COURSE OUTLINE

ENTREPRENEURSHIP AND NEW VENTURE MANAGEMENT

Course Code:Credit units: 3Term: VICourse Instructor: Dr Sonu GoyalEmail: sgoyal@imt.edu

COURSE OVERVIEWTraditionally students graduating from the best b-schools in India and elsewhere in the world preferred to work for large corporate entities. However, in the changing context of downsizing and restructuring by many large corporations, more and more jobs in the economy are expected to be generated by new and small businesses. The outstanding success of many entrepreneurs is also attracting many MBAs to opt for starting new businesses rather than opting for more conventional career options; to become job creators rather than job seekers. B-schools admit students with great talent and high long-term expectations of responsibility, autonomy, and financial reward. Today, many MBAs are skeptical of long-term careers in large corporations. They belong to a culture that celebrates entrepreneurial individuals. Therefore, although only a handful of MBA students start businesses right out of school, a large proportion expects to do so some years later. This course seeks to develop the knowledge, skills, and attitudes that will support and enhance their entrepreneurial activity. The wide range of potential opportunities that entrepreneurs can pursue allows many different types of individuals to succeed. Graduates of an MBA program need not be out of the ordinary, therefore, to start their own venture.

Courses in entrepreneurship have gained popularity in B-schools everywhere, but it is not clear just what should be taught and how. Centered around the creation of a new venture, the key questions addressed in this course include: Who is an entrepreneur? What special opportunities and challenges do entrepreneurs face? How can these opportunities and challenges be managed creatively and effectively? This course is a basic primer on the issues and challenges faced by entrepreneurs.

The aim of this course is to facilitate the development of skills and a knowledge base that will enhance the student’s ability to more effectively understand, interpret and implement entrepreneurial acts and new venture creation. The objective is to prepare MBA students to start and nurture their own businesses.

Individual entrepreneurs face distinctive challenges, especially if they take the improvised route to starting and nurturing their businesses. The core portion of an MBA program, which serves a broader audience than this Entrepreneurship course, cannot fully cover important issues that such entrepreneurs typically face in evaluating opportunities, securing resources, and growing their businesses. At the same time, we must be realistic about what a 20-session course can accomplish. Some important skills, such as selling,

take years of "learning by doing" to refine and develop. An important objective of the course, therefore, is to highlight key issues and help students develop an agenda for future learning.

LEARNING OBJECTIVES:After completing this course the students should:

Understand concepts, processes and issues in entrepreneurship and new venture creation;

Develop skills in creating a new venture proposal, including the required Research, analytical/evaluative and presentation skills; and

Develop an awareness of strategies and processes that both enhance and inhibit entrepreneurial behavior in large and small firms, including one’s own orientation.

PEDAGOGYStudents will learn the subject through a mixture of lectures, case studies, readings, videos, presentations, guest lectures and a hands-on project that involves biographical study of an entrepreneur. Students are also encouraged to use all sources of information at their disposal like business journals, books and magazines, as well as the Internet to familiarize themselves with the world of entrepreneurship and new venture creation and management, and share their views and information in the classroom.

REFERENCESCore TextKaplan, 2003; Patterns of Entrepreneurship; John Wiley & Sons Inc.

Books for reference1. Donald F. Kuratko and Richard M. Hodgetts, Entrepreneurship : A Contemporary

Approach, 6th edition, Harcourt College Publishers, 20042. Robert D. Hisrich and Michael P. Peters, Entrepreneurship, 6th edition, Tata

McGraw Hill Company Limited, 2006, New Delhi3. Dollinger Marc J.; Entrepreneurship Strategies and resources; 3rd edition; Pearson

Education4. Timmons, J.A, 2002. New Venture Creation: Entrepreneurship for the 21st

century. McGraw-Hill.5. Charantimath, P.M. Entrepreneurship Development and Small Business

Enterprises. Pearson Education.6. Michael H. Morris and Donald F. Kuratko; Corporate Entrepreneurship :

Entrepreneurial Development within Organisations : Harcourt College Publishers, 2002

7. Prahalad, C.K. The Fortune at the Bottom of the Pyramid. Wharton School Publishing.

8. Raymond W. Y. Kao and Tan Wee Liang, Enterprise and Enterprise Development in Asia, Prentice Hall, 2001

9. Entrepreneurs : Talent, Temperament, Technique, Bill Bolton and John Thompson, Butterworth Heinemann, 2001

Journals for reference1. Harvard Business Review2. Journal of Business Venturing3. Entrepreneurship: Theory and Practice4. Strategic Management Journal5. Journal of Entrepreneurship6. Vikalpa7. IIMB Management review

SESSION PLAN

Session Topic ExerciseModule 1 – Entrepreneurship & The Entrepreneur

1-2What is entrepreneurship and why it is important.

Readings Dana, L. P. 2000. Creating

entrepreneurs in India. Journal of Small Business Management, 38: 86-91.

Reynolds, P. 2005. Entrepreneurship in the U.S. 2004 Assessment. Entrepreneurship Research Institute, Florida International University. (Edited reading only).

Module II – Developing ideas and business opportunities

3-4

Opportunities, Ideas and feasibilityEnvironment Analysis and Opportunity Recognition - Where entrepreneurial opportunities come from and how to analyze an opportunity.

Case Hotmail: Delivering Email to

the world

5-6 Business concept

Exercise: In-class individual exercise on

developing and presenting a concept statement.

7-8

Entrepreneur as an organizational productThe Individual Entrepreneur - To understand role of vision, persistence, determination and ambition in entrepreneurial success.

Case: ‘New dotcom business –

Sanjeev Bhikachandani’.

9Entrepreneurship as a management process

A perspective on entrepreneurship

10 Historical roots, economic, sociological Guest Lecture

and psychological dimensions – Discussion on the concept of entrepreneurship and its historical development. Cultural and social differences in entrepreneurship in different countries.

Module III – New Venture Strategy

11 - 12 Planning and analysis - decision process

Readings: Note on developing start up

strategies How to write a great business

plan

13 - 14 Managing a growing a venture

Readings: The questions every

entrepreneur must answer. Milestones for successful

venture planning

15 -16 Corporate Entrepreneurship

Readings:Meeting the challenge of Corporate entrepreneurshipCase: 3M

Module IV – Project Presentations18-20 Project Presentations

Grading Policy

Quizes (5 marks each) 20%Mid Term 20%Project (Report & Presentation) 15% + 10%Class Participation 5%End Term 30%

Entrepreneurship a definition: To reform or revolutionize the pattern of production by exploiting an invention or, more generally , an untried technological possibility for producing a new commodity or producing a new commodity or producing an old one in a new way, by opening up a new source of supply of materials or a new outlet for products------ Entrepreneurship, as defined essentially consists in doing things that are not generally done in the ordinary course of business routine

Schumpeter did not equate entrepreneurs with inventors, suggesting instead that an inventor might only create a new product, whereas an entrepreneur will gather resources, organize talent and provide leadership to make it a commercial success. The viewpoint was mirrored by Peter Drukker, who described the entrepreneurial role as one of gathering and using resources, but he added that “resources”, to produce results, must be allocated to opportunities rather than to problems. In Drukker’s view entrepreneurship occurs when resources are redirected to progressive opportunities, not used to ensure administrative efficiency. This redirection of resources distinguishes the entrepreneurial role from the traditional management role. A distinction that Henry Ford made in his decisions.

Robert Ronstadt definition of Entrepreneurship: Entrepreneurship is the dynamic process of creating incremental wealth. This wealth in created by individuals who assume the major risks in terms of equity, time and/or career commitments of providing value for some product or service. The product or service itself may or may not be new or unique but value must somehow be infused by the entrepreneur by securing and allocating the necessary skills and resources.

Ronstadt has a doctorate from Harvard and taught for years at Babson College a well known Private institution. He has authored several books on Entrepreneurship and has been widely considered an authority on the subject. The following article is not very laudatory of the man and highlights the huge gulf between the management that is taught in business schools and the real management that should be practised in business. This does not suggest that many business practitioners in fact know how to run their businesses

Robert Ronstadt wrote and taught about entrepreneurship for years. You'd think that would have helped him when he started a company of his own

As an academic, Robert Ronstadt developed one of the first college programs in entrepreneurship and even wrote what has been used as the standard textbook -- Entrepreneurship: Text, Cases and Notes. Now, two years after leaving the security of tenure to run a business of his own, Ronstadt has found that real life and his book don't match. What will he write next time? -- J. H.

* * *

W hat does this clown know about running a business?

That's what you want to say as you watch him, so self-assured, philosophizing in the comfort of a classroom about "venture formation" and "cash outflows" and "product life cycles." You can tell by the smooth timbre of his voice that this entrepreneurship professor has never once tumbled down a learning curve, never sat up all night plugging numbers into a pro forma just so a banker could say no the next morning, never faced the sobering reality of meeting payroll. "It's frustrating to watch these academics," Robert Ronstadt says. "I see it, and I want to say something."

Which is odd, because Robert Ronstadt -- that's Robert Ronstadt, doctor of business administration -- spent years teaching courses with such titles as Fundamentals of Entrepreneurship and Starting New Ventures. In 1983 he took a six-month sabbatical from Babson College, in Wellesley, Mass., to write a 770-page textbook, Entrepreneurship: Text, Cases and Notes. Not exactly, if you will, the gritty stuff of true-life experience.

That will certainly not be said, though, about the next version of the book, should Ronstadt find the time to write it. "I've learned plenty of things I could add," he says. In 1976 he and his wife, Rebecca, launched Lord Publishing Inc., "a small lifestyle venture." A decade later they pushed Lord into the software business; Ronstadt resigned from his tenured position to serve as chief executive of what he hopes will grow into a $10-million firm within seven years. "I wanted to learn about fast-growth ventures by doing it myself," he says.

Not the best motivation, perhaps (think about those situations from which you've learned the most). "I don't want to fail," Ronstadt counters. "But whatever eventually happens, I like to think I went in as well prepared as anyone could be."

No argument there. The 47-year-old Ronstadt earned his doctorate at Harvard Business School. When Ronstadt decided to teach at Babson -- a small college that was at one time so devoted to replicating the business world that students punched a clock and had their own secretaries -- he was one of a handful of academics who pushed for developing a program in entrepreneurship. By 1980 undergraduates could major in the field, and graduates could concentrate in it. The college also boasted a $1-million endowed chair in entrepreneurship studies and an annual research conference.

In the meantime the Ronstadts had sidled into the publishing business. In the mid-1970s Ronstadt wrote a 189-page book for his students called The Art of Case Analysis. When publishers rejected it because the market sounded too small, Ronstadt published it with the help of his wife, who was then working as a marketing consultant. Using her grandmother's maiden name, Rebecca Lord, she appealed to college bookstores all over the country. In its first year more than 3,000 copies were sold. In under two years Lord Publishing was selling about 7,000 copies annually, netting some $30,000 per year.

When professors started asking whether Lord Publishing could publish their books and collections of their cases, the Ronstadts gladly obliged. By 1979 the company's sales were up to $100,000.

Next came Ronstadt's textbook, which, despite its scattershot approach, got good notices. One reviewer wrote that the book "included a substantial amount of research-based knowledge . . . and should be useful to both practitioners and academicians." Company sales shot up to $250,000 by 1985. Shortly after Ronstadt's textbook appeared, the Ronstadts acted on a suggestion from readers and spent $5,000 to transfer some data from the case studies in the textbook to a disk. It was difficult to use, though, and not many schools were fully equipped with personal computers in 1985. The Ronstadts just about recouped their costs.

But the project did encourage them to pursue Ronstadt's Financials, the rock on which their corporate ambitions stand. It's a software program that provides small-business executives with a relatively easy-to-use tool for evaluating the effect of different assumptions on cash flow, the income statement, the balance sheet, and all key measures (see Executive Software, "Consultant in a Can," June 1989, [Article link]). Ronstadt figures he has raised more than $2 million since September 1986. In 1988 the company posted sales of about $450,000, nearly 65% of that from the software. Ronstadt had hoped to reach a user base of 5,000 by March of this year; he hit his goal by May. Money problems have forced him to make severe cutbacks. Last September, for example, the company burned through $190,000. By May monthly expenses amounted to just $47,000 -- and it was still bleeding $10,000. "You don't really appreciate what this is like," Ronstadt says, "until you have it all on the line."

Some well known 20th century entrepreneurs: Robert Morse inventory of the Morse Code and telegraphy, Eli Whitney inventor of the Cotton gin, Samuel Colt inventor of the Colt 45 and other hand weaponry, Andrew Carnegie founder of the U.S. steel industry, Henry Ford pioneer of mass production. Cornelius Vanderbilt pioneer of the U.S. railroad industry, John. D. Rockefeller pioneer in the U.S. Oil industry. Earlier entrepreneurs were Cyrus McCormack who invented the mechanical reaper and Alexander Graham Bell who launched the telephone industry. Many entrepreneurs were inventors who leveraged their product inventions into successful corporations. But others like Ford were process innovators who expanded the scale and scope of their respective industries. Some pioneer industries on the basis of relocation of business activities to lower cost locations as has been the case for India’s so called software industry whose rise should be credited with G.E.’s move to outsource simple system maintenance coding to low cost areas.

OUTSTANDING YOUNG INDIAN ENTREPRENEUR

CREATING AN IMAGE OF INDIA

SANDEEP MAHESHWARI

At 29 years Sandeep Maheshwari’s life reads like a fairy tale in which a college drop out from a middle class background faces countless adversities to become one of the most well known entrepreneurs of India.

Not surprisingly India’s leading business weekly, Businessworld recently adjudged Sandeep as one of India’s most promising entrepreneurs. On the surface Sandeep Maheshwari might appear plain lucky to have started the right business at the right time. But like all success stories, there’s a lot more to his success than just plain luck,

Before the success of Mash Audio Visuals Pvt. Ltd. ( of which Image Bazaar and ShotIndia are a part), he had tried his hand at six businesses, but in vain. At the age of 21 he had authored a book on Marketing. But when no publisher was ready to take it on, he published it himself. Out of the first print run of 1000 copies, barely a hundred sold. The book might have failed but look carefully and you will see that it is a very special book. Unlike most books, the pages need to be turned left to right rather than right to left. If you are wondering why, you just need to read the first page that asks “ if you cant even change the way you read, how can you change the way you think”.

Sandeep’s attempts at creating something unique did not end there. At 23, he created a world record in photography by taking more than 10,000 shots of 122 models, in just 10 hours and 45 minutes.

Source of Idea: As a photographer, Sandeep would regularly get queries from advertising agencies who wanted to use his pictures for their campaigns rather than shooting fresh images. That’s when he thought of creating a websits with a stock of pictures that he had already shot.

Some research on the Internet revealed that “Stock Photography was a well established industry worldwide. However he discovered that there was no stock photography agency providing creative images with Indian faces. This helped him firm up his plans and work started in earnest in March 2005 and the website www.imagebazaar.com was launched in Feb. 2006

ImagesBazaar.com: with over 700,000 images Imagebazaar.com today has the world’s largest stock of Indian images where one can search, purchase and download as per need.

The website has proved to be a great hit with small, medium and large businesses by providing them ready to use high quality images for advertising, marketing and publishing. In sort it slashes down the cost on producing a shoot from Lakhs of rupees to a few thousands and the time from weeks to a few minutes.

Advantage of ImagesBazaar.com

According to many surveys in visual communication, a product or sevice meant fro a particularl population has better chances of success if it carries a face that viewers can relate to. With India emerging as a leading market for an ever increasing range of products, there has been a surge in demand for images that show an Indian face in an Indian setting. ImagesBazaar.com offers an immense advantage with its vast database of images that are reflective of India.

Difficulties faced: But creating this website was no easy thing for Sandee. As a photographer, he was well versed with the artistic and creative side of his business but the real challenge lay in understanding and implementing the right kind of technology for a fully searchable e-commerce website.

Initially many complained that the site took over a minute for a simple search query to display the results. With time and optimized technology, a search on Imagesbazaar.com today takes less than 2 seconds. In terms of speed of pages loading and navigation too, this website has become on of the best in the world.

Business Transformation: Having established itself as an undisputed leader in the stock photography industry, Sandeep decided to launch another website Shotindia.com under Mash Audio Visuals in September this year.

Unlike on ImagesBazaar.com where top photographers shoot the images, on Shotindia.com anybody can upload pictures that they have taken, and when one of their pictures is sold, they get 50 % of the sales amount.

It might be just a few months old but Shotindia.com already has more than 3000 registered members who upload thousands of images every day. Ever looking for new heights to reach, Sandeep has set a target of over two million images on Shotindia.com by the end of next year.

Clientile: At present, over 6,000 customers in 42 countries are using images from ImagesBazaar.com and Shotindia.com for advertising, marketing and publishing. Delivery of images on both websites is completely online. For providing the localized customer support, there is also an all India Toll free number (1800 11-6860) and local numbers for Mumbai, Delhi, Bengaluru, Chennai, Hyderabad, Cochin, Kolkatta and Ahmedabad. Sony, Toyota, Microsoft, Reliance, Phillips, Airtel, ICICI. Apollo, HP, Times of India, Tata Exports and HCL are among those who use the images regularly.

Testimonials: Rommel Mudra Rakshasa, National Creative director of Interads Advertising Pvt. Ltd. Says “ImagesBazaar.com is a boon for India’s advertising world, a world where speed is the essence and clients hardly give time to shoot relevant pictures”.

In the words of Ramesh S. general manager of R.K.Swamy BBDO, “ImagesBazaar.com has depth and breadth of experience to offer a rich variety of Indian images whose look and feel are unparalleled. Above all, ImagesBazaar.com offers very competitive rates across various segments. This makes them affordable even to small and medium level advertisers.

ImagesBazaar.com is much more than a stock photography websitefor thousands of creative people. As U Dwijendra Acharya, Vice President of Adsync puts it “ I cant help but think of ImagesBazaar.com as an extended arm of our companyh. Whenever I surg to source images from ImagesBazaar.com , there’s a distinct gleam im my eyes I confess that I am proud to be associated with this fascinating and offbeat website”.

Sandeep’s vision: With both his websites a roaring success, Sandeep still is raring to create more, bigger and better in is words “we will take India to the world.In a few years we will be behind every possible visual communication about India or Indians anywhere on the globe and that’s going to be not just through our still images but also with videos, animation, illustrations and 3D graphics. In other words, he world will see India through our eyes”.