Entrepreneurship

Introduction
Entrepreneurship is the tendency of a person to organize a business of his own,
and run it in a profitable way. It is a form of social decision performed by economic
innovators, pursuing economic development in several fields.
The entrepreneur is an individual who organizes a new business by taking a
financial risk, represented by the capital requirements for launching a new startup
with no guarantees of success. An entrepreneur is a person with many qualities:
work ethic, confidence, autonomy, creativity, risk management, opportunism,
resiliance, vision Entrepreneurs can fail for management mistakes, lack of
experience, poor financial control, weak marketing, uncontrolled growth and other
reasons.
There are several entrepreneur types: innovating entrepreneur (aggressive in
experimentation of innovative products), imitative entrepreneur (does not come up
with innovative ideas, but imitates others instead), fabian entrepreneur (timid and
skeptical in adopting innovation), drone entrepreneur (conservative and orthodox,
not interested in innovation), pure entrepreneur (pursues the need of personal
satisfaction and does not care about profits), induced entrepreneur (became an
entrepreneur by external help).
The process of starting a new venture is embodied in the entrepreneurial process,
which involves more than the responsibilities of a manager in a typical management
position. Entrepreneurs must find, evaluate, and develop an opportunity by
overcoming forces that resist the creation of new ideas. This process is composed
by four steps: decide to become an entrepreneur, develop a successful business
idea, turn the idea into a company, and grow the company.

The ACRO model is used to focus on the attitudes, skills and behaviors needed to
enable young people to meet the needs of business. It stands for attitude (self
knowledge), creativity (innovation and problem solving), relationship (communication
and teamworking) and organization (decision making and risk management).

Virtues
There are six primary virtues that entrepreneurs need to have: prudence (ability to
effectively manage the balance of risk and reward when making decisions, and is the

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 virtue that enables the others), justice (desire to to what is right, and give people
what they deserve), fortitude (ability to face suffering without giving up),
temperance (ability to not allow one’s emotions to cloud their rational judgement),
serendipity (ability of turning a situation to your advantage, by looking for solutions
in fields that nobody looks into) and antifragility (ability to get stronger by shocks).

Product
A new product is anything, either a good, a place, a person or a service, offered to a
market for attention, acquisition or consumption that might satisfy a need or want.
Some products are sold to individual consumers, while others are sold to
organizations.

There are eight phases in product development: idea generation (brainstorm

ideas), idea screening (choose the best idea), idea clarification (test the idea),
marketing strategy (price, product, place, promotion), business strategy (competitive
position, business model), prototype generation (develop an initial version of the
product), prototype testing (test the prototype on the market), commercialization
(launch the product).

In terms of brainstorming, its goal is to expose the team to as many ideas as

possible - as the dangers of only having one idea is that you might get married to
something that does not work. There are two categories of brainstorming: lateral
brainstorming (does not follow a logical process and encourages experimentation)
and vertical brainstorming (follows a logical process and encourages structure).

Value proposition
A company’s vision is the long term goal expressed in terms of impact on society,
while its mission is a statement that clarifies how the company satisfies the needs of
its customers. The value proposition canvas, developed by Alexander
Osterwalder, is a tool that helps ensure that products are positioned in alignment
with what the customer values and needs. The ultimate goal is product-market fit. It
is composed by two sections, each with three components.

Customer profile, representing the customer.

Jobs, the objective customers want to reach.

Gains, the benefits customers obtain by achieving their jobs.

Pains, the obstacles that prevent customers from achieving their jobs.

Value proposition, representing what the company offers.

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 Product, which are the goods and services offered to customers.

Gain creators, how the product increases customer’s gains.

Pain relievers, how the product decreases customer’s pains.

Business model canvas

A business model describes the value that an organization wants to offer to its
customers in a structured and systematic way. The business model canvas was
developed by Osterwalder, and is a visual representation of either an existing or a
conceptual business model, and is used for strategic reasons. It is structured in nine
blocks, each representing a component of a business model.

Customer segments, representing the customer categories for which the

business model creates value ranked in terms of importance.

Value proposition, representing what value the business model delivers to the
customers, and which problems it is solving.

Channels, representing the way in which the company reaches and interacts
with its customer segments.

Customer relationships, representing what kind of relationship each customer

segment has with the company.

Resources, representing the key resources the company needs to possess in

order for the value proposition to be realized, both tangible and intangible.

Activities, representing the key activities and business processes the company
needs to excel at in order for the value proposition to be realized.

Partners, representing who the key partners and collaborators of the company
are, and how they contribute to helping the business model.

Revenue streams, representing for what value customers are willing to pay and
the preferred method of payment.

Cost structure, representing the list of the most important costs required to
mantain the business model.

Lean startup
Lean startup is a radical approach to launching innovative ideas and activities that
helps to identify a path to sustainable business, drastically reducing time and cost,
and consequently the possibility of failure. It proposes a continuous ideation-

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 verification-modification process, with a massive use of digital tools, aimed at
adapting the product step by step to customers’ needs and minimizing costs.

The goal is that any change that accellerates learning for the organization is a win. It
uses the strategy of validated learning, meaning to use feedback in order to figure
out what works and what does not. The minimum value product, or MVP, is the
smallest product or service that you can create and launch, with the goal of
generating feedback and learning.
The early adopters of the minimum value product will help improve it, and the
organization can either decide to persevere with the product if feedback is positive,
or pivot in a different direction if feedback is negative. Companies can pivot either by
zooming in (picking an element of the product customers liked and using it as the
entire product, disregarding the rest), or by zooming out (build an entirely new
product).

Gear up
Gear up is a method that helps entrepreneurs understands what components of a
business idea they should focus on. It guides the development of business
opportunities by creating a strategy that focuses on customer acquisition. The
method is composed by nine steps, divided in three sections, to be followed in order
to develop a plan of action of a business idea.

Identify your customers and how the idea solves their problems.

Identify your customer delight factor, the ‘wow’ factor.

Identify your customer acquisition strategy.

Build your business model.

Select your partners.

Study your competitive landscape.

Develop your global strategy for scaling up.

Select your team members.

Put your idea through a reality check.

Lean canvas
The lean canvas is a one page business plan for startup entrepreneurs, adapted
from Osterwalder’s business model canvas and designed to direct the focus of

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 entrepreneurs towards high risk and actionable factors related to their business. The
lean canvas is focused entirely on the startup process, and pursues the goal of
increasing the success rate and mitigating the risk of failure. There are nine
components in the lean canvas.

Problem, representing the problems that each customer segment is trying to

solve. This box contains the steop three high priority problems that your product
will attempt to solve.

Customer segments, representing the users that suffer the problems identified
in the previous box. You can’t have customer segments without problems and
vice versa.

Unique value proposition, representing the promise of value to be delivered to

customer segments. It’s what makes you different from competitors.

Solution, representing how your product solves the problem. Solutions are
developed through customer interviews and interactions.

Channels, representing the ways in which the startup is going to reach their
customer segments. Scale is not important - learning is.

Metrics, representing the performance indicators that will be used to monitor

success.

Unfair advantage, representing what competitive advantage the startup has,

and why it cannot be copied or bought by competitors.

Revenue streams, representing the sources of revenues, and cost structure,

representing the primary cost elements.

Startup canvas
The startup canvas integrates the business model canvas with the lean canvas,
bringing together elements that are missing in the two frameworks but fundamental
for the construction of a successful startup. The primary goal of the startup canvas is
to help the entrepreneur find the right way to launch the company as soon as
possible. It is composed by 12 blocks, divided in three sections or “circles”.

Inner circle, which focuses on the business idea.

Problem, representing the needs of the customers the startup tries to solve.

Customer development, focused on segments, channels and customer

relations.

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 Value proposition, reprenting how the product creates value.

Assumptions, representing the assumptions on which the idea is based.

Strategy circle, which focuses on the strategy.

Business model, representing how the startup creates value. A good

business model needs to be scalable, repeatable, sustainable.

Marketing, representing how the marketing mix of the startup looks, based
on pricing, communication, distribution and product.

Financial plan, representing the estimations of revenues, costs, profits,

payback period, scenario analysis and cashflows generated by the startup.

Intellectual property, representing the patents possessed by the startup to

defend their business models and build competitive advantage.

Implementation circle, which focuses on implementing the strategy.

Team, representing the people in the startup.

Operations, representing how the organization works.

Traction, representing the growth model of the startup.

Fund raising, representing the sources of capital.

Gamification
Gamification is the use of elements borrowed from game design in non-gaming
contexts. Gamification can be applied in different fields, such as ecommerce, loyalty
and engagement programs, as well as the internal processes of a company.
Implementing playful mechanics is one of the most effective methods to involve
people in any activity.

Users that engage in such mechanics no longer act as passive users, who solely
consume content, but become active users instead. By encouraging people to take
actions instead of simply consuming information, the message the company wants to
send can be linked to the action itself, which creates a stronger relation. For
example, if the user needs to throw a can in the basket to make a plant grow, the
message of a clean city is associated to the action of throwing a can.

Another advantage in having the user perform certain actions is to get feedback in
the form of data. This collection of data based on the actions performed within the
game allows you to catalogue users and understand what everyone’s tastes are,

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 allowing you to focus particularly on the target audience or trying to expand the
potential catchment area.

The strength of gamification is the ability to stimulate human insticts with the aim of
creating or satisfying human desires and needs. A gamified product provides goals
to achieve, levels at which to progress and compete with users, as well as earning
rewards.

The gamification model canvas shows the components of a gamified business

model.

Players, the users of the game.

Aesthetics, the emotional response evoked in the player.

Behaviors, the desired player actions.

Dynamics, the way in which aestethics and behaviors are achieved.

Mechanics, the rules of the game.

Components, the components of the game (missions, rewards, badges, etc)

Platforms, the platforms used to interact with the game.

Financials, the costs and revenues.

Business plan
A business plan is a formal written document that contains business goals, the
methods for achieving these goals, and the time frame within which these goals
need to be achieved. It also describes the nature of the business, provides
background information on the organization, its financial projections, and the
strategies it intends to implement to achieve the stated targets. In its entirety, this
document serves as a road map that provides direction to the business.

Customer development
Customer development is the portion of the Lean Startup methodology aimed at
understanding the problem. This requires first fully vetting the opportunity and
validating that the proposed solution will indeed meet customer needs and demand.
Customer development runs counter to typical product development processes that
begin with the ideal solution in mind and dive right into execution.
Following this process allows companies to understand the market needs and come
up with multiple potential solutions. From there, the process calls out the

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 assumptions behind the various hypotheses (operating under the assumption that
the company is starting with no facts prior to this exercise) and then validating those
assumptions. After delivering an MVP, begin continual reevaluation to ensure the
solution is optimized to deliver value and achieve the business’s goals.

There are four steps in customer development

Customer discovery harnesses the vision and creates a series of hypothetical

business models. Then, it creates a strategy to test and validate those
hypotheses with customers.

Customer validation examines the scalability and repeatability of the viable

hypotheses.

Customer creation creates/accesses the market by building demand and

awareness for the solution by activating sales channels.

Company building transforms the organization from the “startup” mentality to

an ongoing, execution-focused company.

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