The Entrepreneurial Mind Notes-1

8/9/2019 The Entrepreneurial Mind Notes-1

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The Entrepreneurial MindChapter 1: Crafting a Personal Entrepreneurial StrategyAchieving Entrepreneurial Greatness-an entrepreneur creates the culture in his/her own venture

Leadership and Human Behaviour-a single psychological model of entrepreneurship has not been supported by research-numerous ways of analyzing human behavior that have implications in the study of entrepreneurship

-individual motivation for e!ample"-ppl are motivated by # needs$

-for achievement$ to e!cel and for measurable personal accomplishment- for power$ to in%uence others- for a&liation$ to build a warm relationship with someone else

-the prototypical entrepreneur has a high need for achievement and power low need for a&liation

'esearch-focused on the common attitudes and behaviours of ent"-found relationship between attitudes and behaviours of successful ent-another found that ent" Are uni(ue individuals-those who li)e to plan are more li)ely to succeed-academics continue to characterize the special (ualities of ent"

-ris) bearing souce of formal authority innovative desire for responsibility need for power drive

etc*

+onverging on the Entrepreneurial ,indesirable and Ac(uirable Attitudes Habits and Behaviours-evidence that ent" Are born and made better and certain attitudes and behaviours can be ac(uireddeveloped practiced-# attributes as principal reasons for success$

-ability to respond positively to challenges and learn from mista)es-personal initiative-perseverance and determination

. ominant hemes 0+1'E A '2B3 E45Commitment and Determination: most important an ent can overcome obstacles and comensate

for other wea)nesses" +an be measured through willingness to invest to ta)e cut in the pay throughsacri6ces in lifestyle and family circumstances" +ompetitive persistent in solving problems

Leadership $ self-starters high standards team builder inspire others share the wealth patient andurgent superior learner in%uence without formal power

Opportunity Obsession: has intimate )nowledge of customers7 needs and wants mar)et drivenobsessed with value creation and enhancement

Tolerance of is!" #mbiguity" and $ncertainty: calculated ris) ta)er ris) minimize and sharermanages contradictions tolerates uncertainty and lac) of structure stress and con%ict able to resolveproblems

Creati%ity" Self reliance" and #daptablility: non conventional open minded restless with status(uo able to adapt to change creative problem solver (uic) learner no fear of failure able to 8sweatdetails9

Moti%ation to E&cel" Courage: goals and results oriented high but realistic goals drive to achieveand grow low need for status and power supporting aware of wee)nesses and strengths hasperspective and sense of humor

esirable Attributes$ 2ntelligence +apacity to 2nspire :alues Energy Health and Emotional 4tability+reativity and 2nnovativeness

Entrepreneurial 'easoning$ he Entrepreneurial ,ind 2n Action


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-successful ent have wide rang of personality types-research focused on in%uence of genes family education career e!perience but no

psychological model is supported-needs set of ac(uired s)ills rather than speci6c inherent traits-an ent way of thin)ing is universal

+reativity and innovation$ High 2nventor Entrepreneur Low ;romoter ,anager

Low HighGeneral management s)ills business )now how networ)s

Entrepreneurs $ possess management s)ills business )now-how su&cient contactsInventors $ noted for creativity but lac) management s)ill and busness )now howPromoters $ usually lac) serious general management and business s)ills and creativityManagers $ govern police and ensure smooth operation" ,anagement s)ills are high but tuned toe&ciency creativity not usually re(uired

he +oncept of Apprenticeship4haping and ,anaging an Apprenticeship-ent are usually rich in e!perience years of e!perience built contacts-ac(uired intimate )nowledge of the customer distribution channels-successful ones have made money for their employer before doing it for themselves

-the 6rst


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-want the whole show to themselves-are their own bosses-wor) lionger and harder than managers-e!perience great deal of stress-money is the most important ingredient-ents should be young and energetic-only money-driven

C'#PTE ( ) T'E *$S+,ESS PL#,eveloping the Business ;lan-the bus plan for a high potential venture reveals the ability to $

-create or add value to a customer-solve a problem or meet a want or need for someone who will pay-have robust mar)et margin and moneyma)ing characteristics-6t well with the founders and management team at the time

-plan is point of departure for investors to begin their due diligence to various ris)s of the venture$-technology mar)et management competitive and strategic 6nancial

-plans change constantly should be thought of as wor) in progress-without a bp ? di&cult to raise capital from informal and formal investors-odds can be shaped in your favour through the development of a bp but Fust because you have a plandoes not mean that the business will be a success

4ome ips-enture Capitalists: (ualify your targets be vague about what other venture caps you are tal)ing toThe Plan: stress you bus concept in the e!ec summary numbers don7t matter but the economicsmatter ma)e the plan loo) and feel good prepare copies of published articles contracts mar)etstudies purchase orders detailed resumes and reference lists of )ey players in the ventureThe Deal: ma)e sure investors are as desparate as you create a mar)et for the venture never say noto an oIer price

How to etermine if 2nvestors +an Add :alue-selling ability is one of the most common denominators among successful ents-carefully (uery investors must be savvy listeners

he ehydrated Business ;lan- -


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4egmenting and 2ntegrating 2nformation-important to organize info in a way that can be managed and useful-eIective way$ segment info into sections such as target mar)et industry the competition the6nancial plan etc""-process wor)s best f sections are discrete and the info is digestable-order of sections can vary-e!ec summary is prepared last

Establishing Action 4teps-process by which a bp is written$-Segmenting Information: needs to be devised and include priorities who is responsible for eachsection due date of 6rst draft and 6nal draft-Creating an overall schedule: more speci6c list of tas)s identify priorities who is responsible for themwhen they will be started and complete as speci6c and detailed as possible tas)s need to be pro)endown e!amined for con%ict-Creating an Action Calendar: tas)s on the do list need to be placed on a calendar calendar needs to bere-e!amined when complete for con%icts or lac) of realism-Doing the work and writing the Plan: adFustments need to be made to the list and calendar reviewedby lawyer and obFective outsider

;'E;A'2 G A B342 E44 ;LAA +omplete Business ;lan

-diIerences between screening an opportunity and developing a business plan$-someone parting with lots of money-guiding the policies and actions of the 6rm over a number of years-more detail is needed more time gathering data interpreting it etc

2 E' E 2,;A+$ 1;;1'3 24mall Business +ommerce-many businesses say that the 2nternet improved their pro6tability helped their business to growessential to survival sell products online

#PPE,D+. ) S#MPLE *$S+,ESS PL#, ) chide/it2 E E+3 2:E 43,,A'

he ;remise

-criticism can be constructive 0good5 or baseless 0bad5-if done correctly and constructively it can improve ideas businesses stidues philosophies fashionsetc

he ;roblem-criticism and the process of providing constructive feedbac) is an ine&cient and unproductivephenomenon

-no way to diIerentiate between constructive and baseless-no way ot tell if a criticism is good proper popular-no wat to freely and anonymously e!press own constructive feedbac)-no way to solicit 8constructive feedbac)9 from the community and organize that info

he ;itch

-if there was a way to$-tell the diI between a constructive and baseless one-provide constructive feedbac) anonymously-gather all constructive feedbac) in one location and sort it-6nd out the most popular constructive fb amongst e!perts in the community

-then this would have a positive iimpact on all topics being analyzed and constructively criticized-would bring the power of the community together to improve ideas philosophies products services*

he 4olution-chide"it is a web crowdsourcing tool that harnesses the power of the internet community to gather sortand ran) constructive criticism from ppl around the world


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-is a community based on constructive fb where anyone can be a critic and where best critics rise inpopularity rewards those who provide constructive fb

arget ,ar)et-initially tech savvy and analytical ppl with strong opinions 0ie bloggers5-tech savvy individuals/orgs that want to receive constr fb from community

+urrent 4tatus-a federally incorporated company with an o&ce in 1ttawa-strong management and development team-launched an alpha version is testing product to prepare for beta release

@hat is the business modelJ-internet is becoming more cluttered $ must obtain prime real estate on web sites ? placing a video onthe front page of youtube-if someone wants to have his posting on front page of chide he has to bid for space

-highest bidder will have the most prominent placement and more ppl will view the topic-chide intends to revenue share with the critics who provide best constr fb as determined by thecommunity

-by doing so it will entice its group of e!pert critics to provide high (uality fb-through ran)ing and voting it will identify top e!perts in a wide range of topics" hese critics will be avaluable diIerentiating asset for chide

4calability/'M /1pen 4ource-is using a new web platform 8 Fango9

-open source platform that allows for rapid and agile development while )eeping in mindscalability-open source has allowed chide to build faster and focus eIorts on its diIerentiating intellectualproperty and not on technology

Dinancial ;roFects-will have revenues of apr" == === in year <


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@hat is the development ApproachJ-team will continue to build new features and twea) based on feedbac)

222 ,A'KE 2 G A+ 2+4 A ;'1 3+ DEA 3'E4How to Gain +ritical ,ass-tool for soliciting gathering sorting contr fb

-if done well more ppl will use the site as a tool-the more content there is on the site the more search engines leads it will attain-strategy is to build the site a s a tool-2s this a proven and tested conceptJ es-some features$

Blog ;ost-Bac)-bloggers are a good mar)et have audiences that follow them too-will help create initial content-when they post a review they will have the option to automatically post it on their blog 0mutuallybene6cial5-chide bene6ts form having community create content on its site-bloggers increase tra&c to chide-the co-founder designer and developer are all members of chide and that have active bloggingnetwor)s

@idgets-websites can use chide to get fb on their sites 0chide"it lounge5

-chide widget on their website-will initially use fam and friends of co-founding team to try out the widget" Db from this group willimprove the widget and process

Events-will mar)et itself to even hosts to create chide lounges for their events-will test out on one event fb from this event will be used to improve the lounge tool-events of friends of founding team

oolbar-is a plugin for internet browsers can install plugin

-will ma)e toolbar available on own website ? will inform only most active users of the toolbar

Deeds ;age/Email 3pdates-useful mar)eting tactic$ sending email summaries of activity and updates to threads

Daceboo) 1pen4ocial ,obile Apps-team must build apps in order to publicize its services

2: ,A'KE 2 G 'E4EA'+H A A AL 424,ar)et Bac)ground and 2nformation-success of social networ)s-most important mar)et challenge for social networ)s is developing a bus model that creates a positivecash %ow

+ontentN most important factor in attracting an audience-controversial topics encourage involvement-forums with current hot topics

Audience Growth-social networ)s grow through referrals and invites-chide will provide orgs with a forum to establish own blogs or online focus groups

Active ;articipation-anonymity enables everyone to participate without being identi6ed if preferred


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'ecognized :alue to +onsumers and Business-value by e!posing readers to diI viewpoints-positive value from suggestions on how to improve content-opportunity to 6eld test new products

'evenue 1pportunities-free services until the client base grows-sponsored topics by enterprises-pay per clic)-licensing of the technology to bus for online focus groups

+ompetition-other popular social networ)s

+ompetitors-some crowdsourcing appls are more speci6c 0+ambrian House hreadless5

,ar)et evelopment ;lan-*rand recognition: the initial focus is on increasing the audience base select topics of interestensure topics are current use )eywords that will obtain high rating on search engines-Target #udience: analysis of initial audience performance stats gathered on activity target groupsthrough promos ads lin)s to social networ)s

-Mobile Clients: ensure site is compatible on phones0Sponsored orums: relecant topics lin)s banners related to the org )ey words-Licensing to Enterprises: prganize data to demonstrate activity on the site categorize according todemographics interests participation

: B342 E44 ,1 EL;remium ;lacement

2ouTube Model: place videos on front page3oogle sponsored Search Model: bidding systems highest bidders will have topics posted at bestplace

;remium ,embership-


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!Entre'ship re$uires a bias toward action and a sense of urgenc % but also demands patience and perseverance

!"he greater the organi)ation% orderliness% discipline and control% the less ou will control ourultimate destin

!Adhering to management best practice became a seed of self!destruction and loss of leadershipto upstart competitors

!"o reali)e long!term e$uit value% ou have to forgo the temptations of short!term pro#tabilit -to thrive one needs to be good at coping with ambiguity chaos uncertainty building managements)ills that create predictability

he Higher ;otential :enture$ hin) Big Enough-one of the biggest mista)es aspiring entrepreneurs ma)e is strategic$ thin) too small-chances of success and survival are lower in small businesses

-if they do survive they are less 6nancially rewarding-criterion$ loo) for business concepts that will change the way ppl live and wor)-many mega-entrepreneurs launched their ventures in their =s- C-# are most active in entrship

4,ALLE' +A ,EA H2GHE' DA2L3'E 1 4-failure rates for startups ? C=R in the 6rst few years-retail and services account for maFority of all failures restaurants also-li)elihood that startups will survive in their initial year diIers across provinces

-higher success in 1ntario than in the Atlantic ;rovinces-startups in B+ Suebec Alberta are more li)ely to survive their 6rst year than those in

4as)atchewan and ,anitoba-maFority of failures occur in the 6rst -C years-not always 8failure9

-entrs may choose to get out closing or selling it oI -idea may no longer be viable-better opportunity may come along

-failure rates vary across industries as well-real-estate is lowest-technology sector has a high rate-software and services has even higher

-diIerences in survival rates among industry categories $ retail trade construction small service

businesses account for Q=R of failures

Getting the 1dds in our Davour-decided pattern of e!ceptions to the overall rate of failure$

-most smaller enterprises that stop do not create enhance or pursue opportunities that realizevalue" hey tend to be Fob substitutes in many instances

hreshold +oncept-odds for survival and a higher level of success change dramatically if the venture reaches a criticalmass of at least


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;rivate 2nvestors oin :enture +apitalists-entrepreneurs that have cashed out have become 8angels9 as private investors in the ne!t generationof entrepreneurs-many of successful entr have created own investment pools and are competing with venture capitalists-private investors and entre have similar selection criteria to the venture capitalists

-search for high potential higher growth ventures-unli)e venture capitalists private investors are not constrained by having to invest so much money ina short period of time

-angel investors are prime sources for less capital-intensive startups and early stage businesses

Dind Dinancial Bac)ers and Associates @ho Add :alue--one of most distinguishing disciplines of these higher potential ventures is how the founder identify6nancial partners and )ey team members

-insist on bac)ers/partners who do more than bring in money commitment motivation-want those who can add value through e!perience )now-how networ)s wisdom-)ey associates are selected bc they7re smarter and better at what they do than the founder

1ption$ he Lifestyle :enture-for many entrepreneurs issues of family roots and location ta)e precedence-accessibility to a way of life can be more important than how large a business one has-some prefer to be with and wor) alongside family ? move to the country for e!ample

-e(uity contracts are prevalent for high-growth ventures whereas debt-type contracts are typical oflifestyle ventures

HE 2,,1 4 ,1 EL$ @HE'E HE1' A ;'A+ 2+E +1LL2 E 2 HE 'EAL @1'L2ntellectual and ;ractical +ollisions with the 'eal @orld-core principle$ in every (uest of the entr process there must be intellectual and practical collisionsbetween academic theory and the real world practice

:alue +reation$ he riving Dorces-it is opportunit driven-it is driven by a lead entrepreneur and an entrepreneurial team-it is resource parsimonious and creative-if depends on the #t and balance among these

-it is integrated and holistic-it is sustainableNthe controllable components of the ent process that can be assessed in%uenced altered-founders investors focus on these to analyze the ris)s and determine what changes can be made

+hange the 1dds$ Di! 2t 4hape 2t ,ould 2t ,a)e 2t

-the driving forces start with opportunity not money strategy team networds*-most opportunities are bigger than the talent/capacity of the team or the resources available to

them-role of the lead entr and the team is to Fuggle these elements in a changing environment-business plan provides the language for communicating the (uality of the # driving forces-ent process depicted in the immons ,odel$ shape size depth of the opportunity establishes there(uired shape size and depth of the resources and team

-show these as circles ? so balance appears fragile


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-ent must carry the deal by taking charge of the success e$uation-ambiguity and ris) are your friends-analyze the 6ts and gaps that e!ist in the venture

-what is wrong with this opportunity what is missing who can change it*"-determine these answers and mane the changes by 6guring out how to 6ll the gaps and

improve the 6t attract )ey players who can add value-ent role is to manage and rede6ne the ris)-reward e(uation with an eye towards sustainability

-appears as the underlying foundation in the model since the entr legacy is to create positiveimpact without harming the environment community society

The Opportunity: at the heart of the process-a good idea is not always a good opportunity-


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-strategic investors or partners can enhance the balance of the driving forces-are de6ned as those who can 6ll the gaps left by other members of the team-create balance where imbalance e!ists-role diIers according to the needs of a venture

-ent process is based on logic and trial and error is intuitive and consciously planned 0@right brothers7airplain too)


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Best 3nderwriters ,a! appetites of diI suppliers in the capital mar)ets food chain enables you toanswer the (uestions for what reason does this venture e!ist and for whomJ

-answers have implications for fund-raising team building and growing the company-shows that the )ey to creating a company with the highest value begins with identifying an opp in the8best tech and mar)et space9

-created attraction for the 8best management team9-speed and agility to move (uicly attrac)s the 8best venture capitalists board members and

other mentors9 who can add value-Dood +hain +oncept$

-diI players have diI capacities and preferences for the )ind of venture that want to invest-early step to avoid wasting time chasing venture capitalists angels others when these is a mis6t

from the outset-problem is compounded when see)ing angel or informal investors there are


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he 'eal @orld-opps are created/built using ideas and the entrepreneurial creativity-li)e hurricanes over the ocean ideas interact with real-world conditions and entrial creativity at somepoint

-product of this interaction is an opp where new venture can be created-bus environment cannot be altered signi6cantly-social and non-pro6t orgs are also subFect to mar)et forces and economic constraints-dealing with suppliers production costs labour and distribution is critical to the health of these socialcorporations

-social and non pro6t orgs are Fust as concerned with the positive cash %ow-for-pro6t businesses operate in a free enterprise system characterized by private ownership and pro6ts

4pawners and rivers of 1pportunities-in a free enterprise system changing circumstances chaos confusion inconsistencies lags or leadsetc* spawn opps-constant vigilance for changes is a valuable habit-ents can seize opps while others study opps-opps are situational-some of most e!citing opps came from technological innovation

-OCR of the radical innovations since @@ came from new and small 6rms-revolution in ,24 had big impact on businesses

-tech and regulatory changes have really altered and will continue to alter the way we conceive opps-Bulldog Ditness ? integrating tech into 6tness for )ids

4earch for 4ea-+hanges-simple criterion for highest potential ventures$ companies that are addressing worldwide mar)etswhich are large enough to allow the portfolio company to grow to a signi6cant size-best place to start in see)ing to identify big ideas is to identify signi6cant sea-changes that areoccurring/will occur

-e!$ personal computing biotech internet-echnology 4ea-+hanges

-,oore7s Law 0computing power of a chip doubles every


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-ideas are inert and worthless but in6nite though resources are not-fallacy persists despite lessons of practical e!perience-1wen @inters$ 8the manufacturer who shows his mousetrap to the world )eeps the smo)e coming outhis chimney9

+ontributors to the Dallacy-the portrayal in oversimpli6ed accounts of the ease and genius with how ventures li)e ero! ;olaroidmade their founder wealthy-inventors are sheltered in viewpoint and e!perience from the tough competitive realities of thebusiness world

-may underestimate the importance of what it ta)es a bus to succeed-psychological ownership attached to an invention/ product

-narrows the focus which should be on the building of the business not one aspect of the idea-desire to do it better technically and scienti6cally-desire to do it 6rst does not mean success

-Fust proves that there7s a mar)et ma)es room for competitors

;A E' 'E+1G 2 21 he E!perience Dactor-e!perience is vital in loo)ing at new venture ideas-e!perienced ents show an ability to recognize (uic)ly a pattern and an opp while it is ta)ing its shape

-pattern recognition$ creative process that is not Fust logical linear and additive but intuitive

-involves creating lin)ing cross association 8chun)s9 of e!perience )now-how contacts-need to see relationships between pieces be able to 6t together some that are seemingly

unrelated before the whole is visible-capacity to see what other don7t

Enhancing +reative hin)ing-is of great value in recognizing opps-creativity pea)s around


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-as mar)et (uic)ly becomes larger more opps are possible-as mar)et becomes established conditions are not as favourable

-window opens where a mar)et starts to become su&ciently large and structured-closes as the mar)et matures

-curve shows rapid growth pattern typical of industries as microcomputers and software cell phones*-length of time the window will be open is important ? ta)e long time to determine whether a newventure is a success/failure

-bene6ts of success need to be realized-venture-capital-bac)ed 6rms$

-lemons 0losers5 ripen in Y years-pearls 0winners5 ta)e Q-P years to mature

-ability to recognize a potential opp when it appears and the sense of timing to seize that opp arecrucial

'elation to the Dramewor) of Analysis-loo) at an opp as a # relief map with its valleys mountains etc all represented

-each opp has #- factors 0patented innovation sole distribution rights brea)through tech5-these elements pop out at the observer indicate possibilities where others might see obstacles

-easy to see where there are thousands of e!ceptional opps that will 6t with a variety of

ents but not into the framewor)$

Attr activeness+riteria Highest ;otential Lowest ;otential2ndustry and ,ar)et +hanges way ppl live wor) learn 2ncremental improvement only,ar)et$

+ustomers

3ser bene6ts

,ar)et drivenZ identi6edZ recurringrevenue niche

3nfocusedZ onetime revenue

'eachableZ purchase orders removepain point

Loyal to others unreachable

Less than < year paybac) solves a veryimportant problem need

# years > paybac)

Etc*

4+'EE 2 G 1;;1' 3 2 2E41pportunity DocusNmost fruitful point of departure for screening opps

-screening should not begin with strategy 6nancial analysis estimations of how much thecompany is worth-many ents run out of cash at a faster rate than they bring in customers and pro6table sales ? theyhave not focused on the right opp-number of customers amount of the transaction repeat transactions are recognized standards goodmetrics

4creening +riteria$ he +haracteristics of High ;otential :entures-table above summarizes criteria used by venture capitalists to evaluate opps-venture capital investors reFect .=-Q=Rof the new ventures presented to them very early in the reviewprocess based on how the ents satisfy these criteria-companies built without a dime of professional venture capital$ ;leasant 'owland


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2ndustry and ,ar)et 2ssuesMar!et:*igher potential businesses can identify a mar)et niche for a p/s that meets an important customerneed and provides high value-added bene6ts to customers-customers are reachable and receptive to the p/s with no brand loyalties-paybac) to the user is one year or less is identi6able repeatable veri6able-if bene6ts to customers can be calculated in dollar terms mar)et potential is far less di&cult and ris)y+ower potential: opps are unfocused regarding customer need customers are unreachable or havebrand loyalties to others-paybac) to the user is W# years-low value-added-unable to e!pand beyond < product

Mar!et Structure:-number of sellers size distribution of sellers whether products are diIerentiated conditions of entryand e!it number of buyers cost conditions sensitivity of demand to changes in price N signi6cant-imperfect mar)et$ contains vacuums that create un6lled mar)et niches

-those where info/)nowledge gaps e!ist where competition is pro6table but not so strong as tobe overwhelming are attractive-industries that ate highly concentrated perfectly competitive are mature/declining N unattractive

-price-cutting and other competitive strategies$ signi6cant barrier to entry

Mar!et Si7e-attractive new venture sells to a large and growing mar)et-minimum mar)et size of more than


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-attractive opps$ have potential to yield a return on investment of CR > per year-high gross margins and high after ta! pro6t usually yield high earning per share and-unattractive$ U


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-attractive$ being able to gain proprietary protection regulatory advantage other legal/contractualadvantages e!clusive rights to a mar)et distributor being able to gain advantage in lead times intech product innovation mar)et innovation people location resources high-(uality contacts

-creates barriers to others

,anagement eam 2ssuesEntrepreneurial Team-attractive$ e!isting teams that are strong contain industry superstars has proven e!perience in techmar)et service area members have complementary s)ills+ndustry and Technical E&perience-attractive$ management trac) recod of signi6cant accomplishment in the industry with the tech themar)et area lots of achievements where new ventue will compete+ntegrity-attractive$ trust and integrity un(uestioned rep+ntellectual 'onesty-attractive$ founders )now what to do about shortcomings or gaps in the team/enterpriseatal0 la8 +ssues-attractive$ no fatal %aws

-overpowering competition cost of entry is hgihg unable to produce at competitive price

;ersonal +riteria3oals and it

-good match between re(uirements of business and what the founder want out of itJ$pside>Do8nside +ssues-attractive$ does not have downside ris)-ent needs to be able to absorb 6nancial downside and reboundOpportunity Cost-there are always opp costs when pursuing a venture opp-ent needs to heed other alternatives and account honestly for any cut in salary that ma be involved inpursuing an oppDesirability-not only attractive but also desirable

-location of wor) other social cultural demographic characteristics of a city/region

is!> e8ard Tolerance

-successful ents ta)e calculated ris)s avoid unnecessary ris)sStress Tolerance-initial startup stage N most stressful time-thin)ing and planning for the future may reduce the stress

4trategic iIerentiationDegree of it $ to what e!tent is there a good 6t among the driving forces and the timing given thee!ternal environmentJTeam $ no sub for a top (uality teamSer%ice Management: Q=R stopped using a p/s because of bad customer service" 4ervice recovery isimportantTiming: < element that can ma)e a signi6cant diIerence can be enemy or friendTechnology: a brea)through creates competitive advantage

le&ibility: maFor strategic weapon particularly when competing with large companiesOpportunity OrientationPricingDistribution Channelsoom for Error

GAHE'2 G 2 D1',A 21Dinding 2deas-the right person right place right time-past e!perience can help-sources of info can help generate ideas$


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E&isting *usinesses: purchasing an ongoing business-save time and money reduce ris)ranchises: starting a franchise operation becoming a franchiseePatents: acuisitions eIected by bro)ers have resulted in signi6cant new productsProduct Licensing: available from universities corps independent investors subscribe to infoservicesCorporations: corps engaged in 'M often develop inventions/services that they do not e!ploit,ot0for0Pro9t esearch +nstitutes: do 'M under contract to the government$ni%ersities: are active in research in physical sciences and see) to license inventions

2ndustry and rade +ontactsTrade Sho8s and #ssociation Meetings: way to e!amine products of competitors meetdistributors sales reps learn of product/mar)et trendsCustomers: contact customersDistributors and ?holesalers: can yield info about the strengths/ wea)nesses of e!isting productsCompetitors: e!amine products can be improvedJormer Employers: some companies help ents set up companies in return for e(uityConsulting: lead to prototypes,et8or!ing: social networ)s source of valuable contacts facilitate and accelerate process of ma)ingcontacts

4haping your 1pportunity

-invest in thorough research-6nd out about competitor7s sales plans )ey elements of corp strategies capacity of plants supplierscustomers new products-use published reources interview people-are less-ethical ways 0phony interviews5

;3BL24HE 413'+E4-< st stepL complete search of materials in libraries internet

-databases and other sources about industries mar)ets etc"-other sources$

Guides and +ompany 2nformationAdditional 4ources of 2ntelligence

Trade #ssociationsEmployees: who have left competitor7s company can provide insightConsulting irms: conduct industry studiesMar!et esearch irms@ey Customers" Manufacturers" Suppliers" Distributors" *uyersPublic ilings: federal provincial locale%erse Engineering: to determine costs of production manufacturing methods,et8or!sOther: classi6ed ads buyers guides labour unions*"

2 E' E 2,;A+ $ 'E4EA'+H A LEA' 2 G-resource for entrial researcu and opp e!ploration-rapid growth of data sources sites search engines

-blogs oIer insight and perspectives on opps-email (uesionnaires-ability to tap wisdom from e!perts

C'#PTE A ) EO$ CE EB$+ EME,TS HE E 'AL A;;'1A+H 1 'E413'+E4N ppl 6nancial resources assets intellectual property-ents see) to use min amount of resources see) to control them-reduce ris)$

-less capital staged capital commitments more %e!ibility low sun) cost lower costs reduced ris)


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Bootstrapping strategies$ ,arshalling and ,inimizing resources-lac) of money employees e(uipment N advantage

-forces ent to concentrate on selling bring in cash

3sing 1ther ;eople7s 'esources-particularly in start-up early growth stages-money invested lent people space e(uipment material

13 42 E ;E1;LE 'E413'+E4Build our Brain rust-brain$ group of close advisors selected for their various e!pertises-way of managing ris) reward

Board of irectors-decision of whether to have one is troublesomeThe Decision: in%uence by the form of organization chosen for the 6rm 0corps must have one5

-certain investors re(uire one venture capitalists almost always re(uire one-tied to 6nancing decisions and ownership of the voting shares-are dominated by company e!ecs and venture capitalists

Selection Criteria: #dd %alue 8ith !no80ho8 and Contacts: 6nding right people is challenging-personal ac(uaintances of the lead ent team their lawyers ban)ers accountants-intellectual honesty

Liability: corporate fraud scandals lead to crisis of con6dence in the capital mar)etplace-41 Act re(uires companies to 6le paperwor) with the 4ecurities and E!change +ommission

faster maintain volumes of data test their procedures for posting accurate timely info-directors of a company can be held liable for its actions and those of its o&cers

'arassment: outside shareholders can have unrealistic e!pectations about the ris) involved in a newventure ? are continual annoyance for boardsTime and is!

Alternatives to a Dormal Board-advisors and (uasi-boards-advisors$ designed to dispense advice rather than ma)e decisions and are not e!posed to personalliability

-bring needed e!pertise without legal entanglements and formalities less e!pensive

Legal +ounselDecision: availability comfort level with the lawyer e!perience level and appropriateness to the tas)cost whether the lawyer )nows the industry and has connections to investors and venture capitalventure7s size-ents need assistant with these areas$ incorporation franchising and licensing contracts andagreements formal litigation liability protection etc"" real estate insurance copyrights trademar)spatents intellectual property protection employee plans ta! planning regulations mergers andac(uisitions ban)ruptcy law personal needsSelection Criteria: personal contact with a member of the law 6rmN main factor reputation priorrelationship

-best place to start$ ac(uaintances of the lead ent management team or directors-chemistry is important you get what you pay for

Ban)ers and 1ther LendersDecision: involves decisions about how to 6nance certain needs serve as an advisor ban)er withe!cellent reputation 6nancial institutionSelection: start with recommendations

AccountantsDecision: those who are e!perienced as advisors provide valuable servicesSelection: whether to go with small local 6rm regional 6rm or maFor accounting 6rm

-many ents prefer smaller regional 6rms lower costs and better personal attention-address$ service needs cost and chemistry


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+onsultantsDecision: hired to solve problems and 6ll gaps not 6lled by the team

-startups re(uire help with critical one-time tas)s-assessing business sites evaluating lease and rental agreements 6nding bus partners

etc*Selection: options are numerous (uality varies costs are unpredictable

-ppl s)ills best referral is word of mouth not geographically bound chec) references

D2 A +2AL 'E413'+E4Analyzing Dinancial 'e(uirements-cash is the lifeblood of a venture

Documents

The Entrepreneurial Mind Notes-1