UNI -100
Basics of EntrepreneurshipDemetris C. HadjisofocliManaging Director, Helix Business Incubator, Ltd.Director, Liaison Office University of NicosiaCoordinated Induction of Entrepreneurship Education in Schools
March 31, 201415:00 – 18:00
This problem can be solved by pre-school children in five to ten minutes, by programmers in an hour and by people with higher education… well check it yourself!8809=
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Entrepreneurship & Car Paradigm Common: Wheel, Tires, Body, Engine
Definition - Systemic Entrepreneurship®______________________________________ Systemic Entrepreneurship® is a holistic approach to
entrepreneurship execution were the stakeholder environment allows the user to use general frameworks and principles in a modular way during the development of business leaders, business models, monetization strategies and while the corporate strategic objectives are met, to ensure that the end target of Economic, Political, Social, Legal, Environmental equality across the societal graph is reached.
Example of Systemic Entrepreneurship Developing agribusinesses in rural Africa, that strives to empower individuals
and communities It operates in several African countries. Researchers have introduced a system of vegetable
production that combines conventional farming with hydroponic technologies for healthy and high value crop cultivation
In partnership with the Sun International hotel group, a vegetable production network has been established, allowing local groups of farmers to produce vegetables for sale to top hotels serving the international tourism market This has led to the emergence of agri-entrepreneurs, and overall, the farmers benefiting
earned income of $1million annually since 2006. Beneficiaries include vulnerable groups like homeless, the visually disabled, widows and orphans
These are examples of the kind of systemic entrepreneurship that are needed. It takes a social problem and utilizes knowledge transfer to come up with a solution that is not about economic growth per se, but about human development
Definition - Social Entrepreneurship __________________________________ Social entrepreneurship is the process of pursuing suitable solutions
to social problems. More specifically, social entrepreneurs adopt a mission to create and sustain social value. They pursue opportunities to serve this mission, while continuously adapting and learning.
Possible Social Problems Unemployment among youth Poverty Civil Unrest Recession Closure of large number of SMEs
Productive Entrepreneurship
What is (Social) Entrepreneurship Social entrepreneurship is the process of pursuing suitable solutions
to social problems. More specifically, social entrepreneurs adopt a mission to create and sustain social value. They pursue opportunities to serve this mission, while continuously adapting and learning.
Possible Social Problems Unemployment among youth Poverty Civil Unrest Recession Closure of large number of SMEs Unproductive Entrepreneurship
Socially Productive Entrepreneurial Activities
Entrepreneurship_______________________________ Entrepreneurship is an agent of creative distraction
Individuals NOT Corporations are the driving force
Small agile companies as opposed to traditionally large companies
Knowledge intensive
Needs Policy shifts
What is the contribution to systemic societal development _________________________________
Entrepreneurship focuses Solely on economic growth Blind focus on straight forward monetization contributes to
scorch earth business models, business strategies, business systems
How does society as a whole contributes to the development of responsible business leadersEducationCultureValues discussion Ethics (not just business ethics but ethics in general)
What do we need Entrepreneurship to address?______________________________________ How do we address the issue of social and financial equality?
Society and quality of life should move forward in unison; not necessarily at the same level but in unison
The gap between social groups at worst should remain the same, but we should strive to shrink it (capitalism needs free willing customers)
Disparities, inequalities Entrepreneurship that brings economic justice, equality, environmental
sustenance Economic, Political, Social, Legal, Cultural, Technological, Environmental
Perspective social, economic, political, religious considerations Correlation between Entrepreneurship and Development
How is it to have an Idea and Start a Business?
What is the journey like?
Brainstorming
Perceptions
Realities
Key Steps Why is a product/service necessary?
What are the objectives for setting up a Company?
Formulate a basic idea and organize a brainstorming session
Research the needs/opportunities and set up a framework
Map how the company will operate and how it will benefit the stakeholders
Define Business Model and Business Structure
Key Steps Get support (talk about the idea)
Develop an executive summary and find someone who can help with building initial strategies/basic planning
Identify the resources needed and the resources available
Think about both Operational and Tactical Planning
Key Success Factors
The Planning, Tactical, and Strategic Vision should be globalized
Learn from others’ experiences but….. There isn’t a One Model Fits All approach Don’t build a business just for the sake of building
one– Cost/Revenue Planning is Vital– Don’t do it for non value added reasons– Have sustainability planning (running out of
money is the biggest problem that kills even great ideas)
Key Success Factors
Be honest when setting and communicating expectations
Continual internal evaluation with consideration of external factors
Continual communication with stakeholders
Be willing to pivot
What is Entrepreneurship Drive
The ability to identify new ideas
Passion, determination and the drive to try them out
Willingness to listen and learn
Have the character to know when it is time to pivot to a better version…
Characteristics of Entrepreneurship
InnovationCreativityScientific CuriosityCollaborationForward Looking
But Methodology to Success Can differ….
FOOTBALL
One Ball Tool
Same Objective Success
Different Approaches
What is a startup?
Usually it goes like…
Brother…. Whoa…. I have this idea that is Kick Ass…. If we build it everyone is gonna want it …. We made it!
And often seems to end like …..
GOOGLE, YAHOO, FACEBOOK…..
BUT, GUESS WHAT?
The reality is……
Nothing works Run out of money Nobody wants to buy Someone else did it Don’t have more time to work on this So and so on the team doesn’t do his share of
work
“”
94 out of 100 die…
STARTUPS ARE REALLY HARD AND THERE IS NO SECRET INGREDIENT THAT WILL HELP YOU TO SUCCEED
A good definition of startup
“A human institution designed to deliver a new product or service under conditions of extreme uncertainty”
Eric Ries
What are some of the Ingredients
VISION
MISSION
Vision
What is it gonna be?
So why we do our thing?
Vision
When Chester Carlson invented a way to make copies of paper docs IBM laughed at him
Then Xerox created copy machines and today “to Xerox” is a verb
Characteristics of a good Vision
Short
Easy to understand
Implemented quite fast (< 2-3 yrs)
Long lasting (decades)
Mission
What we do?
For whom?
MissionWang Laboratories
3 Billions in revenue in the 80sWord processing computers
Failed
Didn’t foresee general purpose computers
Startups
Everything but an exact science
“Don’t worry about failure you only have to be right once”
- Drew Houston
Most Successful entrepreneurs failed on average 6 times before getting some traction
Startup Myths
It Costs nothing to build
Get funded with some nice slides and a lot of passion
It’s all about the idea
Founders are all cool hippie college dropouts
Myth 1Start Ups are cheap
Lean or not, building something meaningful costs money and at some point savings run out
Funding Channels
Personal, Friends, FamilyIdea CompetitionsIn Kind SupportIncubators/AcceleratorsAngel InvestorsAgency FundingAngel/Small InvestorsVenture FundingBanks/Other Financial Institutions
Plan well ahead of when you need it, Otherwise you will be killed!
Myth 2“WOW them with your presentation and you’ll get money”
You are already underestimating the number of times you will be rejected and how long it will take you to raise some funds
Myth 3“The idea makes the difference” Ideas are easy – Implementation is hard
A great idea with:a great executiona great timinga great teamgreat perseverance
Maybe
Myth 4“A startupper is a cool hippie college dropout”
Profile of the average founder:
40yrs oldMarried with Children6-10 yrs work experienceBachelors or higher
How to make it?
Find your product/market fit before you run out of money
THAT’S IT
Solve a Problem
Start Up is not a linear path
Was everything you think you knew about your product and market wrong?
What if…
RJReynolds
Burned $450.000.000 to develop smokeless cigarettes but...
………. Smokers didn’t give a f**k about smoke … at that time
WebVan
Grocery home delivery Within a 30-min window
Time chosen by the customer but..
Didn’t consider that many working customers would like their groceries delivered at home and at night
They built the wrong capacity for the wrong time
WebVan
Burned $800.000.000
CNET named it the largest dot-com flop in history
Motorola
Burned $5.000.000.000 For satellite-based phone system that nobody wanted
Critical Point
You don’t invent product/service
You solve problems
Setup the right goals
How good/thorough do you know customer’s needs?
Does your product/service solve that need?
How much are they willing to pay for your solution?
How much is this problem a priority to the customer?
Does it solve a significant problem?
Customer Discovery Who can be the customers?
TargetProfile
Can they afford the product/service?
Can they access it?LocationLegalWeather
Go through the process
You’ll get plenty of doubt: Analyze data
It’s all about speed and control
Customer Segments
The People & Organizations targeted by the company
For whom are we creating value?
Who are our most important customers?
Not all customers are created equal
Value proposition Services and products that provide value to customer segments
Product Satisfies a new need/creates a needSolves a problemOffers better performanceIs more customizedCosts lessHas a better design
KNOW Numbers KNOW Markets WHAT is the Monetization of the Solution Who is the TEAM
Channels How does company reach customers to tell them about
value proposition?
Through which Channels Customer Segments can/want to be reached?
How are Channels integrated?Which ones work best?Which ones are most cost-efficient?How are Channels integrated with customer
habits/routines?
Customer Relationships
Types of relationships established between the company and customer segments
What types of relationships does the company have with customers?Direct or relying on othersCustomer facingLoyalty Schemes
Revenue Streams
Represents the income of the company for every customer segment
For what value are customers willing to pay?For what value do they currently pay? If they do!How are they currently paying?How would they prefer to pay?How much does each stream contribute to overall
revenue?
Key Resources Strategic assets that the company need to maintain its
business model
What Key Resources does the… Value Propositions require to be delivered?Distribution Channels?Customer Relationships?Revenue Streams?
Resources type: Physical, Intellectual, Human, Financial
Key Activities Strategic activities to deliver the value proposition, reach customers
and nurture relationships
What Key Activities does theValue Propositions require?Distribution Channels?Customer Relationships?Revenue streams?
Types of Key Activities: Production, Problem Solving, Platform/Network
Key Partners Define contractors and partners that are supporters/critics for
company’s business model
Who are the Key Partners?
Who are the key suppliers?
Which Key Resources is the company acquiring from partners?
Which Key Activities do partners perform?
Cost Structure
What are all the costs required for the company in order to have its business model up and running
What are the most important costs inherent in the business model?
Which Key Resources are most expensive?Which Key Activities are most expensive?Cash Flow is KingCost Rationalization? Why this/that Expense? How
does it Contribute?
Funding - Due Diligence____________________________________ The process through which investments are decided Detailed, Broad, Deep Has some fixed elements Has some local elements Need expertise to perform It is important and critical to the success of an
investor but it should not delay the process
Ideas will fail for sure; better chances are 2 in 50
Team____________________________________ Not everyone can become an Entrepreneur but
ALMOST everyone can be Enterprising ………..Teams that have GREAT Technologists Engineers Operations Legal
Individuals who are Agile and Flexible If someone is not an Entrepreneur but has those
qualities, put a GREAT Entrepreneur on their team Know what the team does not know – No Ego!
Position for Success____________________________________
KNOW A PITCHING EAR …. Not all money is created (or given) equally Not all investment people have the same philosophy,
psychology, interests, knowhow.. Not all cultures/ecosystems are the same
A pitching angle Tech, Business Model, Operations, Monetization…. ADJUST IT
Value Proposition_______________________________________
KNOW Numbers
KNOW Markets
WHAT is the Problem to be Solved
WHAT is the Monetization of the Solution
HAVE a TEAM
Tool Box – Major Points____________________________________ To the point Business Plan; Executive Summary (short & sweet) Only the “justified & confirmed” Facts; no blah blah!!! Sustainable Competitive Advantage Know your business inside-out Know what you don’t know
Avoid Tunnel Vision Syndrome Confirm the viability of your idea
Know and Respect your competition Think & Plan 2 steps ahead (market trends) Team with Chemistry & Know-How; Build a balanced team-gene pool Assess & know your cost Sales pipeline
Tool Box – Use of Funds!___________________________________
Why do you need the money? How will the money be used? Legitimate reasons
Grow Sales Product Development Marketing Recruiting Training Infrastructure
Tool Box – Transparency___________________________________
What are the controls which guarantee legitimate use of funds?
Established Audit processes
Weekly/Monthly reports
Knowledgeable/Functional Board of Directors
“”
YOUR TURN
Ask yourself
What are the emerging trends I notice?Am I willing to put the time and effort?Am I ready for sleepless nights and hardworking
days?Am I willing to Work hard, Learn, Listen, Kill ego?Do I have the support of people I care about?
What is your personality?
Critical to understand personal traits because certain characteristics fit certain jobsExtrovert / IntrovertFighter / Go getter / QuietLerner/Listener/Know it all
Know your strengths and weaknesses
Business Idea
Needs that will be satisfiedProblems to be solvedWho will buy? Customers? Target?Competitive differentiation
Team Engineer Developer General Business/Finance Marketing Lawyer Leader (could be one of the above) Interact, Share, Listen, Respect, Embrace, Never Walk
Alone
Have a Network
FamilySupportersKnowledge TransferExperience CouriersMarket ExpertsCoaches/MentorsFailure OwnersFile contact information
Rationalization
Think Logically and consider the factsNo Feelings or Intuition or Someone told meBe CreativeLook at the +’s
Ideation
Identify a Group or Problem you want to solve
How does your group behave? Where does it frequent?
Describe the activities of the groupWhat kind of problems/difficulties could they
have?What are the possible solutions
How are Ideas born?
Are they easy? Do they just come to us? Once we have the idea, is it easy to get to the
market? Set the right expectations It’s about passion, planning, hard work, commitment,
the overall environment, the team, the resources, perseverance
Tnx 4
UR Patience!
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