Introduc)on

 to  Entrepreneurship  

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   1  

 Entrepreneurial  

•  What  is  meant  by  the  term  “entrepreneurial”?  

•  Two  characteris)cs  
1)  Innova)on    
2)  Growth  

•  Does  entrepreneurship  necessitate  the  crea)on  of  novel  

inven)ons?    
•  Not  necessarily    

23/02/22   Rojers  P  Joseph  -­‐  IIM  Ranchi   2  

  
Who  or  what  is  an  entrepreneur?    
 
•  They  see  the  past  and  present  as  other  people  do;  but  judge  
the  future  in  a  different  way    
–  Ludwig  von  Mises,  1966    

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   3  

  
What  is  entrepreneurship?    
 
•  Is  it  an  innate  talent,  or  can  it  be  passed  down  from  one  
genera)on  to  another?    
•  Can  it  be  taught?    
•  Can  entrepreneurship  be  learnt?  

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   4  

  
What  is  entrepreneurship?    
 
•  The  impact  of  a  student’s  aWtude  and  effort  in  
comprehending,  applying  and  reflec)ng  on  gained  knowledge  
•  Such  knowledge  can  be  imparted  and  students  can  be  
familiarized  with  an  entrepreneur’s  toolkit  of  skills  and  
decision-­‐making  models  in  a  structured  series  of  lessons  
•  However,  the  mindset  of  an  entrepreneur  may  only  be  
developed  with  intrinsic  mo)va)on  and  prac)ce  

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   5  

 BRISK3  Mind  Model    

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   6  

 Business  opportunity,  Business  idea,  and  Business  
Plan    

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   7  

  
Business  ideas  and  opportunity  recogni)on    
 
•  Pain-­‐point  observa)ons  
•  External  learning  
•  Developing  other  ideas  
•  Improving  exis)ng  solu)ons  
•  Novel  inven)ons  
•  Open  innova)on  approach  

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   8  

  
Business  ideas  and  opportunity  recogni)on    
 
•  Oyo  rooms  (Ritesh  Agarwal)  
•  RedBus  (Phanindra  Sama)    
•  Pothi.com  (Jaya  Jha)  
•  Guardian  Lifecare  (Ashutosh  Garg)    
•  Apple  iPhone  (Steve  Jobs)  
•  P&G’s  connect  and  Develop  programme  

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   9  

  
Market  sizing  &  user  experience    
 
•  Which  market  will  the  entrepreneurial  venture  be  launched  
in,  and  how  vola)le  or  stable  is  it?    
•  Stakeholder  interdependencies  
•  A  clear  profile  of  poten)al  rivals,  benefactors,  and  
beneficiaries  must  be  iden)fied    
•  Exis)ng  incumbents,  barriers  to  entry  and  compe))ve  
posi)oning  must  also  be  mapped    
•  Example:  Lumos  

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   10  

 Lumos  

•  Three  B.  Tech  graduates  from  Indian  Ins)tute  of  Technology  

(IIT)  Gandhinagar  started  Lumos,  right  out  of  college  in  2014  
•  The  idea  was  to  build  smart  switches  that  can  automate  all  
electrical  appliances  in  a  home  
•  Lumos  was  shutdown  in  2015  
•  What  were  the  reasons  for  the  failure  of  Lumos?    
 

03/10/2018   Rojers  P  Joseph-­‐  IIM  Rohtak   11  

  
Compe))on  mapping  and  evalua)on    
 
•  Wherever  there  are  opportuni)es,  there  is  ojen  also  
compe))on  
•  In  184,  the  Times  newspaper  predicted  that  by  1944,  “every  
street  in  London  [would]  be  buried  under  nine  feet  of  
manure.”  But  then  came  the  automobiles    
•  How  to  deal  with  exis)ng  compe)tors?  new  entrants?    
•  Put  yourself  in  compe)tors  shoes  
•  Engage  in  a  price  war?    
•  Differen)ate  the  offerings?    
•  Seek  truce/  cooperate?    

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   12  

  
Hypothesis,  itera)ons  and  business  models    
 
•  The  envisioned  solu)on  should  be  explored  and  validated  
sufficiently  with  real  market  condi)ons  
•  Design  thinking:  Focuses  on  human-­‐centred  design  to  cater  to  
the  customer’s  known  and  undiscovered/latent  needs  (Design  
and  consul)ng  firm  IDEO)  
•  Examples:    
•  AirBnB  
•  Uber  Eats  

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   13  

 Have  a  business  idea?  

•  How  to  define  and  communicate  your  business  idea  or  

concept?  
•  How  to  explain  the  fundamental  elements  of  a  business  or  
product?  
•  How  to  structure  your  idea  in  a  coherent  way?    
•  How  to  do  all  these  quickly  and  easily?    

29/08/2020   Rojers  P  Joseph  -­‐  BITS  Demo  Lecture   14  

 Business  Model  Canvas  (BMC)  

29/08/2020   Rojers  P  Joseph  -­‐  BITS  Demo  Lecture   15  

 Components  of  a  Business  model  

•  The  value  proposi)on  

•  Customer  segments  
•  Customer  rela)onships  
•  Channels  
•  Revenue  model  
•  Costs  
•  Resources  
•  Key  ac)vi)es  
•  Partnerships  

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   16  

 Advantages  of  Business  Model  Canvas  

•  Quickly  draws  a  picture  of  what  the  idea  entails  

•  Makes  connec)ons  between  what  your  idea  is  and  how  to  
make  it  into  a  business  
•  Conveys  a  clear  idea  of  what  the  business  will  likely  be    
•  Shows  what  kind  of  customer  decisions  influence  your  
internal  systems/ac)vi)es  

29/08/2020   Rojers  P  Joseph  -­‐  BITS  Demo  Lecture   17  

  
The  lean  start-­‐up  model  (by  Eric  Ries)  
 
•  Three  stages:    
•  1)  Sketching  a  business  model  and  asking  ques)ons  related  to  
the  9  building  blocks  of  the  business  model  
•  2)  Rapid  prototyping    
–  Building  a  Minimum  Viable  Product  (MVP)  
•  3)  Hypothesis  tes)ng  through  customer  valida)on    
•  E.g.:  Dropbox  
–  the  company  started  itera)ng  its  product  much  faster  in  order  to  test  
what  customers  really  wanted,  early  and  ojen  
–  Using  Lean  Startup  principles,  in  just  15  months,  Dropbox  went  form  
100,000  registered  users  to  over  4,000,000  

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   18  

 U)lity  of  the  lean  startup  model  

•  The  results  of  such  a  process  of  evalua)on  may  help  an  
entrepreneur  to  decide  if  one  should:    
•  a)  Con)nue  to  improve  a  product  
•  b)  Pivot  on  the  approach  
•  c)  Shelve  the  idea  en)rely    

•  What  happened  at  OfBusiness?    

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   19  

  
Business  plans    
 
•  A  business  plan  is  different  from  a  business  model  
•  Mainly  for  poten)al  investors  
•  However,  it  can  also  be  used  to  guide  their  decision  making  
by  the  founding  team  and  employees  

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   20  

 Contents  of  a  business  plan  

1)  Industry  analysis  
2)  Company  Descrip)on  
3)  Market  analysis  
4)  The  Economics  of  the  Business  
5)  Marke)ng  Plan  
6)  Design  and  Development  Plan  
7)  Opera)ons  Plan
8)  Management  Team  and  Company  Structure  
9)  Overall  schedule  
10)  Financial  projec)ons  
 
 
12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   21  
 Risk,  Recruits,  &  Rela)onships  

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   22  

 Risk  vs.  Return:  Appe)te  for  uncertainty  

•  Are  the  best  entrepreneurs  risk  seekers  or  risk  mi)gators?    

•  They  are  risk  mi)gators,  people  who  are  good  at  recognizing  
and  managing  risk  
•  Sources  of  risk:    
•  a)  Business  uncertainty  
•  b)  Investment  structure  
•  c)  Demand  elas)city  
•  d)  Supplier  dependence  
•  e)  Regula)ons  
•  f)  Poli)cal  support  
•  g)  Exis)ng  team  

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   23  

  
Recruits  and  Rela)onships    
 
•  People  get  involved  in  various  ways,  and  exit  the  project  at  
various  stages  
•  Entrepreneur  and  co-­‐founders    
•  Rela)onships  are  not  limited  to  interpersonal  connec)ons    
•  These  may  also  include  corporate  mergers  and  acquisi)ons,  
co-­‐crea)on,  compe))on,  and  at  )mes,  even  “coope))on”    

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   24  

 Innova)on  vs.  Inven)on  
Investment  &  Valua)on  
Intellectual  Property  

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   25  

 To  invent  or  innovate?    

•  Either  or  both  

•  Innova)on  primarily  deals  with  solving  a  problem  through  a  
combina)on  of  old,  new  and/or  emerging  solu)ons  in  order  
to  create  new  value  streams  
•  It  is  more  about  value  crea)on  than  anything  else  
•  Tea  bags  vs.  coffee  bags    

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   26  

 Inven)on  vs.  innova)on  

•  Steve  Jobs  and  Apple    

•  Elon  Musk  and  Tesla    
•  Carl  Benz  and  automobiles  
•  Edison  and  Electric  bulbs  
•  Innova)on  refers  to  the  applica)on  of  available  resources  to  
solve  exis)ng  problems  through  new  methods  
•  It  creates  new  value  which  had  not  previously  been  
discovered  

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   27  

  
Investment  and  Valua)ons    
 
Investments   Valua-ons  
•  Bootstrapping   •  Trading  mul)ple    
•  Seed  funding   •  Transac)on  mul)ple  
•  Crowd  funding/Angel   •  Discounted  cash  flow  
investors   •  Market  capitaliza)on  
•  VCs  
•  PE  
•  Bank  loans  
•  IPO  
•  Corporate  partnerships    

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   28  

 Intellectual  property  

•  “Ideas  are  a  dime  a  dozen.  People  who  implement  them  are  

priceless”  
•  Patents  
•  Trademarks  
•  Copyright  
•  Industrial  designs    
•  Geographic  indicators  
•  What  happened  with  Eric  Lundgren?    

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   29  

  
 
Strategy  &  culture  
Scalability  
Spirit  
 
 

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   30  

 Strategy  &  culture  

•  While  a  business  plan  defines  the  goals  of  a  venture,  a  

business  strategy  charts  the  most  efficient  path  to  reach  them  
•  Having  a  strategy  sets  a  venture  apart  in  a  compe))ve  market  
and  enables  one  to  win  
•  Porter’s  5-­‐forces  analysis  
•  “Culture  eats  strategy  for  breakfast”    
–  Peter  Drucker  
•  Strategy  formula)on  vs.  Implementa)on  
•  The  7s  model:  Strategy,  Structure,  Systems,  Style,  Staff,  Skills,  
Shared  values    

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   31  

 Scalability  

•  Scalability    
•  Innova)on    

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   32  

 Spirit  &  Sustainability  

•  Growth  brings  more  customers,  which  may  improve  profits  at  

the  expense  of  adaptability  
•  The  taste  of  success  may  lead  to  complacency    
•  Management  teams  tend  to  be  made  up  of  professionals  who  
are  geared  towards  “managing”  rather  than  disrup)ng  or  
being  entrepreneurial    
•  But,  larger  size  does  not  necessarily  mean  that  a  firm  will  
become  less  innova)ve  as  it  grows  
•  Nintendo  (Wii  in  2006  &  Switch  in  2017)  in  Vs.  Sony  &  
Microsoj  

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   33  

 Knowledge  capital,  Kaizen  and  Kurtosis  

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   34  

 Knowledge  capital    

•  Starts  with  Capital  in  the  form  of  funds  and  knowledge    
•  Knowledge  capital:  Research  findings,  market  data,  talent,  
experience,  exper)se,  or  access  to  astute  consultants  
•  Knowledge  needs  to  be  protected  through  various  
methodologies,  such  as  reward  and  reten)on  strategies,  
protec)on  through  IP  law,  confiden)ality  clauses  etc.    
•  Digital  economy    
•  Knowledge  economy  
•  Informa)on  economy    
•  Intangible  knowledge  capital    
•  Apple?    

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   35  

 Kaizen    

•  Con)nuous  improvement”.    
•  Con)nuous  business  evolu)on  and  sustainability  
•  “Fail  early,  fail  ojen,  but  always  fail  forward”  
–  John  C.  Maxwell,  American  author    
•  Such  learning  allows  entrepreneurs  to  pivot  and  conduct  
more  experiments,  and  thus  con)nue  the  process  of  kaizen  to  
success  and  beyond  

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   36  

 Kurtosis  and  Differen)a)on    

•  A  measure  of  the  frequency  of  outliers  in  a  normal  

distribu)on  
•  A  normal  curve  with  lighter  tails  and  fewer  outliers  has  lower  
kurtosis,  while  a  curve  with  heavier  tails  and  more  outliers  
has  higher  kurtosis    
•  The  principle  of  kurtosis  may  be  applied  to  understand  the  
importance  of  product  differen)a)on  and  having  a  unique  
selling  proposi)on    

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   37  

•  If  an  entrepreneur  targets  a  market  dominated  by  generic  
products,  in  which  the  presence  of  differen)ated  goods  is  
sparse  and  kurtosis  is  low,  he/she  will  be  able  to  reach  a  
larger  audience  even  without  differen)a)ng  his/her  offerings    
•  In  a  market  with  high  kurtosis,  where  consumers  are  spoilt  for  
choice  with  an  array  of  offerings,  it  goes  without  saying  that  
the  entrepreneur  has  to  develop  and  market  products  that  
have  a  clear  and  unique  selling  proposi)on  

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   38  

 Mindset  

•  Passion  and  prepara)on  

•  Causal  thinking  (managers)    Vs.  effectual  thinking  
(entrepreneurs)    
•  Those  who  have  been  trained  as  professionals  tend  to  
develop  a  causal  mindset,  more  ojen  than  not  by  their  
managers  
•  However,  with  deliberate  prac)ce  and  an  open  mind,  this  
may  be  supplemented  with  an  entrepreneurial  mindset  

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   39  

•  Can  business  schools  teach  an  entrepreneurial  mindset?  
•  hsps://www.aacsb.edu/insights/videos/2019/08/can-­‐
business-­‐schools-­‐teach-­‐an-­‐entrepreneurial-­‐mindset  

12/03/22   Rojers  P  Joseph-­‐  IIM  Ranchi   40  

 Entrepreneurial  Ecosystem  

23/02/22   Rojers  P  Joseph  -­‐  IIM  Ranchi   41  

 Ecosystem  

•  A  community  of  interdependent  actors  

•  Entrepreneurial  ecosystems  are  an  inherently  geographic  
perspec)ve  
•  That  is  to  say,  entrepreneurial  ecosystems  focus  on  the  
cultures,  ins)tu)ons,  and  networks  that  build  up  within  a  
region  over  )me    
•  Rich  entrepreneurial  ecosystem  enables  entrepreneurship  
and  subsequent  value  crea)on  at  the  regional  level    

23/02/22   Rojers  P  Joseph  -­‐  IIM  Ranchi   42  

•  What  is  an  entrepreneurial  ecosystem?    
•  An  entrepreneurial  ecosystem  is  defined  as  a  set  of  interdependent  
actors  and  factors  coordinated  in  such  a  way  that  they  enable  
produc6ve  entrepreneurship  within  a  par6cular  territory  
–   Spigel  &  Stam  (2018)  
•  It  is  a  more  nuanced  view  of  entrepreneurship  as  a  social  process  
embedded  in  broader  contexts    
•  The  ecosystem  approach  moves  away  from  individualis)c,  
personality-­‐based  research  focused  on  entrepreneurs  towards  a  
broader  perspec)ve  that  incorporates  the  role  of  social,  cultural,  
poli)cal,  and  economic  forces  in  the  entrepreneurship  process  

23/02/22   Rojers  P  Joseph  -­‐  IIM  Ranchi   43  

 Key  elements,  outputs  and  outcomes  of  the  
entrepreneurial  ecosystem  (based  on:  Stam,  2015)    
 

23/02/22   Rojers  P  Joseph  -­‐  IIM  Ranchi   44  

 Entrepreneurial  ecosystems,  examples  

•  US:  Silicon  Valley,  Boulder,  Phoenix,  Washington  DC,  …  

•  Canada:  Calgary,  Waterloo  
•  Europe:  London  
•  India:  Bangalore,  Hyderabad  
•  Japan:  Kyoto  
•  Israel  

23/02/22   Rojers  P  Joseph  -­‐  IIM  Ranchi   45