Presentation is loading. Please wait.

Presentation is loading. Please wait.

Masters in Engineering and Management of Technology Masters in engineering Design Entrepreneurship and New Venture Creation Rui Baptista.

Similar presentations


Presentation on theme: "Masters in Engineering and Management of Technology Masters in engineering Design Entrepreneurship and New Venture Creation Rui Baptista."— Presentation transcript:

1 Masters in Engineering and Management of Technology Masters in engineering Design Entrepreneurship and New Venture Creation Rui Baptista

2 Entrepreneurship – Rui Baptista 2 Preliminaries Introductions Course Objectives and Content Class Schedules and Readings Deliverables and Student Evaluation Student Projects

3 The Entrepreneurial Revolution and the Entrepreneurship Process

4 Entrepreneurship – Rui Baptista 4 Entrepreneurship and Small Firms Research findings by the U.S. Small Business Administration Small businesses represent 99 percent of all employers Small businesses provide about 75 percent of net new jobs

5 Entrepreneurship – Rui Baptista 5 Small Business and its Disadvantages

6 Entrepreneurship – Rui Baptista 6 Innovation Since World War II Small entrepreneurial firms Responsible for half of all innovation Credited with 95 percent of all radical innovation

7 Entrepreneurship – Rui Baptista 7 What astonishes me in the US is not so much the marvelous grandeur of some undertakings as the innumerable multitude of small ones Alexis de Toqueville, Democracy in America, 1835

8 Entrepreneurship – Rui Baptista 8 Mega-Entrepreneurs Who Started in Their 20s MicrosoftBill Gates and Paul Allen Apple ComputersSteve Jobs and Steve Wozniak Dell ComputersMichael Dell Federal ExpressFred Smith OracleLarry Ellison Amazon.comJeff Bezos eBayPierre Omydiar NikePhil Knight Yahoo! David Filo and Jerry Yang CiscoLen Bosack, Sandra Lerner and Kirk Lougheed Google.comLarry Page and Sergey Brin

9 Entrepreneurship – Rui Baptista 9 New Industries Launched by the E-Generation Personal computers PC software Biotechnology Wireless communications/handheld devices Healthy living products Cellular phone services CD-ROM Internet publishing Internet shopping Virtual imaging

10 Entrepreneurship – Rui Baptista 10 R&D Expenditure and Economic Growth

11 Entrepreneurship – Rui Baptista 11 Entrepreneurship and GDP Growth

12 Entrepreneurship – Rui Baptista 12 Self-employment Rates in the OECD

13 Entrepreneurship – Rui Baptista 13 Global Entrepreneurship Monitor (GEM) 2004: Total Entrepreneurial Activity

14 Entrepreneurship – Rui Baptista 14 GEM 2004: Opportunity Based Entrepreneurial Activity

15 Entrepreneurship – Rui Baptista 15 GEM 2004: Necessity Based Entrepreneurial Activity

16 Entrepreneurship – Rui Baptista 16 Entrepreneurship and Economic Growth High level of entrepreneurial activity equals above average economic growth Portugal: above world average in self- employment rates; below world average in entrepreneurial activity Reduced entrepreneurial activity in high tech sectors

17 Entrepreneurship – Rui Baptista 17 High Growth Technology Ventures Started in the Lisbon Region SectorFirm Nº of employees Start-up year Location of headquarters Biotech Alfama52002TagusPark - Oeiras ECBio51999IBET/ICG - Oeiras Stab Vida102000Oeiras Biotecnol201996TagusPark - Oeiras Media, Multimedia and ICT Novabase> Amoreiras Chipidea301997TagusPark - Oeiras Ydreams582000Madan Parque - Caparica Innovagency902002Chiado Outsystems302001Linda-a-Velha

18 Entrepreneurship – Rui Baptista 18 Entrepreneurship Entrepreneur is someone who engages in the creation of a new business with the aim of achieving success, growth and profits A large self-employment rate (i.e. high percentage of small businesses) does not mean a country is highly entrepreneurial: Many people become self-employed through acquisition and by joining the family business Many people become self-employed out of necessity, i.e. due to the lack of a better income-generating alternative

19 Entrepreneurship – Rui Baptista 19 Entrepreneurship – a way of thinking, reasoning, acting The heart of the process is the creation and/or recognition of opportunities It requires the willingness to take calculated risks Entrepreneurship can occur, of fail to occur, in firms that are old and new, small and large Entrepreneurship involves continued renewal The classic expression of entrepreneurship is the start-up company

20 Entrepreneurship – Rui Baptista 20 Opportunity Opportunity is a set of favorable circumstances associated with a business idea that award it good chances of progress and future success The main function of the entrepreneur is to discover, screen and implement business ideas/opportunities Entrepreneurship can therefore be understood as the activity of identifying and exploiting new business opportunities

21 Entrepreneurship – Rui Baptista 21 The Start-up Startup companyan innovative idea that develops into a high growth company Qualities of a startup company Strong leadership from the main entrepreneur Complementary talents and outstanding team work of team members Skill and ingenuity to find and control resources Financial backing to pursue opportunity

22 Entrepreneurship – Rui Baptista 22 The Entrepreneurial Process It is opportunity driven It is driven by a lead entrepreneur and an entrepreneurial team It is resource parsimonious and creative It depends on the fit and balance among resources and needs It is integrated and holistic

23 Entrepreneurship – Rui Baptista 23 Commonly Shared Characteristics of Successful Entrepreneurs The Behaviorist Approach They seek out new opportunities, looking for the chance to profit from change and disruption in the way business is done They pursue opportunities with discipline and perseverance They pursue only the very best opportunities and avoid exhausting themselves and their organizations by chasing after every option They focus on executionspecifically, adaptive execution They are able to engage the energies of everyone in the company Entrepreneurship is neither confined to certain types of individuals nor organizationsit is easier to find in smaller and younger enterprises because the conditions favoring its development are more likely to be present

24 Entrepreneurship – Rui Baptista 24 Administrator/Trustee vs. Entrepreneur/Promoter Control/ownership of maximum resources Structure stability: Organizational: hierarchy Market: maturity/concentration Risk minimization Opportunities: evolutionary commitment, strategic consensus Opportunity search and recognition Rapid commitment to pursuit of opportunity Structure Change: organizational: adaptable, co-ordinated Market: rapid growth and change Acceptance of controlled risk Resources: Limited control Gradual, efficient use

25 Entrepreneurship – Rui Baptista 25 Leadership

26 Entrepreneurship – Rui Baptista 26 Increasingly Fast Emergence of New Technology Time for new technologies to reach 25% of the U.S. Population Household electricity (1873)46 years Telephone (1875)35 years Automobile (1885)55 years Radio (1906)22 years Television (1925)26 years Videocassette recorder (1952)34 years Personal computer (1975)15 years Cellular phone13 years World Wide Web7 years

27 Entrepreneurship – Rui Baptista 27 Disadvantages of Large Corporations (Christensen) Characteristics of giant corporations in the face of radical innovation Hierarchical in structure Leadership as managing and administering from the top down Rewards/incentives for the largest (assets, budgets, etc.) Cause of downfall Slow to change archaic strategy Slow to change outdated culture Slow to recognize and incorporate entrepreneurship, entrepreneurial leadership, and entrepreneurial reasoning

28 Entrepreneurship – Rui Baptista 28 Radical Innovation

29 Entrepreneurship – Rui Baptista 29 The Timmons Model of the Entrepreneurial Process Opportunity (2) Resources (4) Team (3) CreativityLeadership Communication Business Plan Fits and gaps AmbiguityExogenous forces Capital market contextUncertainty Founder (1)

30 Entrepreneurship – Rui Baptista 30 Opportunity Resources Team Timmons Model: The Driving Forces Context

31 Entrepreneurship – Rui Baptista 31 Timmons Model Interpreted The process starts with opportunity, not strategy, resources or planning Opportunity recognition results from creativity, which is shared by the entrepreneur and the entrepreneurial team; Creativity results from collision between academic learning and real world practice Value Creation results from integration of opportunity and efficient use of resources Combination of people, opportunity and resources coming together at a particular time may determine the chance for success

32 Entrepreneurship – Rui Baptista 32 Entrepreneurial Traits Minimize and control vs. maximize and own Creativityopportunity recognition and generation Unique/not easily imitated (technological?) assets Knowledge of the market and competition People (entrepreneurial team) and motivation skills Financial resources (identify needs) Business plan Implementation and management skills Ability to devise a growth/exit strategy

33 Entrepreneurship – Rui Baptista 33 A Descriptive Model of The Entrepreneurial Process Entrepreneurial Interest Generate Business IdeasOpportunity Identification Opportunity Evaluation/Assessment Develop and Refine the Concept Determine the Resources Required Acquire the Necessary Financing/Partners Develop the Business Plan Implement and Manage Harvest the VentureGrowth/Exit Strategy

34 Entrepreneurship – Rui Baptista 34 The Entrepreneurial Process I Entrepreneurial Interest Generate Business Ideas/Opportunity Identification What are my interests? What am I passionate about? What am I good at? Do I want to be an entrepreneur? Searching processes and methods Unique assets and knowledge Past business experience Establish goals for the business Preliminary resource needs

35 Entrepreneurship – Rui Baptista 35 The Entrepreneurial Process II Venture Screening: Business/Opportunity Assessment Develop and Refine the Concept Changing Demographics Size/Growth of Market; or Emergence of New Market New Technologies: products/processes Regulatory Change Social Change Competitive advantages: potential for value creation Define Products/Services, Processes Target Customers Define Competition New Organizational Structures/Forms Sales or Distribution Channels Start Developing the Business Plan

36 Entrepreneurship – Rui Baptista 36 The Entrepreneurial Process III Determine the Required Resources Acquire the Necessary Financing/Partners Marketing and Sales Expertise Technical Expertise Financing Needs Distribution Channels Sources of Supply Licenses, Patents, & Legal Protection DebtSupplier Financing EquityJoint Ventures OutsourcingPartnerships LeasingBarter

37 Entrepreneurship – Rui Baptista 37 The Entrepreneurial Process IV Implement and Manage Growth/Exit Detailed Concept/Opportunity Description Detailed Operating Plan Detailed Marketing Plan Detailed Financial Plan Management Team Agreement Implementation of Plan Monitor Performance Payback to Resources Providers Reinvestment/Expansion Achievement of Performance Goals Licensing of RightsSell or Merge Go Public – IPOShut Down Developing the Business Plan

38 Entrepreneurship – Rui Baptista 38 Entrepreneurship and Innovation Schumpeterian view: entrepreneur translates new scientific knowledge into new products/markets and/or processes in order to gain monopoly power Druckers view: innovation is a specific function of entrepreneurshipit is the means by which the entrepreneur either creates new wealth-producing resources or endows existing resources with enhanced potential for creating wealth

39 Entrepreneurship – Rui Baptista 39 Sources of Innovation/New Business Ideas Generation of Business Opportunities R&D and External Technological Developments Customers and Suppliers Individual Creativity and Brainstorming Existing Products and Geographical Markets

40 Entrepreneurship – Rui Baptista 40 Market-Pull Opportunities/Innovations Oriented primarily towards satisfying the needs of a specific market Tend to occur when customers are technologically sophisticated Occurs more frequently with older technologies Are mostly incremental innovations where an established market bases its perceptions of opportunity on known technologies

41 Entrepreneurship – Rui Baptista 41 Technology-Push or Capability- Push Opportunities/Innovations Oriented primarily towards increased technical performance Require that scientists and engineers have direct experience with users in order to apply new technology successfully Technical information lies mostly with the innovators, while users tend to be relatively unsophisticated Are often the major source of radical changes in market and organizational structures

42 Entrepreneurship – Rui Baptista 42 Opportunity Recognition: Innovation and New Venture Strategies Old Products New Products Old Markets New Markets Market niches New geographical markets or new users New product variants, features, services Significant innovation, new product and market

43 Entrepreneurship – Rui Baptista 43 A Typology of New Venture Opportunities (I) 1.Increasing the value of a good or service to the consumer: ex.: improvements in quality, accessibility, image... 2.New applications for existing technologies and resources: ex.: use of magnetic cards (already used as credit cards) in hotel doors 3.Creation of mass markets: ex.: automobiles, disposable cameras and shavers; personal computers 4.Customization: ex.: Dell, BMW 5.New sales platforms: ex.: Amazon.com

44 Entrepreneurship – Rui Baptista 44 A Typology of New Venture Opportunities (II) 6.Mass distribution: ex: Wal-Mart; Worten; Continente 7.Discontinuities and changes to the environmental context: ex.: regulation and de-regulation of trade and markets; government policy; internet 8.Process innovation: ex:mass production (Ford, Intel) hubbing (FedEX) 9.Consolidation: ex: cost reduction in declining industries (Blockbuster)

45 Entrepreneurship – Rui Baptista 45 Descontinuities as Opportunities Sources of Discontinuities: Radical innovation: new technological knowledge, technology convergence – nanotechnologies, genetics, computer science, biosensors Society – cultural changes, life style and preference changes Government policy: environmental regulations, market de-regulation and privatization Demographics – aging of the population; growing urban poulation

46 Entrepreneurship – Rui Baptista 46 Accidental Innovation Levi Strauss: Denim Blue Jeans (originally intended for tents) Clarence Birdseye: frozen foods Charles Goodyear: vulcanization of rubber Percy Spencer: microwave oven Arthur Fry (3M): Post-it Peter Dunn & Albert Wood (Pfizer): Viagra

47 Entrepreneurship – Rui Baptista 47 Technological Trends and Market Opportunities Life sciences: biogenetics, biometrics, stem cells ICTs: diffusion and increasing application of wireless devices; VOIP; voice recognition interface; security software, smarcards Security verification devices Nanotechnology and biosensors Robotics: new uses in security, search and rescue Energy: hydrogen and hydrocarbon (fuel cells)

48 Entrepreneurship – Rui Baptista 48 Society Trends and Market Opportunities Increase in geriatric population Rise of the middle class in developing countries Greater ethnic and cultural diversity in urban centers Greater religious diversity; more secular vs. more religious societies Convergence in access to higher education and codified/embodied knowledge Increasingly important role played by ICTs and the media in everyday life


Download ppt "Masters in Engineering and Management of Technology Masters in engineering Design Entrepreneurship and New Venture Creation Rui Baptista."

Similar presentations


Ads by Google