Entrepreneurship : successfully launching new ventures

Cover......Page 1
Title Page......Page 5
Copyright Page......Page 6
Brief Contents......Page 8
Contents......Page 9
Preface......Page 15
Acknowledgments......Page 20
About The Authors......Page 23
Part 1 Decision to Become an Entrepreneur......Page 25
  Opening Profile—Superjam: The Classic Entrepreneurial Story......Page 27
  Introduction to Entrepreneurship......Page 29
  What Is Entrepreneurship and Why Is It Important?......Page 30
   Be Their Own Boss......Page 31
   Pursue Financial Rewards......Page 32
   Passion for the Business......Page 33
   What Went Wrong? Prim: How a Lack of Passionand Resolve Can Kill a Business......Page 35
   Tenacity Despite Failure......Page 36
   Execution Intelligence......Page 37
  Common Myths About Entrepreneurs......Page 38
   Myth 2: Entrepreneurs Are Gamblers......Page 39
   Myth 3: Entrepreneurs Are Motivated Primarily by Money......Page 40
   Myth 5: Entrepreneurs Love the Spotlight......Page 41
  Types of Start-Up Firms......Page 42
  Partnering For Success: Start-up Incubatorsand Accelerators: A New Way of Gaining Accessto Mentors, Partners, Investors, and Other CriticalStart-up Resources......Page 43
   Women Entrepreneurs......Page 44
   Young Entrepreneurs......Page 45
   Economic Impact of Entrepreneurial Firms......Page 46
   Entrepreneurial Firms’ Impact on Larger Firms......Page 48
   Developing Successful Business Ideas (Chapters 2–6)......Page 49
   Managing and Growing an Entrepreneurial Firm (Chapters 11–15)......Page 50
  Chapter Summary......Page 52
  Review Questions......Page 53
  Application Questions......Page 54
  You Be the VC 1.2......Page 55
  Case 1.1......Page 56
  Case 1.2......Page 59
  Endnotes......Page 61
Part 2 Developing Successful Business Ideas......Page 63
  Opening Profile—ICRACKED: Solving a Problem andBuilding a Business in an Exploding Industry......Page 65
  The Differences Between Opportunities and Ideas......Page 67
   Observing Trends......Page 68
   Solving a Problem......Page 74
   Finding Gaps in the Marketplace......Page 77
  Personal Characteristics of the Entrepreneur......Page 78
   What Went Wrong? Why a Company that Solved a Problem with a Great ProductWent Out of Business......Page 79
   Cognitive Factors......Page 80
   Creativity......Page 81
   Brainstorming......Page 83
   Focus Groups......Page 84
   Library and Internet Research......Page 85
   Encouraging Creativity at the Firm Level......Page 86
   Partnering For Success: Want Help Fine-Tuninga Business Idea? Find a Mentor......Page 87
  Chapter Summary......Page 88
  Review Questions......Page 89
  Application Questions......Page 90
  You BE the VC 2.2......Page 91
  Case 2.1......Page 92
  Case 2.2......Page 94
  Endnotes......Page 96
  Opening Profile—LUMINAID: The Value of Validating a Business Idea......Page 99
  Feasibility Analysis......Page 101
   Product/Service Desirability......Page 102
   Product/Service Demand......Page 107
  Industry/Target Market Feasibility Analysis......Page 109
   Savvy Entrepreneurial Firm: How Learningfrom Customers Caused a Successful Firm toMake a 180-Degree Turn on the Positioning ofa Product......Page 110
   Industry Attractiveness......Page 111
   Target Market Attractiveness......Page 112
   Resource Sufficiency......Page 113
   What Went Wrong? How Feasible Was StandoutJobs from the Beginning?......Page 114
   Partnering For Success: Finding the RightBusiness Partner......Page 115
   Total Start-Up Cash Needed......Page 116
   Financial Performance of Similar Businesses......Page 117
  A Feasibility Analysis Template......Page 118
  Chapter Summary......Page 119
  Key Terms......Page 120
  Application Questions......Page 121
  You Be the VC 3.2......Page 123
  Case 3.1......Page 124
  Case 3.2......Page 126
  Appendix 3.1......Page 129
  Appendix 3.2......Page 131
  Endnotes......Page 133
  Opening Profile—HER CAMPUS MEDIA: Executing on an Established Business Model and Preparing for the Future......Page 135
  Business Models and Their Importance......Page 137
  Savvy Entrepreneurial Firm: Quirky: How OneCompany Creates, delivers, and Captures Value forIts Stakeholders......Page 138
   Standard Business Models......Page 139
   What Went Wrong? Peer-to-Peer BusinessModels: Good for Some, Not So Good forOthers......Page 141
   Disruptive Business Models......Page 142
  The Barringer/Ireland Business Model Template......Page 143
   Core Strategy......Page 144
   Resources......Page 148
   Financials......Page 150
   Operations......Page 153
   Partnering For Success: Odesk, Elance, andGuru: Platforms That Facilitate the Forming ofPartnerships with Freelancers......Page 156
  Chapter Summary......Page 157
  Review Questions......Page 158
  Application Questions......Page 159
  You Be the VC 4.2......Page 160
  Case 4.1......Page 161
  Case 4.2......Page 165
  Appendix 1......Page 169
  Endnotes......Page 170
  Opening Profile—GREENVELOPE: Occupying a Unique Position in an Evolving Industry—and Thriving......Page 173
  Industry Analysis......Page 175
   Studying Industry Trends......Page 176
   Partnering For Success: Three Ts That AreImportant for Becoming Active in an Industry: Trade Associations, Trade Shows, and Trade Journals......Page 177
  The Five Forces Model......Page 178
   Threat of Substitutes......Page 179
   Threat of New Entrants......Page 180
   Rivalry Among Existing Firms......Page 181
   Bargaining Power of Suppliers......Page 182
   Bargaining Power of Buyers......Page 183
  The Value of the Five Forces Model......Page 184
  Industry Types and The Opportunities They Offer......Page 186
   Mature Industries......Page 187
   Declining Industries......Page 188
   Identifying Competitors......Page 189
   Sources of Competitive Intelligence......Page 190
   Savvy Entrepreneurial Firm: Thriving in aCrowded Industry by Creating Meaningful Value and differentiation from Competitors......Page 191
   Completing A Competitive Analysis Grid......Page 192
   What Went Wrong? Digg: A Start-Up That LostIts Way and Its Place in Its Industry......Page 194
  Chapter Summary......Page 195
  Review Questions......Page 196
  Application Questions......Page 197
  You Be the VC 5.2......Page 198
  Case 5.1......Page 199
  Case 5.2......Page 201
  Endnotes......Page 203
  Opening Profile—TEMPORUN: Proceeding on theStrength of a Winning Business Plan......Page 205
   Reasons for Writing a Business Plan......Page 207
   Investors and Other External Stakeholders......Page 209
   Structure of the Business Plan......Page 210
   Content of the Business Plan......Page 211
  Outline of the Business Plan......Page 213
   Exploring Each Section of the Plan......Page 214
   Savvy Entrepreneurial Firm: Know When toHold Them, Know When to Fold Them......Page 215
   Partnering For Success: Types of PartnershipsThat Are Common in Business Plans......Page 219
   What Went Wrong? What EventVue Learned theHard Way About Making Assumptions......Page 226
   The Oral Presentation of a Business Plan......Page 227
  Chapter Summary......Page 229
  Review Questions......Page 230
  Application Questions......Page 231
  You Be the VC 6.2......Page 233
  Case 6.1......Page 234
  Case 6.2......Page 236
  Endnotes......Page 240
Part 3 Moving from an Ideato an Entrepreneurial Firm......Page 241
  Opening Profile—TEMPEREd MIND: Proceeding on a Firm Legal Foundation......Page 243
  Establishing a Strong Ethical Culture for a Firm......Page 245
   Lead by Example......Page 246
   Establish a Code of Conduct......Page 247
   Implement an Ethics Training Program......Page 248
   Choosing an Attorney for a Firm......Page 249
   What Went Wrong? Fitbit Force Recall:did Fitbit React Quickly Enough?......Page 250
   Avoiding Legal Disputes......Page 252
   Savvy Entrepreneurial Firm: VestingOwnership in Company Stock: A Sound Strategyfor Start-Ups......Page 253
   Partnering For Success: Patagonia and Build-A-Bear Workshop: Picking Trustworthy Partners......Page 256
   State Licenses and Permits......Page 257
   Local Licenses and Permits......Page 258
  Choosing a Form of Business Organization......Page 259
   Sole Proprietorship......Page 260
   Partnerships......Page 262
   Corporations......Page 263
   Limited Liability Company......Page 266
  Chapter Summary......Page 267
  Review Questions......Page 268
  Application Questions......Page 269
  You Be the VC 7.2......Page 271
  Case 7.1......Page 272
  Case 7.2......Page 275
  Appendix 7.1......Page 278
  Endnotes......Page 280
  Opening Profile—GYMFLOW: Managing Finances Prudently......Page 283
  Introduction to Financial Management......Page 285
  The Process of Financial Management......Page 286
   Partnering For Success: OrganizingBuying Groups to Cuts Costs and MaintainCompetitiveness......Page 287
   Historical Financial Statements......Page 289
   Savvy Entrepreneurial Firm: Know the FactsBehind the Numbers......Page 292
   Sales Forecast......Page 297
   Forecast of Costs of Sales and Other Items......Page 299
  Pro Forma Financial Statements......Page 301
   Pro Forma Income Statement......Page 302
   Pro Forma Balance Sheet......Page 303
   Pro Forma Statement of Cash Flows......Page 304
   Ratio Analysis......Page 307
  Chapter Summary......Page 308
  Review Questions......Page 309
  Application Questions......Page 310
  You Be the VC 8.2......Page 311
  Case 8.1......Page 312
  Case 8.2......Page 314
  Endnotes......Page 316
  Opening Profile—NEXT BIG SOUND: Hitting the Ground Running......Page 319
  Creating a New-Venture Team......Page 321
   PartnErinG For Success: To Overcome the Liabilities of Newness, Consider Joining a Start-up Accelerator......Page 322
   The Founder or Founders......Page 323
   What Went Wrong? Devver: How Miscues inRegard to the Composition and Management of a New-Venture Team Can Kill a Start-up......Page 326
   The Management Team and Key Employees......Page 327
   Savvy Entrepreneurial Firm: Overcoming aLack of Business Experience......Page 328
   The Roles of the Board of Directors......Page 331
   Board of Advisors......Page 334
   Lenders and Investors......Page 335
   Consultants......Page 337
  Chapter Summary......Page 338
  Application Questions......Page 339
  You Be the VC 9.2......Page 341
  Case 9.1......Page 342
  Case 9.2......Page 345
  Endnotes......Page 348
  Opening Profile—ROOMINATE: Raising MoneyCarefully and deliberately......Page 351
   Cash Flow Challenges......Page 353
   Lengthy Product Development Cycles......Page 354
   Partnering For Success: Startup Weekend: AFertile Place to Meet Business Cofounders......Page 355
   Friends and Family......Page 356
   Bootstrapping......Page 357
  Preparing to Raise Debt Or Equity Financing......Page 358
   Business Angels......Page 361
   Venture Capital......Page 362
   Initial Public Offering......Page 364
   What Went Wrong? How One Start-up Caughtthe Attention of VCs, Gained 25,000 daily Users,and Still Failed......Page 365
   Commercial Banks......Page 367
   Sba Guaranteed Loans......Page 368
   Crowdfunding......Page 369
   Leasing......Page 370
   Sbir And Sttr Grant Programs......Page 371
   Other Grant Programs......Page 372
   Strategic Partners......Page 373
  Chapter Summary......Page 374
  Review Questions......Page 375
  Application Questions......Page 376
  You Be the VC 10.2......Page 378
  Case 10.1......Page 379
  Case 10.2......Page 382
  Endnotes......Page 385
Part 4 Managing and Growingan Entrepreneurial Firm......Page 387
  Opening Profile—WINK NATURAL COSMETICS:Creating a New Brand in the Cosmetics Industry......Page 389
   Segmenting the Market......Page 391
   Selecting a Target Market......Page 392
   Crafting a Unique Market Position......Page 393
  Branding......Page 394
   Product......Page 397
   Partnering For Success: How Co-Branding IsCombining the Strengths of Two Already Successful Brands......Page 398
   Price......Page 400
   Promotion......Page 401
   What Went Wrong? What Start-ups Can LearnAbout Marketing from Missteps at JCPenney......Page 402
   Savvy Entrepreneurial Firm: How Airbnb UsedBlogs as a Stepping-Stone to Generate Substantial Buzz About Its Service......Page 407
   Place (or Distribution)......Page 410
  Sales Process and Related Issues......Page 411
  Chapter Summary......Page 414
  Review Questions......Page 415
  Application Questions......Page 416
  You Be the VC 11.2......Page 417
  Case 11.1......Page 418
  Case 11.2......Page 421
  Endnotes......Page 424
  Opening Profile—DRIPCATCH: The Key Role ofIntellectual Property Early In a Firm’s Life and ItsOngoing Success......Page 427
  The Importance of Intellectual Property......Page 429
   The Four Key Forms of Intellectual Property......Page 431
  Patents......Page 432
   Types of Patents......Page 434
   Who Can Apply for a Patent?......Page 435
   The Process of Obtaining a Patent......Page 436
  Trademarks......Page 438
   Savvy Entrepreneurial Firm: Knowing the Ins and Outs of Filing a Provisional Patent Application......Page 439
   The Four Types of Trademarks......Page 440
   Partnering For Success: Individual Inventorsand Large Firms: Partnering to Bring New Productsto Market......Page 441
   What Is Protected Under Trademark Law?......Page 442
   The Process of Obtaining a Trademark......Page 443
   What Is Protected by a Copyright?......Page 445
   How to Obtain a Copyright......Page 446
   Copyright Infringement......Page 447
   Copyright and the Internet......Page 448
   What Went Wrong? GoldieBlox vs. Beastie Boys:The Type of Fight That No Start-up Wants to Be aPart Of......Page 449
  Trade Secrets......Page 450
   Trade Secret Disputes......Page 451
   Trade Secret Protection Methods......Page 452
   The Process of Conducting an Intellectual Property Audit......Page 453
  Chapter Summary......Page 454
  Review Questions......Page 456
  Application Questions......Page 457
  You Be the VC 12.2......Page 458
  Case 12.1......Page 459
  Case 12.2......Page 461
  Endnotes......Page 462
  Opening Profile—BIG FISH PRESENTATIONS: Growing in a Cautious, yet deliberate Manner......Page 465
   Appreciating the Nature of Business Growth......Page 467
   Staying Committed to a Core Strategy......Page 469
   Partnering For Success: How ThreadlessAverted Collapse by Bringing on a Partner withBack-End Operational Expertise......Page 470
   Planning For Growth......Page 471
  Reasons for Growth......Page 472
   Influence, Power, and Survivability......Page 473
  Managing Growth......Page 474
   Knowing and Managing the Stages of Growth......Page 475
   Savvy Entrepreneurial Firm: Safesforce.comCrosses the Chasm......Page 478
   Managerial Capacity......Page 479
   Day-to-day Challenges of Growing a Firm......Page 480
   What Went Wrong? How Trying to Build Out ItsOwn Capabilities in a Key Area Contributed to the Failure of a Promising Firm......Page 482
  Chapter Summary......Page 483
  Key Terms......Page 484
  Application Questions......Page 485
  You Be the VC 13.2......Page 487
  Case 13.1......Page 488
  Case 13.2......Page 491
  Endnotes......Page 494
  Opening Profile—SHAKE SMART: MaintainingConsistent Strategies for Growth......Page 497
   New Product Development......Page 499
   Savvy Entrepreneurial Firm: SwitchFlops: Howto Create Built-in Avenues for Future Growth......Page 501
   Increasing the Market Penetration of an Existing Product or Service......Page 503
   Geographic Expansion......Page 504
  International Expansion......Page 505
   What Went Wrong? Lessons for Growth-MindedStart-ups from Crumbs Bake Shop’s Failure......Page 506
   Assessing a Firm’s Suitability for Growth Through International Markets......Page 507
   Selling Overseas......Page 508
   Mergers and Acquisitions......Page 509
   Licensing......Page 513
   Strategic Alliances and Joint Ventures......Page 514
   Partnering For Success: Three Steps to AllianceSuccess......Page 516
  Chapter Summary......Page 518
  Review Questions......Page 519
  Application Questions......Page 520
  You Be the VC 14.2......Page 522
  Case 14.1......Page 523
  Case 14.2......Page 526
  Endnotes......Page 528
  Opening Profile—UPTOWN CHEAPSKATE: Franchising as a Form of Business Ownership and Growth......Page 531
   How Does Franchising Work?......Page 534
  Establishing a Franchise System......Page 537
   Steps to Franchising a Business......Page 538
   Savvy Entrepreneurial Firm: Wahoo’s FishTaco: A Moderate-Growth yet Highly SuccessfulFranchise Organization......Page 539
   Selecting and Developing Effective Franchisees......Page 541
  Advantages and Disadvantages of Establishing a Franchise System......Page 542
   Is Franchising Right for You?......Page 544
   What Went Wrong? Trouble at CurvesInternational......Page 545
   The Cost of a Franchise......Page 547
   Finding a Franchise......Page 548
   Partnering For Success: Using Co-Branding toReduce Costs and Boost Sales......Page 549
   Advantages and Disadvantages of Buying a Franchise......Page 550
  Steps in Purchasing a Franchise......Page 552
   Watch Out! Common Misconceptions About Franchising......Page 553
   Federal Rules and Regulations......Page 554
   State Rules and Regulations......Page 555
   Franchise Ethics......Page 557
   International Franchising......Page 558
   The Future of Franchising......Page 559
  Chapter Summary......Page 560
  Review Questions......Page 561
  Application Questions......Page 562
  You Be the VC 15.2......Page 564
  Case 15.1......Page 565
  Case 15.2......Page 567
  Endnotes......Page 570
Glossary......Page 572
Name Index......Page 582
Company Index......Page 584
Subject Index......Page 588