Question

describe how concept of management is preceived in entrepreneurship

Answer 1

Entrepreneur and management are two opposite words.

Entrepreneurs look for new markets, new products and work with new ideas. Management on other hand is rigid, hierarchical, business oriented and mostly work on bureaucratic principles.

A new venture needs completely different perspective and style of management.

The books, and material

in market mostly deals with organizations and businesses which has attained certain size.

There are stories, how a small new venture turn out to be great success. But there is hardly any material, which talks about how to manage early stage ventures. Or a new venture which is in idea stage.

There is enough audio video content, about what steps needed to follow from idea to execution, to business.

But such tips or guidelines vary tremendously from company to company. Uber ‘s marketing strategy can not be completely copied by a grocery start up.

Entrepreneurial management is an evolving domain. It is mature version of management as a discipline.

This is exciting phase for management as a discipline.

New challenges, New market dynamics need to be entangled with old proven principles.

As entrepreneurship and start ups are about unproven and uncertain products and markets. Innovation is at the heart of entrepreneurship ,that is why it is equally important for start ups to manage

innovation.

It demands different kind of management skills and techniques.

Peter Drucker, did write about innovation and entrepreneurship in his seminal book in 1985.

Peter Thiel, in his book Zero to one focused successfully on business side of start ups and innovation.

Peter Drucker had said, Innovation has to deal more with economic aspects than technical aspects of product or service.

Entrepreneurial management is discipline that deals with ventures ,innovation, strategies which will take idea into market, and to make venture a successful business.

I did not address some obvious points which are not directly related to entrepreneurial management in Many ways, but crucial to new ventures, such as funding, equity sharing etc.

The major and primary aspect of entrepreneurship is to decide limitations. If limitations are not kept in mind,the new idea or venture is bound to fail sooner or later. There are numerous testimonies to this event.

1. First of all, it all starts with an idea. I must confine the discussion to Idea, and not how to get an idea. Once a person gets an idea, she immediately starts looking everywhere about the potential of that single idea.

How this idea can turn into a successful business enterprise. And how people will benefit tremendously from this idea. As in, How it will make world and society a better place to live in.

Well, even if this is true, it is in virtual world.

But taking idea into a product, A venture and then turn that venture into business enterprise, is altogether a different game from getting an idea.

It will be better if we discuss it with an example.

Suppose ,If one has a good idea, of an application that will show nearby shops and items available in those shops. This is something everyone needs. And suddenly, that guy starts seeing all people walking on roads as his potential customers.

Oh, This could turn out to be a big business enterprise.

Well, at this point one must stop for sometime.

2. Validation of Idea.

Let me again remind, we are dealing with entrepreneurial management, of which, these steps are important part.

As we have Vision, Mission,Goals and then Planning, Targets, Evaluation, Feedback etc.

Here we are trying to, not only establish stages but trying establish principles on which new ventures can rely.

So first principle, is to stop after getting an idea, and get into validation stage.

Validation is very difficult task. It is basically at the heart of innovation. Innovation is successful only in market, it can not be called successful in laboratory or in an incubator.

Validation has to be against certain concrete established parameters. The first one is about competency and capacity to deal with such idea.

1.Will this Idea be accepted in society and market ?

2.If so, will such product will generate revenue ?

3.If yes, How will product ( in this case application ) will generate revenue ? ( this is crucial question which must be answered at the idea stage itself )

4. Do we have enough competencies and resources to deal with such process ?

1. Will this idea be accepted in society and market ?

This question is not so important.

Steve Jobs once said, People Don't know what they want, unless you show it to them.

Now you can think of smartphone, Uber, Airbnb, ,, twitter, Space X, Tesla Motors etc.

Mostly, guys take this question as most important and, go on asking people what kind of product they would love to have.

But this is wrong approach. Innovation is done in such a way to create market for itself. As per peter drucker, there are only two, and two functions of any business enterprise, and those are marketing and innovation.

Marketing has deeper meaning than most of us perceive it.

So how too deal with Question ? There is one visionary in every organization, and she is bound to be a leader. Leader has to see the market ahead of the curve. And understand market dynamics. If you built a product for present problems, it will solve present problems , but it will also fetch serious competition.

So how do we solve this problem. How should one testify whether the product is fit for the market or not. Here, one should practically observe the market and behaviour of people, about certain category of products. It is also important, to understand the culture of market where firm intends to operate.

If this broad understanding gives sufficiently positive signals, then one can think of going ahead with idea. Asking people certain questions, is a good approach, but this will not validate the idea to the extent of business.

2. Will such product generate Revenue ?

The idea has to be converted into product or service and company. As we took example of an app ,which will aggregate information about products in local stores and will avail it to customers on locational basis.

If at all , such product comes to market, will people buy it ?

Lets have some brain storming about the same.

Yes, it will save alot of time. A particular product can be easily searched in an area. But it is questionable whether people would pay for such product, because where customers reside, they would be aware about area very well.

This will not prompt them to use product repetitively, so paying for such an app even $10 a year would be questionable. ( now we have addressed how part, that is next question, how will it generate revenue? ).

Retailers would always like to get maximum customers from wherever possible, retailers won't hesitate to pay $40-50 dollars for the yearly subscription to such an app. This is very much possible as retail is huge and wide spread market. And there is no app, or website through which such data can be fetched.

Even google won't be so effective on local basis.

But then why would customer download an app, which shows local information about which they are already aware, as they stay in certain area since long time. This aspect of business is making idea validation difficult.

Travellers, Frequent flyers are potential customers of this app. Because travellers don't shop in malls, they hang out and explore streets.

This segment can be targeted. Already travelling industry is booming, and such product will be very much complementary to travel aggregator apps.

I think , I have discussed up to required depth, as to how can one approach validation of an idea. There need to be a lot of features like multi lingual app, payment interface etc.

As of now we have answered 2nd and 3rd question.

Lets get into 4th.

4. Do we have enough competencies and resources to deal with such process ?

There likely to be not enough resources. To deal with such situation you need a good team or partners. Funding is also aspect of this stage. How to built a team ? This problem need to be solved at individual level, because making partners purely business basis is risky, when it comes to new ventures.

You need to look around and see trustworthy people who can be part of your cult. Little crazy, courageous and with certain skills.

Competency is very important. First of all , there has to be a clear and quality leadership. It decides alot of things in future.

And believe it or not, leadership is rare trait.

Once these questions are satisfactorily solved, one can move into building real venture.

Principle: Take time to validate idea, ensure resources will support innovation. This process may take months and even years. With time, Idea and approach can get refined. Keep writing your observations and keep evaluating them frequently.

3. Making Venture

The most important aspect of new venture is business plan and Business model.

Business plan talks broadly about product and how it will generate sustain revenue.

Business model is actually a model, according to which resources will be placed and will be utilized.

Technology is becoming common denominator, that is why, to beat competition and make impact on market, new venture need to have exceptional business model.

It will make venture highly efficient. All processes will be smooth and structured, so that it will have possibility of scaling rapidly.

Business model need to be built carefully over the months. This is because it will make venture's product highly valuable to society. At same time, it will beat competition successfully. Remember, there is always competition. Product need to be way ahead of others in features and quality. So that customer will have higher propensity to use products and services.

Principle: Business Model can beat competition. This is crucial for new ventures to have a strong business model. It is advisable to new ventures to study various models. The surprising part of innovation happens in business model than in Idea or technical development. Examples, Uber and Airbnb, these are innovative business models than just new idea or new product.

4. Marketing

Beating the competition and positioning company with help of strong business model is a compulsion.

Marketing remains an important aspect of venture as well as business enterprise. Marketing is at the heart of new products. As the products are unproven, it demands different marketing style. Marketing must carefully understand the demand of market.

As I pointed out earlier, Steve Jobs ,Customer don't know what they want , unless you show it to them.

A new product needs to be fit in the market and minds of people.

There had been so many patents for new toothbrush design, tyres, belts etc. But this never made a mark in market. Because all these inventions and innovations had insufficient marketing.

Principle : Assuming that the new product will be a great success is a faulty strategy.

Of course, the new product is solving some very crucial problem of society. But it demands marketing.

How to do marketing for new product with limited resources ?

New ventures try to scale so rapidly, that such massive expansion plans fails on all fronts. The strategy must be to make slow progress in limited market. For example, Amazon sold books in initial years. This made amazon leader in that segment, and slowly over the years it expanded capacities.

New ventures must try to become that famous shop on every street, which attracts alot for customers over the years.

This will allow new venture to have solid platform. This is something difficult in technology domain, because technology itself allows venture to scale on national and global scale from beginning.

In a way, technology is acting as a barrier in marketing strategy. Because in first place assumption is that product will be scaled at very large geographical level. Such strategy is faulty. Product/service must capture certain specific segment.

Principle: Technology is not always an advantage, it is a burden as well. It is important for new ventures to understand business and market side of technology.

Example, Whatsapp, It smoothly solved the problem of text communication, the interface allowed seamless chatting over the days, months ; such thing was not possible earlier. Apple's iPhone first had such interface, but as it worked on sms platform, that's why not scalable.

Moreover, Media and pictures was something that was missing in our chats, and whtsapp tactically captured this huge space. Even today whtsapp is not diversifying into other segments like , news alerts or horoscope or payments. Now they are thinking of launching payment interface. But one must note how slowly they are moving. Some new ventures suddenly jump to capture market and fail miserably.

Suppose we are launching Uber today, we must confine it to one city for few months and consistently improve performance in that particular city or area. then into adjoining city and so on.

Principle: Focus is more important for new ventures. Capture small market, make monopoly in smaller segment and market.

There are many strategies to practically approach customers, first is open advertisements in newspapers and social media, or targeting certain groups in society, such as college communities, resident welfare organizations etc. Remember Facebook was made for a small group of university students.

The best way is to endorse product in expo, events etc. Here people are more open to ideas and new products. Such mindset in first place allows them to understand product and use it. Otherwise in day to day lifestyle, people are rather opaque to new ideas and innovations, leisure time allows people to hunt for new ideas and try new things.

There are few points new ventures need to caution about.

1. Product/service must deliver quality, which must be higher than any of the existing products in same segment.

2. It must deliver quality consistently.

3. Product must be durable , if a service, it must be reliable.

4. Venture must be easily approachable.

Most of the times, after sales service is very poor which leads to breach of trust. At such points, New ventures must remain very conscious. Because even a single customer can ruin the venture. Yes, it is that serious.

Principle: Old principles of business are applicable to new ventures as well.

So it is always advisable to listen to old guys in market. Although, new ventures are aimed at competing with old businesses.

Focusing on minute details is very important. Because it slowly builds a brand in minds of people.

I discussed broad areas which are part of entrepreneurial management.

There are always many more micro issues which needs to be in place like office, marketing material, logo, slogan, colors used in interface,product etc.

All things must be better off than market standards. As we are trying a altogether a new method to solve a problem. People will certainly hesitate to try it. But People do try. And once the quality is assured, it will lead to mouth publicity and in turn a lot of customers.