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Myths & Realities of Being an Entrepreneur
Born not made - MYTH
Anyone can start a Biz - REALITY
Entrepreneurs are gamblers - MYTH
Entrepreneurs are Independent - MYTH
Entrepreneurs work more - MYTH
Entrepreneurs are more stressed - MYTH (could be reality)
Without $$$ you can’t have a start up - MYTH
Money drives entrepreneurs - MYTH
Venture Capital easy with an idea - MYTH
Need an A+ Average - MYTH
Need the spotlight/glory - MYTH
Innovation is 3 Different Things - Kenneth B. Kahn
Innovation is an outcome
Innovation is a process
Innovation is a mindset
Innovation is an outcome
Emphasizes Output
Product innovation (i.e., New to the world, Product improvements, Product extensions (features), Cost reduction, New markets, New uses)
Process(es) Innovation
Marketing Innovation
Business Model Innovation
Supply Chain Innovation
Organizational Innovation (work from home)
Innovation is a process
The way in which innovation is and should be organized so that theses outcomes can come to fruition
Discover
Potential Opportunities
Develop
Technical specifications and design
Deliver
Offering is introduced and sold
Innovation is a mindset
Innovation as a mindset addresses the internalization of innovation by individual members of the organization and advancement of a supportive culture throughout the organization
Mindset consideration is the incorporation of design thinking, a human-centred approach to innovation
While design thinking encompasses a design process, there is emphasis on embracing an empathetic mindset, which stresses the needs of the end user (buyer).
4 Types of Innovation
Technological Innovation
Product/Services Innovation
Strategic Innovation
Cultural Innovation
Levers of the Seadoo Case
Weeks at the cottage
Seadoo fill-ups (how many)
Duration of ownership
Boat fill-ups (how many?
Will never use marina services
Buy a new boat?
Other services?
Recency, Frequency, Monetary Value (RFM)
It is a ranking system of each customer
Score depends on the optimum purchase behaviour
RFM Scoring System
Buy Interval
# of Purchases
$ Purchase
Industry Structure
Industry structure can be linked directly to the income statements and balance sheets of every company in an industry
An industry is a group of companies that are related based on their primary business activities
…Classified based on their largest sources of revenue
Dozens of industry classifications
Industry classifications are grouped into larger categories call sectors
PESTLE
Political
Economic
Social
Technological
Legal
Environmental
Market
The easiest way to find a customer is to define who they are (defining your market)
Market segmentation
Demographic (Who?)
Geographic (Where?)
Psychographic (Why are they into it?)
Market Acronyms
TAM? - Total Available Market
SAM? - Serviceable Available Market
SOM? - Share of the Serviceable Obtainable Market
CAGR - Compound Annual Growth Rate
3 Principles of Financing
More cash is preferred to less cash
Cash now is preferred to cash later
Less risky cash is preferred to more risky cash
Loans (Secured vs. Unsecured)
Secured
Secured debts are those for which the borrower puts up some asset as surety or collateral for the loan
Unsecured - Debenture
Lenders issue funds in an unsecured loan based solely on the borrower’s creditworthiness and promise to repay
Family & Friends Funding (FFF)
Fast and easy
Borrowing costs minimal
Terms favourable
Slack when you need it
“Know you” - less convincing
Relational risk/cost
May not be savvy
Blurred lines (family dinner)
Panel of critics - Best/Worst
Angel Investor vs VC
Both venture capitalists and angel investors invest money in businesses in exchange for equity - but
angel investors tend to invest lower amounts earlier in the fundraising process,
while venture capitalists invest more money (require more equity) later in the fundraising process.
Debt Financing
Bank Loans
Banks are rarely comfortable with brand new start-ups
Often willing to lend if you don’t need the money
Lines of credit;
Credit cards;
Mortgages; and
Equipment loans
Equity Financing
Angel Investors
Valuation Key
Venture Capitalist
Initial Public Offering
ART & SCIENCE
Bootstrapping
In a bootstrapped financing model, the business founders use their own savings, investments, resources, and yearning to finance their business
Mezzanine Financing
Between debt and equity financing
It is senior to pure equity but subordinate to pure debt
No mandatory payments… more capital
High interests on maturity (12%-20%)
Often WARRANTS used...gives lender right to acquire equity
Set price (exercise price or strike price)
Set time
Crowdfunding
Process of funding a project or venture by raising money from a large number of people who each contribute a relatively small amount, typically by the internet
1) Donations
2) Reward
3) Debt
Pros
Low financial risk
You keep your equity (typically)
Enhanced visibility
Cons
Limited time
You campaign may be unsuccessful
Your idea can be stolen
Journey Mapping
Pre-purchase
Mail-drop
Purchase
In-store (online) purchasing
Post-purchase
Brand Advice
Products are created in the factory. Brands are created in the mind
Brand is not what you say it is. It is what they say it is
Brand Concept
“Capitalized value of trust between company and its consumers”
Brand’s Image
Brand identity is verbal and visual expression of a brand
Brand Iceberg
10% is viewed at surface level
90% is under the surface work
Brand (5 Factors)
1) Names
2) Brand MARKS
3) Taglines
4) Brand Promise
5) Characters
1) Brand Names
Founders - Dick’s Ben & Jerry’s, Ralph Lauren
Descriptive - Shred-it, Under Armour, Heeley’s, Sher-wood
Metaphor - Nike, Patagonia
Acronym - IEG, IMG, IBM
Combinations of above
Some Stats:
72% of consumers make purchases based on brand names
74% of people between the ages of 21 and 35 would pay more for a product with a brand name they like and trust
2) Brand Marks
VIsual representations
1) Woodmarks - name, acronym
2) Emblems/logos
3) Brand Taglines
“A short phrase that captures the company’s essence, personality, and positioning”
1) Imperative (Commands action)
Call to action:
“Just do it”
“Think Different”
2) Descriptive
Describes functionality:
Expect more… pay less
3) Superlative
Positions as best in class:
“Ultimate Driving Machine” - BMW
4) Provocative (provokes thought)
Often a question…
“Got Milk?”
4) Brand Promise
Sometimes confused with a tagline
More of an internal focus
The brand promise is not a public statement
Not to be communicated to the customer
It’s not some deep, dark secret; would be fine if it got out
It is not designed for public consumption
It is only to align people’s efforts within the organization (top to bottom)
“Promise to customers from the organization members”
5) Brand Characters
Designed to bring brand life through association
Best ones become icons
Linked to brand
PISH
Perishable
Intangible
Simultaneous
Heterogenous
Pushes
Limited opportunity
No mentorship
No WFH
Limited benefits
Bored
Bad PR for Business
Boring city
Pulls
Salary
Promotion
Weather
Friends
Dream job
Authority
Why people leave jobs?
75% of workers voluntarily left their jobs because of their bosses and not the position itself
3 Ps of Sustainability
People
Planet
Profits
Triple Bottom Line
The triple bottom line maintains that companies should commit to focusing as much on social environmental concerns as they do on profits
Design Thinking
Empathise - understanding people
This step includes the work you do to understand people (and various stakeholders) within the context of your design challenge. Why people do things and what is meaningful to them
Define - figuring out the problem
Seeks to bring clarity to the design problem you are facing
Test - refining the product
Ideate - generating your ideas
Prototype - creation and experimentation
Customer Equity Components
Value Equity
Quality, price, and convenience
Brand Equity
Awareness, attitudes, and perceptions
Retention Equity
Relationship building
Brand Loyalty
Ability to attract & retain customers
The emphasis is on customer satisfaction
Serve the customer in a satisfactory way
Brand Association
Any mental connection a consumer will make with a particular brand
Brand-as-a-person is valuable
Brands are bought for who they are as well as what they are
Like any other interpersonal relationship, the brand must represent values that are meaningful to the customer
Perceived Quality
Relates to a consumer’s judgment of a product’s overall excellence relative to its intended purpose
All about expectations…
Ability of a team to achieve preconceived expectations for wins and progression into post-season play
It is usually at the heart of what the customers are buying
Brand Awareness Measures
1) Recognition
2) Re-call
3) Top-of-mind
4) Knowledge
5) Opinion
Marketing Mix Decision (4 Ps)
Product
Price
Place
Promotion
Employer of Choice
Employer of choice means that individuals, even though they are presented with alternative choices of employment, choose to work for that organization
FAB
Features
Attributes
Benefits
Revenue Model (how to make money)
Sources of revenue - WHAT you charge
Revenue From - HOW you charge (cash, e-deposit, etc…)
Cash Flow - WHEN you get paid
Product/Service/Market Focus
We sell [?] to [whom?] via [how?]
Target Audience - Who is “Highest Valued Customer”
Product/Service Offering - “Feature” mix
Business Model Canvas
Key Partners
Key Activities
Key Resources
Value Propositions
Customer Relationships
Channels
Customer Segments
Cost Structure
Revenue Streams
Conjoint Analysis
Provide consumers with 2 companies to provide feedback for
A utility score tells which company is more effective
Porter’s 5 Forces
Bargaining Power of Suppliers
Bargaining Power of Buyers
Threat of New Entrants
Threat of Substitutes
Competitive Rivalry
What is Innovation>
innovation as an integral managerial competency that contributes to organizational effectiveness
Marketing Communication Mix
Advertising
Sales Promotion
Personal Selling
Public Relations
Direct Marketing