introduction to technology entrepreneurship 2009
DESCRIPTION
Introduction to Technology Entrepreneurship 2009.TRANSCRIPT
Technology EntrepreneurshipTheory to Practice Seminar
2009
Tarek Salah KamelManagement of Technology MSc., Nile University
• This introduction training was developed initially for the “Entrepreneurship Education Initiative” between Intel and the Arab Science and Technology Foundation (ASTF) using part of the Intel+UC Berkeley Technology Entrepreneurship Challenge training materials.
• http://entrepreneurship.berkeley.edu/main/GEEI.html
• This customized version for Egypt is for a 1 full-day FREE seminar for Egyptian Universities senior students (Engineering, Science, …etc.) to prepare them to the concepts of Entrepreneurship and Innovation.
AGENDA
1. Introduction to Entrepreneurship 2. Entrepreneurial Process3. Opportunity Identification4. Business Strategy5. Business Plan Writing Basics6. Startup Company Valuation Model7. Introduction to Marketing
1. Introduction to Entrepreneurship
AN ENTREPRENEUR?!
REAL ENTREPRENEURS!
INVENTION VERSUS INNOVATION
INVENTION• It’s is either a concept of a
creation of a novel technology. It could be a product, a process or a previously unknown system.
INNOVATION• It’s is the creation of a new
product, service, or process within an organization. It’s the introduction into the marketplace, either by utilization or by commercialization of a new product, service or process
INVENTION VERSUS INNOVATION
WHAT IS ENTREPRENEURSHIP?
Business Entrepreneurship (Companies) or Social Entrepreneurship (NGOs)
EGYPTIAN EXAMPLES! (BUSINESS & SOCIAL)
WHAT IS ENTREPRENEURSHIP?
A critical component of a complex dynamic process to bring innovations into market
ARE YOU AN ENTREPRENEUR?
Why do you think people want to be entrepreneurs?– .. – ..– ..– ..– ..– ..– ..– ..– ..
HOW YOU KNOW YOU FIT AS AN ENTREPRENEUR?
Check online questionnaire on:– http://www.venturelab.ucf.edu/resources_bizplan.html 1. FastTrac Personal Vision Assessment
Step 1
•Establish Personal Criteria
Step 2
•Establish Professional Criteria
Step 3
•Establish Financial Criteria
Step 4
•Write your Vision Statement
Open File
HOW YOU KNOW YOU FIT AS AN ENTREPRENEUR? Check online questionnaire on:
– http://www.venturelab.ucf.edu/resources_bizplan.html 2. FastTrac Entrepreneurial Readiness Assessment
•Understanding Entrepreneurship (15 Questions)
•Understanding Investors and Business Issues (45 Questions)
•The Start-Up Process (32 Questions)
• You receive full recommendation on your answer for the 92 questions in the assessment that you should thoroughly investigate Open File
THE ENTREPRENEUR
1. Self starter, defines goals as he or she goes alone.
2. Does the important things by himself or herself.
3. Not a good delegator, strong need to control.
4. Charismatic leader, but hard to follow.
5. Extremely strong drive and capacity for work.
6. Reward oriented for money, visible rewards (cars, boats, clubs, etc.) community admiration for accomplishments, prerequisites.
7. Excellent problem-solving abilities.
8. Innovative thinker.
9. Realistic, takes moderate and well calculated risks.
10. Committed to the company.
THE PROFESSIONAL MANAGER
1. Career oriented with well defined goals.
2. Accomplishes tasks through people.
3. A good delegator and motivator.
4. Good leader and people person.
5. Competitive and politically astute.
6. Reward oriented for cash, visible rewards, status, prerequisites.
7. Experience, ability, and accomplishments are evident.
8. Plays by the rules, not a risk taker.
9. Committed to self, more than company.
CASE STUDY: OSBORNE COMPUTER COMPANY
The personal computer (PC) market began in the middle 1970’s.
Adam Osborne decided to package all the PC components together as a portable computer (July, 1981).
In two months the company had its first $1,000,000 in sales.
By the second year the net revenues reached $100,000,000.
Consumers were interested in a larger, more standard 80-characters display
What do you think happened?!
CASE STUDY: OSBORNE COMPUTER COMPANY
The personal computer (PC) market began in the middle 1970’s.
Adam Osborne decided to package all the PC components together as a portable computer (July, 1981).
In two months the company had its first $1,000,000 in sales.
By the second year the net revenues reached $100,000,000.
Consumers were interested in a larger, more standard 80-characters display
What do you think happened?!
Company Bankruptcy after 6 months!!
CASE STUDY: OSBORNE COMPUTER COMPANY
Osborne lagged in his R&D efforts to introduce the large screen model
Osborne delayed the generation of needed capital through public offering for 6 months
Kaypro, a competitor, took advantage of the weak points and introduced the larger screen model in the perfect time for market demands.
Osborne announced he will introduce the bigger screen one while still has orders for the 1st model (large inventory) – A serious mistake.
Kaypro offered 5 million shares to the public in 1983 realizing $9 millions from the sale of part of their equity
CASE STUDY: OSBORNE COMPUTER COMPANY
CASE STUDY: OSBORNE COMPUTER COMPANY LESSONS
Entering a market with a new innovation gives a company an early advantage in sales (Leader)
New product concept creates new markets or alters old markets
If a company competes with innovation, it should plan to continue competing with innovation
All products have a finite life span. Timely product innovation should be part of every management’s technology strategy
The timing of announcements is very important
Capital formation and cash flow are very important for a growing business
Successful new ventures must be able to cope with the rapid market growth and with increasingly tough competition.
2. Entrepreneurial Process
KEY ELEMENTS NEEDED
Founding Team
Resources
Strategy
People
TechnologyMoney
A Business Plan
The Right Skills
The Right Personalities
THE FOUNDING TEAM – AN A TEAM
The Right Personalities
• Everyone should be:• A team player• A hard worker• Curious• Flexible• Good at listening
The Right Skills
• Need to have:• Personal achievers• Creative people• Managers• Domain Experts
RESOURCES
STRATEGY
STRATEGY - THE BUSINESS PLAN
3 Core Questions to Answer:
– What the company is
doing?– Why?– How?
Open File
Elaborate Business Plan
TECHNOLOGY ADOPTION LIFE CYCLE (TALC)
Innovators = Technology Enthusiast. People who are fundamentally committed to new technology … techies.Early Adopters = Visionaries. True revolutionaries in business and government to exploit new tech capabilities.Early Majority = Pragmatist. People who make the bulk of all technology infrastructure purchases and do not love technology for its own sake. They believe in evolution and not revolution.Late Majority = Conservatives. Pessimistic to gain any value from technology investment and are price sensitive and are unwilling to pay for any extra services.Laggards = Skeptics. Not to sell to these people but to sell around them
Laith Kassis (PICTI)
TECHNOLOGY ADOPTION LIFE CYCLE
Laith Kassis (PICTI)
Early Market
Mainstream Market
TheChasm
Crossing the Chasm
LINKING ALL TOGETHER
Early Market
Mainstream Market
TheChasm
Crossing the Chasm
The Valley of DeathScarce funding for early-stage innovation
LINKING ALL TOGETHER
DEVELOPING A NEW MODEL
DEVELOPING A NEW MODEL
ACTIONS TO START
Are you ready to start?!
3. Opportunity Identification
WHAT IS SCIENCE AND WHAT IS TECHNOLOGY?
– What ?
– Why?
– How ?
Carlson Consulting
WHAT IS SCIENCE AND WHAT IS TECHNOLOGY?
Technology, more than any other human endeavor, has the power to transform and improve our lives in every way!
– What ?
– Why?
– How ?
Carlson Consulting
TECHNOLOGY AND SOCIETY
SOCIETY, CUSTOMERS & STAKEHOLDERS
BUSINESS
SCIENCE & DISCOVERY
TECHNOLOGY
Carlson Consulting
TECHNOLOGY AND SOCIETY
SOCIETY, CUSTOMERS & STAKEHOLDERS
BUSINESS
SCIENCE & DISCOVERY
TECHNOLOGY
Products
Markets
Carlson Consulting
TECHNOLOGY DYNAMICS
BUSINESS
SCIENCE & DISCOVERY
TECHNOLOGY DYNAMICS
Product A
Product B
Carlson Consulting
TECHNOLOGY DYNAMICS
BUSINESS
SCIENCE & DISCOVERY
TECHNOLOGY DYNAMICS
Product A
Product B
Innovation
TechnologyPUSH
Market PULL
Technology PUSH Unknown value Business evolves Takes time
Market PULL Existing business Instant value
perspective Lower perceived risk
Carlson Consulting
OPPORTUNITY IDENTIFICATION
SOCIETAL MODEL
TECHNOLOGY
ECONOMY
POLITICS
CULTURE
• Societal Trends in:– Technology– Economic Regulation– Social/Cultural Behavior– Politics
• Identified problems• Market Gaps• Technology Forecasting
WHAT ARE THE MAIN GLOBAL TRENDS TODAY?
Technology Progress Economic Growth Improved Healthcare Increasing Mobility Environmental Decline Increasing De-Culturation
How to gain insight in trends business opportunities?
TREND COUPLING MATRIX
Carlson Consulting
TREND COUPLING MATRIX
Carlson Consulting
TREND COUPLING MATRIX - EXAMPLE
Carlson Consulting
CASE STUDY IN GROUPS
• Groups of 5.• For the following trends, try to deduce the coupling matrix:
– Fresh Water shortage in 2015 by 75%– People are using GPS equipment the same they are using mobile today– Google is selling Geo-maps with details up to 20M below sea level.– Visa entry by Arabs to Arab states is canceled– Nanotechnology is able to desalinate salty water at a 90% lower price
than today.– Computer prices are at 90% lower price, with today’s processing power.– 1st human robot assistant came into market in 2015.
“What If?” Scenario Analysis
THE POWER OF TECHNOLOGY FORECASTING
Trend Analysis
Road Mapping
Scanning
Expert Judgment
Technology Foresight
Scenario Planning
Carlson Consulting
FUTURING LESSONS
Cornish’s Lessons: Prepare for what you will face in the future
Anticipate future needs
Use poor information when necessary
Expect the unexpected
Think long term as well as short term
Dream productively
Learn from your predecessors
Carlson Consulting
DO ALL INDUSTRIES HAVE EQUAL OPPORTUNITES?
How to Analyze the Attractiveness of a Certain Industry?!
PORTER INDUSTRY ANALYSIS MODEL – 5 FORCESPORTER MODEL
The Importance of structural analysis of Industries is to relate companies to the industry or industries, in which they are competing!!
•How to position a company within its industry?•How to create an effective strategic planning process?
CASE STUDY: DIGITAL IMAGING IN THE 90s
CASE STUDY: DIGITAL IMAGING IN THE 90s
Copyright © 2009 Tarek Salah, Arab Science and Technology Foundation, [email protected]
CASE STUDY: DIGITAL IMAGING IN THE 90s
Copyright © 2009 Tarek Salah, Arab Science and Technology Foundation, [email protected]
CASE STUDY: DIGITAL IMAGING IN THE 90s
In 2007180 New Models!
From over 27 vendors were
released
CASE STUDY: DIGITAL IMAGING IN THE 90sExisting Competitors
Copyright © 2009 Tarek Salah, Arab Science and Technology Foundation, [email protected]
Company Name Revenues
Apple Computer Inc $9.2 billion
Canon $19.3 billion
Dycam $1.7 million
Eastman Kodak $13.6 billion
Fuji Photo Film Co. $11 billion
Polaroid Corp $2.3 billion
Sony Corp $37 billion
CASE STUDY: DIGITAL IMAGING IN THE 90s Bargaining Powers
Copyright © 2009 Tarek Salah, Arab Science and Technology Foundation, [email protected]
Bargaining power of Buyers (low to medium) In 1980’s cost of electronic imaging systems rapidly declined because
user’s tolerances for complexity fell and image quality requirements rose. For Professional photographers & Journalists there were potential
rewards of saving time & money in processing.
Bargaining power of Suppliers (high) High Resolution & Lower cost CCD Sensors were developed at Sony,
Matsushita, NEC, Sharp, Samsung & Goldstar. Image Science research were in corporate laboratories.
CASE STUDY: DIGITAL IMAGING IN THE 90s Potential Entrants
Copyright © 2009 Tarek Salah, Arab Science and Technology Foundation, [email protected]
Unique Technological & Competitive Strengths Low Entry Barrier
CASE STUDY: DIGITAL IMAGING IN THE 90s Substitutes
Copyright © 2009 Tarek Salah, Arab Science and Technology Foundation, [email protected]
Searching for other products that can perform the same function as the anticipated product. (Medium)
Traditional Camera + Scanner, $800 to $1500 (PC)
Traditional Camera + PhotoCD player, $300 (TV)
Still-video, $1000 to $4000 (TV)
Traditional Video + Frame Grabbers , $350 (PC)
Camcorder, $800 (TV)
CASE STUDY: DIGITAL IMAGING TODAYPlenty of Manufacturers
Copyright © 2009 Tarek Salah, Arab Science and Technology Foundation, [email protected]
CASE STUDY: DIGITAL IMAGING TODAYMany Products
75 Models!!
CASE STUDY: DIGITAL IMAGING TODAYMany Products
65 Models!!
CASE STUDY: DIGITAL IMAGING TODAYMany Products
70 Models!!
CASE STUDY: DIGITAL IMAGING TODAYMany Products
60 Models !!
CASE STUDY: DIGITAL IMAGING TODAYMany Products … Which are not differentiated!
180 New Models from over 27 vendors are
released in 2007 alone
CASE STUDY: DIGITAL IMAGING TODAYAPPLY PORTER MODEL
Copyright © 2009 Tarek Salah, Arab Science and Technology Foundation, [email protected]
Entry Barrier (High) Economy of Scale. Slow Industry Growth. High Developed Experience. Yet, no Product Differentiation.
Rivalry (Intense) Competition on quality, high specifications, ease of use,
connectivity & price.
CASE STUDY: DIGITAL IMAGING TODAYAPPLY PORTER MODEL
Copyright © 2009 Tarek Salah, Arab Science and Technology Foundation, [email protected]
Entry Barrier (High) Economy of Scale. Slow Industry Growth. High Developed Experience. Yet, no Product Differentiation.
Rivalry (Intense) Competition on quality, high specifications, ease of use,
connectivity & price.
CASE STUDY: DIGITAL IMAGING TODAYAPPLY PORTER MODEL
Copyright © 2009 Tarek Salah, Arab Science and Technology Foundation, [email protected]
Buyers bargaining power (High) Mobile phone Cameras are approaching qualities of normal
commercial satisfaction.
Threat from a substitute (High) Mobile Phone cameras
Supplier Bargaining power (still High) Technology components are used in many other industries
THE 5 COMPETITIVE FORCES
Porter Interview Movie
4. Business Strategy
WHAT IS STRATEGY?
The basic purpose of strategy is for a company to make a series of Moves to achieve a Sustainable Competitive Advantage.
What is Strategy?
WHAT IS STRATEGY?
To be effective, the moves require careful analyses of:(i) The industry environment and (ii) The firm’s internal resources, capabilities, and competencies.
“…competitive advantage…is tougher to create and sustain with each passing year….(but)…As hard as it has become to create an edge, some smart organizations are finding new ways to do it…a few standouts …keep creating new competitive advantages, over and over…” Business Week, (Aug. 21-28, 2006, p. 80)
Internal Analysis Tools External Analysis Tools
WHAT IS STRATEGY?
Strategy Long-Term DirectionTactics Short-Term Direction
Strategic Thinking Reasoning about the Long-TermTactical Thinking Reasoning about the Short-Term
Reasoning Inferring consequences from assumptions
Strategy A change-in-direction for long-term future’s prosperity
Long-Term Business Survival requires to strategic capabilities: Ability to Prosper Ability to Change
WHAT TOOLS TO USE TO FORMULATE STRATEGY?
STRATEGIC BUSINESS MODEL
How a company generates profit?
• Target Customers• Fulfillment & Support• Pricing Structure
• Core Competencies• Strategic Assets
• Suppliers/Partners• Other Key Relationships
• Business Mission• Product/Market Scope• Basis for differentiation
Core Strategy Partnership Network
Customer Interface
Strategic Resources
EXAMPLE
5. Business Plan Writing Basics
ONLINE TRAINING ON WRITING YOUR BUSINESS PLAN
Small Business Administration (SBA)“How to Write a Business Plan”: http://app1.sba.gov/training/sbabp/index.htm
ONLINE TRAINING ON WRITING YOUR BUSINESS PLAN
Small Business Administration (SBA)“Developing a Successful Business Plan”: http://www.paloalto.com/sba/course.cfm
ONLINE TRAINING ON WRITING YOUR BUSINESS PLAN
Small Business Administration (SBA)“Online Training Courses”: http://www.sba.gov/services/training/onlinecourses/index.html
ONLINE TRAINING ON WRITING YOUR BUSINESS PLAN
Small Business Administration (SBA)“Online Training Courses”: http://www.sba.gov/services/training/onlinecourses/index.html
ONLINE TRAINING ON WRITING YOUR BUSINESS PLAN
Small Business Administration (SBA)Another Assessment Tool : http://web.sba.gov/sbtn/sbat/index.cfm?Tool=4
ONLINE TRAINING ON WRITING YOUR BUSINESS PLAN
Small Business Administration (SBA)Another Assessment Tool : http://web.sba.gov/sbtn/sbat/index.cfm?Tool=4
3 Core Questions to Answer:
– What the company is
doing?– Why?– How?
BUSINESS PLAN PROCESS OVERVIEW
Step1 • Opportunity Identification
Step2 • Idea Feasibility Analysis (Test Assumptions)
Step3 • Industry and Market Analysis
Step4 • Building an Effective Business Model
Step5• Team and Company Structure, Operations and
Product Development, Marketing Strategy, Technology Strategy, Financial Projections
Step6 • Write and Present the Business Plan
6. Startup Company Valuation Model
3 FACTORS THAT ADD VALUE TO A STARTUP
Adding Technology Value
Adding Market Value
Adding Management Value
7. Introduction to Marketing
IS THIS MARKETING?
Prof. Tarun Sony
RADICAL CHANGES IN MARKETING: CC DV TP
Philip Kotler
Create … Communicate … Deliver … Value … to a Target Market … at a Profit
3 BUSINESS IN MARKETING
Brand Management
Customer Management
Product Management
VALUE CHAIN MODEL OF THOUGHT
Prof. Tarun Sony
Prof. Tarun Sony
3Cs
Customers
• Estimate Market Potential (size, growth rate)
• Understand Customer Behavior (wants & needs, segmentation, preferences and buying patterns)
Competitors
• Industry Structure Analysis
• Competitor Response Profiles
Company
• Economic Analysis• Company Fit
(strengths, weaknesses, objectives, culture, etc.)
4Ps
Product Strategy
• Provide goods/services consistent with chosen positioning and target segment
Pricing Strategy• Product
revenue (capture consumer value)
• Communicate value to the customer
• Provide incentives to the channel
• Establish barriers to entry
Promotional Strategy
• Building awareness & get distribution
• Convey information
• Develop positive associations/identity
• Increase intent to purchase
Distribution Strategy• Match
channel services to target market needs
• Motivate and manage channel members’ behavior
• Collect information about end users
A MORE HOLISTIC VIEW
Prof. Tarun Sony
SO WHAT DOES A MARKETING PLAN CONTAIN?
Prof. Tarun Sony
Actionable decisions With backup for decision
• Strategic– Target marketing decisions– Value proposition– Analysis of marketing
opportunities
• Tactical– Product features– Promotion– Merchandising– Pricing– Sales channels– Service
THE INFORMATION TECHNOLOGY (IT) EFFECT
The spread of information and communications technology is fundamentally changing the nature of
marketing strategy and operations.
EXAMPLE: PALM JEBEL ALI
Palm Jebel Ali
Tarek Salah KamelManagement of Technology MSc., Nile University
Have a clear vision and go achieve it!
Thanks