOBAL PRIVATE EQUITY

>>>CONVERTING OPPORTUNITY TO AN OPERATING BUSINESS<<<

Module 1: The

EntrepreneurialMindset

Module 2: Entry

and Positioning

Module 3:Organization

Design

Module 4: Post-

Startup choices

Session #1 & #2: Whatdo Entrepreneurs Do?

Session #4 & #5:Business Models, EntryStrategy & Positioning

Session #7 & #8: UsingPersonal NetworksStrategically

Session #12: LettingGo of Your Baby

Session #3:Opportunity – The well spring of enterprise

Session #6: AligningPowerful Partners

Session #9: Building aWorld Class Team

Session #13: Copingwith Failure

Session #10: HerdingCats? Managing theStart-up team

Session #14: Summing up: Does Learning before Doing help?

Session #11: Managingfor Cash Flow

Focus on risks related to “Organizing”

Entrepreneurship is all about shifting the odds to your favor

Riskversus

Reward