ENTREPRENEURSHIP
EDUCATIONAL AIMS: Entrepreneurship is a multidisciplinary activity involving strategy, R&D, marketing and project management. In practice, entrepreneurs face a number of complex issues simultaneously. The specific educational objective of this course is to demonstrate to candidates with entrepreneurial aspirations, issues related to the creation of a company around an innovative product.
INTENDED LEARNING OUTCOMES
Candidates will learn to:
1. Recognise and evaluate business opportunities.
2. Build a team around the opportunity.
3. Assess and gain control of the required resources.
4. Market new products in entrepreneurial settings.
5. Grow the business and exit from it.
ASSESSMENT: Individual project. 2500 words maximum
Present a case for an entrepreneurial new product or service with high-growth potential. Think big!
Answer the following questions:
1. Is this a good opportunity? What is the business model?
2. How are you going to build your team?
3. Where and how are you going to find funding?
4. What is your growth strategy?
5. When and how would you like to exit from the business?
SYLLABUS
- The entrepreneurial process
- Evaluating opportunities
- Building the team
- Accessing financial resources
- Marketing of new-technology products - Business growth
- Harvest and exit
Session 1: The entrepreneurial process
1) Instructor's input: Introduction to entrepreneurship
2) Case Study: Permafresh Corporation: A case in entrepreneurial new consumer product development.
Questions
- Evaluate the product development process
- Evaluate the commercialisation process
- Evaluate the financing process
Essential reading: The questions every entrepreneur must answer. Harvard Business Review, November-December 1996. By Amar Bhide
Session 2: Evaluating opportunities
1) Instructor's Input: Testing your entrepreneurial opportunity
Further reading: Mullins, J. (2003) 'The new business road test' FT- Prentice Hall.
2) Case Study: Enox Technologies
Questions
- Evaluate the opportunity in the two different industries. Which industry/ies should ENOX focus on and why?
- Outline a 5-year strategic plan for ENOX technologies
Session 3: Building the team
1) Instructor's input: How to build your team
2) Case study: Nanogene technologies
Questions
- Evaluate the founders' decisions regarding the split of equity and compensation level. As a potential venture investor in the company, would these decisions concern you?
- Evaluate the size and the composition of the management team. What is the difference between being a founder and an early employee?
- Evaluate Paige Miller as an addition to the team, and assess her compensation demands. Would you hire her on the terms she seeks?
- Assess the company's progress on each of the specific issues discussed in the last section of the case: the hiring process; a compensation policy; the company's culture. Specifically, in each of these areas, what should the company do?
2) Video case: O-Hagan sausages
What went wrong? What lessons did you learn from the case?
3) Case study: Entrepreneurs versus executives at Socaba.com
What should the founders do next?
Session 4: Accessing financial resources
1) A Silicon Valley Venture Capitalist explains the entrepreneurial journey to success (video 55 min)
2) Case Study: The Renovo story. Venture Capital at the Cutting Edge
Questions:
- Assess the business opportunity from the investor's perspective. Would you invest?
- Are there risks in delaying the decision to invest? How can you reduce such risks?
- What is fair "pre-money" valuation for your £8M investment? What would the post-money valuation be and what % equity would you hold?
- Would you attach any milestones to the investment and if so what would they be?
- From the founders' perspective what are the key issues they faced along the journey to start Renovo. What were the key decisions/risks for them?
Essential readings: How venture capital works. Harvard Business Review, November-December 1998. By Bob Zider.
Some thoughts on business plans. By William A. Sahlman.
For those of you that are interesting in raising finance, you should read:
1. Raising venture capital, by Rupert Pearce and Simon Barnes, Wiley Finance (2006).
2. Boo-Hoo (the story of the failed internet retailer Boo.com)
Session 5: Marketing of new technology products - Business growth
1) Instructor's input: Marketing technology products. The chasm problem Marketing an e-book device (no preparation required)
Further Reading: Moore, J. (1991) 'Crossing the chasm', Capstone
2) Case Study: Andres Galindo. A growing venture in import and retailing
Questions:
How should Andres grow his company further?
Essential reading: A note on managing the growing venture, by Hammermesh, R. Heskett, J.L., Roberts, M. J. (2005)
Session 6: Harvest and exit
1) Instructor's input: Harvest and exit from the business
2) Case study: Too soon to IPO?
Question:
What would you do if you were Diane? Would you go for an IPO or wait?
Recommended text-book: Entrepreneurship: a process perspective / Robert Baron, Scott Shane, 2nd Edition.