The Entrepreneurial Lifecycle

The Entrepreneurial Lifecycle Presented By: Kavit Doshi (Roll No- 113)

Flow of presentation Entrepreneurial Life Cycle Entrepreneurial S-curve Risk Model Fit Model Conclusion

Life-cycle stages What is born today, Must die tomorrow The ‘IDEA’ Growth Shakeout Maturity 

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Entrepreneurial Lifecycle Chart Revenue

Maturit y Shakeou t

Incubation

IPO / acquisitions

Growth

Ide aBusiness plan/

startup Pilot/Prototy pe

Founders fund

Banks / financial institutions Market development/ roll-out

Venture capitalists & corporate investors

Time

The ‘IDEA’ (Stage 1) 

Not everyone with an idea starts his/her business Intent Motivation Mindset

Mull over the idea INCUBATION CENTRE (e.g. Hi-Tech Products)to: Designing and Prototyping the product Test marketing Developing customer & supplier base Not all need INCUBATION MODEL

1st milestone (for Technology Based Products): Development of the Prototype Tested with few ‘alpha’ customers

2nd milestone: Launching in a limited way Next tranche of funding usually needed here

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Entrepreneurial Lifecycle Chart Revenue

Maturit y Shakeou t

Incubation

IPO / acquisitions

Growth

Ide aBusiness plan/

startup Pilot/Prototy pe

Founders fund

Banks / financial institutions Market development/ roll-out

Venture capitalists & corporate investors

Time

Growth (Stage 2) Entrepreneur goes for expansion through: Capturing Market Share Differentiating Expanding channels Training and Expanding the core team Acquiring resources Entrepreneur Focuses on: Developing Operational Systems Achieving Sales growth Increasing market Share VCs bring in important Value Additions 

Entrepreneurial Lifecycle Chart Revenue

Maturit y Shakeou t

Incubation

IPO / acquisitions

Growth

Ide aBusiness plan/

startup Pilot/Prototy pe

Founders fund

Banks / financial institutions Market development/ roll-out

Venture capitalists & corporate investors

Time

Shakeout (Stage 3) Period of Continuous Growth Company is now big enough to be ‘noticed’ Entrepreneur goes for: Rapid growth and professionalization Attempts for Market Leader Position Broadens product/service lines & geographical coverage To carry on Continuous Growth: New Venture Strategies Continuous Innovations In a position to approach the Banks for Debt

Funding

Entrepreneurial Lifecycle Chart Revenue

Maturit y Shakeou t

Incubation

IPO / acquisitions

Growth

Ide aBusiness plan/

startup Pilot/Prototy pe

Founders fund

Banks / financial institutions Market development/ roll-out

Venture capitalists & corporate investors

Time

Maturity (Stage 4) Entrepreneur’s Alternatives regarding future Evolve the company Partial/Full management buy-outs Founder’s Vision and Objectives May Cash-out to start another business

It is a Journey that is Important It is a journey of Self actualization and realizing one ’ s full Potential The truly successful are those few who are Contended and Disciplined

The Entrepreneurial S - Curve : A Conceptual Model for Entrepreneurial Life Cycle

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Submitted to the:  International Council for Small Business and Entrepreneurship 2005  Annual Conference  June 15-18, 2005 

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Introduction A single, holistic model to help entrepreneurs

conceptualize the entire entrepreneurial process The concept of the entrepreneurial S-curve is intended to help entrepreneurs predict, formulate, and execute strategies over time, taking into account changes in context. It includes Risk Model Fit Models Finally, we correlate the entrepreneurial Scurve, entrepreneurial risks, and the fit models together, and suggest a future research agenda and three propositions.

The Risk Model The conceptualized entrepreneurial S-curve with three

stages in the entrepreneurial process as well as possible and relevant risks along each stage 3 stages:  Startup  High Growth  Sustainability  (global enterprises)

Entrepreneurial Risk All of the risks may occur at all three stages. This

paper attempts to focus on those risks that are most prominent at specific stages of the three-stage entrepreneurial process.

Six Risks 1.Developmental Risk 2.Manufacturing Risk 3.Marketing risk 4.Management Risk 5.Growth Risk 6.Public Financing risk

Performanc e (5) Growth Risk (6) Public Financing Risk (3) Marketing Risk (2) Manufacturing Risk

(4) Management Risk

Time (1) Developmental Risk

Entrepreneurial Fit Models May be helpful for entrepreneurs to manage

stage-related risks Elements in the Four Fit model Start-up Stage Hi-growth Stage Sustainability Stage Global Enterprise

Each stage in the entrepreneurial process

involves three correlating and critical elements that must fit together to achieve success at that stage.

Fit model: Start-up Stage Entrepreneur

Venture

Context

Fit model: Hi-growth Stage Tools

Task

Manager

Fit model: Sustainability Stage Product

Market

Finance

Fit model: Global Enterprise Entrepreneur

Venture

Context

S-curve, Risk and Fit Model correlation  The Fit Models and entrepreneurial risks formulates a cycle along

the entrepreneurial process.  As the two approaches join, elements within the Start-up Fit Model relate to the early stages of an entrepreneur’s journey.  Once the initial investment and the payback period has been achieved, a firm may begin to experience rapid growth and expansion.  Using the tools provided by the Hi-growth Fit Model, managers can ensure that the organization has the potential to continue to develop into a larger business venture.  Businesses at some point usually enter into a period of stagnation (commonly following a period of rapid growth). During this phase, managers of a firm may profit from an understanding of the sustainability phase and its elements of product, market, and finance to keep its operations viable.  This conceptual framework may allow entrepreneurs, corporate leaders, and venture capitalists to better understand their own businesses and forecast potential risks and opportunities, thereby formulating plans to avoid obstacles, seize opportunities, and achieve new Heights.

“ If I’m

I am in control , probably moving too slow !” - Mario Andretti

Thank You