how entrepreneurs craft(hbr)(lalit nainani)

How Entrepreneurs CraftHaward Business Review

Lalit Nainani

Is Planning Necessary ? ? ?

Research & Findings

Interviews with founders of 100 Co

And 100 MBA ventures suggest that little research and planning

1990 National Federation of Independent Business study of 2994, start up’s suggest that founders with planning survived only 3 years

Elements of winning Entrepreneurial Approaches

Screen opportunities quickly to weed out unpromising ventures

Analyze ideas parsimoniously,Focus on few important issues

Integrate action and analysis,dont wait for all the answers,get ready to change the course

Does Planning pay ? ? ?

Viablity of a Potential Venture

1 Objectives of the Venture :

To build a large enterprise Carve out a niche

This requires:

Revolutionary idea Seizing existing market share Creating a new market share

Example :Federal express founder Fred Smiths creativity in recognizing that customers will pay for overnight delivery.

2> Leverage Provided by external change: Mature markets give less return Exploiting new opportunities in an new external market is more profitable.

« In the land of the blind ,the one eyed person is the king »

Example: In 1980’s Entrepreneurs like Bohdan’s Peter Zacharkiw started computer installing & fixing

3> Basis of Competiton : Assets Vs Hustle In some industries profitability depends on their assets Eg: Pharma, Luxury Hotels, Consumer goods

But in fragment service industries such as consulting,investment banking demand service,

start-ups in those fields rely mainly on hustle

Example: Marvin Bower Co founder of McKinsey & Co,who’s aim was to provide high quality business advice to top managers of large companies

4> Gauging Attractiveness

Entrepreneurs should compare risk rewards associated with a project

Choose ventures that aren’t capital intensive,low fixed cost etc

Venture must fit the entrepreneurs values and wants,certain questions need to be asked

Do they seek public recognition Do they want to make a fortune out of it Are they prepared to devote their lives to it

« Unless entrepreneurs have a burning desire to change the world,they should not take revolutionary ventures »

5> Parsimonious Planning & Analysis:

Minimize time & resources in researching Avoid researches to which cannot act upon

6>Integrating Action & Analysis

Handling Analytical tasks in stages:

Plugging Holes quickly:

Evangelical Investigation: ex: Software industry ‘beta sites’

Smart Arrogance: Entrepreneurs must have great confidence,talent,ideas to

preserve their customers.

Thank you