Entrepreneurship

MNO2009 - Session 2
Goal Setting & Action Planning
Prof. Dr. Sarah Cheah
 Guest Lecture
Eddy Chan

Head of Operations, Online Case

QLC.io Pearson Online Coursepack
 Guest Lecture
Q&A

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 Recap L1: What factors
contribute to opportunity identification?

Knowledge Network Creativity

Change in Environment
 Recap L1: Opportunities for you

Connect three success factors and use your

creativity to generate biz ideas

My Knowledge My Social Changes in Idea?

Networks Environment
Recap L1: Opportunity Evaluation
Criteria – Spinelli’s Framework

Industry &
Market

Personal
Criteria/
Economics
Strategic
Differentiation

Competitive
Advantage/ Harvest Issues
Management
Spinelli and Adams, 2015
Cheah et al., 2017, Facing Down Failure Chapter 1
Recap L1: Opportunity Evaluation
Criteria: Industry & Markets (1/5)

Spinelli and Adams, 2015

Cheah et al., 2017, Facing Down Failure Chapter 1
 Recap L1: Opportunity Evaluation
Criteria: Industry & Markets (1/5)
Example: Growing underserved industry

Source: nlb.gov.sg
Recap L1: Opportunity Evaluation
Criteria: Economics (2/5)

Spinelli and Adams, 2015

Cheah et al., 2017, Facing Down Failure Chapter 1
Recap L1: Opportunity Evaluation
Criteria: Economics (2/5)
Example: Time to break even

Year 1 Year 2 Year 3 Year 4

Spinelli and Adams, 2015

Cheah et al., 2017, Facing Down Failure Chapter 1
Recap L1: Opportunity Evaluation
Criteria: Harvest Issues (3/5)

Spinelli and Adams, 2015

Cheah et al., 2017, Facing Down Failure Chapter 1
Recap L1: Opportunity Evaluation
Criteria: Competitive Advantage/
Management (4/5)

Spinelli and Adams, 2015

Cheah et al., 2017, Facing Down Failure Chapter 1
 Recap L1: Opportunity Evaluation
Criteria: Competitive Advantage/
Management (4/5)
Example: patents & exclusive license

7,534 patents 4,952 patents 4,055 patents 3,244 patents

2,829 patents 2,608 patents 2,590 patents 2,566 patents

Source: Fortune
Recap L1: Opportunity Evaluation
Criteria: Personal Criteria/
Strategic Differentiation (5/5)

Spinelli and Adams, 2015

Cheah et al., 2017, Facing Down Failure Chapter 1
 Recap L1: Opportunity Evaluation
Criteria: Personal Criteria/ Strategic
Differentiation (5/5)
Example: Timing/Fit
Singapore 238 (33 deaths)
Global 8,906 (774 deaths)

SARS Outbreak, 2003 2003

2004
Spinelli and Adams, 2015
Cheah et al., 2017, Facing Down Failure Chapter 1
 Recap L1: Opportunity
Evaluation Criteria Tool –
Spinelli’s Framework

Screen Evaluate
opportunities for opportunities of
group project cases

Spinelli and Adams, 2015

Cheah et al., 2017, Facing Down Failure Chapter 1
 Recap L1: Readings
Opportunity Identification

• Spinelli and Adams, 2015, Chapter 5, Opportunity Recognition, pp. 113-129 in

New Venture Creation, 10 edition, McGraw-Hill (IVLE e-Reserves)
• (Personal care products) P&G joins forces in search for start-ups
http://www.ft.com/cms/s/0/c126cd1c-6a0d-11e2-a80c-
00144feab49a.html#axzz3OgmNgqPk
• (Industrial clients) GE Ventures backs drone start-up Airware
https://www.pehub.com/2014/11/ge-ventures-backs-drone-start-up-airware/
• (Healthcare analytics) GE Ventures backs Apervita for Health-Care Analytics
http://blogs.wsj.com/venturecapital/2015/01/07/the-daily-startup-ge-ventures-
backs-apervita-for-health-care-analytics
• The Economist, 2013, The rise of the sharing economy
http://www.economist.com/news/leaders/21573104-internet-everything-hire-
rise-sharing-economy
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 Session 2
Goal Setting and Action Planning
 Agenda

Startup Ecosystem

Goal Setting & Action Planning

The Startup Process

Lean Startup

Customer Development Process

 L1 to L6 Topics – Where are we?

L1: entrepreneur L2: entrepreneur makes plans L3: entrepreneur

identifies & evaluates and sets goals while finds co-founder(s)
opportunity developing target customers & builds team
1 2 3

L4: entrepreneur finds L5: entrepreneur persuades, L6: entrepreneur can

investors & mentors negotiates and networks to choose to build social
from ecosystem (e.g. engage prospective enterprise to help
incubator/ accelerator/ investors, employees, community or join a
clients & partners 5 6
coworking space) 4 corporation
 L1 to L6 Frameworks – Where are we?
1. Ardichvili’s model of 3. Babson’s framework of 5. Building a founding
opportunity startup ecosystem (6 team –Wasserman’s 3R
identification (4 domains) model (relationships,
factors) 4. Action planning process: roles & rewards)
2. Spinelli & Adam’s Lean startup approach
model of opportunity (customer development)
evaluation (5 criteria)
1 2 3

6. Self-motivation and 8. Watkin’s 4 principles of 11. ACSEP’s models of

personal factors: persuasion social entrepreneurship
Wasserman’s 9. Kolb’s negotiation 12. Wolcott and Lippitz’s
founders’ dilemma- approach models of corporate
rich vs king 10. Cross and Thomas’ model entrepreneurship
7. Saravasthy’s of building networks
causation vs
effectuation model 4 5 6
 Ecosystem
Building
The Rainforest Approach
Singapore’s startup ecosystem

Source: Zach Tan

OECD/Eurostat Framework
Entrepreneurship Determinants

OECD/Eurostat Framework by Ahmad and Hoffman

 Babson’s Framework
Domains of Startup Ecosystem

Policy

Markets Finance

Entrepreneurship

Human
Culture
Capitals

Supports

Isenberg (2011)
Cheah et al., (2016) “Role of Public Science in Fostering I&E Ecosystem in Sg”
 Babson’s Framework
Domains of Startup Ecosystem: Policy

Cheah et al., (2016) “Role of Public Science in Fostering I&E Ecosystem in Sg”
 Babson’s Framework
Domains of Startup Ecosystem: Finance (US)

Source: Fundable, US SBA, Centre for Venture Research, Angel Capital Education Foundation, Angel Resource Institute
 Babson’s Framework
Domains of Startup Ecosystem: Finance (ASEAN)

Venture Capital Deals in ASEAN Region – Proportion by country, 2007-2013

100% 3% 3% 2%
4%
5% 4%
18% 7% 10% 5%
90% 21% 5%
6%
33% 11% 9% 7%
80% 4%
3% 11%
12% 7% 13%
70%
Proportion of No. of Deals

4% Vietnam
9%
60% Thailand
17% Philippines
50%
21% Malaysia
Indonesia
40% 78% 75% 72% Brunei
4% 71%
67%
30% Singapore

46%
20%
33%
10%

0%
2007 2008 2009 2010 2011 2012 2013
Source: Preqin Venture Deals Analyst, 2014
 Babson’s Framework
Domains of Startup Ecosystem: Finance (Singapore)

Number and Aggregate Value of Venture Capital Deals in Singapore, 2007 – 2013
80 500
73
454 450
70

400
60
350

Aggregate Deal Value ($mn)

50
300
No of Deals

41
40 250

200
30 27

150
18 19
20
100
11 91
8 74
10
49 50
37 40
12
0 0
2007 2008 2009 2010 2011 2012 2013

No. of Deals Aggregate Deal Value (USD mn)

Source: Preqin Venture Deals Analyst, 2014
The life Cycle of a Startup

Source: UC, Davis

 The life Cycle of a Startup
Different sources of funds for different stages

Source: UC, Davis

 Babson’s Framework
Domains of Startup Ecosystem: Finance (Singapore)

Source: SPRING
 Babson’s Framework
Domains of Startup Ecosystem: Finance (Singapore)
Direct Support for startups

SPRING GRANT SPRING TECS EQUITY INVESTMENT

Source: SPRING
 Babson’s Framework
Domains of Startup Ecosystem: Finance (Singapore)
Indirect Support for startups

INCUBATOR  TAX INCENTIVES 
SUPPORT FOR ANGELS
Source: SPRING
 Babson’s Framework
Domains of Startup Ecosystem: Culture

High Social status: Good career choice:

Singapore 62.9% Singapore 51.7%

Asia & Oceania 59.7% Asia & Oceania 52.3%

Europe 68.8% Europe 55.6%
US 73.3% US 61.0%
Cheah et al., (2016) “Role of Public Science in Fostering I&E Ecosystem in Sg”
 Babson’s Framework
Domains of Startup Ecosystem: Support

Cheah et al., (2016) “Role of Public Science in Fostering I&E Ecosystem in Sg”
 Babson’s Framework
Domains of Startup Ecosystem: Human Capital

Research scientists Startups Mentor with equity

& engineers
31,900 42,000 1.27 per
startup
Cheah et al., (2016) “Role of Public Science in Fostering I&E Ecosystem in Sg”
 Babson’s Framework
Domains of Startup Ecosystem: Markets

Foreign customers
49%

Source: Hermann et al., (2015)

 Principles of Goal Setting
and Action Planning

Goal setting and action planning help you to

initiate and maintain action to achieve success

Source: Frese (2009)

 Why Bother with Goal Setting
and Action Planning?

Goal Setting Action Planning

Source: Frese et al. (2007)

What is a Startup
 A startup is a temporary organization
designed to search for a repeatable and
scalable business model
 SMART Goals

Specific Measurable Achievable

“ask a couple of people” “try to get some “IPO in 1 year of
vs “interview 3 potential sales” vs “get sales start-up” vs “break-
customers” of $100k” even in 3 years”

Relevant Time-bound
“winning an “find a supplier” vs
award” vs “find a supplier by
“closing a deal” 1st Q”
Any Action Plan for Entrepreneur?
Is it anything like below? Source: yourstory.com
Auto-industry: Top losers in Europe
 Portable music & pictures

$500m loss $150m loss

Source: Steve Blank, 2013

Reality Bites: New Product Disasters

Volkswagen Phaeton - $500m

Sony’s MiniDisc player - $500m
Kodak’s photo CD - $150m
Segway - $200m
Apple’s Newton - $100m

Source: Steve Blank, 2013

 Traditional Approach

Concept /
Start
Seed
Pitch to Develop Alpha/ Launch/ selling as
Stage
investors product beta test 1st ship hard as u
(write biz
can
plan)
 What are the limitations
with this linear approach
Concept /
Start
Seed
Pitch to Develop Alpha/ Launch/ selling as
Stage
investors product beta test 1st ship hard as u
(write biz
can
plan)
 Linear approach has its limitations
• Lack of customers & proven
financial model
• Over-focus on 1st ship date/
execution instead of learning &
discovering customer needs
• Lack of meaningful milestones for
sales & marketing (S&M)
• Use product dev method to
measure S&M
• Premature scaling -> death spiral
Source: theleanstartup.com
The Startup Process
Lean vs Traditional

Source: Steve Blank, 2013, HBR

The Startup Process
Lean vs Traditional

Source: Steve Blank, 2013, HBR

The Startup Process
Lean vs Traditional

Source: Steve Blank, 2013, HBR

The Startup Process
Lean vs Traditional

Source: Steve Blank, 2013, HBR

The Startup Process
Lean vs Traditional

Source: Steve Blank, 2013, HBR

There are no facts inside
your building, so get

OUTSIDE
Steve Blank
 What is Lean Startup
Practical approach to action
planning & goal setting

Customer Business Model Agile Engineering or

Development Canvas Rapid prototyping
(To be covered by S&P) (Not in the scope of this course)

Cheah et al., 2017, Facing Down Failure Chapter 2

 Lean Startup Cycle

Ideas

Learn Build

Persevere Turn ideas into

or pivot products
Data Product

Measure

Cheah et al., 2017, Facing Down Failure Chapter 2

 Sarah’s Encounter with
Bad Restaurant Service
Empty section cordoned

Service delay
Serving hygiene

Unknown chargeables
No credit card < $20
 Customer Development Process
Hypotheses/Guesses to Facts

Source: NUS Enterprise Lean Launchpad @Singapore; Steven Blank

 Sarah’s Business Model
version 1

Hypothesised Problem Hypothesised Solution Prototype of proposed

Statement product
Restaurant staff Provide training for Training curriculum
are poorly trained restaurant staff to raise outline brochure
their quality of service

Receive fees for

providing training
 Customer Development Process
Customer Discovery Phase 1: State Hypothesis

Sarah’s Biz model v1

Prototype of
“product” – training
brochure

Source: Steve Blank

 Customer Development Process
Customer Discovery Phase 2: Test Problem

Do you have challenges with training staff?

Yes, we are aware. But staff are part-time and

turnover is high. Training is a challenge

Source: Steve Blank

 Customer Development Process
Customer Discovery Phase 3: Test Solution

Do you have challenges with training staff?

Yes, we are aware. But staff are part-time and

turnover is high. Training is a challenge

We could provide regular training for your staff to

improve restaurant service
We already have a lot of such training providers
calling us. Trained staff become more valuable &
they leave for competitors after that. What’s the
point of training them for competitors?
But some staff service really needs improvement.
I have experienced it as customer.
Did you fill up feedback form? So far I didn’t get
any negative feedback on my staff?
…

Prototype of
“product” –
training
brochure

Source: Steve Blank

Customer Development Process
Customer Discovery Phase 3: Test Solution
More Customer Visits..
 Customer Development Process
Customer Discovery Phase 4: Verify or Pivot

Source: Steve Blank

 Sarah’s Business Model
version 2

Hypothesised Problem Hypothesised Solution Prototype of proposed

Statement Provide training for product
Restaurant staff are restaurant staff to raise Training curriculum
poorly trained their quality of service outline brochure
Restaurant had Provide feedback on their Sample QA report
challenges in tracking customer service as
and maintaining staff mystery patron
service quality

Receive fees for

providing Quality
Assurance report as
mystery patron
 Customer Development Process
Customer Discovery Phase 4: Verify or Pivot

Sarah’s Biz model v2

Source: Steve Blank

Customer Discovery Process Video
(4 minutes)

NUS Business School Production

View on IVLE/Multimedia
 Customer Development Process
Customer Discovery: 4 Phases (Summary)

Source: Steve Blank

 Customer Development Process
Customer Discovery: 4 Phases (Detail)

Source: Steve Blank

 Summary

Startup ecosystem Principles of Goal

Setting & Action
Planning

The Startup Lean Startup

Process
 Readings
Goal Setting & Action Planning

Read
• Spinelli and Adams (2015) Chapter 5, Opportunity Recognition, pp. 113-129 in
New Venture Creation, 10 edition, McGraw-Hill (IVLE e-Reserves)
• Cheah et al. (2017) Chapter 2, Developing a Product and Service Offering, pp.
39-46, Facing Down Failure, 2 edition (Pearson online coursepack)
• Cheah et al. (2016) Role of Public Science in Fostering the Innovation and
Startup Ecosystem in Singapore, Asian Research Policy Journal.
http://www.arpjournal.org/usr/browse/view_issues_detail.do?seq=132
• Blank, S. (2013) Why Lean Start-Up Changes Everything, Harvard Business
Review http://hbr.org/2013/05/why-the-lean-start-up-changes-everything/ar/1
• Isenberg, D. (2011) Introducing startup ecosystem, Forbes
http://www.forbes.com/sites/danisenberg/2011/05/25/introducing-the-
entrepreneurship-ecosystem-four-defining-
characteristics/#32cc91fc38c435dd899938c4
 Readings
Goal Setting & Action Planning

Browse
• Ahmad, N. & Hoffman, A. (2007), A Framework for Addressing and Measuring
Entrepreneurship, OECD/EUROSTAT, pp. 17-19.
http://www.oecd.org/std/business-stats/39629644.pdf
• Overview of Singapore government schemes for startups (check with
government websites) http://www.guidemesingapore.com/doing-
business/finances/singapore-government-schemes-for-startups
Watch
• Customer Discovery Process by Steven Blank
https://steveblank.files.wordpress.com/2014/06/what-is-customer-
discovery.m4v
• Customer Discovery process by NUS biz school production (IVLE/Multimedia)
 References
Goal Setting & Action Planning
(Optional reading)
• Frese, M. et al. (2007). Business owners' action planning and its
relationship to business success in three African countries. Journal of
Applied Psychology, 92(6), 1481.
• Frese, M. (2009). Towards a psychology of entrepreneurship—an action
theory perspective. Foundations and Trends® in Entrepreneurship, 5(6),
437-496.
 T1 to T5 Topics – Where are we?
1. Ardichvili’s model of 3. Babson’s framework of 5. Building a founding
opportunity startup ecosystem (6 team –Wasserman’s 3R
identification (4 domains) model (relationships,
factors) 4. Action planning process: roles & rewards)
2. Spinelli & Adam’s Lean startup approach
model of opportunity (customer development)
evaluation (5 criteria)
Case: QLC.io 1 Case: Tware 2 Case: Digify 3
Industry: ICT/Edtech Industry: Healthcare/Medtech Industry: ICT/Securitytech
6. Self-motivation and 8. Watkin’s 4 principles of 11. ACSEP’s models of
personal factors: persuasion social entrepreneurship
Wasserman’s 9. Kolb’s negotiation 12. Wolcott and Lippitz’s
founders’ dilemma approach models of corporate
7. Saravasthy’s 10. Cross and Thomas’ model entrepreneurship
causation vs of building networks
effectuation model
Case: Vault Dragon 4 Case: InvitroCue 5 Case: NA 6
Industry: ICT/EHRtech Industry: Healthcare/Biotech Industry: NA
 Preparation for Tutorial 1
31 Aug 2017

Pre-tutorial activities:
1. Read QLC.io case (ICT/Edtech) (Pearson online
coursepack)
2. Cheah et al. (2017) Chapter 1, Identifying Opportunities,
pp. 7-12, Facing Down Failure, 2 edition (Pearson online
coursepack)
3. Read Spinelli and Adams, 2015, Chapter 5, Opportunity
Recognition, pp. 113-129 in New Venture Creation, 10
edition, McGraw-Hill (IVLE e-Reserves)
4. Review Lecture 1 notes
 Preparation for Tutorial 1
31 Aug 2017

Go through the readings and answer the

following questions:
1. How did QLC.io identify their opportunities?
2. What are the challenges faced by QLC.io? How
would you respond to them if you were their
CEO?
3. If you were QLC.io’s potential investor, how
would you evaluate their commercial potential,
using Spinelli and Adam’s framework for
opportunity evaluation?