ENTREPRENEURSHIP &

INNOVATION
May 2016
Summary

Professor:

Students:

Prof. Benjamin Huybrechts

Dobbelsteyn Thomas

HEC Management School,

University of Liege

Halleux Nathalie
Meeckers Maxime

b.huybrechts@ulg.ac.be
Pters Antoine
www.ces.ulg.ac.be
Wera Marie-Sophie

SESSION 1: INTRODUCTION

1. GOALS AND STRUCTURE OF THE COURSE

At the end of this course, students should be able to:

Locate and understand different forms of entrepreneurship and innovation

Understand the different steps of the entrepreneurial process and apply them to existing cases

Identify the paradoxes and challenges at different steps of the entrepreneurial process and connect them with
relevant theoretical lenses

Analyse the entrepreneurial eco-system surrounding them and identify opportunities for entrepreneurship
and innovation

CAN ENTREPRENEURSHIP BE TAUGHT?

YES: the concepts and theories, the cases of successes and failures, the ecosystem, the tools,

NO: the practice itself this must be experienced

This course: gives you an overview of the main concepts, features, steps, challenges and dilemmas of
entrepreneuring

=> For practical tools, methods, coaching, etc.: shop around, starting with Venture Lab @HEC

2. INTRODUCTION TO ENTREPRENEURSHIP AND INNOVATION

ENTREPRENEURSHIP
Among the numerous definitions:
- Shane & Venkatamaran, 1987; Shane, 2003:
An activity that involves the discovery, evaluation, and exploitation of opportunities to introduce new goods
and services, ways of organizing, markets, process, and raw materials through organizing efforts that previously
had not existed
- Howard Stevenson, HBS, 1983:
The pursuit of opportunity beyond the resources you currently control
ENTREPRENEURSHIP AS MULTIDIMENSIONAL CON CEPT
Various views:
Level of analysis see for ex. Babson College

Narrow view: focus on the entrepreneur or the created organization

Broad view: person, outcome, process, context

Driver, expected outcome:

Narrow view: making profit

Broad view: creating value

INNOVATION
Metaphor of the dots
Innovation as:

An Outcome: new products, product features, and production methods that result from innovation
o = What you get
A Process: organizational and social processes that produce innovation, such as individual creativity,
organizational structure, environmental context, and social and economic factors
o = How you get it

ENTREPRENEURSHIP VERSUS INNOVATION

Not all innovation is entrepreneurial. Not all entrepreneurial efforts are innovative.

3. ENTREPRENEURSHIP AT THE CROSSROADS OF SEVERAL TRADITIONS

A. ECONOMIC TRADITION
Central question: what is the role of entrepreneurship with regard to economic (un)certainty and growth?
1700s-1800s:

Cantillon: entrepreneurs compensate for discrepancies between supply and demand and in doing so
stabilize the economy
Entrepreneurs are those who plan, supervise, organize or own factors of production

1900s: uncertainty of the economy borne by entrepreneurs (Knight) or driven by them (Schumpeter)
Schumpeter, 1912: entrepreneurs are innovators who propose new (combinations of) things and pursue
opportunities in a way that disrupts yet develops the economy through waves of creative destruction:
1.
2.
3.
4.
5.

New products or product qualities

New production methods
New markets
New supply sources
New industry organization

B. SOCIAL-PSYCHOLOGICAL TRADITION

Locus of control: refers to how much individuals believe they can control events that affect them
Tolerance for ambiguity: ability to perceive ambiguity in information and behaviour in a neutral and open
way.
Self efficacy: the extent or strength of ones belief in ones own ability to complete tasks and reach goals

Abundant work in 1970s and 1980s, yet criticism regarding::

-

lack of inter-individual and contextual factors

wide range of traits suitable to anyone

=> e.g. Gartner 1988: Who is the entrepreneur? is the

wrong question

Social perspective complements focus on individuals through integrating notions of teams, groups,
networks, culture, movements, etc.

=> Session 7, Networks

C. EMERGENCE TRADITI ON

Central question here: how are new organizations created?

Connections with organization theory by documenting early phases and activities of organizational
start-up

Choices inherent in organizational creation phases: name-logo, legal form, capital, governance, staff,
architecture, business model, etc.
Idea

Opportunity

Project

Emerging
organization

Stable
organization

D. OPPORTUNITY TRADITION

Central question here: how are opportunities pursued?

Entrepreneurship defined as: discovery, evaluation and exploitation of opportunities to introduce

new goods and services, ways of organizing, markets, processes and raw materials (Shane, 2003, p.
4)

Opportunities emphasize innovation in the market as antecedent of entrepreneurship

Organizational creation as one possible outcome among others (e.g. intrapreneurship, programs)
focus on innovation process rather than outcome

4. MAPPING THE FOUR TRADITIONS

SESSION 2: WHO IS THE ENTREPRENEUR?

1. ENTREPRENEURIAL MINDSET
Not every idea is an opportunity. You need to analyse the idea, the project.
Entrepreneurial mindset refers to a specific state of mind that orientates human conduct towards
entrepreneurial activities and outcomes. Individuals with entrepreneurial mindsets are often drawn to
opportunities, innovation and new value creation. Characteristics include the ability to take calculated risks and
accept the realities of change and uncertainty.
[Financial Times, http://lexicon.ft.com/Term?term=entrepreneurial-mindset]

2. IN TO DEVELOP OPPORTUNITIES, YOU NEED:

An idea/ creativity
Creativity talent: ability to see things differently. Look at things from different approaches
Resources

Plan/vision/perspective

To take risks Arise when you start to ACT Uncertainty There is no real right or wrong

The entrepreneurs have to deal with uncertainty. They dont know where they are going, there are always
risks, but they cope with it.
We (Students) are not used to uncertainty. We are all the time taking risks but we are afraid of it.
If we never feel the experience of taking risk (do always what you are sure about) we are not ready to be
entrepreneur.

Self-confidence (out of our comfort)

Doing things that we are not common with. Why dont we go more often out of our usual life?
We love succeeding => fear of failure
Start a business => fear of failure => want to avoid it.
The best way to progress is to learn from our failure => Situation out of which we learn something.
Entrepreneurship = sth we can practice, learn everyone could do it!!!!

Credibility
When we collect feedback and go through the project

Perseverance
Attention! Different from stubborn

Passion

Education

3. DEUX TYPES OF ENTREPRENE URSHIP:

Entrepreneur lead by his ideas Opportunity entrepreneurship

Lead by cash needs: necessity entrepreneurship (poor countries)

Ability
to do
the task

4. BEING AN ENTREPRENEU R:

1.

Opportunity
Change the way in which you look at things and the things you look at will change. (Wayne
Dyer)

2.

Open minded / Actions

La logique mne les gens penser, l'motion quant elle, les incite l'action.
(Alain Weiss)

3.

Risks

4.

Passion VS Talent
Lessons from successful outliers

5.

Failure
Success is to go from failure to failure without losing your enthusiasm
Winston Churchill

6.

Chance

7.

Team and network

SESSION 3: EMERGENCE OF OPPORTUNITIES

CASE STUDY: STARBUCKS

4. Theory and
practice in play

1. Meet the
practise

Experimental testing
of the acquired
knowledge

concrete stories
about
entrepreneurship

3. Theories about
entrepreneurship
Presentation of new
theory and
theoretical
interpretation of the
story

2. The immediate
interpretation
Your immediate
interpretation of the
story

1. WHAT IS THE PROFILE OF AN ENTREPRENEUR LOOKS LIKE?

1.
2.
3.
4.
5.
6.
7.

Opportunity-oriented
Open-minded
Risk-taking
Passionate (not necessarily talented)
Learning from failures
Seizing chances
Working in team

2. HOW TO GENERATE NEW IDEAS?

1.

Alertness: Scan the environment and the common needs of everyday life (incl. yourselves). Techniques:
observation, publications, survey, focus groups, events with potential users
You have to be aware of your environment; your daily life is rich of opportunities. (Observation is
important what is annoying ?, What can be improved, how to make something easier, basically how
to solve the problems we encounter in our daily life) You can read articles that might show you
problems to tackle or even talk to people.
Focus group: you take a small group and have conversation and debates
Events with potential users: talk with them to understand their needs and to what extend they see your
business

2.

Diagnosis: Analyse existing solutions and why they do not adequately answer the identified need.
Ask yourself the good questions

3.

Proposition/Idea: Identify new ways of answering the need, new approaches that bring more value (ex.
brainstorming).
You might have a bunch of potential ideas, but you have to manage them
All the ideas have to be taken into account to be innovative
Exception: technological innovations, u might be able to stay in your office. This situation is quiet rare.

between idea and opportunity!

An idea can become an opportunity if the Idea is evaluated as being able to create value for others . (Plus
below)
Opportunity = idea but idea = not always opportunity
4.

Prospection: Project how the implementation of the most relevant idea might unfold and what obstacles it
should overcome to maximize value.

3. FROM IDEAS TO OPPORT UNITIES

Opportunity is an Idea that is evaluated as being able to create value for others
Criteria: opportunity is an idea that should be
-

Anchored: bound to product or service

Attractive: others are willing to pay for it (e. g. : Facebook sponsors, public transport government,
etc.)
Adapted to the environment (right time and place) The internet was created 70s-80s, but there was not
enough devices. Many innovation have a lot of potential but it might not be the right time, it might be
too early. (e.g. : sms, created a long time ago but not used for that long time in comparison with its
creation)
Applicable practically

4. IDEAS CAN BE EXPENSIVE, BUT NOT MATURE.

5. OPPORTUNITY EMERGENCE

Planned or not: you might come across one opportunity and you were not searching one. (Example of
planned one: pharmaceutical lab that develop a new medicine)
Regular or one-shot scanning: (example : regular survey to try to better identifie the needs of the
consumers, study,)
Long-term process or flash :
Individual or collective (team, organization, network): most project are teamwork, this is really rare a
one team member entrepreneurial project.
Leading opportunity identifier to pursue it entrepreneurially or not: one person can do identifying the
opportunity than this opportunity can be shared or transferred to someone else.

Two possible chronologies:

Entrepreneurial intent
Opportunity identification

Search for opportunity

Entrepreneurial intent

Two types of waste:

Waste of opportunity = people that have identified an opportunity and do not take it.
Waste of intention = people that want to become an entrepreneur but do not have any entrepreneurial
opportunities.

=> The biggest waste is opportunity

Two possible failures:

Entrepreneurial intent 10%

No opportunity identified 7%

Waste of intention 3%

Second case is more common

Opportunity identification
23%

No entrepreneurial implementation
7%

Waste of opportunity 16%

Figures correspond to a case of Denmark (GEM figures)

EMERGENCE OF OPPORTUNITIES

1. CASE: STARBUCKS DESCRIBED IN BOOK ( PP. 45-48)

Narrated by CEO Howard Schultz in this video:
https://www.youtube.com/watch?v=LnA7n9qSB7E&list=PLdkTxSnHmcQsaEwHY9aftq096dRIHNKk1
2. PERCEPTION OF THE STORY - QUESTIONS:

What was the opportunity pursued by Howard Schultz?

Coffee was new, before it was instant coffee. Now it is roasted coffee, way better.
Take single commodity (coffee) and make it complex, more sophisticated and more appealing - they have
created loads of different taste, ways to drink it. They have widen the range of products served with or besides
coffee.
They created the culture : the way they organise the stores.
-

How did the opportunity emerge? Was it discovered or created?

He went to Italy, the culture to take time and appreciate a cup of coffee.
He saw the development of the Swedish company producing plastic cups, he understood and loved the way they
were working.
3. Theoretical perspectives on opportunity emergence:
-

Discovery: opportunities are all around us and wait to be discovered

Created: opportunities do not pre-exist but are created by entrepreneurs

OPPORTUNITY DISCOVERY

Opportunities exist regardless of entrepreneurial action

=> Why dont we all fall over opportunities?

Alertness as the ability to notice, without search, opportunities that have hitherto been
overlooked (Kirzner, 1979: 148)

Alertness depends on profiles of potential entrepreneurs:

Previous experience
Education (your studies, but also your family)
Information (you collect, attitudes, relatives experience)
Networks
Attitudes

=> the idea is that there is an opportunity waiting for you somewhere

OPPORTUNITY CREATION

Opportunities do not pre-exist ( theres nothing to discover ) but are created by entrepreneurs. You need
innovation thinking.

By means of innovative thinking and creative action embedded in interactions between people. For instance
in Starbucks case, you should talk with the coffee producers, coffee drinkers etc.

Not objective but subjective, constantly emerging, being realized, shaped and constructed through social
processes (Fletcher, 2003: 127). Many people might have found the same idea/opportunity as you did, so
you have to be humble and innovative to add value to it.

Emerging through action that moves entrepreneurs in new and unexpecte

d directions (Boutaiba, 2004: 24). Thanks to the interactions, you will have new and innovative thinking
to manage the project but it will be more risky.

DIFFERENT PROCESSES FOR DIFFERENT OPPORT UNITIES

Kirnznerian opportunities are most likely to be discovered

Schumpeterian opportunities are most likely to be created
Depends on moment of introduction

TYPES OF OPPORTUNITIES

Kirzner (1973): use of existing market information to identify gaps that are not filled, needs that are not
met (or not efficiently)
= Incremental Innovation (you will add small bit to it, for instance you create
to customers needs)

product or cups adapted

= Leads to market equilibrium

Examples?
Kirnznerian opportunities most likely to be discovered

Schumpeter (1934): new combinations of resources that break with the existing perceptions and ways
of doing things
= Radical Innovation : customers would not have expressed as a need

10

= Leads to market imbalance, disruption : because innovative and unexpected (Uber etc.)
Examples? Uber, Airbnb, Netflix
Schumpeterian opportunities most likely to be created

Discovery (// Kirzner)

Creation (// Schumpeter)

Opportunity character

Objectively given unit in

the environment

Dependent on the interactions

of the individual

Opportunity source

The individual who is

attentive towards existing
market information

The individual who creates by

means of his or her creativity

Opportunity status

Stable

Dynamic

Opportunity type

Kirznerian hole in the

market

Schumpeterian market
disruption

DISCOVERING OR CREATING OPPORTUNITIES

Kirznerian view: opportunities are objective and wait to be discovered by entrepreneurs who have
access to information and abilities to discover opportunities
Example: Smartphone

Schumpeterian view: opportunities are created by the action of entrepreneurs who creatively try out
new combinations without knowing the consequences of their actions
Example: eBay

The interesting thing is to justify why you locate this opportunity in this kind. This table is important!
o
o
o
o
o
o
o

Ryanair: created
Uber: created
Euro Tunnel: discovered
Percolator: discovered
Instant coffee: discovered
Nespresso: created
Starbucks: both

Be able to justify!

4. CONNECTING THEORY AND PRACTICE: WHAT ABOUT STARBUCKS?

-

Kirznerian view: opportunity to adapt the Italian coffee shop to the US market, existed independent of
Schultz Schultz was alert through information and experience

11

Schumpeterian view: opportunity emerging from creativity of Schultz and interactions with others,
rather than from market information no reported need of fine-roasted coffee and consumer
demand/market had to be created

=> Some opportunities best examined through the combination of the two approaches

Passion by founders at the origins of Starbucks, without which there was nothing to discover
Alertness of Schulz instrumental to make him see growth opportunities
Discovery and creation go hand in hand during the development of a new venture
Interactions with both the objective environment and the people with whom to co-create
opportunities

SESSION 4: OPPORTUNITY IDENTIFICATION AND VALIDATION [TOLGA

BAYRAK]

3 PROJECTS:

Laloba
Company sprl readytowear (sprl=sole trader)
Tops and tee shirt
Revolution design wear
Build a product that you can wear your colours with Pride
Custom clothing
Pull-rhto.be
OPPORTUNITY IDENTIDICATION

Having an idea = easiest part of being an entrepreneur

You have to try solve a problem

Solving a problem that is already solved but adding value to it
Which businesses are steady for a long time? What kind of technology can I bring in this
industry to make it more modern?
Lets assume we have a great idea, what are we doing now?

OPPORTUNITY VALIDATION

Introduction to ideas:
Ideas are worthless
So, whats the key? => EXECUTION = Team + product + timing
The same idea can bring different products
What constitute an idea? Anatomy of an idea?
Idea = Set of assumptions, we dont have tangible evidence but we think it will work
If we want to validate the idea, we have to validate assumptions

12

-Validated learning
-Getting the idea out of the building
-How do you validate assumptions?
-Great ideas succeed in the real world
-MVP = minimum viable product = the smallest thing (not a bad version of your product) that you
can product (for your product / your idea)
Ex: dropbox : he has the idea but couldnt build it , he made a video to explain ( = the smallest
things he could do , because he couldnt make the website , too complicated)
Strategizing on an idea
Then, after the assumptions and the MVP, strategies, you have to have a big vision, but to
start small! Establish a monopoly (as customer, our interest is business competition, as a
business you dont want to be in that position) target a market segment where the customers
will have the most value for your product and then you grow from there (continue using this
strategy; facebook do like that, thy start for their university , .)

Conclusion:
The 4 key takeaways (exam??)
1. Ideas are worthless. Execution is everything
2. An idea is a set of leaps of faith. You have to validate assumptions
3. You need to check it in the real world
4. You have to have a big vision but to start small, establish a monopoly and grow from there.

13

SESSION 4 (PART 2): EVALUATION OF OPPORTUNITIES [LECTURE]

DISCOVERING OR CREAT ING OPPORTUNITIES?

1. OPPORTUNITIES CRITERIA: OPPORTUNITY SHOULD BE

Idea that is evaluated as being able to create value for others

Criteria, opportunity should be:

Anchored: bound to product or service

Attractive: others are willing to pay for it
Adapted to the environment
Applicable practically

2. EVALUATION OF OPPORTUNITIES

Ideas should be able to create value for others. But how the idea should be evaluated? How do you
know that your idea will be attractive? What are we doing? How to convince founders, Is the idea
an economically viable option? Can it create value in the eyes of the market (customers, funders)? For
whom? To what extent?
= Does the idea represent an opportunity?
Bridge between emergence and organization of opportunities
Two approaches to evaluation:
-

A: Instrumental
B: Legitimacy

14

3. CHALLENGES OF EVALUATION

o UNCERTAINTY (= I expect I will sell more and more. Predictions regarding benefits and costs in
the long term)
o COMPLEXITY (= You dont know who are the competitors that will come? difficult to evaluate
interplay of various)
=> RISK
-

Only partially objectifiable

Dependent on entrepreneurs assessment

A. FIRST APPROACH: INSTRUMENTAL

Rational and analytical tools and guidelines to help entrepreneur assess whether the opportunity is
attractive or not
Decision should precede exploitation and be based on analysing:
-

The product or service

The market/industry (Ex. SWOT, Porters 5 forces)
The (future) organization
The financing

=> Elements that should be covered in the business plan

Small or large, local or global, new or existing organization, - how to assess the potential?
Dimensions of evaluation (Wickham, 2004):
Scale (size)
Scope (value delivery)
Span (duration)
VIQ Framework (Hindle, 2007): evaluating potential of product, market, industry, people and
money

L IMITS OF INSTRUMENTAL APPROACH :

Evaluation cannot always be based on ex-ante analytical tools enabling a true universal answer as
to whether the opportunity is worth pursuing or not
Why?

Entrepreneurs not necessarily analysts

Ideas not suited for testing
Lack of time or resources
Complexity and risk impossible to evaluate
Especially for very innovative ideas (Schumpeterian opportunities)

Alternative: legitimacy approach

15

B. LEGITIMACY APPROACH

Evaluation not separate and ex-ante but rather part of everyday entrepreneurial activity
Evaluation not by entrepreneur alone but rather through social interactions
Regular interactions with audiences : is the idea attractive to others? (How) can they be
convinced that the opportunity is worthy and deserves support?
=> Subjective assessment by audiences = Legitimacy
Regular feed-back // Lean Start-Up approach
Generalized perception or assumption that the action of the entrepreneur is appropriate and desirable
(Suchman, 1995)
Environment/audiences determine whether there is room for the entrepreneurial process
Explains why innovations with strong potential may be assessed negatively in a given period and
place
Examples: Electricity, train, car
Especially true for pioneers with very innovative ideas = liability of newness (Aldrich & Fiol 1994)
GAINING LEGITIMACY:

Steps to gain legitimacy (Johnson et al., 2006):

-

Innovation
Local experimentation and validation
Diffusion
General validation

Actions to gain legitimacy:

-

Showing benefits to stakeholders (= pragmatic legitimation)

Smart communication and marketing
Certification and labelling
Network membership
Endorsement (= associational legitimation)
Symbols: name, logo, etc.

16

INSTRUMENTAL OR LEGITIMACY APPROACH TO OPPORTUNITY EVALUATION?

SESSION 4 [THIRD PART]: WHAT DOES INNOVATION MEAN? (SIMON

POLEDRINI)

1: WHAT IS INNOVATION

INVENTION VS INNOVAT ION

Both are new knowledge but Invention is a new idea, discovery while innovation is the application of
such invention in a new product, processes, organization, or market. Innovation can be: New
products (ex: google glass, ..) = sth that is new in the market for the customers
When the new products are very very new, they need a new way to be produced.
1. New products
2. New processes (implies machinery used for new problem)
3. Not every time a link between them.
4. New organisations. (the way I organize my company in order to make new products)
5. New sources of supply (JIT philosophy)
6. New markets (ex : Ryanair: low costs fly. They give a new product, fly already exist but there
is new market, the low costs fly)
Strong link between all of these 5

17

RADICAL VS INCREMENT AL INNOVATION

Another important classification can be according how radical the changing is:
Radical innovation [completely new, I create something brand new]
Every time we have a completely new product in the market
Incremental innovation [Upgrading/improving sth already existing]
Example: From the very first television to the current one. It is a radical innovation in term of
technology; its started having colours. The service is the same but behind this fact, so much things
improved!
TECHNOLOGICAL VS NON TECHNOLOGICAL INNOV ATION:

Youtube, Google, Facebook, use technologies. But there are not companies that produce techno
innovation but produce services > Non technological Innovation
Techno innovation: Ex: camera, tv, tablets,
2: HOW CAN WE DEVELOP NEW INNOVATION?
Innovation can arise from many different sources
and the linkages between them:

Source of innovation:
Individuals:
-

Inventor
Innovator
Business man

Firms:
R&D refers to a range of activities that extend
from early exploration to specific commercial
implementations

Universities
-

Many universities encourage research that leads to useful innovations:

Science park
University spin-off

Government
-

Government can support innovation activities thanks two main ways:

Through national centre
Financing firms

Private non-profit
Many non-profit organizations do in-house R&D, fund R&D by others, or both

Collaborative networks

18

Collaborative Networks are clusters of firms that have a connection to a common technology

SESSION 5 [PART 1]: COPY SIM

Copy Sim specialized in Offset and Numeric Printing (95% of his customer are from Lige B2C and B2B
customers). Active since 2010 and specialized in Offset and Numeric printing. Local business: 95% of our
customers from Lige.
Objective: developing our activities in Belgium via a web shop (Netherlands, Luxembourg)

A. WHY THE PRINTING INDUSTRY?

When he was 16, he was passionate by printing. In his neighbourhood, there was only one shop printing. It was
expensive and not friendly.
At 16, he started his business by buying a machine of 2000.
Low risk means improvisation. (And no rational tools): at the beginning he didnt use any rational tools (Swot
financial/business plan)
Risk of failure was really low. He only bought one printing machine and became competitive with the only local
printing shop close to his house.
Investments made on needs.

B. HIGHER INVESTMENT S MEAN LESS IMPROVIS ATION

Turnover increases each year.
He had to buy a bigger machine, so he tried to take out a loan. The bank denied first.
So he could not improvise anymore, he had to use rational tools. His accountant helped him as well as Venture
Lab. Thanks to their help, he managed to make his business plan.
=> He could get the money from the bank.

C. THE ORGANISATION ITSELF

3 majors elements to define when you create the business:
1.
2.

The name: it has to make sense to the customers. (you have to understand the core business of the
company thanks to the name)
The structure: Sole trader (PP) or Private Limited company (SPRL)
a. He started as sole trader as the initial cash is really low. (When your risk is really low, begin
by creating a sole trader)
b. Problem: high benefit means high taxation [55% taxation]
i. Whereas private limited company: 31% taxation maximum
ii. Sole trader: the boss is not protected in case of bankruptcy
iii. Last year he changed structure as he invested a lot
iv. Not Public limited company (SA) because it has to be 2 owners minimum

19

c.

3.

If you have a limited risk, you have the ability to be alone (only owner of the company),
limited taxation, opportunity to work with bigger company which dont want to work with
Sole Trader -> Create a Private Limited Company
Strategy: Commercial & production point of view
a. U have to know in advance what you will pay at the end
b. The customer is aware about what they will actually pay
c. A machine that does not work cost u a lot, his utilisation rate is 90%
d. Safety stock high enough to compensate the lead time of suppliers

D. DIFFICULTIES AND DANGERS

Creation of company: hard to find cash
=> Hopefully he did not need
=> But when he needed cash, he struggled
-> Important to deliver historical figures
The law is really demanding in Belgium.
He had to pay 2000 to a lawyer to give a paper and get access to his private limited company.
Besides this, the tax office is really demanding.

Big danger: focused only on my business. You dont see the problems surroundings your business. You have to
have a global vision. Take into considerations remarks of customers. His advisor at Venture Lab is also helping
him a lot.

SESSION 5 [PART 2]: ORGANISATION OF OPPORTUNITIES

Anchored
Attracted
Adapted to the environment
Applicable practically

A. ORGANISATION OF OPPORTUNITIES

Once evaluation is successful: exploiting the opportunity through combination of people and resources =
i.e. creating an organization
Other possible options?
- Selling the opportunity
- Buying a franchise unit : if the product does already exist, by franchising you can differentiate
yourself besides creating tremendous value
- Creating a new unit within an organization: Intrapreneurship

=> Focus here on organizational creation as most common outcome

B. CASE OF COPYSIM

What were the organizational choices of Copysim?

20

The name of the company : has to represent the product .

The structure, he has changed it at one moment due to : improvisation.
He could not improvise anymore, he had to use rational tools. Therefore he had to change the structure of the
company.

How were the choices made, where did they come from?

How is his story different from others you know?

C. ORGANISATION

Copysim reasons:

1.
2.

Ability to be alone in the private limited company (public limited company)

The capital to put in the company
Legal framework
Sector: not the same kind of investment

Mostly visible: name and logo

Less visible
a. Organisational structure
b. Shareholder structure and governance
But also: informal dimensions, people, and interactions

=> Organization = formalized group of individuals who interact and mobilize resources to achieve a common
goal

Goal can be:

-

Economic (company)
Social (e.g. NGO but not only !)
Political (e.g. political party or worker union)
Combination of these (CSR, hybrid organizations such as social enterprises, academic spin-offs,
etc.)

21

Idea

Opportunity

Idea

Opportunity

Project

Organisation

Emerging organization

Stable organization

Not necessarily in that order

Fluid process - Not easy to determine when new organization emerges
Interplay of various tasks (see book p. 97)
Time and efforts depend on legal context (e.g. 2 procedures and 0.8% GNI in Australia VS 16
procedures and 323% GNI in Guinea)

Alternative vision
=> Lean Startup as Tolga said
Idea
Test

Test

Organizati
on

Product
Test

Storyboard of The Lean Startup Introduction

https://www.youtube.com/watch?v=jBlrLqsjIDw

Lean Startup summary by Eric Ries

22

 Main principles:
Entrepreneurs are everywhere (>< Hero approach )
Process can be managed:
Build-measure-learn
Improvement through regular feed-back loops
Innovation accounting

Why those differences?

Legal framework differences

Culture: US not a shame to go bankruptcy
Fear to fail

WHY SUCH SMALL SUCCESS RATE?

No start: Fear of failure (Belgium: 49%; US: 30%)

Problems with opportunity identification and value proposition
Business plan: overestimating revenues, underestimating costs
Overestimating stakeholder support:
- Interest from consumers (in the long term)
- Interest from financers
- Broader social support
- Growth and cash flow issues
Personal availability and risk aversion
Alternative plan for entrepreneur(s)!

SUCCESS CRITERIA
Success or failure depends on original goals differs according to each entrepreneur:
Short-term profitability or long-term survival?
Rapid growth or gradual development?
Life challenge or balance with family life?

Failure is not failure opportunity to learn for next successes

Fear of failure often stronger obstacle, and reason for failure or suicide, than objective conditions

23

ORGANISATION OF OPPORTUNITIES

Planning perspective: entrepreneur as architect who builds an organization in a rational, pre-determined

way

Organizing is planned, intentional and rational

Assumes entrepreneur has complete informations on context, goals, steps, consequences future is
predictable
Entrepreneur has adequate resource basis and seeks to best use them
Choice of optimal strategies to achieve desired goals with existing resources
Planning and action separate requires stable environment
Analogy: cooking based on recipe

Improvisation perspective: impossible to clearly define a goal that will remain stable over time and to
master the different parameters (consumers demand, competition, etc.)

=> numerous small steps to adapt to the environment that will ultimately result in a given organization

Environments are not predictable and stable, entrepreneurs lack information, resources are limited or
absent
Organizing too complex and unclear to predict appears along the way through action and trials &
errors
Entrepreneur acts based on resources and informations available at the moment = effectuation
(Sarasvathy, 2008)
=> What effects can I achieve with the resources at hand?

Open, interactive and experimental approach to organizing that leads to unexpected outcomes
Analogy: cooking based on available ingredients and infrastructure

24

Lean start up approach: first we think improvisation, but it is planned. But the output is not planned. So
we assume it is both as they are different steps to follow. Somewhere in between.

25

SESSION 7 (PART1) : 21.03.2016>> HONEY PATCH

HoneyPatch is a very complex product (about 200 chemical components). We had to work hard for getting
honey as a medical product meeting the standard of production because you cannot use the traditional way of
making honey. At the launch stage in Belgium, it was difficult to find key opinion/ leader to get the product into
hospitals (main goal), it is impossible to do it by ourselves.
Honey isnt recognized as a good medical product. So, we need to find what is very important, get feedbacks
from professionals (nurses, doctors) because we are responsible for security of the product. Moreover, we
should find the right labels thanks to experts (external audit: everything has to be checked).

We are a small company, so we dont have support of bigpharma. We do have an exclusive and unique
business, we cant compare what we are doing with others, so networking is essential in our case to attract
clients and set-up our business that is not selling traditional product.

Network, what for?

1.
2.
3.

4.

Prove with articles, evidence the benefits of the product.

Having a marketing support.
Having a scientific position: clients are not doctors, patients benefits have to be considered. Doctors
dont pay for the product. Given the fact that it is a pharmaceutical product, it is hard to evaluate
profit when talking to nurses/doctors, because they just recommend the product to the patient but
dont pay for it. The economic model is not validated by any other product, we are taking a lot of risks,
it is hard to establish a business plan when you have no comparison firm.
Our goal is to have smaller margins than competitors in order to get an affordable product (not
switching product once back home because of the price.

26

27

SESSION 7(PART2) : - 21.03.2016- NETWORKS

1. WHY ARE NETWORKS SO IMPORTANT IN ENTREPRENEURSHIP?
>Useful for getting legitimacy (honeypatch: for the product to be used in hospital).
>Used for getting information: while discussing with experts, you can realize you need more research for
developing your product
>Influencing ones and others decisions and actions: if satisfied, they could recommend using other
components to improve the product
>Legitimacy and resources: financial resources for instance people you can contact to invest, but resources can
also be different from material ones: a place to gather,
>Identity which is constructed through people you are surrounded by, people endorse an identity because they
share an idea.
2. WHAT IS A NETWORK?
It is composed of 3 elements:
> A node: represented by dots representing individuals.
>A tie: making the link between nodes, symbol of relationship.
> Network.
It does exist different types of network:
Ties

way of the information is flowing

Network

Strong close friends, people you

exchange a lot with. People you
trust, you can rely on: for instance,
2 brothers.
Unidirectional during the class,
students are listening to the
teacher.
Sparse No everyone has access to
the same information because the
network is scattered.
Existence of cliques A clique is a

sub-set of a network in which

the actors are more closely and
intensely tied to one another
than they are to other
members of the network

Weak someone your fairly know,

for instance a teacher vs a student.

Bidirectional discussion, when

both parts are invited to share
opinions.
Dense Almost everybody knows
everybody, the information will
flow more rapidly.
Existence of voids No relationship
with the network, just an
unconnected dot.

28

3. HOMOGENEITY VERSU S HETEROGENEITY

Here, we focus only on heterogeneous and homogeneous criteria. An entrepreneurial network should rather
be like:

Homogeneity

Heterogeneity

Relationship

Trust you share experience,

identity, values, people you are
likely to trust.
Resources Through trust, you
acquire some resources (strong
ties->>(financial)support)

Network

Trust/Identity forming a hint of

close groups, lot of sharing. You
feel as a group against the other,
you feel more powerful as a group
than individually.
Diffusion of information
Information flows faster

Strength of weak when wanting a

better job, you dont rely on your
friend, it is more efficient to rely
on people you fairly know because
they access different information:
new information, no redundancy.
Moreover if they access the same
information, they could become
competitors if they have the same
material resources.
Structural holes when a hole
appears between 2 parts of the
network. You get a competitive
advantage by being the bridging
network because you access 2
sources of information; you decide
which part you let go. You get
information from both sides of the
sub-networks, so you are more
likely to develop good ideas to be
valued by both parts.

4. IDEAL NETWORK
Ideally, the perfect entrepreneurial network should be like on this graph.

> First, it should be heterogeneous because you should access a lot of different information and be able to
compare arguments. Meeting various potentials customers is important in order to be innovative.
> Then, it becomes homogeneous (start-up stage). You want to trust your partner, to keep your idea inside the
organization and not to spread these around
>At the launch stage, the network becomes again heterogeneous. You have more and more people around to
grow up.
This graph is a view from a very rational and strategic perspective. In reality, it is less obvious to go clearly from
one style (heterogeneous/homogeneous) to another.

29

5. PARADOX: EMBEDDED VS RATIONAL.

Entrepreneurs are constrained by their network (other people
decisions), their history and by how they have been socialized
(education, school)
Social networks determine what you are doing, it is quite
deterministic for the entrepreneurial process.
6. CASE OF HONEYPATCH
How does the network impact the entrepreneurial process?
(embedded)
He contacted doctors,experts to get information and get certification he needed from European
Union, for getting legitimacy as well.
How and why do entrepreneurs develop their network?
Certification (faced with the same constraints)
Access to hospital environment
Develop a network to reach other people (-> patients).

7. WHAT ABOUT TEAMS, ARE THEY A KIND OF NETWORK?

Entrepreneurial teams can be seen as crystallized network. We can analyze teams through the lens of network.
(It could be interesting for your case)! 79.1% start-ups are founded by teams.

SESSION 8 : THE BUSINESS PLAN : 11 AVRIL

INTRODUCTION

There are two types of entrepreneurial approaches:

-

Causal: This represents a project with low uncertainty ( market research is done,
plan) we know exactly what we are doing ( ex : je veux cuisine un truc, je vais
chercher une recette sur internet, jachte les ingredients et je la cuisine )

30

This approach is about EXECUTION , this is about the MANAGER

There are no surprises, everything is known
Information is available and accurate
Everything goes as planned
Step-by-step guideline to develop a project

different means to work towards one single predetermined goal

-

Effectual: No information, the market is unknown, you have to search, experiment. (

ex avec la cuisine: on veut cuisiner quelque chose, on prend tous les ingredients du
frigo et on improvise)
High uncertainty
High risks
This approach is about CREATIVITY, this is about the ENTREPRENEUR

with given means, you look for different possible goals

So the two approaches are: is my business plan a management tool or a creativity curb?
STEPS TO DEVELOP A PROJECT
Identify a problem > Idea > Research > Business plan > Raise funds > Execute the project

31

THE CONTENT, CONTEXT AND PROCESS.

The three are connected and influence each other. Moreover, the need for a business plan
varies according to the degree of uncertainty on the actual idea and the context within
which it occurs.
In very simple and traditional small business where the uncertainty is low, the need is
limited
In innovative business, need of business plan is higher

WHAT INVESTORS WANT TO SEE?

-

A clear definition of the activity and market.

A clear explanation of why potential customers will need your products/services.
A demonstration of your capacities: Technical Commercial Managerial.
A clear implication and business ethic of entrepreneurs.
An attractive financial proposition.
AND FEW KEY NUMBERS (finance and marketing)

ITS FORMAT
About 40 pages + appendix
Few tables and figures
Nice presentation

It is a selling document !!!!!!

Not be too long
Be oriented toward the future
Avoid exaggerations
Clarify critical risk factors
Identify the target group
Be written professionally
Catch the readers attention and interest

ITS CONTENT
The Business Plan must be adapted to the opportunity the situations and the target
audience of the plan. The best description of these will vary of course ;)

32

 The situation concerning the opportunity will also has a great influence on how the
business plan should fit together.
Different audiences will have different requirements for the information in the
business plan.
Content of the business plan:
-

Executive summary
Context: Industry, market and products/services analysis
Opportunity presentation
Marketing mix
Planning and sales forecasts
R&D and production development
Team
Financial plan
Risks/contingencies analysis
Offer

THE EXECUTIVE SUMMARY

-

It is the foot in the door

To write last
About 2 to 4 pages
A strong, clear and convincing synthesis of the key aspects of your project
(OPPORTUNITYRESOURCES-TEAM)
Objective: TO CONVINCE THE POTENTIAL PARTNER TO READ MORE
At first, the venture capitalist will read the executive summary, if there are
interested in, they will read the business plan

INDUSTRY, MARKET AND PRODUCT ANALYSIS

Market :
- Growth
- Segments
- Needs
- Key success factors

Products/services:
- What are the strengths and weaknesses of exisiting product?
33

- What are the unsatisfied needs?

PROJECT PRESENTATION:
What is the project/product/service/concept?
What is the new product/service?
Where is the innovation?
Why is that innovation so important for the market?
Why does that innovation fits the window of opportunity?
How is the innovation so different from existing products/services?
MARKETING PLAN
Key operational features of the marketing-mix
- Products/services features (likely this has been presented in the project
presentation)
- Pricing
- Place (distribution)
- Promotion
Do you have a prove of concept? (customers)
MARKETING STRATEGY
Marketing segmentation
Competition analysis
Competitive positioning and benchmarking

THE 4 PS
Pricing:
- Elasticity
- EOS
- Learning effects
- Signaling effects
- Entry deterring price
- Take the money and run
- Likely reaction of competition

34

- Cost structure
- Product positioning,
Place:
- Structure of distribution
- Cost/margins
- Binding agreements (existing or possible)
- Alternatives
- Push vs. Pull strategy
- Relative strength and size
- Go direct?
- Product positioning,
Promotion:
- Cost/efficacy
- Pull vs. Push
- New product vs. New market
- Economies of scope
- Target Role of opinion leaders? Or Role of prescriptors?
- Product positioning
Product:
- Segment fit
- Selling proposition
- Options policy
- After sales services
- Guarantees
- Assistance
- COmpatibliity ,

PLANNING
Sales forcecasts and key drivers of sales
5 years perspectives (could be more for life science projects)
Key milestones in the development of the project
R&D PRODUCTION
-

Stage of development/mastering of the technology

Tests/prototypes

35

Implications of production
Investments
Human resources and organization
Cost structure

Partnerships strategy
Production vs sub-contracting (==> Core business definition)
IP
THE TEAM

What is the profile of

The entrepreneurs
Key teammates
Board members
External key advisors
How do you pay them?
Level of salary
Stock option plan
What is their current implication?
Full time
Part-time
Will join for sure
May join
To be found
RISK AND CONTINGENCIES ANALYSIS
What are the major risks?
What is their likelihood?
How to prevent them?
What are their possible consequences?
What are the contingency plans?
OFFER
What are you exactly looking for ?? Money ?

36

 This raise the issue of:

- Your objectives and ambitions
- Modes of financing
- Choice of partners
- Deal structuring
Negotiations
THE FINANCIAL PLAN
- Economic structure of the project
The gross margins and their likely evolution over time
Fixed and (semi-) variables costs
Accounting break-even (level and # of months)
Cash flow break-even de (level and number of months)
- Balance sheet and P&L forecasts
- Treasury plan
- Financing plan

Present the treasury statement on a quarterly basis

Do not underestimate the inertia of most start-up periods
Be specific about how you would control the necessary resources
Think bootstrapping
Start small and then grow ==> cfr. Key milestones of development

- The key financial questions a business plan must address:

* HOM MUCH money and WHEN do I need cash to stay with a positive cash flow?
* What type of financing do I need? Equity? Debts? Leasing?
* What is the potential return on equity of my project?
* What is the value of my project?

37

Le paradoxe expliqu dans le livre:

The business plan as a management tool > < The business plan as a creativity curb
1. As a management tool

Business plan see as means to manage and plan an organisations future.

Tool to exploit opportunities
The use of business plan has three main advantages:
o BP and planning process can be used to make decision making faster by
identifying missing info before the resources are tied up
o BP is a tool for managing supply and demand of resources in such a way as to
avoid bottlenecks
o BP is a way to identify the activities that must be initiated to achieve the
targets set within the timeframe
Entrepreneur familiar with the future assumptions
However, the persons who see the business plan as a management tool are aware
that this is just assumptions
They are aware the people can only act with bounded rationality

38

 BUT importance of planning !!!!!!!

Business plan as a creativity curb

BP has no positive impact on entrepreneurs performance

Some entrepreneurs doesnt use the planning approach but previous experience
They use the experience thay have in the pas to carry out the entrepreneurial
process

SESSION 9 (PART 1): 18.04.2016 >> PRESENTATION BIOGEN

Biogen was founded by a man in Switzerland.
7000 employees Its a very socially responsible company
MISSION
Through cutting-edge science and medicine, Biogen discovers, develops, and delivers to patients worldwide
innovative therapies for serious neurological, autoimmune and rare diseases (Celona, 2016)all of which
improve the lives of patients.
VISION
Through excellence in all that Biogen does, they will become the most effective and most admired company in
the biopharmaceutical industry, providing meaningful benefits for patients and exceptional value (Celona,
2016).

39

They want to control every process/ segment to maintain a level of quality promised to their clients. It is very
quality oriented.
Slide 10: In the US, they finally have health insurance thanks to Obama
Slide 11: Lot of countries make lot of investments in research and development.
TWO REAL THINGS THAT DISTINGUISH BIOGEN TO THEIR COMPETITORS:
Biogen brings therapies to market quickly, with particular strength in scale up and manufacturing
Biogen excels at creating productive and profitable partnerships that ensure and enhance global
market coverage for its products
BIOGENS BASIS OF COMPETITIVE ADVANTAGE
Biogen brings therapies to market quickly, with particular strength in scale up and manufacturing
Biogen excels at creating productive and profitable partnerships that ensure and enhance global
market coverage for its products

40

3 DIFFERENT WAYS TO GROW:

-

Joint venture

Internal grow

Acquisition

Slide 18: The opportunity that Biotech has in Cannabis is one of the most significant opportunities of this sector
INTERNAL GROWTH: Build New Capabilities to be successful in New Industries

Strategy: Build a strong talent acquisition culture

Practice: Identify target industries and companies to recruit from

ACQUISITION: Buy Technology & Talent

Strategy: Incorporating all talent in a cohesive and productive culture

Practice: Create an office of integration that assists in process of integrating newly acquired teams

JOINT VENTURE: Focus on Collaboration

Strategy: Create guiding principles for joint venture

Practice: Create a knowledge management system to capture learning from joint ventures

(Fin de la prsentation au slide 25)

SESSION 9 (PART 2): 18.04.2016 >> INTRAPRENEURSHIP

1. ENTREPRENEURSHIP: DEFINITIONS
Some interesting videos about intrapreneurship: entrepreneurship within your company, with your employees

Development of new entrepreneurial activities within an existing organization and with an

employment relationship = employees in existing organizations as springboard to identify/exploit new
opportunities

Other definitions: https://www.youtube.com/watch?v=VJhcfmgNI4o

Top-Down / Bottom-Up

Diverse (available to all employees) or focused on employees with greatest innovative potential

Twice as prevalent in high-income countries, thanks to economic prosperity and large organizations

Denmark = nearly half of the entrepreneurial activity

Very difficult to identify when the process of intrapreneurship begins.

41

2. BRANCHES IN INTRAPRENEURSHIP
Intrapreneurship can take very different forms:

Intrapreneurship with formation of new organizational unit-> related to a new organization

- Internal: new division (spin-in)
- External: new company (spin-out or spin-off)

Intrapreneurship aiming for innovation: e.g. new combinations of knowledge

Intrapreneurship aiming for strategic renewal: changing core competencies, resource uses and
competitive parameters

The 3 can be combined.

3. TYPES OF INNOVATION IN INTRAPRENEURSHIP

It can be radical or really incremental.

Incremental intrapreneurship:

Easily managed within existing structure

Little contribution to opening new horizons for the organization

Radical intrapreneurship:

Opportunity for clear differentiation and competitive advantage

Risk, complexity and challenge for organizational culture

4. BIOGEN WHY INTRAPRENEURSHIP?

Asking people from your company to innovate rather than asking external consultant can be better because its
less expensive and their knowledge of the company can help to be more effective. You dont begin from
scratch. Asking to your employees to innovate and to undertake make them motivate and implicated in the
company.
Why intrapreneurship? (Cliquez pour voir la vido)

5. DRIVERS FOR INTRAPRENEURSHIP

HOW CAN AN ORGANIZATION PROMOTE INTRAPRE NEURSHIP? WHAT ARE THE INGREDIENTS?
Through organizational characteristics:

Management support -> Support to intrapreneurial behavior, processes, and outputs

(welcome new and challenging opportunities). Employees need to feel the support from the
management.

Work discretion autonomy -> Autonomy in goals, planning and implementation

42

Rewards/reinforcement -> Reward and encouragement even when failure. Show them that
its in their interest to innovate, dont punish them if they do something wrong.

Time availability -> Long-term challenges rather than short-term deadlines

Flexibility -> Open approach to job description, work configuration

All these elements are not enough! Individual characteristics (quite the same that an entrepreneur need) are
also needed:

Risk-taking propensity -> Experiment, learn, escape routines

Desire for autonomy -> Work content not driven by authority

Need for achievement -> Seek to take initiative and perform

Goal orientation -> Get energy from challenges

Internal locus of control -> Be responsible for successes and failures

It is a challenge for employers to identify who are the employees who are willing to intrapreneur those who
dont specially want a fixed career with fixed and stable revenues
THE WHOLE CHALLENGE FOR AN ORGANIZATION IS TO FORECAST THESE TRENDS
(PRECIPITATING EVENTS):

Impetus to behave intrapreneurially when other conditions are met

For example:

New technologies

New processes, location,

New management or staff (ex. HR manager)

Consultant advice or imitation of other company

Inter-organizational collaboration or network

Merger or acquisition

Economic crisis

New opportunities brought by stakeholders

43

6. OBSTACLES

Lack of managerial support

Lack of incentives (If you dont have any incentives, dont expect your employees to undertake)
Evaluation and internal competition
Daily business activities and routines

Watch the video, it shows how to overcome the obstacles. To overcome obstacles: ex. of 3 step-method
Separate-Integrate-Adjust by ACE QUT: https://www.youtube.com/watch?v=7oqit-jY9Fk

7. DIFFERENCES BETWEEN THE TOP-DOWN & BOTTOM-UP INTRAPRENEURSHIP

We need to understand the differences between the top-down and bottom-up intrapreneurship.
TOP-DOWN INTRAPRENEURSHIP

Initiative taken by top management and translated throughout the layers of the company

Controlled process with close connection between managers, intrapreneurs and projects

Organizational characteristics more important than individual ones

Easy access to skills and resources

May limit creativity

BOTTOM-UP INTRAPRENE URSHIP

Result of employees initiative

Autonomy from management, loose connections, and possible conflict

Strategy shaped by intrapreneurial initiative

44

More difficult access to skills and resources

More creativity but risk of lack of support or conflict if management operates from top-down
perspective

FINDING A BALANCE BETWEEN THE 2 APPROACHES IS POSSIBLE => EX AMPLE: SAP

(VIDEO)

Avoid both exagerated control and free-rein

Ensure social acceptance, commitment and (some) control from managers

Example: Intrapreneurship Contest (case of SAP)

Research : Simon et al., 1999 propose three roles: (not very important)

Venture manager (runs the new project) someone to manage the project

Venture godparent (ensures resource provision and autonomy from parent company)

Venture ombudsperson (ensures fit with parent companys strategy and performance)

45

(Some informations about the exam at the end of the slides)

46