source: faltin 2010 royal university of bhutan, august 26, 2010 dr. guenter faltin entrepreneurship...
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Source: Faltin 2010
Royal University of Bhutan, August 26, 2010Dr. Guenter Faltin
Entrepreneurship DepartmentFree University of Berlin
Entrepreneurship and InnovationCreating and Managing New Business Models
Source: Faltin 2010
The essence of entrepreneurship
is being different.
Marc Casson
Source: Faltin 2010
Why is the business model so important?
Let´s have a look at the burst of the
dot.com bubble:
The companies had everything they needed for success:- huge amounts of (venture) capital- professional managers coming from big companies- cutting edge technology
What was missing?
A convincing business model!
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The traditional approach to find a working business model is expensive!
The traditional Trial and Error-Approach works like this:
Try, failTry, fail
Try, succeed
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The new paradigms of entrepreneurship
1. idea-based business models
2. focusing on entrepreneurship,not business administration
3. applying modular entrepreneurship
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The European Paradox
Mountains of research and patents
- but making use of it happens elsewhere
Ejermo and Kander, 2006,Audretsch, 2007
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Inventions,research findings, new technologies,new ideas
„raw material“
developing and refininga business model
business model
business administration,acceptance by customers,competition
economicsuccess
economicfailure
the market
Success Factors for Start-Ups
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The Golden Opportunity
Emphasize on entrepreneurship!
(The production facilities are located in developing countries anyway)
Source: Faltin 2010
Humboldt University Berlin
Institute of Information Sciences
Skype and Prof. Malek‘s students...
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Don‘t emphasize too much on technology,
serve the market!
Glorianna DavenportMIT Media Laboratory
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From an initial ideato a well developed concept
Business model design is a part of Entrepreneurship, NOT of Business Administration
Business Model Design
Do the trial and error-process in your imagination, rather than with real
money.
It´s faster and much cheaper.
Find a business model that works and maybe has the potential to
change a market
Business Model Design
Do the trial and error-process in your imagination, rather than with real
money.
It´s faster and much cheaper.
Find a business model that works and maybe has the potential to
change a market
LAUNCH
LAUNCH
Business Administration
Keep your focus on the business model and outsource most of
the business operations
If you belief that competence is too expensive… would you rather try incompetence?
Business Administration
Keep your focus on the business model and outsource most of
the business operations
If you belief that competence is too expensive… would you rather try incompetence?
Entrepreneurship Management
Example 1: ebuero AG (www.ebuero.de)
• Virtual office services– Call handling– Address service– Fax– Letters– Notification
• Customers reduce their fix costs by 90%• Market leader in Europe• 200 Employees
Started very small with the founder as the first secretary and his lawyer as the first customer.
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The principle:function, not convention
• Online access• „Copy and pay“
• Complete bibliographic quotations• Income-sharing with the publisher
Example 2 www.paperc.deThe future of scientific libraries
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New perspectives of entrepreneurship
1. idea-based business models
2. focus on entrepreneurship,not business administration
3. modular entrepreneurship
Source: Faltin 2010
Welche Steuern muss ich zahlen?Wie kann ich mein Unternehmen finanzieren?
Einführung in die busy-Software.Finanzplanung
Unternehmen und Organisation
Wie organisiere ich meine Gründung richtig?
Marketing für Existenzgründer
Einführung in ArbeitsrechtÜberblick über das deutsche Unternehmensrecht
Theorie und Praxis der Mitarbeiterführung
Steuerliche Probleme für Gründer
Förderrichtlinien der deutschen Ausgleichsbank
Einführung Rechnungswesen 1Strategisches Management
Interkulturelles Management
Zielgruppenanalyse
DatenbankmanagmentControlling und Qualitätssicherung
MitarbeitermotivationVergütungs- und Anreizsysteme
DatensicherungssystemeInternationaler Zahlungsverkehr
Public relations
Workload Reduction ManagementRisk management
Outsourcing
Business-to-Business-Marketing
Research and DevelopmentSWOT-AnalyseBoring People Reduction Management
Increase complexity and loss of supervision strategy
Five-Forces-Analyse
Business Plan
accounting
reading a balance sheet
controlling
negotiating with financial institutions
legal problems
professional experience in the field of the business
managing employees
creating team spirit
negotiating with suppliers
keeping inventory on hand
equipment maintenance
marketing skills
communicating with customers
reacting to complaints
representing the company in the public and media
Traditional descriptions of knowledge requirements
?
Source: Faltin 2010
There are millions of masters of business administration,
but only few masters of new concepts.
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If I ever had gone to a business school,I would never have started the business.
Anita Roddick
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The modern concept of an entrepreneur‘s competencies
Awareness for new trends
Recognizing new developments
- in technology
- in competition and market environment
Creating new innovative conceptsManaging their implementation
Creating enthusiasm, curiosity, humor, a sense of joy, optimism in his or her company
Last ressort to solve severe problems
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New perspectives of entrepreneurship
1. idea-based business models
2. focus on entrepreneurship,not business administration
3. modular entrepreneurship
Source: Faltin 2010
Concentrate on creating a sophisticated business model
Use modulsfor almost every function
of your company
The modular approach to entrepreneurship
Source: Faltin 2010
use standardized markets,
or
production by order
outsource secreterial services
use service providers(for transport, storage, packaging, shipment)
delegateaccounting
The entrepreneur as a composer
Modular Entrepreneurship“The powerful entrepreneur“
Almost no initial investment
Almost no fixed costs
There are costs only when sales occur
High cost savings compared to the established competitors
From the beginning professional, highly efficient, virtual and global
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Example 3: myphotobook GmbH (www.myphotobook.co.uk)
• Everybody can make her own books• Free Software enables you to create your own
photobook as a real printed and bound hardcover book – Download the free software– Arrange your digital pictures – Upload the file– Receive a printed and bound hardcover book
• 50 employees worldwide
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Criteria for an excellent business model
1. Secure a competitive edge
2. Have a concept how to deal with imitators(“me-too“ business models)
3. Prepare for technological obsolescence
4. Prepare for economic obsolescence
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Criteria for a High Potential Entrepreneurial Design
• Scalability
• Simplicity
• Minimize risk
experimental pre-start
intelligent prototyping
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“Intelligent Prototyping“
The principle:
Try out first, only thereafter invest full scale.
For Example:
Use Adwords at Google for market acceptance
Create a website, offer a platform for critisising conventional product
Check out techniques of rapid prototyping
Create your own testing environment
Google not only helps to find products to buy, but also markets to sell to!
You can buy these Ads and
pay only for the clicks
For 1000 THB you find out, how many people
are looking for your product
and how many like your offer so much that they
click on it
For 1000 THB you find out, how many people
are looking for your product
and how many like your offer so much that they
click on it
Minimizing fixed costs by means of modular entrepreneurship reduces your risk and maximizes your chances for success!
Business Administration
Source: Faltin 2010
The trick is creativity, simplicity and vision.
Take a different view of the world.
Be curious, learn and free yourselfof conventional rules.
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Create something original that stands out above the masses, something with a lasting value.
Above all, though, you want to be proud of your product.
Such was my business philosophy .
Richard Branson
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The development of an innovative entrepreneurial idea is,
above all, a creative process.
Its engineering is comparable to an artistic creative act.
Karl H. Vesper
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The Golden Opportunity
Create a culture of entrepreneurship:
Focus on people‘s needs, use IT,
tune in with society‘s values
Source: Faltin 2010
Dr. Guenter FaltinEntrepreneurship
Free University of Berlinwww.entrepreneurship.de
Tel.: +49-30-85 95 61 21
Source: Faltin 2010
Source: Faltin 2010
www.entrepreneurship.de
Source: Faltin 2010
Example 3: www.wartemusik.de
• The simplest company ever:– Only one product– Solves only one need– Is only sold online– A website consisting of
only one page
• No complexity• No employees• No fixed costs