Chapter 2

situations in which a new relationship between means and purposes can be established in order to sell goods or services

discovery and emergence approach

• opportunity already exists and merely needs to be discovered by the entrepreneur.

• Entrepreneurs, in this view, are the special people who recognize and take advantage of business opportunities

• it is entrepreneurs’ activity that causes an opportunity to emerge. The opportunity is created, not discovered

• this is the product or service that a founder wants to

  offer on the market.

  
  

• Is the idea viable? (= market feasibility)

• Is its implementation worthwhile? (= economic feasibility)

• Is the idea feasible? (= technical feasibility)

In the first step, the degree of technical possibility, innovation, patentability, and general intellectual protection are examined. Approximately 50% of ideas drop out at thisphase

The second step is to determine whether it is possible to bring the service or product to market. This usually requires it to offer an advantage over existing solutions. Approximately 30% of ideas are not pursued further after this step.

Equally important is to calculate the expected return, price, market volume, and market, as these are all estimated - as well the anticipated costs of pursuing the opportunity. Here, the market is examined in detail, potential segments are identified, and suitable entry strategies and sales plans are formulated. If economic feasibility can be established, the results are typically documented in a business plan

• Self-realization: realize their goals and dreams, and/or are looking for a challenge

• Material remuneration: being paid according to their efforts.

• Innovation: create something new, develop innovative products or services

• Striving for independence

However, these motives differ only slightly from the career motives of non-founders. Many entrepreneurs point towards a specific biographical event that led to their decision to build their own business. These events are often negative (such as receiving a negative performance appraisal, being passed over for a promotion, or even losing one’s job)

• Performance motivation: will to perform and to deal with tasks that are both challenging and feasible.

• High self-efficacy expectation (internal control conviction, or high internal “locus of control”): This describes the belief that one is responsible for one’s own fate and the results of one's actions, and that one can actively influence this outcome. Above all, events represent the results of one's own actions.

• Attitude towards risk: Entrepreneurs often show a tendency to voluntarily expose themselves to situations with an uncertain outcome. They often take calculated risks and are willing to develop the ability to manage such situations appropriately.

• The pursuit of independence

• Problem orientation: Rather than ruminating about negatives, cultivating a proactive mindset often allows entrepreneurs to focus on the possible solutions to a problem.

• Resilience: This refers to physical stamina and the mental ability to perform under pressure.

• Emotional stability

• Assertiveness: This is the will to pursue one’s interest, often including the willingness to lead others.

• Social adaptability: This describes flexibility to adjust to the oft-changing requirements, especially towards customers and suppliers.

• a greater capacity for problem-solving, a broader horizon of experience, and a wider range of knowledge.

• ability to help one another in a personal and/or professional way.

• ease of coping if someone leaves.

• less occurrence of feeling alone or lonely

• possible difficulties in cooperation due to unclear competences and group thinking.

• teams only working together effectively after extended periods of time.

• constructive resolution of any conflicts that arise in the team, requiring conflict competence, respect, listening, participation, and honesty

• illustrated model of how added value is created for customers, and how a return on investment is secured for the organization.

• how companies use their strengths to be successful in the

  market.

• the business model is developed via the founding idea, and then the strategy of the new company is forMulated based on the business model.

COSTAR framework (six core elements of a business idea)

• Customer: Who is the customer? What are their interests, characteristics, needs?

• Opportunity: Where is the market opportunity? How big is the potential? Which trends, technologies, and market changes are relevant?

• Solution: What exactly does the solution look like? How does it meet customer needs and how are identified market opportunities exploited?

• Team: Who is needed to develop the solution successfully

• Advantage: What are the advantages over other options? What is unique about them?

• Result: What results are expected? What does market success look like?

The promise of value to be delivered to a customer through the use of a product or service

• Value proposition: the customer segment is described as precisely as possible, as well as the task that is solved for the customer. The benefits must be clearly defined.

• Business structure: Ideally, the way the business is structured conveys enthusiasm to those who work there. How is the promise of the value proposition convincingly fulfilled by the product, service, or combination thereof? This requires suitable sales channels, production or service processes, core capabilities, and business partners.

• Profit model: how the money is earned. The description of costs and revenues and their influencing factors leads to the determination of the profit. Questions such as “make or buy” lead to the analysis of cost drivers. Different sources of income (product sales, licensing, rents, fees for services, subscription fees, etc.) should be examined and compared with the rules of the industry. This allows for assessing how long-term survival can be achieved.

• Entrepreneurial spirit (team and values): Who is a member of the team? How is an enthusiastic team created? In order to achieve the desired spirit of enterprise, team and values must be united. All desired professional and social skills should be present in the team. The team should embody the values of the value proposition (e.g., rules, ideals, manners) on a daily basis—and manage customer complaints appropriately.

• Customer understanding

• Business architect: The founder develops and implements his business structure.

• Basic economist: The founder understands the basic financial mechanisms of the company.

• Team builder: The founder builds a team that shares and lives the desired values

Business model canvas: The canvas shows nine essential aspects of the business model. The discussion process associated with the entries in the canvas leads to the involvement of the stakeholders and to a common understanding of the business model

ideal-typical, multi-stage, linear process (usually iterative):

• development of a vision. desirable corporate image for the next three or more years. Future products, markets, customers, and processes, as well as company location and personnel structure, are taken into account

• formulation of a mission ( of purpose and nature of the company) , also known as a “mission statement,” the self-image is described in order to make the meaning and value of a company’s task clear to the employees.

• definition of the strategic corporate goals. what the company wants to achieve in the medium and long term. It also shows in which area (product-market combinations) the companymshould become active

• define operational objectives and metrics for achieving these objectives. Operational targets relate, for example, to market share, the quantity of a product sold, key financial figures, and profitability

• then examined and assessed using a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats)

• Cost leadership: A price advantage sets you apart from the competition; cost reductions and cost control are essential for this.

• Differentiation: At least one unique advantage (e.g., quality leadership) is offered, through which a higher price can be achieved.

• Concentration on focal points: Concentrating on targeted niches can result in greater customer benefit or a better cost situation in the segments, thereby increasing cus-

  tomer loyalty.

• market positioning

• innovation

• uniqueness of offerings

• structure of sales channels

• management experience

• ability to meet demand

• market environment

• quality should generally take priority over cash flow, as should market share over profit.

• focus on rapid growth, with aggressive marketing used to gain and defend market share.

• characterized by high productivity, with a particular emphasis on experience and learning curve effects.

• the profit for which the prerequisites were created can finally be gained.

Entrepreneurs want to realize their potential. They want to be adequately remunerated for their work, to be innovative, and independent. The business ideas of founders are based on entrepreneurial opportunities that are identified or created and then implemented. These opportunities need to be evaluated—and only if they are technically, commercially, and economically feasible should they be pursued.

A business model then results from a deepening of the business idea. To that end, the value proposition of the firm is formulated.

Strategy development is based on the vision and mission, as well as the strategic corporate goals. By means of a SWOT analysis, generic standard strategies are compared and the most favorable strategy is selected. For founders, this typically means building on their strengths.