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A new venture that creates a novel solution to a problem will be subject to uncertainty of outcome. An action in an uncertain market is sure to experience a risk of delay or loss. It is the entrepreneur’s task to reduce and manage all risks as much as possible. Attractive new ventures can be designed to grow as demand for their products increases. Furthermore, it is hoped that economies of scale will be experienced so that as demand and sales grow, the cost to produce a unit of product will decline. Additionally, it is desirable to have economies of scope so that costs per unit decline due to the spreading of fixed costs over a wide range of products. Many industries established on a network format exhibit network economies resulting in a reinforcing characteristic leading to the emergence of an industry standard. New ventures often seek a disruptive application that redefines and reshapes an industry.
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Advanced
Inhalation Research
Describes the early start-up phase and development of Advanced
Inhalation Research (AIR), a company engaged in the development
of a new drug-delivery technology. Focuses on the risks, the
steps taken to manage it, and the manner in which the company
was financed. Also presents acquisition offer.
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IDEO
Product Development
Describes IDEO, the world's leading product design firm, and
its innovation culture and process. Emphasis is placed on
the important role of prototyping and experimentation in general,
and in the design of the very successful Palm V handheld computer
in particular. A studio leader is asked by a business start-up
(Handspring) to develop a novel hand-held computer (Visor)
in less than half the time it took to develop the Palm V,
requiring several shortcuts to IDEO's legendary innovation
process. Focuses on: 1) prototyping and experimentation practices
at a leading product developer; 2) the role of playfulness,
discipline, and structure in innovation processes; and 3)
the managerial challenges of creating and managing an unusually
creative and innovative company culture. Includes color exhibits.
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Global
Wireless Ventures
Global Wireless Ventures examines the issue of entrepreneurial
context. Entrepreneurs must judiciously choose the best enviroment
for a home base to support their new venture, weighing not
only the location’s unique assets, liabilities and risks,
but also their own personal needs. |
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(DVD Section 6.1) Jerry Kaplan: Types of Risks
Jerry Kaplan talks about the different kinds of risks (market, financial and technical) that an entrepreneur faces when starting a company. The trick is to get the risk out as soon as possible. If your product is not obvious to the market you must go out into the market and explain it to them - that's an additional risk. Jerry shares the example of TiVo. |
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Vinod
Khosla: Taking Risks
Khosla believes that success comes from those who dare to
dream dreams, and are foolish enough to try. Khosla relates
this to his hang-bliding and sky-diving experiences. It is
important for entrepreneurs to stretch themselves, to try
the unreasonable and extraordinary. There is a level of foolishness
--a belief in yourself and naivete that frees entrepreneurs,
and allows them not to worry about constraints. |
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Carol
Bartz: Fail Fast Forward: Appreciating Risk
We have a slogan inside Autodesk called fail fast forward
to counter a fear of failure within an established organization.
Our goal was to have employees understand that failure is
very acceptable within an established organization--the key
is to identify it quickly, and move forward with lessons learned.
This is an attempt to break free those who are worried about
risk-taking. |
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David Kelley: Design is Risk-Taking
Kelley further describes his passion and what design means to him. He describes design as a process of having a combination of ideas in the head that need to be organized, while making a leap of faith about how it will be presented. He says, "For me, it's a totally enjoyable experience...There's a zen moment for me, where time goes by and you lose track of everything." He presents a few design projects, including Personal Sky and SpyFish...and weather-related inventions. |
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Jerry Kaplan: Five Biggest Mistakes that Entrepreneurs Make
Jerry Kaplan elaborates on the 5 biggest mistakes that entrepreneurs make: 1. Having unclear goals and an unclear mission. 2. Trying to prove that you are smart - very common in young entrepreneurs. 3. Greed - doing it for money, not raising enough money and not distributing the equity and widely as possible. 4. Hiring people that they like, rather than people that they need. "A company is not a social club." 5. Not knowing when to let go. "If you are a great start up CEO does not mean that you are a good CEO of a billion dollar company!" Have a realistic self assessment to know when to step aside. |
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Robert Austin: Why Managing Innovation is Like Theater
Austin suggests that a stage production and product development may have a lot in common. His key insights: whenever you have no blueprint to tell you in detail what to do, you must work artfully and a company with big stars will probably be less effective than an ordinarily talented bunch who have learned how to collaborate. |
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