Foundations of Entrepreneurial Leadership

Class 3 – Concept Development Foundations of Entrepreneurial Leadership Concept Development MGT 190/290 Prof Frey: Frey@gwu.edu

Class 3 – Concept Development AGENDA: 1. Lightning round: Finish Mind Mapping pitches 2. Quiz – System based learning model 3. Business models vs great ideas 4. Venture structure - overview 5. Concept development – Exercise PROVE IT!

Class 3 – Concept Development Lightning Round Elevator Pitch • Description & target audience • Need met through product / service • Competitive advantage Find your inner car salesman people. Work it.

Quiz: System-Based Learning • Objective: Use knowledge in the room to reinforce previous class topics text reading • Skill Development • Thinking on your feet • Accessing and organizing resources • Managing limited time • Creativity • Public speaking

Quiz: System-Based Learning • As a system you will facilitate a review of the readings/class content to date • Small groups (4s) • Review your topic area: Five minutes • Each group engages the class in a brief discussion or exercise on their topic (3 minutes)

Quiz: Here are the Topics Entrepreneurship definition and examples Characteristics of Entrepreneurs Personal leadership & tie to the organization Benefits, drawbacks of entrepreneurship Creativity & sources of ideas Mentors and networks How to evaluate ideas Ways to think entrepreneurially

FEASIBILITY PLAN #1: CONCEPT!!! Class 3 – Concept Development • Idea in a few sentences • Value • Who is it for? • What else already exists that is similar ? • Why is your “it” different?

Huh?The concept step-by-step Class 3 – Concept Development • Idea in a few sentences • What is it? (product, service, activity?) • Value (see next slide) • Value Proposition: Why it matters • Value Model: How value is measured • Who is it for? • What else already exists that is similar? • Why is your “it” different?

Class 3 Value Proposition: The Story • Why it matters! • MUST be Compelling • “Pain in the Market Place” • Problem it solves: The NEED • What is the purpose of creating “it”?

Class 3 Value Proposition: The Story As discussed in Session 2 Ideas can come from anywhere and everywhere. Even surprising places (job angst, unexpected circumstances) Baby Boom Clip http://www.youtube.com/watch?v=ANLotpaHzVQ

Class 3 Value Proposition: The Story Can that experience, idea, or spark lead to a product or service that can be packaged and sold? The Bass O Matic 76 http://www.youtube.com/watch?v=nxwbDC1YeuY Good text takeaway: USP - Universal Selling Proposition. It works.

Class 3 Value Proposition: Run Through Run through: Baby Boom’s Baby Food Product Start with: Idea in a few sentences. Then focus on…. • Value Proposition • Who is it for? • What else already exists that is similar? • Why is your “it” different?

Class 3 Value Model: Measurable Gain • Value Model – measurable value created • THINK: How does your idea create value? • For-profit and Not-for-profit ventures: • How does it make money? • Fee for service • Retail exchange • License fee • Grants, donations, membership fees • Remember: Not-for profit ventures still must create enough money (revenue) to sustain themselves!

Class 3 Value Model: Measurable Gain • How do other types of ventures create value? 1. Input of resources results in useful output 2. Value of output exceeds value of input • Example Concept: www.BenefitsCheckUp.org • 200 x 1 ROI – what does this mean? • Example Concept: Stock Photography Business • ROI during (photos for fee. Why do we like this model?) • ROI AFTER (exit strategy) • AFTERMARKET (book, speaking) Beate’s Case

Class 3 Venture Options: Pros & Cons Entrepreneurial Traditional Start up Purchase existing Franchise Licensed user/vendor E-bay Biz Direct Sales E-commerce Home-based Incubator park Intra-preneurial Project Org or business unit Special Initiative SAP Implementation Employee Fund Drive Non-Profits Free-standing Institutions Division of larger entity Branch of umbrella group

Class 3 Venture Structure: Legal Forms For Profit Sole Proprietorship Partnership LLC S-Corporation C-Corporation Not for Profit 501 C (3) 501 C (4) – (27) Most decisions are made based on 1. Ease, 2. Liability, 3. Taxes See text and online handout for more

Class 3 Feasibility Plan: Concept • Concept is first formal content section • Compelling! Concise! Complete! • Section Content • State the concept • Present the value proposition • Explain the value (business) model • Brief description of form and legal structure • Other relevant details that will be further explored in later plan sections

Class 3 Prove It (Investor) • Class acts as investor • Scenario: • You have the money to invest, but you have to give something else up in order to do it. • What information would convince you this is the right place to spend your hard earned cash??? • Ask any questions you consider important • Don’t worry that it is early in the process, this is the entrepreneurial leader learning need to find to support the concept.

Anatomy of a Feasibility Plan Executive Summary Concept Value Proposition Value Model Industry/Context Market General Specific Competition Direct/indirect Strategic Differentiation Financial Information Startup Costs Pro Forma Income Statements Balance Sheet Sources of Funding Management Team Operations Milestones Harvest Strategy You are here

For Next Session 1. Venture Concept Plan draft • DUE: 1 PAGE BY WEDS 9AM-in BOX @ 315 FUNGER 2. Skill Building – Doing Research • READ: About research (docs online) • BLOG: About research skills/experience before next class 3. Reading - Essentials 8 & 9 4. Mentor selection – pre step Approval for “off grid” mentors Have someone in mind? DUE: Email Prof Frey Friday if you want to select your OWN Mentor 5. Provide online feedback: Peer forum Catch up - Grad students need to: • Approve your book and • Need outline (printed – one page – see blog)

Foundations of Entrepreneurial Leadership