Unit - Ii Entrepreneurial Idea and Innovation
Unit - Ii Entrepreneurial Idea and Innovation
Unit - Ii Entrepreneurial Idea and Innovation
and impact:
continuous to discontinuous
Drivers for innovation
Entrepreneurship, 2e
© Oxford University Press 2011
Sources of Business Ideas
Past work experience
Hobbies and interests
Strengths and abilities
Friends and family
Distribution channels
Travel
Books and magazines
Current trends
Research & development
Existing product or services
Government policies and priorities
Day dreaming
The web
Forced Relationship (try watch with headphone)
Brainstorming
Problems and complaints
Entrepreneurship, 2e
© Oxford University Press 2011
Methods of Generating Ideas
This involves a process including first generating the ideas and
then scrutinizing of the ideas.
Focus Groups: It consists of 6-12 members belonging to
various socio-economic background. Group is facilitated by a
moderator to have an open in-depth discussion. It can be in
either a directive or an non-directive manner.
Brainstorming: This technique was originally adopted by
Alex Osborn in 1938 in an American company for encouraging
creative thinking in groups of six to eight people. According to
Osborn, brainstorming means using the brain to storm the
problem. It involves 4 basic guidelines
(a) Generate as many ideas as possible.
(b) Be creative, freewheeling and imaginative.
(c) Build upon piggyback, extend, or combine earlier ideas.
(d) Withhold criticism of others' ideas.
There are two underlying principles; i) all ideas are encouraged
without criticism and evaluation, ii) Quantity over Quality
Methods of Generating Ideas
Problem Inventory analysis: It is slightly
different from focus group method that it not only
generates ideas but identify the problems.
This method should better be used for generating and
identifying new ideas for screening and evaluation.
Identification and Classification of Ideas
There are many ways to categorize different businesses
ideas. Let's categorize them into three general types:
Innovative, Commoditized, and Hybrid which is a mix of
the two.
Innovative Business Ideas
The great thing about these kinds of ideas is that they lead the way for
everyone else. They create whole new markets and for a short time get
a lead over other kinds of businesses. They tend to also have potential
to grow rapidly, and for that reason, are attractive investments for
venture capital and seed investors.
The problem with innovative businesses is that precisely because they
are new, and their products are also new, no one really knows what the
demand for them will be, and how well they will ultimately grow, or
whether they will not find market acceptance.
E.g. Apps, gadgets, smart phones, tablets, or other electronic devices.
Identification and Classification of Ideas
Commoditized Business Ideas
There are many types of businesses which have been around for
a long time that do not have to innovate, and can still be great
businesses. Just think about the different businesses in any city.
Every city needs restaurants, cleaners, dentists, mechanics,
people to fix homes, etc. The list goes on.
The core differences between these types of businesses and
innovative businesses are that these tend to be service-based
business with a local focus.
But the great thing is that there is no risk of demand. There is
definitively demand for these kinds of businesses as long as the
entrepreneur can provide the service with quality.
Identification and Classification of Ideas
Hybrid Businesses
Hybrid business ideas are the kinds of ideas which borrow a
little bit from both, the commoditized types of ideas and the
innovative. Here are some examples.
E.g Restaurants that serve fusion cuisine. They are traditional
types of businesses, but with a new twist on their main product
which is the food.
e.g. Websites to find school tutors. These kinds of sites take a
local service that has been around for a long time, and make it
easier to find tutors. Eg Jio & Facebook deal
As you see, no idea is perfect. You have to choose
between the extra costs and slow growth of traditional
types of businesses. Or you have to accept the higher
risk of failure for technology based businesses.
Individual Creativity: Role and Process
A thorough observation of the entrepreneurial process
shows that creative thinking is the must have skill of an
entrepreneur for the creation of new ideas. Creativity
allows a person to devise interesting processes, which
gives so many advantages to entrepreneurs.
It is of four types:
No Ability to do Ability to do
(B) (A)
(D) (C)
Information Technology
Organic Farming
Healthcare Sector
Ayurveda and traditional medicine
Social Venture
…….Students can add more
Challenges of new venture start-up
Money
Neglecting Marketing and Sales
Lack of Planning
Finding Right People
Scaling up
Competitors
Lack of Mentoring
Good Idea but poor Management
Time Management
Reason of Failure
INNOVATION
“It’s the introduction of novelty in a given market or industry, such as
new products, services, methods, sources of supply or organization.
Innovation doesn’t always mean creating something new: innovators
often take something that already exists, improves it, change it, make
it better and make it the best for their customers. Innovative ideas are
what will make a startup competition.
Change oriented leadership
Because the world is changing so rapidly change-oriented leadership
is essential. A change-oriented leader tries to promote exploration of
new and be hidden potential in people, things, or situations. Change-
oriented leaders work towards a better future, but they may not know
at the outset what that future is.
Technical skills
Communication skills:
Communication is a way to make interaction between people.
communication skills will assist entrepreneurs in sharing their
ideas and presenting them clearly .
Research and Development (R&D
research and development (R&D) include activities that companies
undertake to innovate and introduce new products and services. It
is often the first stage in the development process. The goal is
typically to take new products and services to market.
The R&D cycle often begins with ideation and theorizing, followed
by research and exploration and then into design and
development.
Management skills
Marketing skills:
Marketing is a vital process for entrepreneurs because no venture
can become established and grow without a customer market.
The process of acquiring and retaining customers is at the core of
marketing.
Finance:
Entrepreneurial finance is the study of value and resource
allocation, applied to new ventures. It addresses key questions
which challenge all entrepreneurs: how much money can and
should be raised; when should it be raised and from whom;
what is a reasonable valuation of the startup; and how should
funding contracts and exit decisions be structured.
Creating and Sustaining Enterprising Model
& Organizational Effectiveness
According to Merriam-Webster, effectiveness is
‘the power to produce a desired result’.
In an organizational context, however,
effectiveness is harder to define.
The effectiveness of an organization depends on its
mission & goals, internal efficiency, strategic
positioning, and many more factors.
The picture below shows three organizations. Which
organization would you qualify as more effective? Each of
them makes a tangible positive impact, either on their
shareholders, their users, their workers, or the
environment. This makes each of them effective – in
different ways.
Organizational Effectiveness Models
Organizational effectiveness
Effectiveness models
means…
Donation Based
Not received anything. Eg YOUCARING, FriendFund
Reward Based
Received free priority service. Eg Kickstarter & Indiegogo
Equity Based
Received share & Ownership in the Startup. Eg FUNDNEL,
SEEDRS, CAPBRIDGE
Debt Based
Received fixed incentive eg. FundedHere, CROWDO,
MoolahSense