Venture Ideation

Section 1: Introduction Autumn 2019

Teachers: Ranajoy Choudhury, PhD CandidateProf. Myrto Chliova, PhD

A little bit about ourselves…

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Myrto Chliova, PhDAssistant Prof. Entrepreneurship

Ranajoy ChoudhuryPhD Candidate, Entrepreneurship

Juhana Peltonen, PhDAssistant Prof. EntrepreneurshipHanken

A little bit about the course!Photo: Aalto

Objectives:1. Recognize key concepts in entrepreneurship

2. Identify, create and evaluate entrepreneurial opportunities

3. Develop and promote entrepreneurial and innovative solutions in their own life and work

4. Reflect on the possibilities and limitations of entrepreneurship

Photo: Lee Dyer/flickr

This is a process-based course:

A content-based course:- Progress depends on teacher- Students in more passive role- Studying rather than doing

A process-based course: - Progress depends on students- The course staff are facilitators- Doing rather than studying

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The course is meant to be:

intensivecollaborative

hands-on

About the Venture Formation (VF) course (P2)• Best teams with an existing idea in Venture Ideation can move onto VF

- @Hanken students: If you do not pass the bar to VF, an internal Hanken solution will be provided to ent. major students participate in LNB II (18023).

• Professional mentors paired to teams• 3 meetings for face to face advice and follow-up with your mentor• Final pitching competition

- Present your ideas to expert judges- Alternatively, the very best can pitch at Startup Circus (startupcircus.fi)

• Award prizes: money and more• Stay tuned for more details on the 2019 run!

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Forming Teams• Please refer to the syllabus for details and deadlines

• We aim for overall diversity in nationality/gender/background/unis/skills BUT similarity in values, interest, commitment to contributing & intention to continue to Venture Formation if the opportunity arises.- However, changes to teams from VI to VF are permitted

• Teams will consist of 5 students approximately.

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Some tips for good team dynamics(Van Gelderen, 2017)

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Task aspects are important, but also:• Create a psychologically safe climate• Stimulate ‘creative controversy’• Set norms for social behaviour• Get to know each other• Be a good follower in addition to being a leader• Pay attention to fairness aspects

Venture Idea as constantly evolving

Your team’s venture idea can change at any stage

That is a sign of healthy development

But – you need to make sure that if you make a change you develop it as you have learned

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Class etiquette• No electronic devices used or even visible during class, unless you are instructed to use

them

• For the hackathon sessions and the final pitching sessions, participation is mandatory. Exceptions only on very strong grounds. E.g., in case of sickness, and official document from a doctor is required.

• Avoid disrupting (no late entrance, silence your phone)

• Questions on the logistics/assignments of the course: first check syllabus, then postquestions to MyCourses if question is not team specific.

- For team specific issues please email Ranajoy: ranajoy.choudhury@aalto.fi

- For admin. issues that are specific to Hanken: juhana.peltonen@hanken.fi

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Managing expectationsPossible misconceptions:

- Teamwork can be coordinated through whatsapp only

- Course and assignments are easy / fast

- Sloppy work on foundational team assignments will have no impact on graded assignments

- Critical questions will not be posed concerning your work

- Graded assignments can be developed at a high level at the last minute

- Judges will be easy to impress

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Questions on the course structure or assignments?1) When in doubt, consult the syllabus on MyCourses.

2) If still in doubt, do not hesitate to contact the course staff.

Part 1: The entrepreneur and entrepreneurial team

The course structure

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The entrepreneur, and the entrepreneurial

team

Problem and customer definition

Idea generation and selection

Financial feasibility and the business

model

Financing and presenting your idea

Final Pitching Competition

Hackathon 1

Hackathon 2

In-class

Out-of-class activities

Out-of-class activities

Why should we care about entrepreneurship?

Photo: Benjamin Reay/flickr

A world that is changing rapidly…

1. Geographic mobility

2. Technological changes

3. Economic changes

4. Career changes

Photo: NASA Goddard Space Flight Center/flickr

Change can bring challenges, but also opportunities to..• innovate and renew obsolete organizations• build something out of nothing• move across geographies and career boundaries• create jobs and prosperity• create social value and change• find meaning• adapt to the future by inventing it!

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A thriving ecosystem at AaltoPhoto: Toimintaa/flickr

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‘Entrepreneurship’ Google search trend

Some motivational claims:True or false?Entrepreneurs are born, not made.

Entrepreneurs are risk-takers

Entrepreneurs are primarily motivated by money

Founding a business with friends or family is not a good idea

The fastest - growing companies pursue breakthrough, high-tech ideas and havea broad customer base

Most new ventures fail

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Entrepreneurs are born, not made

Photo: Joi Ito/flickr

It’s not necessarily about intelligence orschool performance…

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https://youtu.be/ufPweb-mO70?t=15m

…nor necessarily about social skills…https://youtu.be/mh45igK4Esw?t=3m8s

(a few minutes on)

(a few minutes on)

“I’m convinced that about half of whatseparates the successful entrepreneursfrom the non-successful ones is pure perseverance.”

Steve Jobs

Entrepreneurs are risk takers

Photo: rekre89/flickr

Entrepreneurs do not take major risks, they persuade others to take risks

Bhidé 2001, based on Inc. 500 sample

Entrepreneurs are primarilymotivated by money

Not about the money!

Autonomy is the main incentive(Kuratko et al, 1997)

Photo: Roberto Ventre/flickr

Roelof Botha, Sequoia Capital

“The key to start-up success is purity of motivation. The most successful entrepreneurs tend to start with a desire to solve an interesting problem –one that’s often driven by a personal frustration... They’re not initially trying to build a billion-dollar company.”

Photo: TechCrunch/flickr

The fastest - growing companiespursue breakthrough, high-tech ideasand have a broad customer base

only 12% have a unique idea2/3 not technology based< 15% in consumer goodsBhidé 2001, based on Inc. 500

Photo: Christian Bolstad/flickr

Most new ventures fail

Photo: Zoraiah/flickr

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Source: https://www.sba.gov/sites/default/files/FAQ_March_2014_0.pdf

Survival / failure rates

• Approx 1/2 of new ventures survive 5 years or more• Approx. 1/3 survive 10 years or more• The probability of survival increases with a venture’s age• Survival rates have changed little over time• Closure does not mean failure, as 29.1 percent of owners felt the

business was successful at closure• Successful businesses might be closed in cases of a planned exit

strategy, closure without excess debt, sale of a viable business, orretirement from the work force

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Sources: Small Business Association, US; Headd, 2003

How can we define (successful) entrepreneurship?

Photo: greeblie/flickr

“The entrepreneur shifts economic resources out of an area of lower and into an area of higher productivity and greater yield.”Jean-Baptiste Say, apprx 1800, cited in Drucker, 1985

. . .the function of entrepreneurs is to reform or revolutionize the pattern of production by exploiting an invention or, more generally, an untried technological possibility for producing a new commodity or producing an old one in a new way, by opening up a new source of supply of materials or a new outlet for products, by reorganizing an industry and so on. . . Joseph Schumpeter, 1976

Entrepreneurial alertness: the ability of some people to recognize competitive imperfections in marketsIsrael Kirzner, 1979

“process by which individuals… pursueopportunities without regard to the resources they currently control”

Stevenson & Jarillo, 1990

An individual -opportunity nexusThe combination of enterprising individuals and lucrative opportunities Shane & Venkat, 2000

Photo: Alejandro Lavin, Jr/flickr

End of section 1: Introduction