ENTREPRENEURIAL MANAGEMENT

MGT 246 Introduction to

Entrepreneurship

Professor Haibo LIU

1

Announcement

 T1. Presentation proposal due 11/01

©2015 John Wiley and

Sons 2

Searching for Entrepreneurship Opportunities  How

 Who  Where  When

©2015 John Wiley and

Sons 3

When

 The different search needs at different stages of the innovation

©2015 John Wiley and

Sons 4

©2015 John Wiley and

Sons 5

https://www.youtube.com/watch?v=E-U02-RWUPc

©2015 John Wiley and

Sons 6

https://www.youtube.com/watch?v=E-U02-RWUPc

Dominant Design

 People began exploring the idea of the bicycle in the middle of the 19th century and a huge variety of types emerged between 1860 and 1890.

 Various attempts were made to establish a dominant design, but it was not until near the turn of the century that the experiments with wheels, gears, seats, etc. converged to the now familiar 'diamond frame'. This still forms the basis of most bicycle design.

©2015 John Wiley and

Sons 7

Dominant Design

 The post-war period in Europe led to an expansion in the demand for cycles as a cheap mode of transport and this put emphasis on production to low cost and high quality.

 For a long period innovation focused on process improvement to achieve these goals and the product and market remained stable - essentially characteristic of the mature phase in the product/technology life cycle.

©2015 John Wiley and

Sons 8

Dominant Design

 This did not mean that more radical concepts were not being explored, simply that they were not adopted widely. Innovation was still taking place in specialist niches.

 But it was not until the 1960s when Alex Moulton introduced his small wheel collapsible bike that mainstream product innovation took place.

 His original design was for a bicycle which could be folded up and carried on the train for commuters to use between the office and the station; other variants included a small shopping bike.

©2015 John Wiley and

Sons 9

Dominant Design

 Considerable product innovation followed this development, especially around accessories, new lightweight materials, and cycle clothing (helmets, etc.).

 The development of the mountain bike and to a resurgence of interest in cycling as a leisure activity rather than as a mode of transport.

 Given the 150 year history of the bicycle, with its patterns of radical change followed by convergence and consolidation it would be unwise to suggest that today's product represents the end of the road for innovation in this sector.

©2015 John Wiley and

Sons 10

©2015 John Wiley and

Sons 11

Abernathy and Utterback model

©2015 John Wiley and

Sons 12

Innovation Lifecycle

 In the early stage – the ‘fluid’ phase – there is a lot of uncertainty, and emphasis is placed on product innovation.

 Typically, entrepreneurs have lots of ideas (most of which fail) about the ways to use new market and technological opportunities.

 Think about the rise of the Internet and the continuing proliferation of entrepreneurial ideas as an example of a fluid phase.

©2015 John Wiley and

Sons 13

Innovation Lifecycle

 There is a stabilization around a particular configuration – the ‘dominant design’

 Then emphasis shifts away from more product variety to process innovation.

 How can we make this in volume, to a low price, consistent quality, etc.?  Example: Think of Henry Ford; he was a latecomer to the business of car

design but his Ford Model T became the dominant design and succeeded principally because of the extensive process innovations around mass production.

©2015 John Wiley and

Sons 14

Innovation Lifecycle

 Finally, there is a third, ‘mature’ phase in which innovation is incremental in both product and process

 There is extensive competition and the scene is set for another breakthrough and return to the fluid stage.

 We could particularly look for radical innovation ideas in the fluid phase but in the mature stage we would be better placed concentrating on incremental improvement innovations.

©2015 John Wiley and

Sons 15

Dominant Design

16

2007

"Apple reinvents the phone."

Dominant Design

©2015 John Wiley and

Sons 17

How about the dominant design of services?

©2015 John Wiley and

Sons 18

How about the dominant design of services?

 Uber Eats

 DoorDash

 GrubHub

 Postmates

©2015 John Wiley and

Sons 19

How about the dominant design of services?

 Instacart

 Shipt

 Amazon Prime Now

 FreshDirect

©2015 John Wiley and

Sons 20

Social Innovation

©2015 John Wiley and

Sons 21

Jane Chen and the Warm Embrace incubator

 What was the problem that Jane and her team tried to solve?

 What were the constraints?

 What was the innovation?

 Was the price fair?

http://www.ted.com/talks/jane_chen_a_warm_embrace_that_saves_lives?langu age=en

22

Breakout room

 You work with your project team from now on.

 Your tasks as a team: • Appoint someone to take notes

• Appoint someone to keep the time

• Discuss the questions

• You have 6 minutes, click the “help” button any time

Innovation is about recombination!

 New technologies can almost always be traced to combinations of prior technologies

 Einstein wrote that “combinatory play seems to be the essential feature in productive thought”

 Rock-and-roll music is widely thought to have resulted from a fusion of rhythm and blues, folk, country, and gospel music.

 Languages evolve by concatenating their existing words as well as by borrowing from other languages.

©2015 John Wiley and

Sons 24

Innovation

 Innovation is ‘the process of creating value from ideas’. o It is a process o Creating value: economic or social value o Idea: new and useful

Social Innovation

 What is social innovation? Use a few terms to define its characteristics.

 What are the motivations that drive social innovation?

26

Social Innovation

 Using innovation to create social value  Innovation for the greater good

 Usually new combinations or hybrids of existing elements, rather than being wholly new in themselves  Microfinance organization

 Implementing them involves cutting across organizational, sectoral or disciplinary boundaries

Corporate social responsibility

• Social innovation as securing a ‘licence to operate’ o Requests by various stakeholders o May not be incompatible with developing a successful

business • Social innovation as aligning values

o Benefits of aligning values with their staff o Better retention

• Social innovation as a learning laboratory o Meeting the needs of a different group to those of the

mainstream population o Usually under resource limitations

28

Discussion

 Do you think it’s easier – or harder – to create a sustainable business venture with a social entrepreneurship idea? Why?

30

Triple Bottom Line

Simultaneous assessment of a company‘s performance against:

 its financial and shareholder performance

 its internal and external stakeholder expectations and responsibilities

 its environmental/social responsibilities

31

Challenges in social innovation

 Funding: Many social enterprises rely on grants, donations, etc. that are unpredictable

 Voluntary: Many people involved in social innovation are there because of their believes. This means that the traditional forms of organization and motivation may be less applicable