Entrepreneurial Management

Entrepreneurship 101October 24 2012

Jon E Worren

About you

Idea?

Product?

Business?

Established practices not working

Share of Voice

Share of Mind

Share of Market

The Emergence of New Practices

1911Scientific

Mgmt

1948Toyota

Production System

2001 Agile

Development

2003 Lean

Thinking

2005 Customer

Development

2009 Lean

Startup Mvmt

A set of principles and frameworks that helps startups identify a sustainable business model

with the least amount of waste possible

Entrepreneurial Management

Application

Startup Phase

Entrepreneurial Management

Traditional Management

Growth Phase

Search

Business Model?

Execution

PRINCIPLESEntrepreneurial Management

Scientific Management

• Time & Work Studies (measurement)

Toyota Production System

• Muda – Elimination of waste

• Hansei - learning• Kaizen – continuous

improvement• Jidoka – self-learning

Agile Development

• Customer Collaboration• Iteration (short time

frames)

Lean Thinking

• Generalization of TPS• Increased focus on

“Value”

Customer Development

• New 1: De-risking a new venture by breaking up the commercialization process and prioritize business problems to solve

• New 2: Focus on Customer Acquisition

Customer Discovery

Customer Validation

Customer Creation

Company Building

Lean Startup

• Lean Startup = Customer Development + Agile development

• Strong build+ measure focus

• Popularized approach – created Lean Movement

Build

Test

Measure

Learn

PROCESSEntrepreneurial Management

Process

Assumptions

Test problem Assumptions

Measure

Evaluate

Step 0- Describe Idea What kind of problem do you solve for the customer?

Is this an important problem for these customers?

Is there a big potential market for your idea?

What is your competition and how do they solve this problem for their customers today?

What is unique about your way of solving the problem?

Step 1 – Review Assumptions

• Is the customer problem you are solving validated by a measurable fact?

• Are you able to identify which customers are suffering the most from this problem?

• Do you understand how the problem impacts the customer and their business?

• Do you have evidence that links the customer problem to the target customer?

Step 2 –Test

• What key piece of information would validate or invalidate the assumption?

• Where does that information reside?• What is the best way to gather that

information?

Step 4 & 5 – Measure & Evaluate

• Is the customer problem urgent?• Is the problem pervasive?• Will customers pay to have the problem

solved?

How do these answers measure against your initial assumptions?

3 outcomes

Evaluate

Validate: Confirmed value of MVP

Iterate: Change your product features

Exit: Don’t spend any more money!

The Pivot

Easier when….• You have invested little

to this point• You are getting

absolutely no traction

Harder when…….• High noise to signal

ratio ( no clear feedback)

• Next step is unclear

Entrepreneurs are eternal optimists – choose to persist:- Tweak a little: Our next version will take off!- Easy: Our next campaign/trade show will land key customers!

THE 3 STAGES OF THE PROCESSThe quest for a Business Model

The 3 stages of the search process

Customer Problem

Product Solution

Business Model

Business Model Canvas

Value Proposition

• What you offer and how you offer it to customers

• What type of value or benefit is associated with your offering (e.g., cost savings, time savings, revenue increase, customer/employee satisfaction) and how much of it the customer can expect

• How the value is generated • Why it differs from anything else on the market

Examples

WinnersWinners is a department store that offers fashion conscious consumers the latest brand names for up to 60 per cent off.

GoogleGoogle is the world’s largest search engine that allows internet users to find relevant information quickly and easily

CONCLUSION & SUMMARYFinal two slides

Summary

• Startups are different• Search is about learning• Lean is about

minimizing waste• CDM: De-risk your

venture by breaking up the process

• Test for customer problem first

• Test solution/MVP• Test customer

acquisition• Human element: Give

someone the task to keep you accountable!

Conclusion

• Entrepreneurial Management offers a set of tools and processes that makes the process of starting up more manageable:

• The philosophy brings clarity to the skillset required to succeed:– Less persistence – more perception– Stack the odds in your favour – rather than trying

to win against all odds– Commit to the process – not the idea

Thank You!

www.marsdd.com/entrepreneurs-toolkit