Introduction To New Business
Ventures
PROFESSOR BALAGOPAL VISSA
INSEAD
1, Ayer Rajah Avenue
Singapore 138676
--Office: (65) 67995382
Hand phone: (65) 94244573
Email: balagopal.vissa@insead.edu
These notes are intended to support class discussions. They should not be considered a comprehensive set of issues to be dealt with.
Welcome!
Something about me
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Bala Vissa
Ph.D. from London Business School
Research focuses on new venture team
dynamics and networks, Business Groups and
entrepreneurship in emerging economies
Work experience:
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7 years with Unilever plc and HCL in India
2 years experience in corporate entrepreneurship
Now, something about you
Please take 5 minutes to fill in the
questionnaire (whether registered or
not)
• Pair up with another person whose first name
starts with the same letter as yours or is one
letter away
– e.g. John can pair up with Jane, Ian or Kate
• Explain your favorite new venture idea to your
counterpart
• Your Task: Introduce your counterpart to the
class in under 2 minutes focusing on:
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–
–
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His/her name and background
His/her favorite new venture idea
Is he/she seeking team members
His/her relevant prior experience
Sensing an opportunity & executing
flawlessly, time after time …
“She’s always in your face
isn’t she. I don’t get it. What
is it about her? She’s not a
great dancer or singer.”
Michael Jackson
“As America turns prim and proper, radical Madonna, always ahead of trends,
has been penning children’s books, dressing demurely in Laura Ashley florals,
and exalting motherhood”
Madonna: The serial entrepreneur?
1983
1988
“Like a Virgin”
“Desperately Seeking
Susan”
Positioning
Music, sex appeal
1989
1995
“Like a Prayer”; “Sex”;
“In Bed with Madonna”
Music,sex and controversy
1996
2003
“What it feels like for a girl”
“Evita”
Music, sex and new age
Leveraging
Resources
Ambition; Relationship
with Prince; Marriage to
Sean Penn, ability to
spot trends
Relationship with Warren
Beatty – played in several
movies, ability to spot trends
New producers;
New staff; Guy Ritchie,
ability to spot trends
Growth and
change
Discipline
Building and using
alliances;
Manipulating the press
Discipline,
Breaking alliances;
Creating Controversy;
Film experience
Discipline (with a softer
face?)
Self-development;
Motherhood; Move to
London; Guy Ritchie
So, what is entrepreneurship?
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Pursuing opportunities without regard
to resources currently controlled
In this course, we are interested in a
specific aspect of entrepreneurship
Building a high growth
venture
Common problem: How to start?
« I always wanted to create a company…There were
times I didn’t sleep when I was an employee just
because I didn’t know how to go about starting
something. I wanted to start something , I wanted to
be an entrepreneur, but I didn’t know what to do, I
didn’t know how to build on my knowledge and
expertise. What could I do? It’s easy to say –
everybody wants to be an entrepreneur. The
question is, how do you go about it? »
- Entrepreneurial INSEAD Alumnus
New business ventures
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You want to build a business:
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How do you go about building a business?
What resources do you need?
How do you acquire & manage them?
How do you change your management
style as the venture grows?
New business ventures
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You are working with start-ups:
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How do you judge the prospects of an
entrepreneurial venture?
How can you anticipate potential
problems?
How can you help the venture team build
the business?
Course objectives
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Learn how to turn opportunity into
revenue-generating business
Experience the entrepreneurial process
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Meet practice
Work with start-ups
Get your feet wet...
Discover / develop your entrepreneurial
potential
What not to expect
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A “boilerplate solution”
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Legal details on how to start a business
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Logically, there cannot be one
Talk to a lawyer in the country where you
wish to incorporate
Deep industry expertise
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Go find the experts!
Ideal course outcome
« From the beginning, we had known that the New
Ventures course would require a great deal of work.
So we had decided to select a project which was
potentially feasible, although at the time that didn’t
necessarily mean we were going to go through with
it. We worked hard on the project, and by the end
of the course, after we had tested the idea with
many people, seen the success of others… and got a
better knowledge of the business, we became
convinced that it was a real opportunity. »
- Paul Chantler and Thor Gudmundsson, MBA ‘92
bm
R
itt aw
al
id
4 for ea
H f
In ou und
-d r r s
ep ev
th ie
a w
O nal
f f ys
e
D rs m is
ev
elo ade
pm
Su ent
cc
es
s
Su
Surviving projects
Success curves
Venture success curves
10000
1000
100
10
1
Entrepreneurial
ventures
Large Firm NPD
Liabilities of newness and
smallness
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General knowledge only
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Inadequate managerial knowledge
Inadequate financial management abilities
Conflict, worry, inefficiency during founding
period
Few relations with outside individuals and
organizations
Initial lack of trust
No stable ties with customers
Sources: Stinthcombe (1965), Thornhill and Amit (2001)
There are many sources of risk
Science/idea/
service
Competition
Market
Business
Models
Management
Economic
regime
Culture
Exit
environment
Finance
International
Source: Advent
GLOBAL PRIVATE EQUITY
Focus on risks related to
“Organizing”
>>>CONVERTING OPPORTUNITY TO AN OPERATING BUSINESS<<<
Module 1:
The
Entrepreneurial
Mindset
Module 2:
Entry
and Positioning
Module 3:
Organization
Design
Session #1 & #2: What
do Entrepreneurs Do?
Session #4 & #5:
Business Models, Entry
Strategy & Positioning
Session #7 & #8: Using
Personal Networks
Strategically
Session #12: Letting
Go of Your Baby
Session #3:
Opportunity – The well
spring of enterprise
Session #6: Aligning
Powerful Partners
Session #9: Building a
World Class Team
Session #13: Coping
with Failure
Session #10: Herding
Cats? Managing the
Start-up team
Session #14: Summing
up: Does Learning
before Doing help?
Session #11: Managing
for Cash Flow
Module 4:
PostStartup choices
Entrepreneurship is all about
shifting the odds to your favor
Risk
versus
Reward