NPTEL

COURSE ON ENTREPRENEURSHIP
Perspectives of Business Strategy and Economic Development

WEEK 2 – LECTURES 6, 7, 8, 9 and 10

Entrepreneurial Discovery
Parts 3 and 4

Prof. C Bhaktavatsala Rao, Ph.D.

Ajit Singhvi Chair Professor

Department of Management Studies

Indian Institute of Technology Madras
 NPTEL

COURSE ON ENTREPRENEURSHIP

WEEK 2 – LECTURE 6
Course Module 2 (Part)

Entrepreneurial Discovery
Part-3

Prof. C Bhaktavatsala Rao, Ph.D.

Ajit Singhvi Chair Professor

Department of Management Studies

Indian Institute of Technology Madras
Entrepreneurial enigmas

▪ Is a successful start-up entrepreneur a successful entrepreneur for life?

▪ Should one have limits for claiming oneself to be an entrepreneur?

▪ Does transition to mainstream industrial status reduce entrepreneurial

passion?

▪ Is working as an entrepreneur exciting?

▪ Is it exciting to work with entrepreneurs?

▪ Do entrepreneurs create an expanding circle of entrepreneurship?

Is a successful start-up entrepreneur a successful entrepreneur for life?
Not necessarily!

▪ Somewhere along the path of growth some entrepreneurs become all too adventurous, all too
confident or simply all too obsolete in managing their firms

▪ If such firms continue to be entrepreneur driven, they are likely to face significant downturn

However, some entrepreneurs do things differently

▪ Microsoft, for example, failed to see the Smartphone, Tablet, Web, and Cloud revolutions. Sony
failed to see the Flat Panel revolution.

▪ Yet these firms continue to be resilient and growing because the entrepreneurs, in good time,
created institutions with core strengths, and which as firms could reinvent themselves in the
face of adversities.

▪ An entrepreneur who ceases to be a good manager or leader (or fails to recognise the need for
good management and leadership) often fails to transform his or her company into a
sustainable growth engine.

▪ An entrepreneur who turns into a good manager or leader (or professionalizes his firm with
such management/leadership) will build resilience and innovation capabilities in his or her firm
Should one have limits for claiming oneself to be an entrepreneur?

Probably yes!

▪ The moment an entrepreneurial venture achieves a profitable full year of operations,

logically, the main defining elements of an entrepreneur (no money, and no
organisation but only idea and passion) would have disappeared.

▪ The sooner an entrepreneur realizes that, and transforms himself into a role model of
balanced leadership, the better will it be for him and his company.

▪ This is because if he is a true entrepreneur, he will look for new challenges to

undertake another resource-strapped, boundary-less quest.

▪ Such a move is better for his company, because such a transformation substitutes the
singular entrepreneurial zeal of the founder with the diffusion of entrepreneurial
management across the company.
Does transition to mainstream industrial status reduce entrepreneurial passion?

In several cases, yes!

▪ Entrepreneurs who have been creators tend to become preservers once their firms reach
the mainstream industrial stage

▪ Many entrepreneurs tend to also become status-conscious once their firms achieve a level
of public reckoning and respect

▪ Business history teaches that entrepreneurs tend to turn cautious with age and become
risk-averse even as their firms turn bureaucratic with scale.

▪ It would appear that the golden period of entrepreneurship typically spans a period of 2
decades, commencing from the first entrepreneurial venture

▪ If such mellowed entrepreneurs transfer the mantle to co-founders or other professional

leaders in time, they would still retain their entrepreneurial passion and consider new
entrepreneurial launches

▪ Entrepreneurs who institutionalize entrepreneurial thinking in their firms and who move
into mentoring roles redefining their broader purpose would continue to contribute to
broader entrepreneurial ecosystem in the country
Is working as an entrepreneur exciting?

Undoubtedly, yes!

▪ Entrepreneurship is a self-chosen avocation, based on one’s attitude and personality that drive
entrepreneurship

▪ The typical entrepreneur likes to define his or her boundaries and rules of game. He or she typically
works with his or her mind, heart, and guts, simultaneously

▪ As a result, the entrepreneur is able to connect logically, emotionally, and inspirationally with his
team members. This leads to genuineness, ownership, and excitement in the team

Entrepreneurs enjoy significant “psychic benefits”

▪ People who are meant or ordained to be entrepreneurs believe that their own abilities (e.g., passion,
innovation, leadership, resourcefulness, pluck, hard work) or assets generated by them(e.g.,
products, intellectual property, business, industrial and social equity) differentiate them from other
professionals.

▪ The “psychic hangover” oftentimes lasts long after the entrepreneurial firm has reached its peak, and
the entrepreneur loses true excitement which could still come his or her way

Sustainable entrepreneurship optimizes emotional balance alongside risk-reward balance to support

lifetime entrepreneurship and genuine warmth of sustained socio-economic contribution
Is it exciting to work with entrepreneurs?

Largely, yes!

▪ Entrepreneurs tend to be inspirational and energetic individuals fizzing with ideas and optimism.
They believe in individuals, and let people experiment.

▪ This characteristic typically brings out the best in their teams, grooming them into becoming
entrepreneurs in their own right (or multi-faceted and entrepreneurial in thinking at the minimum)

Yet, in the strengths of entrepreneurs lie their own weaknesses

▪ Entrepreneurs fail often in drawing the line between being truly inspirational and acting excessively
rabble-rousing
▪ They have too many ideas to get excited about, and in trying to implement all the ideas they tend to
cross prudential norms of management
▪ Their relentless optimism sometimes strays into a dangerous territory which is characterised by
foolish risk-taking, a denial of reality, and persistence beyond all reasonableness
▪ Many successful entrepreneurs also fail to delegate
▪ Some entrepreneurs who get surrounded by incompetent individuals remind one of lessons in history
where successful emperors failed to retain their successes because when they overreached they had
no one around them to bring them to their senses

Entrepreneurs who leverage their strengths and de-leverage their weaknesses make working with them
truly stimulating and satisfying for their teams
Do entrepreneurs create an expanding circle of entrepreneurship?

They must!

▪ Entrepreneurs, including founders of start-up ventures, are the inventors, the makers,
and the builders of a nation’s economy.

▪ Economies need them for the momentum of growth, more so Indian economy targeting
to be in the global top league

▪ Wise entrepreneurs surround themselves with able team members to balance out their
imperfections

▪ Innovative and wise entrepreneurs translate their singular entrepreneurial competence

into organisational capability

Entrepreneurs who elevate team competencies and diffuse their entrepreneurial energy
make a lasting mark on the history
Entrepreneurial enigmas – importance of entrepreneurial discovery

▪ The entrepreneurial enigmas discussed earlier are natural concomitants of

entrepreneurial journey. However, the enigmas if they are appropriately addressed
can lead to more assured and beneficial entrepreneurial journey.

▪ Entrepreneurial discovery, that is discovering the nature and extent of

entrepreneurial personality in oneself, is an important requirement for making the
journey impactful

▪ Entrepreneurial discovery is a combination of:

- intrinsic entrepreneurial personality,
- acquired entrepreneurial experience, and
- organisational and environmental expectations

▪ Assessment of the intrinsic entrepreneurial personality can be achieved to a

reasonable degree with personality tests and assessments (discussed later).
However, acquired entrepreneurial experience can be assimilated and interpreted by
the entrepreneur with reflection and introspection.

▪ Similarly, responding to organisational and environmental expectations depends on

the openness of the entrepreneur
Addressing the entrepreneurial enigma 1 – Perpetual entrepreneurship

▪ An entrepreneur can be a perpetual entrepreneur when he or she avoids the pitfall

of running the scaled-up entrepreneurial firm as a bureaucratic firm

▪ To be an entrepreneur for perpetuity, one needs to:

- Professionalise oneself and the organisation,

- Build strengths and resilience in the organisation,
- Embed entrepreneurial thinking in the professional leaders, and
- Encourage non-linear growth through entrepreneurial product-market moves

▪ Just as a good leader is one who develops several leaders in the organisational
system, a good entrepreneur is one who develops entrepreneurs in the system

▪ This requires the entrepreneur to establish a board of advisors who can evaluate and
mentor the entrepreneur and professionals in the organisation

▪ Reflection and introspection on one’s own goals helps the entrepreneur to remain an
entrepreneur perpetually or perpetuate entrepreneurship in the organisation
Addressing the entrepreneurial enigma 2 – Setting the limits

▪ Just because an entrepreneur succeeds in setting up a business from scratch, he or she

cannot expect exponential growth on every scaled up base

▪ Industries scale up, mature and get transformed as a rule. As technological

development becomes disruptive in shorter frames of time, the established
entrepreneurial businesses would experience limits to growth.

▪ An entrepreneur would need to retain the elements of disruption to transform the

industry, and reset limits to growth. This is achieved by:

- Assimilating and innovating new technologies continuously,

- Innovating new business models periodically,
- Being on a constant lookout for the next megatrends, and
- Remaining a learning entrepreneur all the time

▪ Limits to growth are a natural resultant of consumption plateauing and base

technologies stagnating; a successful entrepreneur would be constantly primed by a
penchant for innovation.
Addressing the entrepreneurial enigma 3 – Managing mainstream transition

▪ Every successful start-up would grow to become a unicorn and a mainstream company in
the industry

▪ Transition to the mainstream and maturity to handle a questioning marketplace require

mainstream leadership skills. Google and Facebook had to put in place professional
leadership to steady the start-up ships navigating the choppy mainstream waters.

▪ An entrepreneur would need to understand that the mainstream organisation has to look
beyond the founders and founder-families. This is achieved by the entrepreneurs:

- Passing the mantle to professional CEOs,

- Transiting to non-executive board positions in the company,
- Taking on the role of building new entrepreneurial firms, and
- Retiring from active entrepreneurship formally

▪ Mainstream transitions in entrepreneurial firms occur seamlessly with the risk of founders
failing to notice the changes required of them. Entrepreneurs should undertake an
appraisal of their entrepreneurial leadership models every 3 years or at every significant
revenue quantum growth.
Addressing the entrepreneurial enigma 4 – Maintaining excitement

▪ The excitement that gets generated during the start-up and scale-up phases of an
entrepreneurial firm is hard to match in subsequent phases

▪ Adventurous and stressful moves in the late growth and maturity phases hardly resurrect
the original excitement of initial launch; the entrepreneurs need to retain the basic
causation of excitement (innovation, for example) being turned into reality

▪ An entrepreneur would need to appreciate the skills needed to maintain excitement at the
high initial levels as the firm grows. This is achieved by entrepreneurs:

- Relying on innovation to retain competitive advantage,

- Keeping inter-personal connectivity at high levels as in the beginning
- Providing opportunities to their team members to take up new challenges, and
- Creating forums that celebrate wins with excitement

▪ The pathway to sustainable excitement lies in diffusing the excitement that gets generated
at the product level in the initial years into excitement that permeates every role and
touches every employee
Addressing the entrepreneurial enigma 5 – Remaining Inspirational

▪ Entrepreneurial characteristics of the start-up founders inspire the co-founders and other
team members to become equally passionate, energetic, committed, and competent.

▪ Entrepreneurs must resist the temptation of living a larger-than-life, but not necessarily
true, image as entrepreneurs who achieve the impossible and who remain invincible.

▪ An entrepreneur would need to retain the humility and authenticity of the early
inspirational years even after tasting wild successes as scaled-up firms. This is achieved by
entrepreneurs:

- Delegating decision rights, responsibilities and accountabilities,

- Admitting own faults and mistakes and rectifying them
- Encouraging employee entrepreneurship, and
- Celebrating team ideas and successes

▪ An entrepreneur will remain the polestar of inspiration by demonstrating, as a way of life

at all times to the organisation, the same mix of entrepreneurial skills, and attributes that
brought the team together in the first place.
Addressing the entrepreneurial enigma 6 – Creating entrepreneurial
ecosystem

▪ As this course proposes, an entrepreneur contributes to a nation not merely through a

business; he or she instils a spirit of intellectual and development pursuit in the nation,
creating new products, creating new jobs and generating wealth.

▪ Entrepreneurs must not see themselves as only disruptors of ossified businesses; they
should come together as a community of change agents who usher in technological and
industrial transformations.

▪ Every entrepreneur must do his or her bit to establish and develop an entrepreneurial
ecosystem. This is achieved by entrepreneurs:

- Promoting confederations and institutes of entrepreneurship,

- Assuming leadership in public events,
- Leading advocacy efforts with governments to promote entrepreneurship, and
- Using their and enterprise wealth to create indigenous funds for entrepreneurship

▪ An entrepreneurial ecosystem gets created in the country when entrepreneurs see

themselves as transformative agents
Invisible passion and visible energy of an entrepreneur

▪ Entrepreneurs are driven by passion and energy to achieve goals of distinction

▪ Passion and energy shape entrepreneurs as phenomenal personalities

▪ Passion and energy have an interesting relationship, conceptually - if passion is the

spark, energy is the fuel for entrepreneurial ventures

▪ Passion dims without energy, which possibly explains why entrepreneurs, as they
mature, fail to translate their continued passion into sparkling ventures as they once
could do

▪ Passion is akin to motivation while energy is very much the motive power. It is possible
for individuals to be energetic but not necessarily passionate, and vice versa

▪ Passion sustains the commitment to aspiration but energy drives the progress towards
achievement

▪ The energy – passion equation of an entrepreneurial system drives the growth and
sustainability of an entrepreneurial organisation
Passion and Energy

The two major attributes (apart from the nine factor model) of an entrepreneur:

▪ Invisible Passion – the prime force to achieve goals

▪ Visible Energy – the prime force to drive action

Passion
- Is the spark
- Dims with lack of energy
- Serves as motivator
- Provides aspiration
Energy
- Is the fuel
- Drives results
- Serves as the motive power
- Leads to achievement

Entrepreneurs must reflect on their passion and energy levels in terms of the
interplay on their own personalities, and the impact on the firms they head
Bootcamps for Entrepreneurial Discovery - 1

▪ Bootcamp is typically a short, intense, and tough programme for beginners

▪ The enduring and gruelling training is typically targeted to prepare the participants in
certain basic skills

▪ Typically used in military settings, the concept can be an effective platform for any
domain, including say music and arts

▪ Several leading global institutes such as INSEAD, MIT, UC Berkley, Temple, and
Harvard offer educational Bootcamps for entrepreneurship.

▪ Intensive, interactive Bootcamps are designed to test one’s entrepreneurial appetite

and jumpstart the entrepreneurial adventure.

▪ Participants will learn the building blocks of what it takes to create their own venture
from the ground-up, including idea generation, team formation, business validation,
pitching to investors and more.

▪ Bootcamp is an invaluable first step in the entrepreneurial journey

Bootcamps for Entrepreneurial Discovery – 2

▪ Bootcamps provide the opportunity for the participants, especially interested

students and aspirant entrepreneurs, to discover the entrepreneur in them

▪ With the increasing trend of setting up start-ups during the student phase itself,
Bootcamps enable an experiential start-up oriented ecosystem

▪ India needs a strong academic Bootcamp system although there are several start-ups
such as Connect India, Z Nation Lab, TLABS, and Inc42 Media offering
entrepreneurship Bootcamps

▪ Active participation by founders of successful start-ups in the Bootcamps makes all

the difference to the students discovering their entrepreneurial streak and
developing their competency-set for start-ups

▪ Incubators such as IITM Research Park are well-positioned to have Bootcamp

adjuncts
 NPTEL
COURSE ON ENTREPRENEURSHIP
Perspectives of Business Strategy and Economic Development

WEEK 2 – LECTURE 7
Course Module 2 (Part)

Entrepreneurial Discovery
Part-4

Prof. C Bhaktavatsala Rao, Ph.D.

Ajit Singhvi Chair Professor

Department of Management Studies

Indian Institute of Technology Madras
Entrepreneurial Personality Assessments

▪ A number of psychometric tools exist to determine personality types; some of them

specifically test for entrepreneurial personality types

▪ While the more sophisticated tests such as Myer-Briggs Type Indicator (MBTI) are
licensed tests that have been administered on millions of individuals, several others
are available online (BDC, for example)

▪ There is no clear consensus that the psychometric tests reflect actual managerial
effectiveness; yet, the tests may serve as some guideposts to some extent

▪ Some of the online tests have simple frameworks that measure one’s motivations,
aptitudes and attitudes; tests like MBTI involve more granular yet more complex
frameworks.

▪ BDC and MBTI frameworks are presented, with due acknowledgement to the
respective companies and advice that the firms should be approached directly for
assessments
▪
 BDC entrepreneurial potential self-assessment
Scores
S.N. Factor Sub-factor
Minimum Average Maximum
Need for achievement/success 5 17 20

Power/ control appeal 5 17 20

1 Motivations Need for challenges/ambition 5 17 20

Self-sufficiency/freedom 4 12 16

Sub-Total 19 62 76

Perseverance/determination 4 14 16

Self-confidence/enthusiasm 4 13 16
Tolerance towards
2 Aptitudes 6 19 24
ambiguity/resistance to change
Creativity/Imagination 6 21 24

Sub-Total 20 67 80

Perception to act upon one’s destiny 6 20 24

3 Attitudes Action oriented 5 17 20

Sub-Total 11 37 44

ALL TOTAL 50 166 200

Source: https://www.bdc.ca/en/articles-tools/entrepreneur-toolkit/business-assessments/pages/entrepreneurial-
potential-self-assessment.aspx
Types of entrepreneurs in the Myers-Briggs Type Indicator (MBTI)

▪ A personality typology covering 16 personality types

▪ Each person rated on the 4 opposing pairs of personality traits

Personality types

▪ “Extraversion” or “Introversion”, with E and I respectively

▪ “Sensing” or “Intuition”, with S or N, respectively
▪ “Thinking” or “Feeling”, with T or F, respectively
▪ “Judging” or “Perceiving”, with J or P, respectively

▪ The most common unique personality types are ESFJ and ISFJ. The least common unique
personality types are INFJ, ENTJ

▪ The most successful types of entrepreneurs are ENTPs, ESTJs, ENTJs, INTJs and ISTJs

▪ All these entrepreneurs are thinkers - a trait highly advantageous for business

▪ They are more inclined to base decisions on evidence. They are also more capable of making
unpopular decisions

▪ Extraversion covers 60% of the most successful types of entrepreneurs, with Introversion not
being far behind
MBTI types of entrepreneurs

S.N. Code Label Characteristics

1 ENTP “the inventor” Create new products; challenge authority
Draw out order and structure from chaos
2 ESTJ “the supervisor” Amazing aptitude at performing mental tasks
Amongst the most successful entrepreneurs

Make great CFOs and legal counsel

3 ISTJ “the inspector”
Follow the rule-book diligently
The rarest personality type in MBTI
“highly effective
4 ENTJ Make for great CEOs
leader”
Think of options in face of obstacles
5 INTJ “mastermind” Same as the above, with introversion

Common characteristics of all the 5 types of entrepreneurs

▪ Follow their intuition, they take calculated and assured risks

▪ All these types of entrepreneurs are competitive and want to win
▪ They have great self-control and can focus on the end-game
▪ They seldom compromise and rarely prioritize feelings.

Source: https://www.hubgets.com/blog/5-most-successful-types-of-entrepreneurs-personality-testing/
Complex process model of entrepreneurship

NATIONAL CULTURE

PERSONALITY HUMAN CAPITAL ACTIVE PERFORMANCE ENVIRONMENT

Need for achievement Education and training Active goals and visions Lifecycle
Locus of control Experience Entrepreneurial orientation Dynamism
Self-efficiency Mental ability Active task strategy Hostility
Innovativeness Knowledge Active action planning Industry
Risk attitude Effectuation, innovation
Openness Active social strategy for
Conscientiousness networking
Extraversion Active feedback seeking
Agreeableness Active approach to mistakes
Neuroticism Active approach to learning

SUCCESS
Source: Kerr, S.P., W.R. Kerr & T. Xu, “Personality Traits of Entrepreneurs: A review of Recent Literature”, HBS
Working Paper 18-047, November 2017
Entrepreneurial potential

Entrepreneurship is the key to national growth and competitiveness:

▪ Nations are made wealthier and competitive by entrepreneurship

▪ New ventures are established; additional jobs created; economy made export-
competitive
▪ Sunrise sectors of advanced markets and growth sectors of emerging markets offer
great potential for entrepreneurial play
▪ Product innovation, process / manufacturing efficiency and delivery excellence are
achieved in combination

Full potential of entrepreneurship is yet to be tapped, on a global scale:

▪ Advanced countries have mature sectors but are able to spark entrepreneurship
more in sunrise sectors, rather than in core sectors
▪ Emerging markets have huge potential across the sectors but lack resources and risk-
taking ability for a broad-based play in core and sunrise sectors.

To achieve the full potential, three paradoxes of entrepreneurship must be

well-understood, and resolved
Entrepreneurial Paradox 1 - Entrepreneurship tends to get inversely
proportional to scale

▪ The bigger an entrepreneurial enterprise becomes, the lighter its entrepreneurial

passion becomes and the colder its entrepreneurial fire

▪ As entrepreneurs create industries (not merely firms!) out of their ventures they also
attract follow-on entrepreneurs and competitors

▪ As entrepreneurial firms grow organisationally, entrepreneurs tend to induct more

managers than entrepreneurs into their organisational eco-systems

▪ As a result, the larger entrepreneurial firms become more deliberative and

administrative in nature than intuitive and impulsive as they had been

▪ Start-up entrepreneurship has more of goal-directed execution and less of strategy-

driven execution while scale-intensive entrepreneur firms become more process-
dependent and less goal-inspired

▪ Retaining entrepreneurial culture in an entrepreneurial firm as it grows in scale is a

daunting challenge for the entrepreneur
Entrepreneurial Paradox 2 - Entrepreneurship is rarely linear

▪ A founder may set up a start-up with just Rs 10,000 and grow it to a formidable
Rs 10,000 million enterprise in 3 decades, as an example

▪ It does not, however, happen that he or she can continue to grow the firm to a
Rs 10,000 billion enterprise in another 3 decades

▪ Entrepreneurs become stymied by the growth boundaries of the industries and their
markets in which their firms operate

▪ Entrepreneurial organisations need to overcome the constraints of scale-sensitivity

and pursue out-of-the-box approaches to achieve continued market growth and
positional dominance for their firms

▪ Continued exponential growth would be near-impossible however passionate an

entrepreneur is and however competent his organisation is

▪ The entrepreneur would need to repeat the feat of disruptive innovation to create a
new firm, or reinvent the existing firm, and build a new industry around it
Entrepreneurial Paradox 3 - Entrepreneurship is highly
independent yet interdependent

• Entrepreneurship is not only an intensely independent and self-propelled

activity but is also a highly close-knit socio-economic endeavour amongst
people of common interests

• The importance of the family in supporting or suppressing entrepreneurial

aspirations cannot be overemphasised

• When family system has a neutral or negative stance, friends and well-
wishers emerge as the supportive system

• In more ways than one, the small team of founder, co-founders, and early
employees constitute a well-knit socio-economic system

• Understanding entrepreneurship in a social context leads to a more

transparent and supportive entrepreneurial ecosystem
Family and Entrepreneurship - 1

▪ Family is the most important social unit for any individual

▪ For an entrepreneur who spurns the security of salary for the independence of own
business, the support of family should mean a lot in the entrepreneurial discovery
and journey

▪ Most Indian families still operate as joint families even though the members may not
live under one roof any longer. The viewpoints of family members do count even in
the diffused family system.

▪ The family constitutes one of the most common and natural entrepreneurial teams
with significant intrinsic entrepreneurial potential; the fact that family businesses
have grown into large corporations and conglomerates supports the hypothesis.

▪ Social capital, spousal bonds, kinship relations, pooling of resources, division of

labour, common values, role modelling, family pride, shared trust, and several other
socio-economic characteristics of a family unit support execution of challenging
entrepreneurial journeys
Family and Entrepreneurship – 2

▪ A family entrepreneurial grouping works primarily based on possession of

complementary competencies and not just family ties

▪ Businesses tend to outgrow families, and there could be conflicts between family
goals and values vis-à-vis business goals and values

▪ Particularly in the case of start-ups, the family as an institution seems to have a

lower impact on the start-up entrepreneurial drive

▪ That said, friends, co-students, and well-wishers replace the family as an alternative
social system for start-up founders

▪ Individuals with entrepreneurial streak in their parents/family, whether by

profession (say value-based employee, or a self-employed doctor, lawyer or
accountant by practice) or by social factors (say rural or urban indigence and self-
help) tend to become start-up entrepreneurs more naturally

▪ The role of family and other social units as an influence on entrepreneurship is an

appropriate area of research in the Indian context
Sustaining entrepreneurial growth momentum

▪ Entrepreneurs who created rapid-growth organisations out of next-to-nothing

resources fail to replicate their entrepreneurial magic proportionately, either in
scale or scope, upon their success

▪ Apart from the reasons discussed so far, there could be other reasons as well:
- natural inclination to seek a better work-life balance
- satiation of capitalistic thrust that triggers entrepreneurial urge
- failure to get synergistic technology or business partners
- changing macro-economic environment
- desire to self-actualize in areas other than industrial/business development

▪ Emerging markets are ‘aspiration-driven’ and ‘potential-plenty’; founders in such

markets should see themselves as the instruments of national wealth creation - a
nation can become a superpower when entrepreneurial fervour is personally
maintained and/or is seamlessly institutionalized

▪ There exist two ways to achieve this - serial entrepreneurship and conglomerate
entrepreneurship
Serial entrepreneurship

▪ Entrepreneurs who are intent on retaining the individual charisma of

entrepreneurship have an option of becoming serial entrepreneurs

▪ Successful serial entrepreneurs bring up their firms to critical scale and leave them in
the hands of larger investors or partners, unlocking value and cashing out the stake,
generating larger corpuses for subsequent ventures

▪ This strategy is particularly relevant when their core entrepreneurial capabilities are
not industry or technology specific or when the industry itself is on a mode of
continuous expansion

▪ India has its examples of serial entrepreneurs: Jerry Rao, GR Gopinath, and the
entrepreneur-duo Meena and Krishnan

▪ Entrepreneurs starting up a basket of ventures in different fields, and having a series

of exits and entries based on the contextual potential for start-ups are akin to
investors following the portfolio approach in start-ups

▪ Serial entrepreneurship is not a major phenomenon in India as founders have as

much emotive attachment as growth passion for their firms
Conglomerate entrepreneurship

▪ Institutionalization of Indian entrepreneurial spirit is best evidenced by Tata, Birla,

Bajaj, Reliance, Hinduja, Adani, TVS, Murugappa, Apollo, Essar, Dhoot, and various
other individual or family entrepreneurial ventures which became major
conglomerates

▪ From a simple strategic business unit (SBU) approach at the firm level to a diversified
conglomerate group approach, many opportunities exist for fervent entrepreneurs to
co-opt other capable entrepreneurs to let them start up, and ramp up such SBUs and
firms as future conglomerates

▪ Institutionalization of the conglomerate entrepreneurship approach needs a breed

of professionals who are fired with entrepreneurial passion and energy as much as
the typical individual entrepreneurs are

▪ It is enigmatic as to why conglomerate entrepreneurship has been a preserve of

entrepreneurial families rather than individual entrepreneurs

▪ Entrepreneurs need to constantly rethink their entrepreneurial self-discovery model

to reconceptualise and reanalyse their entrepreneurial paradigms as the businesses
scale up
Social entrepreneurship

▪ Social entrepreneurship combines the motive of earning a business profit with that
of accomplishing social good. Social entrepreneurs are not necessarily driven by
profit motive; they are primarily inspired by a desire to bring in an improvement in
quality of life.

▪ Social entrepreneurs typically experience the struggles of poverty and indigent living;
as they acquire education and earning potential resolve to channel their
entrepreneurial capability to make an impact on social life.

▪ Microfinance, a model pioneered by Professor Muhammad Yunus of Bangladesh

through Grameen Bank in 1976 remains by far the most shining example of social
entrepreneurship. Professor Yunus combined the economic dimension of banking
enterprise with the social dimension of helping the poor stand on their feet.

▪ With social entrepreneurship gaining wide recognition, social entrepreneurs now

have the support of investment funds which seek to make social impact, and by
corporate social responsibility programmes of companies

▪ With the myriad development compulsions of India, social entrepreneurship has

great potential for entrepreneurially inclined individuals to pursue
Not-for-profit entrepreneurship

▪ Not-for-profit entrepreneurship is wholly based on the motto of service to society,

operating in areas of poverty alleviation, healthcare, sanitation, education, drinking
water, and similar areas of impact for the indigent sections of the poulation

▪ Not-for-profit entrepreneurship requires active donors and governmental support to

operate sustainably

▪ That said, entrepreneurs who succeeded with business entrepreneurship and

professionals who succeeded with corporate development can deploy their
principles of management to make the not-for-profit entrepreneurship efficient and
effective

▪ Corporate Social Responsibility programmes of companies are a great way to

combine the merits of pure social development and effective operational
management

▪ It is potentially possible for some not-for-profit entrepreneurial initiatives become

institutions in their own right and become social entrepreneurships, combining a
reasonable business viability and sustainability with social development
 NPTEL

COURSE ON ENTREPRENEURSHIP
Perspectives of Business Strategy and Economic Development

WEEK 2 – LECTURE 8

Course Module 3 (Part)

Ideation and Prototyping

Part-1

Prof. C Bhaktavatsala Rao, Ph.D.

Ajit Singhvi Chair Professor

Department of Management Studies

Indian Institute of Technology Madras
Subtle Differences Between Entrepreneurship and Start-up

Entrepreneurship Start-up
▪ Spots business opportunities and develops ▪ Spots product/service gaps and builds new
products/services businesses around novel products/services

▪ Mostly a follow-on activity, emphasising ▪ Invariably an innovative activity, aiming at

competitiveness over innovating ‘first-to-market’

▪ Goals are usually in terms of novel product

▪ Goals are usually in terms of scale,
development, proof-of-concept (PoC) and
revenue, profits etc.
valuation

▪ Desires to move to mainstream industrial/ ▪ Targets monetisation of product/business

business positioning assets as a perfectly legitimate aspiration

Both entrepreneurs and start-ups founders

take risks; but start-ups take significant
additional risks of innovation
Risks of Innovation

➢ Converting an experimental product idea into a technically feasible and commercially

viable product

➢ Developing an incomplete or sub-optimal product because of time and resource

constraints

➢ Taking a just developed product directly to the mass-market due to business

compulsions

➢ Obsolete technologies of vendors sub-optimising end-product development

➢ Knowledge gaps and aspiration gaps between product developer and component
developer

➢ Better competitive innovation overtaking the planned innovation

➢ Technology hypothesis failing at product level

➢ Product hypothesis failing at consumer level

➢ Demand hypothesis failing in the marketplace

Balanced Product Development for Optimal Business Impact

Anxiety or compulsion of
early launch, and for
quick business results

Rigours of stringent
product development,
requiring iterative
prototyping and perfection

Fine balance needed between robust product development and timely

business impact
Broad Stages of Product Development (A Recap)

Commercialisation

Validation

Testing

Prototyping

Ideation
Stages from Ideation to Commercialisation: Automobile Industry

Phase 2: Essentially field

optimisation
Commercial
release
Manufacturing
release

Final technical
optimisation

Field testing and

evaluation
Field prototyping

Technical redesign

Laboratory testing
and evaluation
Laboratory
prototyping
Studio
prototyping
Technical
design
Conceptual Phase 1: Essentially
ideation laboratory optimisation
Stages from Ideation to Commercialisation of an Active
Pharmaceutical Ingredient (API): Pharmaceutical industry (1 of 2)
Phase 2: Pilot scale-up of API

Commercial
release Plant inspection
and approval by DMF
the regulatory approval by
agency Drug Master File
the
(DMF) by the
regulatory Stability
company
agency study

Exhibit batch
in API plant

Laboratory
optimisation
Technical
evaluation
Pilot batch in
pilot plant

Testing and
evaluation Phase 1: Laboratory scale-up of API
Process and
analytical
development
Paper chemistry
Stages from Ideation to Commercialisation of a Formulated Medicine: Pharmaceutical Industry (2 of 2)

Phase 2: Pilot scale-up of

Formulation
Commercial release
Plant inspection
and approval by
ANDA
regulatory agency
approval
Abbreviated
by
New Drug
regulatory Stability
Application
agency study
(ANDA) by the
company Exhibit batch
in
formulation
plant
Laboratory
optimisation
Technical
evaluation

Pilot batch in
pilot plant

Testing and
evaluation
Formulation and
Phase 1: Laboratory scale-up of
analytical Formulation
development
Paper formulation
Stages from Ideas to Commercialisation: Software Industry

Phase 2 : Field optimisation

Final roll-out

Pilot roll-out

System and code

re-optimisation

Beta testing

System and code

optimisation

Alpha testing at
development center

Coding

System design Phase 1 : Development optimisation

Process study
Three Growth Engines in Product Development

A novel competitive
Theme functionality of the product or
service

Skills, capabilities and

competencies that form a value
Thread chain

Emotional bond and driving

Passion
force
Theme-Thread-Passion Cube of Start-up
Passion
Thread
Common threads of relationships
between co-founders and the
company and its stakeholders
An emotional attribute
that drives fulfillment of
an objective goal with
sacrifice
Theme
A matrix of core themes
supports development of a
novel product or service
platform
A Typical Thematic Grid Driving Demand-Supply Match

Customisation

Aggregation
Search

Digitisation
Analytics
Examples of Thematic Grid

Customised Cabs
Contemporary
Delivery
Packaging

Traditional Indian Beverages Graded Nutrition Aggregation

Performance Digital
Mentoring Ware-
housing Printing

Data Analytics Robotics Customer idea

Unlimited Monetisation
Choices Cloud
and hosting
Delivery
Options

Review and Rating Voice Application Customer Loyalty

Common Threads Adding Strength

Innovation
Innovation

Acumen
The
Acumen strength

of common
thread

Experience

Experience

Education

Education
New Threads Emerge over Time and Evolution

Delivered
Other deliverable Delivery Service Mediums
Product (Food,
products Mediums
for example)

Processed Two-wheelers Dedicated

Food for school
foods couriers
children
Trucks Generic
Food for elderly couriers
Groceries Drones

Food for the

entire family Fruits and
vegetables
Food for offices
Ready to eat
and factories
foods

Common threads can emerge by multiple combinations of delivery medium,

service medium, delivered product and other products that can be delivered
 NPTEL

COURSE ON ENTREPRENEURSHIP
Perspectives of Business Strategy and Economic Development

WEEK 2 – LECTURE 9

Course Module 3 (Part)

Ideation and Prototyping

Part-2

Prof. C Bhaktavatsala Rao, Ph.D.

Ajit Singhvi Chair Professor

Department of Management Studies

Indian Institute of Technology Madras
Design Thinking as an Interconnected Iterative Process

1.Empathise

2. Define
5.Test

Customer
at the Core

3. Ideate
4. Prototype

✓ Engages with the customer and observes, collects and records the needs
✓ Analyses and develops solutions
✓ Prototypes and tests the solution
Key Elements of Execution from Design Thinking

Design
Product
Portfolio Development

Customer
Quality Solution at Production
the Core

Promotion
Sales and
Marketing
Service

Design thinking
✓ Pivots all organisational functions and activities around the customer
✓ Helps the organisation avoid silo thinking
✓ Eliminates functional conflicts and transmission losses
Design thinking is…
Creative customisation applied to product, manufacturing and delivery processes
applied to fulfill more customer needs and/or provide more fulfilling user
experience

Shopping cart
Shopping basket

Suitcase Strolley

Processed food Ready to eat foods

Normal medicine bottle Child-proof medicine bottle

Impact of Design Thinking on Design, Manufacture and Delivery
From To
Design as a pure technical process Design as a consumer’s fulfillment
process
Components of design process All these, plus
▪ Setting specifications ▪ ‘Fit for purpose’ quality
▪ Specifying materials ▪ Targeted for ease of use
▪ Ensuring manufacturing tolerances ▪ Unboxing experience
▪ Assuring finishes ▪ Ease of service

Triggers for design process Triggers for design thinking process

▪ Market research ▪ Living through consumer experience
▪ Current product with empathy
▪ Performance ▪ Developing insight on issues
▪ New technology ▪ Inspired development of solutions
▪ Manufacturing compatibility ▪ Iterative development of the most
fulfilling solution

Building technical features in a product is a relatively simple process for a trained

engineer. Developing the right features that helps the users in their actual working or
living environment is what design thinking is about.
Emotional Drivers of Design Thinking
▪ Needs
Customer Experiences and Expectations ▪ Desires
▪ Demand-side ▪ Budgets
Factors ▪ Quality of
life
Diverse Ambiguous Dynamics

Need Empathy to Define Solution

Design
Thinking

Need Agility and Flexibility to be Empathetic to the

Customer

Product Process
Capacities
▪ Supply-side Technology Technology ▪ Laboratory
Factors ▪ Plant
▪ People
Company’s Capabilities
▪ Distribution
Design thinking can use available technologies and product intelligently

The simple “wheel” Shopping cart led to ease of

shopping for the customer and
drove ubiquitous
increased business for the mall
industrial and
consumer
revolutions! Strolley made travel with
heavy goods easy and
Together with rail track,
smooth
ushered in affordable mass
transportation

Stepping out into parks,

navigator sports, and travel
The common man’s
to schools became fun for
automobile
kids

Hybridised urban
transport
Balancing sport became
effortless for
individuals

Revolutionised social mobility of

multiple options (personalised,
family, group and mass
Design Thinking’s Importance in Entrepreneurship

▪ Entrepreneurial and start-up ventures need to be consistently customer-

focused

▪ Design thinking helps such firms stay committed to customer focus

▪ With greater digitisation, design thinking leads to multiple customer-

centric options

Bluetooth speaker Affordable water purifier smart wearable for health Telemedicine as digital bridge
becoming IoT Device for millions and wellness; for rural healthcare
From ‘Wheel’ to ‘Gear’, then to ‘Gear and Shaft’, and
then to Automobile were sequential ‘revolutions’!

Wheel Multiple Gears Gear Box Rear Axle

 Passion in Prototype Development
• Objective application of all entrepreneurial effort to achieve the goals and purpose

• Consistence, commitment and resilience to work with all internal and external stakeholders

Service
Support Payment
Mechanism

Delivery Case
Channels Investment
Other Glass Banks
Parts

Battery Dial
Smart
Watch
Regulatory
Packaging Agencies
Strap Hands

Operating Mother
system board

Multiple SKUs Multiple Countries

Value chain management, program management and project management requires diligent attention to
overcome conflicts and hurdles
Role of Empathy
▪ Empathy is the ability to see and understand things from the
user’s ‘see-feel-usage’ perspectives

▪ Empathy requires asking of multiple questions of the user, the

product and the provider

➢ From basic questions to elaborate needs

➢ Use the two 5-W constructs

➢ On-the-field solution development (outline possible solution

as feedback

▪ The empathy exercise requires understanding of three key

dimensions: desirability, feasibility and viability

Viability

Feasibility

Desirability
Differences Between Market Research and Empathetic Analysis

Market Research Empathetic Analysis

Product performance oriented Customer experience oriented

Usually research is based on multiple- Usually empathetic study is free-wheeling

choice questions for easy analysis supported by co-experiencing with the
customer

Reliance on Big Data Analytics and high Emphasis on deep drive and deep learning
volume-high throughput processing for true customer experiences

Usually outsourced to external vendors Usually conducted by in-house staff

Improvement remains as a key goal in Disruption emerges as a key takeaway in

market research empathetic analysis
3-D Approach to Empathy
High

Desirability for users

Low
High High

Viability for the firm

Technical feasibility

Low Low
From Empathy to Ideation
▪ A scaling approach can be used to translate the empathetic leanings
into ideation options

▪ Use a scale of ‘1’ - lowest and ‘10’ – highest to create envelopes to

ideate

Technical Business
User Desire Selection
Feasibility Viability

Easiest 1 10 10 
Lower-Mid 3 3 3 

Mid 5 5 5 

Higher-Mid 7 3 3 

Highest 9 1 1 ?

The objective of ideation is to combine the highest level of user desire with
the easiest paths to technical feasibility and business viability
Ideation
❑ The stage of converting user needs into workable solutions
❑ The conversion processes

From To

Customer needs Measurable specifications

Idealistic desires Realistic benchmarks

Rigid definition Dynamic prescriptions (in a band)

Applied creativity
Pure creativity

Segmented thinking System thinking and architecture

Ease of development and manufacture Ease of usage and service

Designing for product Designing for environment

Ideation requires significant brainstorming within the team as well as

with customers and vendors
The Stages of Ideation and Prototyping in the Entrepreneurial Journey
Validating product market hypothesis

Converting ‘right product’ to ‘right

business’
Lean manufacturing
Commercialisation
Scale-up with
stability
1 2 3 4 5 6 7 8 9 10

Effective prototyping
Creative ideation

Empathetic discovery of market need

Understanding of core competencies

Entrepreneurial self-discovery
What and How of Ideation
▪ Ideation combines conscious and unconscious mind; converts abstract to reality

▪ Ideation can be individualistic or group endeavour; the latter being more impactful

▪ Approaches to ideation (can be iterative)

➢ Observe, record, analyse, re-invent

➢ Exchange, challenge, improve, synergise

➢ Present, advocate, validate, synthesise

▪ Ideation is effective when it is:

➢ Cross-functional

➢ Customer-centric

➢ Experimental

▪ Creative Ideation is heart and soul of entrepreneurship

Competitive Advantage Through Ideation and Prototyping

Highest Lowest Cost

Quality

Lean Agile Delivery

Organisation

Sustainable
Diversified Competitive
Standardised Advantage
Molecular Product
Design Delivery

High
Low Batch
Throughput
Sizes

High Volume High Margin

 NPTEL

COURSE ON ENTREPRENEURSHIP
Perspectives of Business Strategy and Economic Development

WEEK 2 – LECTURE 10

Course Module 3 (Part)

Ideation and Prototyping

Part-3

Prof. C Bhaktavatsala Rao, Ph.D.

Ajit Singhvi Chair Professor

Department of Management Studies

Indian Institute of Technology Madras
Different Ideation Approaches Facsimile

Questioning the
Basics
Food Delivery
Smart Phones
Miniaturisation
and Role Reversal
Simplification

Ride Handling Aggregation Convergence of Smart Devices

Functionality

Ideation

Safety, Health Disintermediation E-Pharmacy

Bio-Pesticide and Environment

Divergence of
Ergonomics Functionality
New-Age Furniture Ethnic Boutiques

Digitalisation helps in all of the above approaches

Technology Drivers for Ideation(1 of 2)

Product From To

Miniaturisation
Old desktop New desktop

Form factor optimisation

Large bezel smartphone Bezel-less smartphone

Portability
Battery Power bank

Robotics

Reception desk Automated caller system

Technology Drivers for Ideation (2 of 2)
Product From To

Sensors
Chauffeur driven automobile Autonomous automobile

Digitisation

Analogue watch Digital watch

Touch
Physical keyboard To Virtual keyboard
Characteristics of Ideation: Improvement Vs Innovation
In Improvement
Existing product rendered better
Observation of product and usage
provides a vast canvas for ideating
Functional experts have a major
specialised role in ideation
Value is easily determined
Leverages existing ecosystem
In Innovation
New product developed
Observation of product and usage may
prevent ‘white space’ ideation
Lateral thinkers and outside experts can
come up with surprising innovations
Value remains uncertain
Typically requires a new industrial
ecosystem
Characteristics of Prototypes: Improvement Vs Innovation

Improvement Innovation

Some, not all components will be Typically, a holistic product

improved transformation happens

Prototype development is a short-term Prototype development is a long-term

process; say, 6 to 12 month process; say 12 to 36 months

Existing vendors and original equipment

Often time requires new entrants to
manufacturers(OEMs) can typically
disrupt the industry
deliver

Prototype performance can be easily Prototype performance requires a level

predicted of testing even before hypothesising
Technology Drivers of Prototypes
Factor From To

Development
IC Engine Electric Power pack

Manufacturing

Machining 3D Printing

Materials
Cobalt, Lithium-Ion
Lead

Assembly
Component-based assembly System-driven assembly
Common Prototyping Problems and Solutions (1of 2)

S.N. Issue Solutions

▪ Have a holistic prototype design
▪ Develop a native prototype rather than ‘mix and
1. Excessive development time match’ prototype
▪ Specify end-criteria and have quick evaluation
▪ Work with all vendors from day 1 collaboratively
▪ Avoid shortcuts in specifications to ensure user clarity
at initial or final stages
2. User confusion ▪ Product-naïve users may not give correct feedback
leading to many iterations
▪ Correct choice of users becomes important

▪ Correct forecast of prototype expense is critical

▪ Understanding that prototype components cost
anywhere between 2x to 20x of off-the-shelf
3. Prototype expense components helps proper budgeting
▪ Trying to fund prototype development through
volatile or unpredictable preorders to be avoided
▪ Prototype development should be part of R&D budget
 Common Prototyping Problems and Solutions (2 of 2)
SN. Issue Solutions

▪ A chain is as strong as its weakest link

▪ Focus on just the, ‘new-technology’ component
Excessive focus on one
4. should not be allowed to lead to neglected or
part
imbalanced development of other parts

▪ Adequate attention must be paid to ‘empathy’

Increased development and ‘ideation’ phases of prototype development
5.
type ▪ All possible product options and product-user
interfaces must be brought to the table

Prototypes that were years ahead and/or incompletely developed

Kodak Digital Camera 1975 Apple Newton Microsoft Spot N-Gage HP TouchPad
Reuters Koichi Kamoshida | Getty Images
Courtesy of the George Eastman MessagePad David Paul Morris | Bloomberg | Getty
Museum Getty Images Images
Mistakes in Empathising

▪ Viewing customer experience through design filters

▪ Asking incorrect questions and hence getting incorrect answers

▪ Inability to interpret words into feelings

▪ Ignorance of body language of customers

▪ Allowing biases to influence interpretation

▪ Inability to differentiate between core and peripheral insights

▪ Inadequate observation of engagement with, and listening to customers

▪ Understand codification of empathy-insights

Understanding, ‘empathy’ in its true sense and acquiring skills to be an

empathetic observer, engager, listener and analyser would overcome the
mistakes
Ideation Mistakes
▪ Lack of clear purpose or goal
▪ Inexperienced facilitation
▪ Idea-naïve team
▪ Excessive constraints
▪ Extreme randomness
▪ Bias and closed-mindedness
▪ Egoistic and hierarchical behaviour
▪ Lack of imagination
▪ Premature judgment
▪ Negativity and conservation
▪ Herd mentality
▪ Cynicism and skepticism
▪ Complete lack of boundaries
▪ Inadequate customer insights

Competence, openness, objectivity, team working and connectivity with

empathetic phase will help ideation process be a strong contributor to
entrepreneurship
Prototyping Mistakes
• Lack of holistic design

• Dependence on off-the-shelf components/technology

• Trying too many futuristic and obsolete technologies

• Obsession with optics/visual features

• Ultra-low or ultra-high fidelity in development

• Jumping too soon into prototyping without proper planning and budgeting

• Failure to form a ‘prototype ecosystem’

• Persisting with prototype despite adverse feedback

Customer centric designer with business acumen

supports development of successful prototypes
Inadequate Customer Insights
▪ Mixing up customer personas while travelling from ‘problem’ to ‘solution’

▪ Imprecise definition of customers and their needs

▪ Confusing between customer needs, wants, desires and aspirations

▪ Failure to understand customer need hierarchy

▪ Lack of brevity, focus and appropriateness in defining the problem and

solution

▪ Confusing company’s core technology with customer’s core need

Customer centric entrepreneurs can train and help the teams in gathering
the right customer insights
Prototype Ecosystem
A microcosm of the total industrial ecosystem

Evaluation Financing
and
Optimisation

Design

Quality
control and
Quality
Assurance Prototype

Materials and
Components

Test Systems
and Infra-
structure
Manufacture

Entrepreneurs must have a clear understanding of how an industrial

ecosystem operates for successful prototyping
Entrepreneurial Competitive Advantage

Operating at opposite ends of spectrum skillfully:

▪ Highest quality producer with lowest cost position

▪ Lean organisation with strong delivery capability
▪ Standardised design but with product variety
▪ High throughput efficiency even with low batch sizes
▪ High revenue without compromising profitability
▪ High market share with continued sustainability

Product, process and business model must, in totality, provide

competitive advantage for an entrepreneurial firm
Passion as a Driver of Entrepreneurship
Passion stereotypes
Low in passion High in passion
Followers Leaders
Professionals Entrepreneurs
Passion is

Hard work Diligence Focus Sacrifice

Passion is essential in all states of: Commercialisation

Validation
Testing and
Homologation
Prototyping
Ideation

Passion tends to be an intrinsic characteristic, but working with passionate leaders

could enhance a potential entrepreneur’s passion
Thank You!