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Venture Strategies: from Inception to Success

This comprehensive guide explores the critical factors and common pitfalls in starting new ventures, providing insights on market focus, financial foresight, and team building. Learn why ventures fail and how to ensure success, with examples of renowned companies like Petronas offering valuable lessons.

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Venture Strategies: from Inception to Success

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  1. By Bruno GABRIEL, Loan MARCIN and David MESNILDREY By Bruno GABRIEL, Michael GALLEGO, Loan MARCIN and David MESNILDREY

  2. Start a new venture

  3. Start a new venture “Start-up's success is 1% your invention, 99% your business skills.” • Creativity • Information Key of success

  4. Information • Product • Which market niche ? • Price range / Quality / Demographics • Competition • How to differentiate from them ?

  5. Information • Customer base • Who is your target ? • Location • Financial and administrative aspects • Finance • Alone or not ?

  6. Conditions • Knowledge • Intense R&D • Demand • Large and quickly growing market • Industry lifecycle • Young industries • Industry structure • Avoid intensive industries

  7. “A venture is most prone to failure during its first three years of operation - the so-called 'valley of death'. A key to getting through these early years is to avoid the obvious mistakes." – from 'Devising Venture Strategies', Invest-Tech Ltd.

  8. Common pitfalls of new-ventures

  9. Pitfalls • Buying a job rather than a business • Being a great plumber but having no idea how to run a business that sells plumbing • Taking on a business partner • Starting a business from scratch

  10. Pitfalls • Thinking the business idee will make the company • Thinkingtoosmall • Competing on price and price alone • Trying to cost-cut your way to success

  11. Pitfalls • Hiringcheap employees • Focusing on only one area of your business • Not testing or measuring anything • Doing the work once and getting paid once

  12. Criticalfactorsinvolved in the development

  13. Criticalfactorsinvolved in the development • Focus on market • Make a financialforesight • Build top management team beforestarting the venture • Make the right decision • In-companies case: Insulate the new venture from main business

  14. Why new venture fail ?

  15. Why new venture fail ? • Development risk: • Can the product or service actually be created? • Manufacturing risk: • If the product can be developed, can it actually be produced in appropriate volume? • Marketing risk: • If the product can be made, can it be sold effectively?

  16. Why new venture fail ? • Financial risk: • If the product can be sold effectively, will the resulting company be profitable and can the profits actually be realized in a form that allows investors to receive cash? • Growth risk: • If the company can achieve operating profitability at one level, can profitability be maintain as the company evolves?

  17. Elementsthatunderlines Venture success

  18. ElementsthatunderlinesVenture success • An Effective management team • Venture financing • Decisionsbased on a clearunderstanding of the market • Be open-minded • A well-researched business plan • Be a good money manager and remain in control of venture’s books • Passionate entrepreneur about his new venture

  19. Management Team

  20. Understanding of the market

  21. Business plan

  22. Example of success

  23. Petronas • Malaysianownedcompany • Founded in 1974 • Biggestcompany in Asia

  24. Historicalaspects • Let’s go back to the beginning of the 70’ • More and more request of oil and gas • Major companiesbecomelessinfluential • Malaysia isdependant of Esso, Shell… • The governmentwanted to removethisdependancy !

  25. Favorable factors and innovation • Lot of research about extensive exploration and drilling offshore • It helpsPetronas to developfaster • The country issituatednear the BunkaShelf • It decided in the 80’ to developnaturalgasalso • Malaysian’snaturalgasisexportedworldwide

  26. Othersfavorable aspects • Cultural aspects • Petronasis a companyfromAsia, not a European or American one • A lot of contractswere made withasiatic country (Myanmar, Vietnam, Japan…) • The companyisknown all over the world • Motorsport (main sponsor of BMW) • Education (« universitiTeknologiPetronas »)

  27. What are the keys to the success? Good opportunities Cultural aspects Diversification Financial power Future prospects

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