Innovation and Entrepreneurship

™

innovation, entreprenurship and
smart business models

Prof. Dr. Sc. math. Dr. h.c.

Mark Harris
CEO and Founder
1
Adjunct Professor for Technology Entrepreneurship & Innovation

What is innovation ?

Innovation is an invention, paired with a process
and a market

Entrepreneurship

invention process market

© innoVaventures ™
2 All rights reserved

Entrepreneurship is:

A process
Not a person

About BIG companies that happen to be small
Not about small business

Important to BIG business


What is Entrepreneurship ?

„The pursuit of
opportunity beyond
the resources one
currently has under
control“. *

* Source: Professor Howard Stevenson


Entrepreneurship Bridges the Gap

Technology/
Entrepreneurship Value
Opportunity


The Entrepreneurial Process

Identify
• Need Opportunity
• Solution
• „Unfair Advantage‟

Acquire
• Technology rights
Resources
• People
• Money


Technology Entrepreneurship
The New Way Forwards EUR
Observations: Criteria US Europe Comparison Comment

• EU 2020 declaration highly Economies in same
focussed (#1 issue) on GDP (2010) 14.66 T$ 14.82 T$ Ballpark

innovation and Europe invents
entrepreneurship. Domestic Patents +65% more (actually
82000 135000
• Invention (ideas,patents ) (2009)
much more because no
SW patents in Europe,

is good, but
CII)

Europe only ~ 1/5th
commercialization is not. the VC
• Very low VC activity in EU VC activity (H1’2010) 12.4 B$ 2.6 B$
(1/5th US), huge equity
GAP % of population that US is 50% higher
• Attitude of consider 67% 45%
entrepreneurship and entrepreneurship

failure not being an option % of Population that US is 289% higher
13% 4.5%
a big hindering factor. become
entrepreneurs
• Need to catch-up on some US 40% higher
% of population that
20+ years of accept possible 75% 54%
entrepreneurship education failure in a startup
• Need to broaden where and Trying to catch up 20-
Entrepreneurship
how entrepreneurship is
25years of Education
1980’s Early 2000’s and attitude
Education since
taught
• Need to get EU success Programs in HE and

™
now starting in K12
rates (20%) close to US Breadth (# types) innoVaventures
© 8 1-2
(30%).

What is Technology Entrepreneurship ?
Cash
Flow

I II III IV

The technical The
Business Business
invention company
Creation Administration
t
The business
innovation

Derived: Prof. Jerry Engel UC Berkeley
Enhanced: Prof. Dr. Mark Harris

Needed: Technology Entrepreneurship Skills Management Skills (MBA etc)

So Technology Entrepreneurship is not only „What“, but also „When“ !!


The Professional Entrepreneur
Cash
Flow

I II III IV

The technical The
Business Business
invention company
Visioning the Future into the Present t
The business
innovation





The Professional Entrepreneur
Cash
Flow

I II III IV

The technical The
Business Business
invention company
Zone of Collaboration t
The business
innovation

Zone of Competition




The Importance of Teamwork
Entrepreneurship is a team sport


The Market
The Technology Lifecycle Adoptation Curve
%

Crossing
The Chasm
The Early
Market The Mainstream Source: The Four Steps to the Epiphany

Market Steven Gary Blank

The
Chasm
t


The Innovators Dilemma (Intro)
The Impact of Sustaining and Disruptive Technological Change
P
Product Performance

Performance
Demanded At the high
end of the market

Performance
Demanded At the low
Disruptive end of the market
Technological
innovation

t
Source: The Innovator„s Dilemma
Clayton M. Christensen

13

Strategy: Using Small Markets as “Beach Heads”

“Sustaining” Technological Innovation
Product Performance

Big Companies Need Third Technology
A Continuous Process

Second Technology

First Technology

Time or Engineering Effort

Source: Clayton M. Christensen, “Exploring the Limits of the Technology S-Curve. Part I: Component Technologies,” Production and Operations
Management 1, no. 4 (Fall 1992): 340. Reprinted by permission.

14

Strategy: Using Small Markets as “Beach Heads”
Application (Market) “A” Application (Market) “B”

Performance as Defined in Application “B”
Performance as Defined in Application “A”

Disruptive Technology
takes over the larger established
market!
New
entrant Technology 2
dominates

Older BIG
company playing
Disruptive Technology
catch-up
• new market niche
• small markets
Technology 1 • small companies

Time or Engineering Effort
Source: Clayton M. Christensen, “Exploring the Limits of the Technology S-Curve. Part I: Component Technologies,” Production and Operations
Management 1, no. 4 (Fall 1992): 361. Reprinted by permission.

15

New Venture Funding Stream

$ Sales
$80

IPO
$40
Cash
Flow
$20

$8
$1
time

Venture Capital Rounds


Structuring the Financing
The “Why” of multiple rounds

Value is a Step Function:

Value Technology/Product

Marketing
Management

Time

Adding Technology Value

Market Introduction
Regulatory Approvals
Value Manufacturing Prototype
Working Prototype
Patent Application
Feasibility or Prototype
Concept
Time

Adding Market Value

Backlog
Satisfied Customers
Market Launch
Beta Test
Value
Technical Reports Published
Surveys/Concept Testing
Qualitative Research (Focus Groups)
Market Analysis - Published Data
Time


Adding Management Value

Human Resources Mgr

Chief Financial Officer

Value Sales Manager
Manufacturing Vice President
Controller
Marketing Vice President
President
Chief Technologist

Time

Smart business models ?

• How to become the next Facebook, Google, etc. ???

• If this was a pure science and any of us new the exact
formula, we wouldn‟t be here…

• Much of that is a function also of the right product at the
right time and (besides greatness) tons of luck….

• Larry and Sergey first failed with their strategy to offer a new
search algorithm to Yahoo…. (I wonder if that Yahoo
employee who turned it down is still there ??)

• Or look at the Intel founders Robert Noyce and Gordon
Moore, they left Fairchild to follow their passion !!


Intel (1968)

• 1 page
• 3 paragraphs
• 9 sentences
So the • 165 words
discipline of • - 3 errors -
business plans
has changed
somewhat
over the years
too 

Today ~50+B$ revenue
~65% pre-tax profits

Smart business models ?

• Follow your passion !! Being passionate about your
new business will help you survive 
• Create your new venture as “global born”.
Focussing initially on a local market is fine, but
don‟t loose sight of the global opportunity
• Know and understand your customers !!!
• Know and understand your market !!!
• Focus on YEAR ONE !! Get that right.
• Have several exit strategies already when you
start.
• Work with global enablers like ™


A short excursion in Math:
Question: What is the shortest distance between points A and B ?

Sure, a straight line: A B
as long as we are in two dimensional space....

in three dimensional space, for example on a globe it is the
GREAT Circle (ARC)

24
Slide:

So what is the shortest path for a new venture ?
The Path (Trail) to New Ventures
Start(up)

loop
forever

Gazelle

Slide:

™enables you to cross the Chasm !!

new ventures left on their own
to bridge this gap

Phase 1
entrepreneurship
education, Phase 5
VC / further scale
Educational BizPlan
Competitions

Educational Real
Process companies

™
helps you to bridge the GAP !!

Phase 1 Phase 2
entrepreneurship Coaching Phase 3 Phase 4
Consulting
education, Mentoring
1st real BizPlans Angel Funding Phase 5
Summer schools infrastructure VC / further scale
Experimental labs
Educational BizPlan Industry connections
Bootcamps
Seed Funding
Competitions

Seed Funding

Entrepreneurship Education

Educational Real-life Real

Services
Process practice companies

InnoVaventures Global Network of Experts


InnoVaventures Network of

-in negotiation (Phase I)
-planned (Phase II)
-planned (Phase III)


Network of Global Clusters of Innovation


™


Innovation and Entrepreneurship

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