the warwick mba - warwick business school and new venture creation the warwick mba: 1–5 september...

The

WARWICK MBA

Entrepreneurship and New Venture CreationIB9C30

1–5 September 2014

Module Coordinator: Deniz Ucbasaran

The

WARWICK MBA

Entrepreneurship and New Venture Creation

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The Warwick MBA: 1–5 September 2014

Module Objectives

IntroductionThe module aims to develop an understanding of entrepreneurs and the firms they create and manage.

Entrepreneurship is not only about new ventures or ‘small’ business or ‘early-stage’ business, nor even exclusively about for-profit business, rather it is a method of creative problem-solving in business and a logic for taking action in a variety of settings where business can make a positive difference. The module, therefore, will explore a range of different ways of thinking about what entrepreneurship is and what entrepreneurs do.

Please note that the module is not about teaching you how to write a business plan. The business plan constitutes just one tool in the entrepreneur’s arsenal, for which there exists a tremendous amount of information on the internet, and without a real insight or idea, writing a business plan is a meaningless exercise. Also, if you are motivated, have a genuine insight and are credible, the business plan will get written.

The intention is that taking the module will contribute to you developing an entrepreneurial mindset, attitude and skills – the necessary hallmarks of successful value creators. In the module we aim to challenge the way you think about entrepreneurs and entrepreneurship and help you engage more effectively with a world in which entrepreneurship is a key driver of change.

ObjectivesOn completion of the module, students should be able to:

g demonstrate a critical understanding of what entrepreneurship is and who entrepreneurs are

g demonstrate a critical understanding of what constitutes an entrepreneurial mindset

g critically appraise issues relating to opportunity identification and evaluation

g explore and show an appreciation of issues relating to opportunity exploitation

g explore and critically evaluate the processes surrounding the growth of and exit from entrepreneurial ventures

g demonstrate a broad understanding of life as an entrepreneur

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Module ProgrammeDU = Deniz Ucbasaran AL = Andy Lockett SE = Sarah Ellis NS = Nick Sanders

MB = Matthew Batstone JL = John Lyon DS = Dani Saveker PS = Peter Summerfield

LS = Larry Sullivan

Monday 1 September 2014

09.30–10.00 Arrival and coffee

10.00–12.30 Entrepreneurs and the entrepreneurial mindset DU/AL

12.30 Lunch

13.30–15.30 Failure and entrepreneurship: Building resilience (guest speakers) DU/AL/DS/PS

15.30–16.00 Break

16.00–18.00 Entrepreneurial teams and beyond DU/AL

Evening Reading and case preparation

Tuesday 2 September 2014

09.00–10.30 Opportunity identification DU/AL

10.30–11.00 Break

11.00–12.30 Opportunity evaluation SE/DU/AL

12.30 Lunch

13.30–15.30 Opportunity identification and evaluation:

Entrepreneur panel discussion DU/AL

15.30–16.00 Break

16.00–17.30 Entrepreneurship as force for good LS/DU/AL




Wednesday 3 September 2014

09.00–10.30 Opportunity exploitation part I: The business model DU/AL

10.30–11.00 Break

11.00–12.30 Opportunity exploitation part I: The business model (continued) DU/AL

12.30 Lunch

13.30–15.30 Opportunity exploitation part II: New venture growth MB/AL/DU

15.30–16.00 Break

16.00–17.30 Guest speaker NS


Thursday 4 September 2014

09.00–10.30 Biotech and Pharma: Moving from corporate to an entrepreneurial start-up JL/DU/AL

10.30–11.00 Break

11.00–12.30 Biotech and Pharma: Moving from corporate to an entrepreneurial start-up (continued)

12.30 Lunch

13.30–15.30 Exiting from the entrepreneurial venture JL/DU/AL

15.30–16.00 Break

16.00–17.30 Exiting from the entrepreneurial venture (continued) JL/DU/AL


Friday 5 September 2014

09.00–10.30 An entrepreneur’s journey DU/AL

10.30–11.00 Break

11.00–13.00 Summary and feedback session DU/AL

13.00 Lunch

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Module AssessmentThe module will be assessed by 100% individual assignment.

Read the following case study which can be found behind Friday’s tab:

Identifying and Exploiting the Right Entrepreneurial Opportunity... for You Ref.: 9-808-043

Your task is to do the following:

g Using the framework presented in the article, provide an analytical account of an entrepreneurial opportunity you have identified and explain how you would go about exploiting it.

g Highlight the central challenges you anticipate facing and explain how you might overcome them.

The document is subject to a 3,000 word limit, which excludes references and any appendices. Anything exceeding the 3,000 word limit will not be read.

SUBMISSION DEADLINE: 17.30 (UK time) Monday 6 October 2014

The submission deadline is precise and uploading of the document must be completed before 17.30 (UK time) on the submission date. Any document submitted even seconds later than 17.30 precisely will be penalised for late submission in line with WBS policy. Please consult your student handbook on my.wbs for more detailed information.

The online assignment submission system will only accept documents in portable documents format (PDF) files. Please note that we will not accept PDF files of scanned documents. You should create your assignment in your chosen package (for example, Word), then convert it straight to PDF before uploading. Please place your student ID number, NOT YOUR NAME, on the front of your submission as all submissions are marked anonymously.

All the submissions should also have the following paragraph included on the front page:

‘This is to certify that the work I am submitting is my own. All external references and sources are clearly acknowledged and identified within the contents. I am aware of the

University of Warwick regulation concerning plagiarism and collusion.

No substantial part(s) of the work submitted here has also been submitted by me in other assessments for accredited courses of study, and I acknowledge that if this has been done

an appropriate reduction in the mark I might otherwise have received will be made.’

PLEASE ENSURE YOU KEEP A SECURITY COPY OF YOUR ASSESSMENT

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Teaching FacultyThe module will be taught by the following faculty members and other guest speakers:

Deniz Ucbasaran – Module Coordinator, Professor of Entrepreneurship, Warwick Business School

Deniz Ucbasaran joined Warwick Business School as Professor of Entrepreneurship in 2010, and is a founding member of the Enterprise Research Centre established in 2013 which seeks to act as the authority on entrepreneurship to guide policy makers. She obtained her PhD from and was previously a faculty member at Nottingham University Business School. She is Associate Dean for Teaching and Learning and was previously Head of the Entrepreneurship and Innovation Group. She has held a visiting position at Vlerick Leuven Gent Management School and is currently visiting professor at the University of Oslo and University of Gent.

Deniz’s research explores entrepreneurial activity involving new value (economic, social and/or cultural) creation at the level of the individual, the team and the firm. Deniz has published widely in a range of academic and practitioner journals including Harvard Business Review, Journal of Business Venturing, Entrepreneurship Theory and Practice, Journal of Management Studies, Journal of Mangement and has appeared in the popular press. Her work exploring the role played by entrepreneurial experience in entrepreneurial activity has culminated in the book entitled Habitual Entrepreneurs. Three strands of her current work seek to explain; a) how entrepreneurs make sense of and recover from business failure b) how new sustainable businesses are created and developed and c) the role of intuition in entrepreneurial decision making. She sits on the editorial boards of Journal of Business Venturing, Entrepreneurship Theory and Practice, Journal of Management Studies and Strategic Entrepreneurship Journal. She engages with both private business and public policy circles – her work has been used by Alliance Boots, EIM Business and Policy Research (Netherlands), Flanders District of Creativity (Belgium), Biotechnology YES, Scottish Enterprise, among others.

Andy Lockett – Professor of Strategy and Entrepreneurship, Warwick Business School

Andy joined WBS as a Professor of Strategy and Entrepreneurship in 2010, he previously held the same post at the University of Nottingham. He is the Pro Dean at WBS; and a founding member of the Enterprise Research Centre, leading the research programme on Entrepreneurial Leadership, Capabilities and Growth.

His research interests span a number of different areas all relating to new ways of creating value (economic, social, cultural) and encompass three main streams of activity. First, entrepreneurship through new venture creation, focusing on aspects of wealth creation through new ventures including issues relating to strategy, governance, financing and performance. Second, entrepreneurship in established organisations (public and private), focusing on how established organisations innovate to create new value. Third, the resource-based view (RBV) of the firm, which focuses on theoretical developments and empirical applications of the theory. This research has been published in over 75 journal articles and two books. In undertaking his work Andy has worked closely with a range of organisations, in both a researcher and consultancy capacity. The organisations include Alliance Boots, NHS, First Direct, Nottinghamshire Police as well as a range of entrepreneurial start-ups and mid-sized companies.

He is a member of the Academy of Management and an editorial board member of the following journals Journal of Management Studies, Journal of Business Venturing, Entrepreneurship Theory and Practice, Strategic Entrepreneurship Journal and the Journal of Technology Transfer.

Sarah Ellis

Sarah is co-founder of Amazing If – an early stage business providing a unique training programme designed to help more people have happier careers. Sarah has always chosen new roles, or new teams or sometimes both. She constantly seeks opportunities to inspire and lead change in organisations and loves to be brave and try out new stuff. By day she lives and breathes her passion for food (you can see why Helen and Sarah get on!) by working for Sainsbury’s and by night she can be found leading Magpie



marketing, a not-for-profit career development programme. Sarah has received a Marketing Academy scholarship and a WACL (Women in Advertising and Communications London) Future Leaders Award. She was recognised by Management Today as one of the top 35 women under 35, has an MBA from Warwick Business School and in 2013 completed the high potential leadership programme at Harvard Business School.

Sarah’s values are: achievement, ideas, learning and progression. The best piece of advice she’s been given is: never live the same year twice.

John Lyon

John Lyon joined Warwick Business School in January 2013 as one of the first Professors of Practice. He is also Associate Dean for Corporate Relations. He has worked both in large corporate pharmaceutical development companies at the Global Vice President level and as an entrepreneur in the role of CEO, CFO and Chairman in the biotechnology industry. He initially trained as a clinical scientist, then as a Chartered Accountant with PricewaterhouseCoopers. He is a Fellow of the ICAEW, a Chartered Fellow of the Securities and Investment Institute, a Fellow of the Institute of Clinical Research, a Fellow of the Institute of Directors, a Chartered Scientist and Chartered Director. He was awarded the northern entrepreneur of the year award for science and technology in 2005 sponsored by Ernst and Young.

John has held non executive director and chairman appointments spanning over 25 years as both a venture capitalist and as a personal investor and has raised in excess of £15 million over the last decade from seed capitalists, venture capitalists, business angels and institutions such as merchant banks and large hedge funds. He now combines his entrepreneurial activities with an interest in entrepreneurship research, specialising in entrepreneurial failure and its effects on entrepreneurs’ subsequent behaviours.

Matthew Batstone

Matthew Batstone was educated at Cambridge University and INSEAD and is an Associate Fellow of WBS. Matthew began his career at the advertising agency, J Walter Thompson, and started his first business in his twenties. He subsequently set up the internet and interactive TV businesses for the broadcaster, Carlton, now part of ITV, before joining The Economist Group, sitting on its management board as the Marketing and Strategy Director. Matthew has invested in and launched a number of businesses, including iAnnounce, Europe’s largest provider of online personal announcements and, most recently, New College of the Humanities, of which he is the co-founder with Professor AC Grayling and a number of other distinguished academics.

Nick Sanders

Nick Sanders is Head of Portfolio at Better Capital LLP, the Private Equity Turnaround Specialist. An engineer by qualification he spent his early career in the Aerospace industry, initially with Rolls-Royce and then Lucas Aerospace. He joined CompAir as CEO in 2002 and led the buyout of the business with the backing of Alchemy Partners. He oversaw a major turnaround in the business with a loss of £19 million pa being turned to a profit of £18 million pa over five years. The business was voted Private Equity Company Turnaround of the year 2006. Purchased for a nominal sum the business was sold for over £200 million in 2008 to a US competitor.

Nick was interim CEO of Deloro Stellite (a Duke Street investment) immediately before joining Better Capital.

Dani Saveker

Dani Saveker was CEO in her family’s manufacturing business for seven years during which time she restructured, won awards, made family members redundant, recovered from a major fire which wiped out production, learnt to weld, electroplate and polish, carried out an MBO, acquired businesses and managed multiple sites. In 2009 she was in the impossible position of placing the 106 year old business into voluntary administration due to the dire economic conditions.



Armed with first hand experience of the complexities of family businesses as well as a frustration for the lack of understanding by advisers she was determined to create an enterprise supporting families in business and those working as advisers to them. Dani brought a community based concept to life as Families in Business Ltd (FIB) to ensure support, resources, tools and a neutral community exists for family businesses.

Larry Sullivan

Larry Sullivan is Founder and Chairman of COINS, a global software company; he is also founder of five other niche market software houses. His companies include Total Objects and OASIS Solutions. Eight years ago he funded and co-founded Stepping Stones; a school for children with mild disabilities based in Surrey. He also sits on the board of Habitat for Humanity.

In 2006 Larry established the COINS Foundation to galvanise the charitable activities of his companies. Two years ago he launched The Cookie Bar; a social enterprise with profits going back to the school and projects supported by the COINS Foundation. He intends to open a chain of Cookie Bar ‘social enterprises’ linked to schools to help children to achieve social, economic and creative independence.

Peter Summerfield

Peter has over 40 years experience in the world of manufacturing and has held a number of senior appointments, including: Managing Director, Regional Aircraft Operations BAE Systems PLC; Managing Director, Transmissions and Structures and Global Procurement; Director, Rolls Royce PLC. He gained a PhD from the internationally renowned Warwick Manufacturing Group based at the University of Warwick and has previously been a visiting Professor in Aeronautical Engineering and Manufacturing Systems at Manchester University.

Since retiring five years ago, Peter has had an active involvement with business start-up mentoring for the Prince’s Trust and where he was Chair of the Global Mentoring Programme for Warwick Business School where he is also an Honorary Associate Fellow. Added to this he recently qualified as a fitness instructor and is a black belt in Wado-Ryu Karate, teaching in the Birmingham Martial Arts Centre.

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Module Reading MaterialsThe textbook for this module is:

Barringer, B.R. and Ireland, R.D. (2012) Entrepreneurship: Successfully Launching New Ventures (4th Global edn) Harlow: Pearson

Pre-reading and PreparationThe readings in this pack are divided into pre-readings, essential readings and further readings.

Completing as much of the pre-reading and essential reading as possible before you attend will provide you with a wider understanding of the topics to be discussed during the module and therefore enhance your contribution to the class.

However, we understand that many of you will find it difficult to complete all of the reading due to other commitments, so have classified the readings as follows:

g Pre-readings are included in this pack (or in the texts) either as hard copies or via weblinks that you will need to visit in order to download the material; you should read these in advance of the session to which they relate. Unless specified, you should treat ALL case studies as required pre-reading.

g Essential readings are either provided in the pack, or via weblinks that you will need to visit in order to download the material, or handed out during the module. In order to complete the module and the assignment successfully you should complete this reading when you have time, either during or after the module.

g Further readings are intended for those who may wish to widen and deepen their understanding of particular issues now or in the future. We have references to a substantial amount of further reading for those of you who wish to get a much deeper appreciation for some of the issues we are dealing with. You will have to use your own library skills to obtain these.

Some of these readings are provided in this pack in hardcopy format and these are included within each day’s readings. However, some readings are only available electronically and so we have provided links to these below each reference.

In addition, we have listed a range of practitioner resources, which are largely web-based. These resources should be used to complement the readings above. Please do not feel as though you need to consult all of these resources.

Monday 1 September 2014

Entrepreneurship and the Entrepreneurial MindsetIn this session we will explore the essence of entrepreneurship by initially posing the question ‘who is an entrepreneur?’ We will reflect on and critique personality approaches to the study of entrepreneurship. We will explore whether focusing on what entrepreneurs do and how they think, might be a more useful approach to understanding entrepreneurship than attempting to identify a list of characteristics associated with individual entrepreneurs. To this end, we will provide a depiction of the entrepreneurial process that forms the basis of discussion for the remainder of the module. Specifically, we will describe the entrepreneurial process as comprising opportunity identification and exploitation activities. Underpinning this process, we consider the possibility that entrepreneurship is best thought of as a mindset that can be applied in a variety of settings. We introduce the idea of effectuation as an alternative to traditional approaches to entrepreneurship that focus on developing business plans.



Case study: Apple’s Core Ref.: 9-809-063 This case is provided in hardcopy behind Monday’s tab

Exercise: In groups, discuss the following question:

What qualifies a person as an entrepreneur? Which person – Jobs or Wozniak is the ‘real’ entrepreneur? Could others be classified as founders?

Case study: Case to be circulated in class

Exercise: Read ‘What Makes Entrepreneurs Entrepreneurial?’ Ref.: UVA-ENT-0065 This article is provided in hardcopy behind Monday’s tab

Pre-reading: Barringer and Ireland: Chapter 1

Essential reading: Davidsson, P. (2006) ‘The Entrepreneurial Process’ in Carter, S. and Jones-Evans, D. (eds) Enterprise and Small Business: Principles, Practice and Policy London: Prentice Hall This reading is provided in hardcopy behind Monday’s tab

Rauch, A. and Frese, M. (2007) ‘Born to be an Entrepreneur? Revisiting the Personality Approach to Entrepreneurship’ in Baum, R.J.; Frese, M. and Baron, R. (eds) The Psychology of Entrepreneurship London: Lawrence Erlbaum Associates This reading is provided in hardcopy behind Monday’s tab

Further reading: Busenitz, L.W. and Arthurs, J. (2007) ‘Cognition and Capabilities in Entrepreneurial Ventures’ in Baum, R.J.; Frese, M. and Baron, R. (eds) The Psychology of Entrepreneurship London: Lawrence Erlbaum Associates

Dew, N.; Read, S.; Sarasvathy, S.D. and Wiltbank, R. (2009) ‘Effectual Versus Predictive Logics in Entrepreneurial Decision-making: Differences Between Experts and Novices’ Journal of Business Venturing, 24, 4, pp. 287–309 (For further elaboration on the concept of effectuation see Sarasvathy’s original 2001 article listed below.)

Gartner, W.B. (1989) ‘Who is an Entrepreneur? Is The Wrong Question’ Entrepreneurship Theory and Practice, 12, 2, pp. 47–68

Kawasaki, G. (2001) ‘The Top Ten Lies of Entrepreneurs’ Harvard Business Review, Jan, pp. 22–3

McGrath, R.G. and MacMillan, I.C. (2000) The Entrepreneurial Mindset: Strategies for Continuously Creating Opportunity in an Age of Uncertainty Boston: Harvard Business School Press (For a summary of the basic ideas contained in this book, visit: www.leighbureau.com/speakers/RMcGrath/essays/mindset.pdf)



Read, S.; Sarasvathy, S.; Dew, N.; Wiltbank, R. and Ohlsson, A-V. (2011) Effectual Entrepreneurship London: Routledge

Sarasvathy, S. (2001) ‘Causation and Effectuation: Toward a Theoretical Shift from Economic Inevitability to Entrepreneurial Contingency’ Academy of Management Review, 26, 2, pp. 243–63

Wiltbank, R.; Dew, N.; Read, S. and Saravathy, S. (2006) ‘What to Do Next? The Case for Non Predictive Strategy’ Strategic Management Journal, 27, pp. 981–98 (Some overlap with Sarasvathy (2001) but does a good job of situating effectuation among other approaches to strategy.)

Failure and Entrepreneurship: Building ResilienceIn this session we will explore the thorny issue of business failure. Many new ventures fail even though we tend to hear more about the successes. While many adhere to the motto ‘failure is the fuel of success’, others find the failure of their business a highly emotional and traumatic experience. Our guest speaker Dani Saveker will share her personal experience of placing the 106 year old family business into voluntary administration while Peter Summerfield will share his thoughts on how one can build emotional and business resilience based on his wealth of business and personal experience.

Pre-reading: There is no pre-reading or essential reading for this session

Further reading: Ucbasaran, D.; Shepherd, D.; Lockett, A. and Lyon, J. (2013) ‘Life After Business Failure: The Process and Consequences of Business Failure for Entrepreneurs’ Journal Of Management, 39, 1, pp. 163–202

Shepherd, D. (2004) ‘Educating Entrepreneurship Students about Emotion and Learning from Failure’ Academy of Management Learning and Education, 3, pp. 274–87

The Entrepreneurial Team and BeyondIn this session we move away from the notion of the lone entrepreneur to one of the entrepreneurial team. Entrepreneurship is increasingly seen as a collective activity. Most high-tech ventures are founded by teams and venture capitalists rarely consider a proposal unless it is supported by team. Thus, in this session we will explore the role, functioning and effectiveness of entrepreneurial teams. We then move on to considering other important people that may support an entrepreneurial venture, focusing in particular on advisory boards and the board of directors.

Case study 1: Apple’s Core Ref.: 9-809-063 This case is provided in hardcopy behind Monday’s tab

Exercise: In groups, discuss the following questions:

1. Imagine you are Steve Wozniak and you just found out the truth about Break-Out. What would you do?

2. Does Apple have a good founding team? Take into account: a. The skills, goals and values of each founder. b. Relationships, roles and rewards systems

Case study 2: Entrepreneurs versus Executives at Socaba.com Ref.: R00413 This case is provided in hardcopy behind Monday’s tab



Exercise: What should the Socaba co-founders do to get the company back on track?

Pre-reading: Barringer and Ireland: Chapter 9

Essential reading: Baron, R. and Shane, S. (2008) ‘Assembling the Team: Acquiring and Utilizing Essential Human Capital’ in Entrepreneurship: A Process Perspective, International Edition Mason, Ohio: South Western This reading is provided in hardcopy behind Monday’s tab

Further reading: Amason, A. and Sapienza, H. (1997) ‘The Effect of Top Management Team Size and Interaction Norms on Cognitive and Affective Conflict’ Journal of Management, 23, 4, pp. 495–316

Eisenhardt, K.M.; Kahwajy, J.L. and Bourgeois, III, L.J. (1997) ‘How Management Teams Can Have a Good Fight’ Harvard Business Review, 75, 4, pp. 77–85

Schjoedt, L. and Kraus, S. (2009) ‘Entrepreneurial Teams: Definition and Performance Factors’ Management Research News, 32, 6, pp. 513–24

Vissa, B. and Chacar, A.S. (2009) ‘Leveraging Ties: The Contingent Value of Entrepreneurial Teams’ External Advice Networks on Indian Software Venture Performance’ Strategic Management Journal, 30, pp. 1,179–91

Practitioner resources (day one) Saras Sarasvathy discusses effectuation

http://www.effectuation.org/videos/saras-sarasvathy-bigthink-full-interview

Saras Sarasvathy explains effectuation research http://www.effectuation.org/videos/saras-sarasvathy-explains-effectuation-research

Saras Sarasvathy – Can we teach entrepreneurship http://www.effectuation.org/videos/saras-bigthink-can-you-teach-people-be-entrepreneurs

Scott Shane on ‘The Myth of Entrepreneurship’ http://www.businessweek.com/smallbiz/content/jan2008/sb20080123_809271.htm

Barclay’s research – SME owners to stay in business longer than marriage http://www.24-7pressrelease.com/press-release/barclays-reveals-sme-owners-plan-to-stay-in-business-longer-than-theyll-be%20married-58172.php

Top 10 Mistakes made by entrepreneurs http://www.youtube.com/watch?v=gtHZUr3mdlY&feature=related

Interview with Marc Andreessen http://www.charlierose.com/view/interview/10093

An entrepreneurs profile? http://www.youtube.com/watch?v=ODJtnLdmhdA&feature=channel

Scott Shane’s advice to entrepreneurs http://www.businessweek.com/smallbiz/tipsheet/08/2.htm

Clayton Christensen (on innovation) http://www.charlierose.com/view/interview/1573

Kathleen Eisenhardt on ‘Team Composition’ http://www.youtube.com/watch?v=LGZQfM-selE&feature=relmfu



Tuesday 2 September 2014

Opportunity Identification and Evaluation

In this session we focus on the early stages of the entrepreneurial process, namely opportunity identification. We review and critique a variety of approaches to opportunity identification that have been presented in the literature, ranging from the search for opportunities to the creation of opportunities. We revisit the concept of effectuation and explore how effectual principles may be used in the process of opportunity identification. You will also be introduced to a number of tools to help you evaluate opportunities, focusing in particular on the investor’s perspective.

Case study: to be circulated in class

Pre-reading: Barringer and Ireland: Chapters 2 and 3

Essential reading: Baron, R. (2006) ‘Opportunity Recognition as Pattern Recognition: How Entrepreneurs “Connect the Dots” to Identify New Business Opportunities’ Academy of Management Perspectives, 20, pp. 104–19 http://tinyurl.com/Baron-R-2006

Davidsson, P. (2006) ‘The Entrepreneurial Process’ in Carter, S. and Jones-Evans, D. (eds) Enterprise and Small Business: Principles, Practice and Policy London: Prentice Hall This reading is provided in hardcopy behind Monday’s tab

Further reading: Alvarez, S. and Barney, J. (2007) ‘Discovery and Creation: Alternative Theories of Entrepreneurial Action’ Strategic Entrepreneurship Journal, 1, pp. 11–26

Fiet, J.O. (2007) ‘A Prescriptive Analysis of Search and Discovery’ Journal of Management Studies, 44, pp. 592–611

Fiet, J.O. and Patel, P.C. (2006) ‘Evaluating the Wealth-creating potential of Business Plans’ Journal of Private Equity, 10, 1, pp. 18–32

Sarasvathy, S. (2001) ‘Causation and Effectuation: Toward a Theoretical Shift from Economic Inevitability to Entrepreneurial Contingency’ Academy of Management Review, 26, 2, pp. 243–63

Ucbasaran, D.; Weshead, P. and Wright, M. (2009) ‘The Extent and Nature of Opportunity identification by Repeat Entrepreneurs’ Journal of Business Venturing, 24, 2, pp. 99–115

Wood, M.S. and McKinley, W. (2010) ‘The Production of Entrepreneurial Opportunity: A Constructionist Perspective’ Strategic Entrepreneurship Journal, 4, pp. 66–84



Opportunity Identification and Evaluation: Entrepreneur Panel DiscussionIn this session we will introduce you to a number of entrepreneurs from different backgrounds/contexts and ask you to interview them about the early stages of the entrepreneurial process, paying particular attention to opportunity identification and evaluation activities.

Your task: A representative of your syndicate group will be asked to interview one of the entrepreneurs on our panel. Combining the data from this interview with what you have learnt during the morning session, you will be tasked with creating a short video (no more than 5 minutes) which depicts the mindset and approach of the entrepreneur when it comes to coping with the early stages of entrepreneurship.

When creating your video you might consider (but are not restricted to) answers to the following questions:

a. What constitutes an entrepreneurial opportunity for this person? What is ‘entrepreneurial’ about the opportunity/opportunities they have identified?

b. How does this person identify opportunities and does their approach match up with the literature (for example, on systematic search, effectual etc.).

c. How does this person evaluate (an) opportunit(ies)? What is their attitude towards risk?

d. Does the data from your interview confirm or lead you to reject any of the ideas about opportunity identification and the entrepreneurial mindset we have discussed so far? Are there any additional factors that emerged from the interview that feed into the early stages of the entrepreneurial process which we have missed so far?

e. What have you learnt from this interview about entrepreneurship generally and opportunity identification and evaluation more specifically?

More details to follow in class.

Practitioner resources (day two) Idea evaluation (panel discussion with entrepreneurs – Stanford)

http://www.youtube.com/watch?v=gEomG_ffp7Y&feature=channel

Richard Branson discusses his version of the affordable loss principle http://online.wsj.com/video/viewpoints-branson-on-his-love-of-risk/A3081F9E-829E-47A6-88D3-4E992AE8B3CA.html

Robert Sutton: Bringing creativity into an organisation http://www.youtube.com/watch?v=2KdXsVyWooE&feature=relmfu

Creativity versus Control: Stanford Entrepreneurship Lecture http://www.youtube.com/watch?v=yYgCAcwiQ6A

Robert Sutton: How to get Creative Ideas http://www.youtube.com/watch?v=HUEeUHuXHAU



Wednesday 3 September 2014

Opportunity Exploitation Part I: The Business ModelIn this session we explore the concept of the business model, which is employed to analyse established as well as new ventures. Business models should be thought of as the very essence of a venture, and the process of thinking through the business model is an important strategic discipline for analysing the strengths and weaknesses of a firm, and to help understand the extent to which a venture may be scalable.

Case study: Amazon.com (please note that this case is a little dated, which is intentional) This case is provided in hardcopy behind Wednesday’s tab

Exercise: Your team has been brought in as a team of strategy consultants to examine Amazon.com. You have been asked to analyse Amazon.com’s business model and to identify its main strengths and weaknesses and to offer your views on its capacity for: i) generating sustainable returns and ii) generating growth.

Pre-reading: Barringer and Ireland: Chapters 3, 4, 5 and 6

Essential reading: Zott, C.; Amit, R. and Massa, L. (2011) ‘The Business Model: Recent Developments and Future Research’ Journal of Management, 37, pp. 1,019–42 http://tinyurl.com/Zott2011

McGrath, R.G. (2011) ‘When Your Business Model is in Trouble’ Harvard Business Review, 89, 1/2, pp. 96–8 Please access the following web address: http://tinyurl.com/wbs-hbr And enter the following search term: AN 56699606

Magretta, J. (2002) ‘Why Business Models Matter’ Harvard Business Review, 80, 5, pp. 86–92 Please access the following web address: http://tinyurl.com/wbs-hbr And enter the following search term: AN 6623782

Further reading: Anderson, J.C.; Narus, J.A. and van Rossum, W. (2006) ‘Customer Value Propositions in Business Markets’ Harvard Business Review, 84, 3, pp. 90–9

Barney, J.B. (1995) ‘Looking Inside For Competitive Advantage’ Academy of Management Executive, 9, 4, pp. 49–61

Chesbrough, H. and Rosenbloom, R.S. (2002) ‘The Role of the Business Model in Capturing Value from Innovation: Evidence from Xerox Corporation’s Technology Spin-Off Companies’. Industrial and Corporate Change, 11, pp. 529–55

Ennew, C.; Lockett, A.; Holland, C. and Blackman, I. (2005) ‘Predicting Customer Visits to Internet Retail Sites: A Cross Industry Empirical Investigation’ Long Range Planning, 38, 4, pp. 359–72

Johnson, M.W.; Christensen, C.M. and Kagermann, H. (2008) ‘Reinventing Your Business Model’ Harvard Business Review, 86, 12, pp. 50–9



McGrath, R.G. (2010) ‘Business Models: A Discovery Driven Approach’ Long Range Planning, 43, 2–3, pp. 247–61

Morris, M.; Schindehutte, M. and Allen, J. (2005) ‘The Entrepreneur’s Business Model: Toward a Unified Perspective’ Journal of Business Research, 58, pp. 726–35

Sahlman, W. (1997 ‘How To Write a Great Business Plan’ Harvard Business Review, 75,4, pp. 98–108

Opportunity Exploitation Part II: New Venture GrowthIn this session we will examine issues relating to the growth of new ventures. Specifically, we will look at the challenges of growth, how firms change as they grow and the different options for growth: organic vs. acquisitive, alliance partnerships, etc.

Case study: To be circulated in class

Exercise: Your team has been brought in as a team of strategy consultants to advise the founders of New College about the different issues relating to their growth ambitions. Specifically, you will be required to think though the main issues facing the founders as they seek to grow the College. In doing so we will examine different growth options, assess their main risks and pay-offs and also how the growth options may change the nature of the firm. On the basis of your analysis you are asked to advise the founders on which growth option you think is best for the College and explain why.

Pre-reading: Barringer and Ireland: Chapters 13, 14 and 15

Essential reading: Hamm, J. (2002) ‘Why Entrepreneurs Don’t Scale’ Harvard Business Review, 80, 12, pp. 110–15 Please access the following web address: http://tinyurl.com/wbs-hbr And enter the following search term: AN 8587423

Lockett, A.; Wiklund, J.; Davidsson, P. and Girma, S. (2011) ‘Organic and Acquisitive Growth: Re-Examining and Extending the Penrose’s Growth Theory’ Journal of Management Studies, 48, 1, pp. 48–74 http://tinyurl.com/ENVC-Lockett2011

Olson, M.; van Bever, D. and Veryy, S. (2008) ‘When Growth Stalls’ Harvard Business Review, March, pp. 51–61 Please access the following web address: http://tinyurl.com/wbs-hbr And enter the following search term: AN 30027506

Wasserman, N. (2008) ‘The Founder’s Dilemma’ Harvard Business Review, 86, 2, pp. 102–9 Please access the following web address: http://tinyurl.com/wbs-hbr And enter the following search term: AN 28534326

Further reading: Bhide, A. (1996) ‘The Questions Every Entrepreneur Must Answer’ Harvard Business Review, 74, 6, pp. 120–30



Bhide, A. (1994) ‘How Entrepreneurs Craft Strategies That Work’ Harvard Business Review, 72,2, pp. 150–61

Christensen, C.M.; Alton, R.; Rising, C. and Waldeck, A. (2011) ‘The new M&A playbook’ Harvard Business Review, 89, 3, pp. 48–57

Churchill, N.C. and Mullins, J.W. (2001) ‘How Fast Can Your Company Afford To Grow?’ Harvard Business Review, 79, 5, pp. 135–42

Davidsson, P.; Steffens, P. and Fitzsimmons, J. (2009) ‘Growing Profitable or Growing from Profits: Putting the Horse in Front of the Cart?’ Journal of Business Venturing, 24, pp. 388–406

Vohora, A.; Wright, M. and Lockett, A. (2004) ‘Critical Junctures in the Development of University High-Tech Spinout Companies’ Research Policy, 33, pp. 147–75

Practitioner resources (day three) The Board of Innovation – has some interesting tools for business modelling

http://www.boardofinnovation.com/

Business model alchemy http://www.businessmodelalchemist.com/category/alexander-osterwalder

A conversation with entrepreneur and software engineer Marc Andreessen (talking about companies like Netscape, Google, Facebook) http://www.charlierose.com/view/interview/10093

Doug Richard, Dragons’ Den (Inspiring Entrepreneurs – Desperately Seeking Finance II) http://www.youtube.com/watch?v=Z71dl3lZdvU

Rita McGrath: Use failure to grow your business http://www.youtube.com/watch?v=M-91LvoyAZo&feature=related

And if you are interested in business plans, at the core of which should be a good business model, have a look at the following:

Sequoia Capital’s business planning advice http://www.sequoiacap.com/ideas

The 10 best business plan tools http://tinyurl.com/BestBusinessPlan

The ABCs of business plans http://www.businessweek.com/smallbiz/special_reports/20080107theabcsof.htm



Thursday 4 September 2014

Biotech and Pharma: Moving From Corporate to an Entrepreneurial Start-upIn this and the next session we focus on the entrepreneurial process within the biotech and pharma industries. The day will begin by exploring the dynamics of the biotech and pharma industries, focusing on the role of entrepreneurial ventures in developing new products and services. The case study for the day is Pharamaco (a fictional name for a very real company), through which the actual CEO, who was a former pharma corporate executive, will examine life as an entrepreneur in the biotech industry. In doing so John Lyon will address a number of issues relating to: differences between corporate versus entrepreneurial life, the decision to become an entrepreneur and the process of transition and the formation of a biotech start-up through to seed capital.

Case study: Pharmaco’s business plan 2003 (to be circulated in class)

Exercise: Your team has been approached by John Lyon for advice about how to pitch to either business angels of venture capitalists for £4 million equity funding. Based on John’s presentation, and the Pharmaco’s 2003 business plan, please can you advise John about the following issues:

g Entrepreneur’s perspective:

g If you were John and his business partner, what kind of investor would you look for and why? (VC versus Business angel? Sector specific versus generic? Hands-on versus Hands-off?)

g When an investor offers you a significantly lower valuation than your own valuation, what would you do?

g Investor’s perspective:

g If you were a potential investor, what would you consider to be the main areas of risk in this business? What additional information would you want? Which assumptions would you question?

g What are likely to be the main challenges for this business? Do you think the management team is well-equipped to overcome these challenges?

Pre-reading: Barringer and Ireland, Chapters 9, 10 and 12

Essential reading: De Clerq, D.; Fried, V.; Lehtonen, O. and Sapienza, H. (2006) ‘An Entrepreneur’s Guide To The Venture Capital Galaxy’ Academy of Management Perspectives, 20, 3, pp. 90–112 http://tinyurl.com/De-Clerq-et-al-2006

Gans, J.S. and Stern, S. (2003) ‘The Product Market and the Market For “Ideas”: Commercialization Strategies For Technology Entrepreneurs’ Research Policy, 32, 2, pp. 333–51 http://tinyurl.com/Gans-and-Stern-2003

Further reading: Bhide, A. (2000) ‘David and Goliath Reconsidered’ Harvard Business Review, 78, 5, pp. 26–7

Bhide, A. (1992) ‘Bootstrap Finance: The Art of Start-Ups’ Harvard Business Review, 70, 6, pp. 109–17



Chesbrough, H.W. (2002) ‘Making Sense of Corporate Venture Capital’ Harvard Business Review, 80, 3, pp. 90–9

Gompers, P. and Lerner, J. (2001) ‘The Venture Capital Revolution’ The Journal of Economic Perspectives, 15, 2, pp. 145–68

Martens, M.L.; Jennings, J.E. and Devereaux Jennings, P. (2007) ‘Do The Stories They Tell Get Them The Money They Need? The Role of Entrepreneurial Narratives in Resource Acquisition’ Academy of Management Journal, 50, 5, pp. 1,107–32

Wright, M.; Pruthi, S. and Lockett, A. (2005) ‘International Venture Capital Research: From Cross-Country Comparisons to Crossing Borders’ International Journal of Management Reviews, 7, 3, pp. 135–65

Zilder, B. (1998) ‘How VC works’ Harvard Business Review, November–December, pp. 131–9

Exiting from the Entrepreneurial VentureIn this session we examine issues relating to exiting from entrepreneurial ventures. Although the business has grown and increased in terms of its paper value, John feels as though it’s time for him and his partner to exit from the business. In this session we will explore issues relating to how and why entrepreneurs exit from their businesses and the difficulties in doing so.

Case study: Pharmaco document (to be circulated in class)

Exercise: Your team has been approached by John Lyon for advice about how to exit the business. What exit options are available for John and the investors? What are the pros and cons of each? Are the interests of the founding/management team and investor likely to be aligned?

Pre-reading: Wall, J. and Smith, J. (1999) ‘Better Exits’ in Bygrave, W.; Hay, M. and Peeters, J. (eds) The Venture Capital Handbook London: Prentice Hall This reading is provided in hardcopy behind Thursday’s tab

Essential reading: Cumming, D. (2008) ‘Contracts and Exits in Venture Capital Finance’ The Review of Financial Studies, 21, 5 pp. 1,947–82 http://tinyurl.com/Cumming2008

Isaksson, A. (2007) ‘Exit Strategy and the Intensity of Exit-Directed Activities Among Venture Capital-Backed Entrepreneurs in Sweden’ in Gregoriou, G.N.; Kooli, M. and Kraeussl, R. (eds) Venture Capital in Europe Boston: Butterworth-Heinemann http://tinyurl.com/Isaksson2007

Schmidt, E. (2010) ‘Google’s CEO on the Enduring Lessons of a Quirky IPO’ Harvard Business Review, 88, 5, pp. 108–12 Please access the following web address: http://tinyurl.com/wbs-hbr And enter the following search term: AN 50229814



Further reading: DeTienne, D.R. (2010) ‘Entrepreneurial exit as a Critical Component of the Entrepreneurial Process: Theoretical Development’ Journal of Business Venturing, 25, 2, pp. 203–15

Ruhnka, J.C.; Feldman, H.D. and Dean, T.J. (1992) ‘The Living Dead Phenomenon in Venture Capital Investments’ Journal of Business Venturing, 7, 2, pp. 137–55

Practitioner resources (day four) Professor Rebecca Henderson: Building growth: Why we don’t use what we know

http://mitworld.mit.edu/video/123 (56 minutes)

The top 500 franchises in 2013 http://www.entrepreneur.com/franchises/franchise500/index.html

What does it take to get it off the ground? http://www.youtube.com/watch?v=T54Ytf1A4rc&feature=relmfu

The British Library Business & IP Centre (St Pancras, London) has a wealth of resources to help you start, run and grow your business. http://www.bl.uk/bipc/index.html

In addition, the The British Library Business & IP Centre contains over 100 interviews with entrepreneurs (many high profile) http://www.youtube.com/bipctv

Business Plans: Jim Goetz, Sequoia Capital http://www.youtube.com/watch?v=gnmYSze9M2g&feature=relmfu

David S. Rose: 10 things to know before you pitch a VC for http://www.youtube.com/watch?v=lzDBrMisLm0&feature=related

Delivering a marketable VC pitch http://www.youtube.com/watch?v=PxQvxlGFHpY&feature=relmfu

Angel investors (panel discussion with angel investors – Stanford) http://www.youtube.com/watch?v=glVAR4ohfBU&feature=channel

See the British Venture Capital Association and European Venture Capital Association’s web sites for some interesting resources: www.bvca.co.uk/ www.evca.com

Behnke, N. and Hültenschmidt, N. (2007) ‘New Path to Profits in Biotech: Taking the Acquisition Exit’ Journal of Commercial Biotechnology, 13, 2, pp. 78–85 http://yale.edu/ybps/YERC/wp_paths_to_profit_in_biotech.pdf

A PWC guide to exit strategies http://griequity.astraea.net/resources/InvestmentIndustry/vc/evca/BetterExits.pdf

An interesting website containing angel investors’ advice – including exits. http://www.angelblog.net/

HM Revenue and Customs have developed a series of educational packages for people who are thinking about being or are newly self-employed. HMRC also provides support to businesses that are growing or diversifying. These are:

Starting Your Own Business http://www.hmrc.gov.uk/courses/syob/syob/index.html



http://www.hmrc.gov.uk/courses/syob/syob/index.html

Exporting Goods (in conjunction with UKTI) http://www.hmrc.gov.uk/courses/syob2/ukti_exp/index.htm

Trading with other EU Countries (in conjunction with UKTI) http://www.hmrc.gov.uk/courses/syob2/ukti_tr/index.htm

Friday 5 September 2014

An Entrepreneur’s JourneyIn the penultimate session we examine the journey undertaken by an entrepreneur, exploring a range of issues relating to entrepreneurship and its relationship with the person enacting entrepreneurship. The aim of the session is to integrate different ideas in the module and to prepare you for the module assessment.

Case study: Innocent Drinks Ref.: 9 805 031 This case is provided in hardcopy behind Friday’s tab

Exercise: To be provided in class but please make sure you have read the article detailed below, which will provide the structure for case discussion.

Pre-reading: Identifying and Exploiting the Right Entrepreneurial Opportunity... for You Ref.: 9-808-043 This case is provided in hardcopy behind Friday’s tab

Summary and Feedback SessionIn the final session we draw together the main conclusions of the module, explain and discuss the requirements of the assignment and elicit feedback.

There is no reading associated with this session.

the warwick mba - warwick business school and new venture creation the warwick mba: 1–5 september...

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