NERC Doctoral Training

Workshop
Entrepreneurship Overview
Keith Heron
Entrepreneurship for FT13 © Henley Business School 2008 www.henley.reading.ac.uk
Being Entrepreneurial
• I am joining our team of professional business coaches
to:
• support your imagination and thinking
• with the aim of helping YOU to develop…

• GREAT IDEAS
• …That can be turned into
• GREAT BUSINESS VENTURES
• By you and your team - being entrepreneurs!

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Business Entrepreneurs

Hutchison Whampoa is controlled by Asia's richest man Li Ka-shing

http://www.bbc.co.uk/news/world-asia-25939930
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Political Entrepreneurs

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Creative Entrepreneurs

Jaakko Iisalo

http://www.entrepreneur.com/article/233465 Rovio Entertainment

https://www.angrybirds.com/
Entrepreneurship – NERC Doctoral Training Workshop
Social Entrepreneurs

Entrepreneurship – NERC Doctoral Training Workshop

Common factor
• They have all created something new…
• Which has been in response to something they have seen
in the …
• World around them…
• Which has agitated them into taking
action…
• Which has created value for ‘consumers’

Entrepreneurship – NERC Doctoral Training Workshop 7

What is being entrepreneurial?
• Schumpeter suggested that an entrepreneur was
someone who:
• Noticed significant events;
• Brought into existence ‘innovative combinations’,
• Delivered an impact of ‘creative destruction’ on passive
or inefficient existing markets.
• An entrepreneur is a person
• “who breaks away from the path of
routine”
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A definition of
Business Entrepreneurship

Entrepreneurship for FT13 © Henley Business School 2008 www.henley.reading.ac.uk

What is Entrepreneurship?
• entrepreneurship is defined as the
• Discovery
• Evaluation
• Exploitation
• of future goods and services
• (Shane & Venkataraman, 2000)

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The source of future business
• An Opportunity is:
• Information or a situation that has come into
effect, outside the control or influence of an
entrepreneur….that the entrepreneur thinks
(perceives) is the source for a new business
venture
• The immediate response to this ‘catalyst’ is an
IDEA…which then needs to be elaborated

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Evaluation of the Opportunity
Evaluation has 2 components

• Evaluation of the customer and the customer

need
• Evaluation of the innovation/value proposition
that needs to be created to match to the specific
customer need- TOMORROW

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Entrepreneurship – NERC Doctoral Training Workshop
Exploitation - Adoption (by consumers)

http://en.wikipedia.org/wiki/File:DiffusionOfInnovation.png
originally published in 1957 by Joe M. Bohlen, George M. Beal and Everett M. Rogers

Entrepreneurship – NERC Doctoral Training Workshop 13

Risk-taking is a pre-requisite
• Cantillon (1755) sees the entrepreneur as;
• a risk taker who
• buys at a CERTAIN price
• but sells [in the future] at an UNCERTAIN price

• The entrepreneur specialises in bearing uncertainty in

the course of taking action

• (Johnson, 2007:21)
• Cantillon, Essai sur la Nature du Commerce en Général
(Essay on the Nature of Trade in General).
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Today:
Spotting Opportunities for
your Ideas

Entrepreneurship for FT13 © Henley Business School 2008 www.henley.reading.ac.uk

Your Objective
• In this business simulation your objective is to
• Spot something from the world around
you which…
• Agitates you into taking action…
• To create an innovation for a perceived
market need…
• That can be tested beyond this workshop

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Your perception: What do you see?

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We are all UNIQUE
“No Two Persons Read
the Same Book”
Edmund Wilson
Inscription in Victoria State Library- Australia

Two Girls Reading (1934). Pablo Picasso (Spain, 1881-

1975). Oil on canvas. University of Michigan Museum of Art

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Discovery of Opportunities…aah-haa!

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The PESTEL Cloud

Political
Economic
PESTEL Legal

Societal Environment- natural

Technological

Trying to understand the information in the PESTEL Cloud

Entrepreneurs Consumers

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The PESTEL Cloud

Political
Economic
PESTEL Legal

Societal Environment- natural

Technological

Trusted Intermediaries- Goldman Sachs, Trade Bodies, Analysts,

UKTI, Experts e.g., NERC Speakers

Trying to understand the information in the PESTEL Cloud

Entrepreneurs Consumers

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Information Asymmetry Opportunities
• Kirzner (1973)
• Entrepreneurs have…“the ability to notice
…opportunities that have hitherto been overlooked”
• They are driven by entrepreneurial alertness
• This is a distinctive set of perceptual and cognitive
processing skills that direct the opportunity
identification process

• Kirzner, I., 1973, Competition and Entrepreneurship, Chicago: University of Chicago Press.
• Kirzner, I., 1979, Perception, Opportunity, and Profit, Chicago: University of Chicago Press.

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 Existing Firms:
The Vision- opportunities in all directions

Market Development Diversification

New
Enter New Markets New Products
- with Existing Products and New Markets
Markets
Market Penetration
Product Development
Existing
Increase Existing
Develop New Products
Product-Market
- for Existing Markets
Strategy

Existing Products New

Entrepreneurship – NERC Doctoral Training Workshop 24

Existing Firms: Marketing Myopia
• Levitt, T, 1960, Marketing Myopia, Harvard Business
Review.
• ‘Short-sighted managements fail to recognise there is no
such thing as a growth industry’
• Growth stops NOT because a market is saturated but
because of the failure of management

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 Existing Firms:
The Reality- 1-2% allocated to new ventures
Market Development Diversification

New

Market Penetration (98-99% allocation)

Markets Increase Existing Product
Development
Product-Market
Strategy
Existing

Existing Products New

Entrepreneurship – NERC Doctoral Training Workshop 26

Be Alert
• When you listen to and observe the following
presentations from ‘Trusted Intermediaries’ of the PESTEL
cloud…
• Your brain will be stimulated by certain things

• Create a mind map of the OBSERVATIONS

• That have captured your attention…
• This is the start of your IDEATION

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Tomorrow:
Evaluating the Opportunity:
Building your Innovation
Propositions

Entrepreneurship for FT13 © Henley Business School 2008 www.henley.reading.ac.uk

Beyond your first idea
• If your idea was so easy to generate…

• We need to go beyond the first idea to

• ‘innovate the idea’
• Which is done through a series of
• Experiments or tests

• Karl Popper would call it ‘Conjecture testing’

• Eric Ries calls it ‘Lean Start-Up’

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Creating the Future- Innovating
• In order to ‘spot’ an opportunity an entrepreneur will
already have a pre-informed idea of the solution to the
problem
• However, other entrepreneurs may have had similar
ideas for the same problem
• The key is to devise an INNOVATIVE solution
• This requires IMAGINATION and CREATIVITY
• This requires understanding our capabilities
• The Future is Risky

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Lean Start-Up process
• See Eric Ries
• Model for starting up by
• Aiming to understand your ‘identified’ customer archetype
• Building ‘something’ to have a conversation with this
customer
• Measuring ‘reaction’
• Reflecting and then adapting or changing
• It is intended to avoid the entrepreneur fixating on their
preferred ‘design’ before really finding out what their
customer actually needs
• See the book of readings provided pre workshop

Entrepreneurship – NERC Doctoral Training Workshop

 Business Model Canvas by Strategyzer

http://businessmodelgeneration.com/canvas/bmc?_ga=1.145618737.421850295.14151
Entrepreneurship – NERC Doctoral Training Workshop 01893 32
 Business Model Canvas by Strategyzer

http://businessmodelgeneration.com/canvas/bmc?_ga=1.145618737.421850295.14151
Entrepreneurship – NERC Doctoral Training Workshop 01893 33
 Business Model Canvas by Strategyzer

http://businessmodelgeneration.com/canvas/bmc?_ga=1.145618737.421850295.14151
Entrepreneurship – NERC Doctoral Training Workshop 01893 34
 Business Model Canvas by Strategyzer

http://businessmodelgeneration.com/canvas/bmc?_ga=1.145618737.421850295.14151
Entrepreneurship – NERC Doctoral Training Workshop 01893 35
 Business Model Canvas by Strategyzer

http://businessmodelgeneration.com/canvas/bmc?_ga=1.145618737.421850295.14151
Entrepreneurship – NERC Doctoral Training Workshop 01893 36
 Business Model Canvas by Strategyzer

http://businessmodelgeneration.com/canvas/bmc?_ga=1.145618737.421850295.14151
Entrepreneurship – NERC Doctoral Training Workshop 01893 37
 Business Model Canvas by Strategyzer

http://businessmodelgeneration.com/canvas/bmc?_ga=1.145618737.421850295.14151
Entrepreneurship – NERC Doctoral Training Workshop 01893 38
Capturing the FIT- the Value Proposition Canvas

http://businessmodelgeneration.com/canvas/vpc?_ga=1.181927842.421850295.14151
01893
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Entrepreneurship – NERC Doctoral Training Workshop
Creating a customer persona
• How does this customer…
• THINK
• SEE
• FEEL
• DO
• What do they like? What influences them? What catches their attention?
• What are their values? What are their emotions?
• When you observe them, or imaging them, what are they doing?

• How can we tell?

• Get OUT of the Office and look!
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Entrepreneurship – NERC Doctoral Training Workshop
Activity: A process for recording
your thoughts about customers
• customers

Why did these

customers attract your
attention?
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Entrepreneurship – NERC Doctoral Training Workshop
Activity: What did your
creativity suggest?

• Customer personae
For each customer
personae
What is the specific
customer need that you
have identified?

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Activity: Enhance your
‘preferred’ proposition

• Diverge to generate
MORE detailed needs

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Activity: Converge to your
Best Solution

• Look for the best • Combine and

elements… Converge to THE
SINGLE main need

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Entrepreneurship – NERC Doctoral Training Workshop
Activity: Repeat the process to
devise the VP for that need

• Look for the best • Combine and

elements… Converge to THE
SINGLE main VP

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Entrepreneurship – NERC Doctoral Training Workshop
Question
Which Number is Least like the Others?

1. Thirty-One

2. Thirteen

3. One-Third
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Entrepreneurship – NERC Doctoral Training Workshop
Answer:

1. Thirty-One

2. Thirteen

3. One-Third
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Entrepreneurship – NERC Doctoral Training Workshop
 Mind Openers- In Groups
•You are a taxi driver.
•Your cab is yellow and black and has been in use for 5 years.
•One of the outside mirrors is broken, and the engine needs a
tune-up.
•The gas tank holds 23 gallons, but is only 2/3 full.
•An air freshener hangs from the rear-view mirror.

•How old is the driver?

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Entrepreneurship – NERC Doctoral Training Workshop
Critical Evaluation Method
• Popper proposed the ‘critical method’ of trial and error.
• “Bold hypotheses should be proposed and then exposed
to the severest of criticism in order to detect where there
is error.”
• The solution, initially ‘tentative’ is a theory which is
critically tested and discussed
• The results (which will change over time) are what he
termed the ‘science of the day’ (p.97)

Popper, K. 1992. ‘Unended Quest: An Intellectual Autobiography’, Routledge, London.

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From Opportunity to Market Ready
The world of...
Ideas for innovations
Environment
Politics
Society
Economics
Technology
Evaluate the Innovation Idea
Legal

Things that occur-

some are ‘spotted’
Modify or reject it Use it

WHY? Market
Personality
Education Exploitation
Experiences
Connections

time

Shane, S. 2003. A General Theory of Entrepreneurship: The Individual-Opportunity Nexus. Elgar, Cheltenham, UK
Schaper, M and Volery, T, 2004. Entrepreneurship and Small Business
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Creativity and its relevance
• At its heart, creativity is simply the production of novel,
appropriate ideas in any realm of human activity, from
science, to the arts, to education, to business, to everyday
life.
• The ideas must be novel—different from what's been
done before—but they can't be simply bizarre; they must
be appropriate to the problem or opportunity presented.
• Creativity is the first step in innovation, which is the
successful implementation of those novel, appropriate
ideas.
• Amabile, T.M., 1997, Motivating Creativity in Organizations: On doing what you love and loving
what you do, California Management Review, Vol 40, No, 1, Fall.
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Thinking tools
• Business Environment Timeline Mapping
• Customer Persona
• Value Proposition Canvas
• Lean Start-Up
• Business Model Canvas

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 Henley Centre for Entrepreneurship
Keith combines his experience of business (Kimberly-Clark)
and business start-up (commercial interiors from 1990-
2002), with his MBA thinking to bridge the gap between
academic thinking and practical application.

He has designed and delivered theory-based, practical

entrepreneurship programmes for different audiences from:
Small businesses for Queensland Government:
16-19 yr group at the inaugural National Enterprise Academy
for Peter Jones: Mr Keith Heron
University programmes in Queensland and at Reading
(Henley Business School).

Keith continually develops and tests his thinking through his

own consultancies, and his supervision of MSc
Entrepreneurship students consulting to business start-ups in
Reading and London, and is developing an online resource for
early stage business owners: EU Trademark-
YourManagementMatters®

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