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Technology Entrepreneurship

MANU 4211

Part 1: You Are Here: X


By Dr. Aishah Najiah Dahnel

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OUTLINE

1. Terminologies
2. Technology Entrepreneurship Today:
Trends, Opportunities & Challenges

3. Five Pillars of Technology Entrepreneurship


4. Technology Venture Idea Generation

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What Is Your Understanding
on These Terminologies?
• Business
• Entrepreneurship
• Technology
• Technological Entrepreneurship (TE)
• Waves of Innovations

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Business

• A business is the activity of making one's


living or making money by producing or
buying and selling products (such as goods
and services). Simply put, it is "any activity or
enterprise entered into for profit”.

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Entrepreneurship

• “Entrepreneurship is a management and


leadership style that involves pursuing
opportunity without regard to the resources
currently controlled.” – Greg Dees,
Rubenstein Senior Fellow in Social
Entrepreneurship

It can be taught and learned

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Technology

• High-tech
• The collection of techniques, skills, methods,
and processes used in the production of
goods or services or in the accomplishment
of objectives, such as scientific investigation.

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Technology Entrepreneurship (TE)

• Technological Entrepreneurship is the ability and


willingness of an entrepreneur, within and outside
the existing organizations to identify and create new
economic opportunities by introducing their
innovative ideas.
• Transforming the potential of the scientific and
research and development fields (including a wider
impact of the so-called business environment
sphere) into innovative products and services.

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Technology Entrepreneurship

• Key driver of a global economic growth


• Create millions of new jobs per year
(Example?)
• Different type of process than starting a small
business
• Tech advancement can be either
revolutionary (“brave new world”) or
evolutionary/incremental (“faster, better,
cheaper”)
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Waves of Innovations

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Waves of Innovations

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Technology Entrepreneurship
Today

• Trends
• Opportunities
• Challenges

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Level of Technology Entrepreneurship

Established
Startup Business

Expert
Entrepreneur

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Startup
• A company or project initiated by an individual / group of people to seek,
effectively develop, and validate a scalable and repeatable business model –
Experimentation.
• Has no established customers & facing uncertainty. Thus, the startup cannot
simply execute a proven business model.
• In early days, it is difficult to find a way to consistently attract & deliver value to
target customers. Intend to grow beyond the solo founder, have employees,
and intend to grow large.
• The immediate goal may be to be credible, proving customer demand, or
market viability, as opposed to demonstrating sales and revenue.
• High rates of failures
• What are examples of startup company that you know in the world and in
Malaysia?
Carsome Iflix DahMakan 13
Startup

• The focus of the startup technology entrepreneur is to run


experiments with products, features, and customers to discover
a scalable, repeatable business model.
• The mantra for technology entrepreneurs during this startup
phase is: “Fail often, fail fast.”
• In other words, run experiments that expose your products to
the market, gather feedback, and refine your offering based on
that feedback until you have a viable product that customers
want to buy.
Established Business

• Have an established customer base that helps you to keep


growing.
• Can start relying on salespeople to make the sales for you.
• With the customer base, you’ll also have more brand
awareness.
• Targets: sales & revenue.

What are examples of established business that you know in


the world and in Malaysia?

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Expert Entrepreneur
• Launch new ventures only after taking thorough stock of resources which they have access
and control.
• Know that problems arise but instinctively avoid many of them through strategic thinking.
• Know that nothing in their plans is above being changed. They are prepared to
change radically (or abandon) a project if needed.
• What are examples of expert entrepreneurs that you know in the world and in Malaysia?

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Expert Entrepreneur’s effectual reasoning
Technology Entrepreneurship (TE)

• Technology entrepreneurship is an investment in a project


that assembles and deploys specialized individuals and
heterogeneous assets that are intricately related to
advances in scientific and technological knowledge for the
purpose of creating and capturing value for a firm.
• Creating and capturing value for the firm through projects
that combine specialists and assets to produce and adopt
technology.
• Technology entrepreneurs must think globally and act
locally to succeed.
• There is always room for innovation that creates value for
local customers despite of big technology nomination
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Trends and opportunities

Big Data

The
Internet of
Quantified
Things
Self
Transformative
internet
technology
trends in recent
years
Cloud Collaborative
Computing Commerce

Context
Awareness
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Trends and opportunities

• The innovator is not always a skilled entrepreneur, yet innovation and


entrepreneurship are inseparable. The entrepreneur without the
innovator has no value to bring to the market, and the innovator
without the entrepreneur has value but doesn’t possess the skills to
serve markets and build a venture.

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Five pillars of Technology
Entrepreneurship
• Pillar #1: Value Creation
• Pillar #2: The Lean Startup
• Pillar #3: Customer Discovery & Validation
• Pillar #4: The Business Model Canvas
• Pillar #5: The Entrepreneurial Method

SELF LEARNING
Quiz on this topic (5 pillars of technology entrepreneurship)
30th September 2019, Monday 22
Pillar 1: Value Creation

• Value creation is the main purpose of business. Your products


and services must create value for customers.
• The concept of “value” has myriad definitions. Value is defined
as whatever customers believe it to be.
• Technology entrepreneurs can develop successful ventures
based on widely different value propositions.
• A value proposition is a statement of the unique benefits
delivered by the venture’s offering to the target customers.
• Creating value requires vision, passion, and an ability to adjust
to customer needs and constantly evolving economic, social,
and technological trends and conditions.
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Economic
Value

Influence
Value

Enjoyment
Value

Social
Value

Harmony
Value

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Examples of value creation

What is it? For whom? What values?

Example 1:

ET Industries has discovered a chemical isomer additive


that allows for a reduction of Volatile Organic Compound
(VOC) emissions

ET Industries has developed an economical and easy-to-


use chemical additive that allows paint manufacturing
companies to reduce the environmental impact of their
products 25
Examples of value creation

What is it? For whom? What values?

Example 2:

Champion is an off-price department store owned by XYJ


that employs international sourcing and buying power

Champion is a department store that offers fashion


conscious consumers the latest brand names for up to 60
per cent off
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Pillar 1: Value Creation

• Most common reason for a failure of some new ventures is


due to failure in creating appropriate value for customers
although they were by the founders’ vision of the product
and its features.
• Products were designed, built, and released without regard
to what customers really want.
• Customers determine what is valuable, not entrepreneurs.
• In some cases, customers don’t always know what they
want, but they always know what they don’t want.
• Thus, technology entrepreneurs must always remember that
customers are the ultimate judges of value and determiners
of the venture’s success.
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Pillar 2: The Lean Startup
• The concept is based on the management philosophies and
tactics used by companies that excel in manufacturing =
Toyota & the world renowned “Toyota Production System”
(TPS). TPS is based on continuous improvement, waste and
cost reduction, just-in-time inventory systems, and many
other things.
• Lean manufacturing - changes the way supply chains and
production systems operate. Empowering individuals to
solve problems as they arise to promote continuous
improvement and organizational learning.
• Lean manufacturing also emphasizes small batch sizes, just-
in-time inventory systems, and accelerated cycle times.
• In short, lean manufacturing is about experimenting,
learning, and constantly improving.
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Pillar 2: The Lean Startup

• The Lean Startup was conceived and developed by


serial entrepreneur Eric Ries.
• Please watch this interesting video:

https://youtu.be/fEvKo90qBns
• In his previous venture, Ries was convinced that he and his team had
built a world-class technology that provided benefits to customers,
but not enough customers bought the product after it was launched.
• Ultimately, he realized, the problem was that the company ran out
of money before it was able to deliver a product that attracted
enough customers to generate sufficient cash flow to survive on its
own. 29
Pillar 2: The Lean Startup

• The MVP is introduced to


potential customers for
their feedback, and then
based on this feedback a
decision is made either to
pivot to something
different or to persevere
along the current product
development pathway.
• This process is referred to
as the Build-Measure-
Learn Feedback Loop.
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Pillar 2: The Lean Startup

• Build-Measure-Learn Feedback Loop is contrasted with the linear


stage-gate product development process by most large
organizations.

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Pillar 2: The Lean Startup

• Other principles in lean startup

Entrepreneurial Management

• Rather than making complex plans based on “moving target” assumptions,


management in a startup needs the discipline to adhere to the build-measure-learn
feedback loop of iterative MVPs.

Validated Learning

• To learn how to build a repeatable, scalable, business model. This requires


entrepreneurs to run experiments that are rigorous and conclusive in order to test
each element of their business model.

Innovation Accounting

• How much the venture is learning and its progress towards finding a scalable,
repeatable business model.
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Pillar 3: Customer Discovery & Validation

• The fundamental purpose of the customer discovery and


validation process is to turn guesses about markets, customers,
marketing channels, and pricing into facts.
• Facts cannot be learned by writing a business plan. They can
only be learned through direct contact with customers.
• Customer discovery and validation should be the primary focus
of technology entrepreneurs during the startup phase of their
company.
• Then, the startup company must undergo transition from
searching for a business model to executing a business model.
• In other words, it transitions from being a startup venture to
an established organization.
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Pillar 3: Customer Discovery & Validation
Toward
Startup an established organisation

• Customer discovery is defined as a process that captures the


founders’ vision and converts it into a series of hypotheses that can
be tested with customers.
• Customer validation is the process of testing whether the evolving
business model is repeatable and scalable. 34
Pillar 3: Customer Discovery & Validation

• Benefit: A technology startup is a temporary organization


that runs repeated experiments to gauge customer
response to a series of MVP introductions. In this way, the
startup can pivot from features and benefits that don’t fit
with customer needs and desires quickly and
inexpensively.
• By way of contrast, if the standard product development
pathway is followed prior to engaging customers, the
startup might very well expend most of its capital (and
also its goodwill with investors) and be unable to pivot or
revise features because it has run out of cash.
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Pillar 3: Customer Discovery & Validation

• The use of the test sales helps the company to


identify important elements of the business model
including:

 The key features that customers prefer


 The existence of a market large enough to be interesting
 The product’s perceived value among customers
 Demand for the product
 The economic buyer of the product
 Pricing and marketing channel strategies
 The sales cycle and selling process
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Pillar 3: Customer Discovery & Validation

• Each experiment in the customer validation process needs


to be designed to address one or more of these key
elements of the venture’s business model.
• If technology entrepreneurs complete this process and
define each of these elements, they have a better chance
of raising the funds necessary to take the company to the
next level of growth.
• In addition, because a repeatable and scalable business
model has been verified with customers, the venture’s
valuation at its initial fundraising will be greater —
preserving the founders’ equity stakes.
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Pillar 4: Business Model Canvas

• The business model canvas is a new and powerful tool for


technology entrepreneurs that was developed by
Alexander Osterwalder.
• A business model is defined as “the logic by which an
enterprise sustains itself financially.” Put more simply, a
business model is “the way the business makes money.”
• It’s important for the technology entrepreneur to
recognize that business models aren’t declared and then
executed at the launch of the venture, but instead have to
be discovered through interaction with customers.
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Pillar 4: Business Model Canvas

• The key to an executable business model is that the


technology entrepreneur has discovered a repeatable and
scalable system that consistently delivers value to defined
customers.
• By “repeatable” we simply mean that a system can be
created that will produce and deliver value to customers
on a consistent basis.
• By “scalable” we mean that the repeatable system can be
made to handle enough volume to serve a growing
customer base.
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Pillar 4: Business Model Canvas

• A good way to begin thinking about the business


model for any organization is by asking and
answering two fundamental questions:

1. Who is the customer?


2. What does the customer need?

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Pillar 4: Business Model Canvas

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Pillar 5: Entrepreneurial Method
• More deeply involved in • Competitive by nature and
the actual value creation are prepared to compete in
process than are most markets where there are
corporate managers and clear winners and clear
leaders. losers.
• The value creation #1: Expert #2: Expert • Believe that, as long as
Technology Technology
process is iterative and Entrepreneurs Entrepreneurs
something useful was
experimental, relying on Believe Value Rebound learned, rebounding
customer feedback to Creation is the Personally and personally and
discover what the Primary Purpose Professionally professionally from
of their Business from Failure failure is a virtue.
venture should attempt
to sell.
#3: Expert #4: Expert
Technology Technology
• Expert technology Entrepreneurs Entrepreneurs
• Willing to run
entrepreneurs have Respect Private Respect the numerous experiments
respect for private Property and Judgment of the with their product and
Uphold Marketplace
property and contracts. Contractual service offerings and to
• To them, private property Obligations “pivot,” if necessary,
comprises the based on market
fundamental resources feedback.
that they can leverage to
create value for a market. 42
Technology Venture
Idea Generation
• Fundamental Venture Types
• The Idea Generation Process
• Non-traditional Idea Sources

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Introduction

• The question that all aspiring technology entrepreneurs


need to answer in their own unique way is: What
business should I start?
• Aspiring entrepreneurs are often confounded by the
challenge of developing a credible idea for a new product
or service.

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Fundamental Venture Types

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Fundamental Venture Types B2C

• New ventures that target the consumer abound are referred to


as “business to consumer,” or “B2C,” ventures.
• There are many ways that technology entrepreneurs can create
value for consumers in both the service and product
categories.
• People have a seemingly insatiable desire not only for
functional products and services that help them meet their
daily living needs, but also for fashionable, adventurous,
whimsical, or entertaining products and services.
• Consumer products and services are in some ways more
difficult to develop because of the great variety of ways in
which value can be created.
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Fundamental Venture Types B2C

• Creating products and services for consumers is


competitive, and most entrepreneurs that have been
successful with consumer products counsel against being a
single-product venture.
• It is fine to launch a venture around a single consumer
product, but it is difficult to grow a company around a
single product.
• The reason for this is well known to those who have
competed in the consumer product space. If a product is
successful, it can rapidly grow through multiple
distribution channels
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Fundamental Venture Types B2C
Noncomprehensive list of ways in which technology entrepreneurs can serve
consumers:
1. Functional: 3D printing, home automation, and appliances
2. Entertainment: Video games, streaming media, and laser tag
3. Adventure: Virtual worlds, space tourism
4. Fashion: Google glasses, smart watches, and nano-fiber apparel
5. Transportation: Electric cars, electric bicycles, and hybrid vehicles
6. Health: Medical devices, fitness gear, and quantified self
7. Communication: Smartphones, online television, and e-mail
8. Shelter: Camping gear, smart homes, and emergency shelters
9. Food: Delivery services, energy drinks
10. Art: Electronic galleries, electronic photo frames
11. Literature: Blogs, tweets, and e-readers
12. Music: Streaming audio, electronic instruments
And the list could go on for likely hundreds of different categories, including some48that
have not even been invented yet.
Fundamental Venture Types B2B

• If you are thinking about building a venture in a B2B quadrant, there are
three primary ways to create value:
1. Help companies make more money
2. Help companies save money
3. Help companies comply with government regulations
and/or community norms.
• B2B ventures have to create value in one of these three categories or they
simply won’t attract business customers. Businesses are not interested in
“fashionable” or “whimsical” items in the way consumers often are.
• Most businesses are focused on making profits, and the only way to do
that is through increasing sales, decreasing costs, or avoiding litigation
and/or fines as a result of running afoul of regulations and norms.
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Fundamental Venture Types B2G

• The business to government (B2G) category is in many ways similar


to the B2B category. The primary difference in doing business with
the government over doing business with other companies is that
the government often has highly restrictive rules that must be
followed by its contractors.
• Usually, acquiring a government contract begins with bidding on a
request for proposals (RFP) offered by a government entity. The RFP
may specify that a single company will be awarded the contract,
usually referred to as a sole-source contract.
• However, government projects often require that at least a portion
of the work be done by a small business and/or a minority-owned
enterprise. These so called set asides ensure that the government is
employing diverse businesses in its contracting.
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Fundamental Venture Types B2G

• Governments around the world purchase both products


and services from private companies on a daily basis.
• The government can potentially be a lucrative client for a
technology entrepreneur, but it is also advisable to avoid
having government agencies as the only clients for the
venture.
• This is because government contracts often are subject to
funding cycles and political processes that could
jeopardize continued operation.

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Idea Generation Process

1. Identify a 4. Explore
2. Innovate a 3. Test a
point of pain how to
product or business
in a target acquire
service models
market customers

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Idea Generation Process

Identifying a point of pain in a target market from consumption chain:

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Non Traditional Idea Sources

In order for you to be In order to stretch


able to transfer ideas your world and
from a domain develop new ways
Visit New
outside your Read of understanding
disciplinary expertise, Places & how
Alternative
you need to dive into Experience people live and
the literature. Literature work, you’ll need to
New Things
get outside of your
normal comfort
Thought leaders are zone.
people who are on the
leading edge of ideas Meet Align yourself with
and innovations in a Thought Team Up someone that has
particular discipline. Leaders that exciting idea.
Where do you meet
people like this? via
cable networks like
the Discovery 54
Channel.
Conclusions

1. What is your understanding on the Technology Entrepreneurship?


2. Do you feel the excitement to be a Technology Entrepreneur?
3. Any good ideas for a Technology Startup company?
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All learning materials & announcement will be
posted through
Google Classroom
Technology Entrepreneurship MANU 4211 Sections 1 & 2

CLASS CODE:
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Please check the site regularly / everyday.
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Technology Entrepreneurship MANU 4211
Sections 1 & 2
Submit Your Group Project Title & Members Through:

https://forms.gle/3QYwwyLfjbS8KC4B8

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