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Successful Entrepreneurship

Munish Thakur

Successful Entrepreneurship

Successful Entrepreneurs-Innovation
Steve Jobs-----Mac/Ipod/Iphone Sam Walton----Rural Retailing Karsanbhai Patel----Washing powder for masses Bill Gates----OS for masses Brin and Page----Free search Narayanmurthy----Pioneered IT and GDM Capt. Gopinath---Making average Indian fly Chetan Bhagat--- New Genre of Books

Successful Entrepreneurs-Innovation
Kurien----Brings White Revolution Kiran Mazumdar---Enzymes (Statins) Dr. VP Reddy----Hepatitis B Cyrus Poonawalla (Serum Institute)---Polio Dr. Govindappa Venkataswami, Dr. V---Arvind Eye Hospitals Baba Kalyani----Made Forging cost competitive Estee Lauder---Cosmetics for High end

Successful Entrepreneurs-Innovation
Kishore Biyani----Massified the retail in India V.G.Sidhartha (CCD)---Brought Coffee experience to Indian markets BV Nagesh----First mover in the organized retail space Shahnaz Hussain---Personal beauty solutions CK Ranganathan (Cavin Kare)---Sachets Sunil Bharti Mittal---First private player in the basic telephony and mobile space Howard Shultz---Coffee Experience Ray Kroc----Standardization

Innovation

New- Capabilities
Luck is a dividend of sweat, more you sweat the luckier you get

Steve Jobs-----Aesthetics, Arts, Calligraphy Sam Walton----Knowledge of retail and Rural area Karsanbhai Patel----Knowledge of chemicals Bill Gates----Knowledge of BASIC Brin and Page----Wrote search algorithms when Ph.D students Narayanmurthy----Knowledge of IT/US markets Capt. Gopinath---Knowledge of flying in Army Sidhartha Rao---new advertising media and content

New- Capabilities
Kurien----Knowledge of Cooperatives, Management Kiran Mazumdar---Knowledge of brewing(Statins) Dr. V P Reddy----Engineer with heavy focus on process Cyrus Poonawalla (Serum Institute)---Prior knowledg of Venoms Dr. Govindappa Venkataswami, Dr. V---Doctor again Baba Kalyani----Made Forging cost competitive- An Engineer from MIT Estee Lauder---Cosmetics for High end ---Knowledge of chemicals and retailing

New -Capabilities
Kishore Biyani----Son of Marwari, ran a retail shop V.G.Sidhartha (CCD)---Son of coffee farmer and hence knowledge of coffee BV Nagesh----Travelled frequently abroad Shahnaz Hussain---Family Tradition, Training CK Ranganathan (Cavin Kare)---Sachets, Plastic Business Sunil Bharti Mittal---Sold Wireless sets before market opened up Howard Shultz---Worked in a coffee chain Ray Kroc----Worked with fast food chain

Why are capabilities important?


Perceive opportunity Fight Competition Provide confidence Help attracting money Help attracting employees Give meaning to resources

What about drive?


As believed by many, it has aided entrepreneurship rather than being the cause of entrepreneurial success Aid: Augmenting capability, combining resources and impression management Walmart moved from rural to urban Infosys moving to consulting .Steve Jobs from computing to mobile

What about Motivation?


Resources

Dynamic Capability
Drive

Lesson1
Innovation

Innovation

Capability

Innovation

Innovation

Motivation
Steve Jobs-----College Drop Out Sam Walton----Rural Aspirations Karsanbhai Patel----HLL s elitist approach Brin and Page----Drop outs and need to prove Narayanmurthy----Lower middle class and need to prove Capt. Gopinath---Dream of flying and make everyone fly

Motivation
Dhirubhai---- Rich vs. Lower middle class Kiran Mazumdar---Could not get a job in India Cyrus Poonawalla (Serum Institute)---Appalled by high prices charged by MNCs Dr. Govindappa Venkataswami, Dr. V--Appalled by high prices and willingness to give back Estee Lauder---Always wanted to look more beautiful

Motivation
BV Nagesh----Always wanted to join army Shahnaz Hussain---Bored because of confinement CK Ranganathan (Cavin Kare)---Had been part of lower middle class himself and poor at studies, sibling rivalry Sunil Bharti Mittal---Was written off as a small time entrepreneur Howard Shultz---Working class background

Are dynamic capabilities enough for innovation? Answer: No Was it possible for Steve Jobs to create apple just because he had very good knowledge of aesthetics?

Organization- Innovation
Organization and Management of Resources
Human Physical Financial

Very difficult to get these resources Acquisitions of these resources depend on extent of development in the markets Development of markets would decide whether capability, resources or opportunity would become dominant factor for successful entrepreneurship

Resources
Human Financial Physical

Resources

Once you have capability, you know what to deliver and how to make best use of resources

Resource Organization
Karsanbhai
Human Resources: Family and Relatives Financial Resources: Local Banks Physical Resources: Friends and Acquaintances

Resource Organization
Arvind Eye
Human Resources: Village girls/Young Doctors Financial Resources: Acquaintances and Friends Physical Resources: Alliances and Acquaintances/Mkt

Sam Walton
Human Resource: Small Town Financial: Acquaintances and Friends and Local Banks Physical Resource: Better local resources utilization through Hub and Spoke Model

Organization
Capability

Organization

Resources

Lesson 2
Capabilities and Resources are brought together by entrepreneurs to create organization

Are capabilities and resources enough for entrepreneurial success? Answer: No

What about Opportunities?

Opportunities
Had Chetan Bhagat been successful without huge IIT/IIM aspiring population? Had Arvind Eye became successful if there were no people with no cataract Problems? Was it possible for Sunil Mittal to succeed without liberalization? Could Narayanmurthy have succeeded without going to US? Could GDM have succeeded in fluctuating currency markets? Could McD. have succeeded if both spouses were not working? Could Henry Heinz have succeeded without opening up of Railroads and Airways? Could Walmart have succeeded without increase in rural opportunities?

Capability and Opportunity

Capability

Opportunity

Lesson 3
Capabilities have to be compatible with opportunities

Convergence of Divergence (Trade Offs)


Capabilities should bring two domains together IT and Aesthetics in case of Steve Jobs IT and Agriculture in case of E-Choupal Process Engineering and Medicine in case of Arvind Eye Chemical and Knowledge of common man- Nirma Rural markets and retailing Engineering plus Cost Consciousness in case of Bharat Forge

Convergence of Diveregnce
Ray Kroc- Food and Standardization of Assembly Line Search Engine and Adword and Adsense Shahnaz Hussain: Ayurveda and Commercialization Capt Gopinath: Flying and Lower Middle Class Ranganath: Cosmetics and Lower Middle Class Shoppers Stop: Retailing Rising Upper Middle class in India

Four Concepts for Successful Entrepreneurship- And Conditions under which these factors would play a role

O R C M

Essence of Successful Entrepreneurship


Dynamic Capability: the essence of entrepreneurial success - Necessary Condition Resources and Capability complementarily: The essence of organization formation-Sufficient Conditions And Capability opportunity compatibility: Essence of sustainability- Sufficient Conditions Entrepreneurs are ultimate strategists as they maneuver around the alleys of opportunity structures with capabilities that they possess.

Value Delivered
Value Proposition Delivered

Supply Side- Value Configured

Demand side- value desired

Business Model

Capability and Resources

Opportunity

Organizations
Is innovation restricted to entrepreneurs? What about organizations? Can innovation be systematic- is a big question?

Sources of Innovation
Peter Drucker

More innovations
AMUL 3M Apple P&G Reebok Google E-Choupal

Innovations
TATA Nano TATA Swach Bharat Forge CavinKare Project Shakti Airtel Mopeds Maruti800

Organizations
Parry India Agriline- Core-Dect and Agriculture Microfinance Biocon- Statins Shantha Biotech- VP Reddy, Hepatitis Serum Institute Direcway Gyandoot MP Government Initiative Akshaya-Kerala government Initiative, BHOOMI: Karnatka Government Initiative

The Unexpected

1. The Unexpected-success
Mini Mill rejected by Steel Mills Antibiotics in Pharma Industry La Roche Laboratory instruments used for Industrial use Nylon discovery by DuPont IBM book-keeping to library-Mainframes Matsushita and TVs Viagra XLRI Satellite and possibly GMP program

The Unexpected Failure


Affordable Housing in India Honda s failure in US market

Reasons
Management too much focused on problems Inability to assess the problems Inability to look at beyond present customers

What to do?
What would it mean to us if we exploit it? Where could it lead us? What do we have to do to convert it into opportunity How do we go about exploiting opportunity?

Incongruities

2. Incongruities-

What is and what ought to be

Incongruities in economic Realities, perceptions and expectations


TATA Swach Steel making, But not in paper making Carnation Amul Washing Powder and Nirma Ocean Freighter and Containerization TV and rural space in Japan

Process Needs: Necessity is the mother of invention

3. Process Needs Examples


Photography- Glass plates replaced by cellulose films- Eastman Kodak Electricity Industry and Bulb by Edison AT&T, demographics and switchboards Linotype and newspaper Japan reflectors- I-wasa reflectors Cataract operation, ligament and enzymeAlcon Lab

3.Process Needs require five basic criteria


A Self Contained process One weak or missing link Clear definition of objective Specification for solution can be defined carefully Realization that there ought to be a right way.

4. Change in structure of Industry

4. Industry and Market Structures


Publishing industry changed after internet. Retail industry changed after malls. Automobile Industry- Model T, Petroleum Panic and entry of Japanese in 1970s, Volvo, BMW and Porsche, Hybrid Engine now. 2G to 3G Motorola lost its leadership, Nokia emerged. Airtel emergence after liberalization.

4. When is structure likely to change?


Rapid growth of Industry Industry doubling its volume Convergence of Technology that has been hitherto considered separate Regulatory changes If activities are changing

5. Demographics

Elderly

Children

5. Demographics
Mobile phones in India Motorbikes in the country Rural Population and Wal-mart Insurance for elderly Old-age homes Urbanization and Space Children Clothing and Nuclear Family Fast Food Educational Explosion/After school/Coaching Fashion Industry in India

6. Changes in Perception
Is glass half empty or half full?

6. Perception- Facts do not change but meanings do


Salesman in Africa Computers can be beautiful TVs sales and rural population Encyclopedia and Working Class Airlines industry in India- A way of looking at middle class- Air Deccan IT industry and employable youth in the country Hilltops and Rural Tourism/Ecotourism Time is very crucial in perceptions

7. New Knowledge

7. New Knowledge
Scientific Discoveries and inventions Most Talked about, least successful Very difficult

Coming together of different knowledges


Gasoline Engine and Aerodynamics- Airplane Hybrid vigor and genetics-Hybrid seeds Audion tube, binary theorem, design concept of punch card, program a feedback-computer Newspaper-editorial independence and mass circulations. Paper type-setting, mass literacy

New Knowledge
Nylon: organic chemistry, X ray diffraction, high vacuum technology and WW shortage Management: Economics, Mathematics, Technology, Sociology, Psychology, History etc. in the context of organizations