This paper was commissioned to examine what is an entrepreneur and why this person can create unique and novel ideas, while observing and taking action on arising opportunities. When brought together, creativity, design and entrepreneurship can result in developing a successful business model that has as a final objective, the creation of value.
This research draws attention to the fact that the advance in the technology domain creates attractive opportunities for creating futuristic products. Moreover, the three business ventures have the aim of revolutionising the today’s world, each in its’ distinctive field.
In addition, a walk through every stage of what the business model has to offer is presented, bringing forward every aspect and every move that an entrepreneur and its’ team have to make.
Further critical reflections of the business model are being discussed in order to evaluate the effectiveness of the business model presented and explained, with an inserted example of one of the greatest entrepreneurs of Great Britain.
The report concludes in final thoughts about how to effectively deliver value to customers and how to further develop and grow a start-up company.
Executive summary_ 2
The three business venture concept summaries and the business model_ 5
The new era wheelchair_ 6
Reinventing the electric car charging stations 6
Phone of the future 7
Business Model Canvas: 8
step-by-step explanation of the business model design process_ 9
Critical reflection of the business model design process_ 11
Herbert (1999, p.33) suggested that “…the next stage of the evolution of the entrepreneurship field may include a more holistic orientation, to include relevant concepts, topics, and selected information from the fields of creativity, change, and innovation.”. Not only there is a strong relationship between creativity and entrepreneurship, some may argue that they cannot go one without another.
There is a great deal of importance in creativity when it comes to new venture outcomes, but there are multiple key factors that have to be present in order for those outcomes to be attained. Thus, one must have intellectual abilities, knowledge in multiple fields, outstanding thinking styles, a distinctive personality, high level of motivation and last but not least, a great interest for the environment.
Entrepreneurship and design are both working towards achieving the same goal of shaping the future and they are indispensable. An enterprise that only has a designer lacks in entrepreneur skills, and on the other hand, an entrepreneur without a designer lacks in creativity.
Design is not only bringing a new product into the market place, but is also destroying the old product while defining new competencies and qualifications in that market place. Furthermore, in a design idea, conceptualization, production and marketing are fundamental for a company’s survival and growth.
Simultaneously, design thinking is largely nonlinear and fluid, and has a distinctive approach to the conventional problem solving, challenging it through its circuitous traits; whilst perfectly combining and balancing the creative thought process with the analytical one.
An entrepreneur is the person in charge of the idea creation, that has to be novel, innovative and, above all, must be in perfect syncronise with the customer needs and wants. One critical step in creating value is knowing and understanding customer needs, therefore looking through their “lenses”. The “lens” model (Brunswick, 1952) suggests that customers see products through the lenses of their perception, their needs, and filter them according to their past experiences. It is argued that this perception may not be the most accurate, but customers’ thoughts about a certain product are mostly based on the image created in their minds through packaging, advertising, social contexts, word of mouth, customer service, in a few words: the overall experience that the company is creating.
The three business venture concept summaries and the business model
In today’s world, coming up with an absolutely novel and groundbreaking idea seems like an impossible mission, though on the other hand, there are a million possibilities and opportunities that the today’s world is offering.
All three business ventures will be using the effectuation entrepreneurial method, which states that the future is unknowable and therefore not measurable, which in all three cases is applicable. Furthermore, in the effectuation method, entrepreneurial opportunities are socially constructed, subjective and created by the entrepreneur through a process named “enactment” which evolves around the fact that managers create their own constraints by rearranging, demolishing and singling out many objective features of their surroundings (Weick, 1979).
Moreover, the process of effectuation has at its’ roots the identification and exploitation of opportunities in new markets with high levels of uncertainty. An entrepreneur has the ability to discover new set of means and establish new goals through leveraging strategic relationships and engaging with stakeholders. Thus, allowing revaluation of means and possible courses of action.
The new era wheelchair
There is a need for improvement in the health department, more specific, the wheelchairs. Therefore, with the help of the flourishing technology we can upgrade the old and basic wheelchairs. The new era wheelchair will have two unique features: it will be controlled by tongue and will also be able to climb stairs.
A major cause of paralysis are spinal cord injuries that affect about a large number of people the U.K. only. Therefore, the wheelchair has a feature that allows the patient to control it by tongue, through a tiny magnet that sits in a titanium barbell tongue piercing. This then sends wireless signals to the wheelchair, enabling the customer to drive. The second feature is based on having rubber tracks underneath the chair. Thus, when approaching a set of stairs, the wheelchair will be aware of it, through sensors, and will change from the normal wheels to the rubber tracks in order to climb the stairs.
Starting with the means available instead of establishing end goals, applying the affordable loss concept instead of expected return when evaluation options, and also exploiting instead of avoiding contingencies.
Our targeted consumers will be patients with locomotor disabilities of all ages, and worldwide. The consumers will first have the opportunity to see and test a prototype, afterwards we will gather all the feedback given by the potential customers, and finally launch with the final, fully developed product.
Reinventing the electric car charging stations
A problem that was spotted, but apparently overlooked by many, are the charging stations for the electric cars. The phenomenon of having electric cars had a rapid and huge impact when it came on the market, but unfortunately it sunk just as fast due to the small number of charging stations.
Luckily, by spotting this problem, charging stations will now be running on solar panel energy and will be more frequent and convenient, in order to tackle this problem.
Our targeted customers are the current and future owners of electric cars. The payment will be done directly through the stations: every customer that wants to charge his car will have to have a membership card or pay a cash or card a fee of just 20 pounds per full charge. Whereas for the location, we will start with U.K. and later develop towards Europe and even further.
Phone of the future
The scope and scale of marketing knowledge has greatly changed in the past years and major external forces are to blame. The ones that stand out are the adoption of the Internet and the web-based communication, but also the augmenting developments in terms of technology.
The phone of the future is more than a device, more than a phone, is the freedom to communicate, the beauty of the design, but the foremost important, the overall experience and the value delivered to the customer.
When talking about design and features, this phone will be nothing like any existing one on the market. It will be distinctive through its’ impeccable design, a wide screen, possibility of connecting to VR, face, iris and voice recognition, wireless charging, and our unique feature: a drone. The phone will be able to levitate with the help of two drones located on the back of the phone, allowing the customer to control the phone not by hand, but with his eyes.
Our target consumers will be teenagers to early adults (ages 14-25), but also adults (26-50) and even extend to elder ages. We will put emphasis on the adults group due to the fact that they have the power of being direct buyers and because, ultimately, the early adults will soon become adults too. We would also target a wide range of consumers, from daily usage devices to industrial basic equipment.
The consumers will be teased through advertising on Social Media prior to the launch, whilst this move will help us see the reaction and possibly get some feedback. Moreover, a prototype of the phone will be launched and tested, giving us the opportunity to gather information about how to further develop our product. Finally, after the research made, the final version of the phone will be launched worldwide, with the help of many angel investors interested in our venture.
A business model defines how the enterprise creates and delivers value to the customers and converts payments received to profits. Thus, a good business model yields value propositions that are compelling to the customer, achieves risk structures and advantageous cost and also enables significant value capture.
Business Model Canvas
Step-by-step explanation of the business model design process
Identifying and going for the resources needed is a key factor in tackling the opportunity that arose and to further develop unique advantages, that ultimately lead to wealth creation.
Perhaps the most tremendous challenge that will be faced, as an entrepreneur, is attracting resources into a fledging venture. The venture’s lack of reputation and track records creates an intense perception of risk in terms of potential resource providers. Thus, in order for the company to attract social relationships and potential partnerships, there must be a strong relation between us and resource providers, apart from just having a feasible venture concept.
Even though, as a start-up, we are deprived of money, technical skills and a professional management team, we will compensate through forming an advisory board, that has broad knowledge in many fields such as law, management, technology, advertising, sales and also customer service. In pursuance of those aforementioned, seeking help in colleagues from Alliance Manchester Business School, as well as using the network of undergraduate and graduate school contacts, we can heighten our sales force and build powerful partnerships, and aspire to obtain a private angel funding.
In this case, our main job is, therefore, to sustain a trustworthy attitude in order to achieve access to further resources, as the vast majority of the new ventures have little to none initial resource endowments. Through creating this image of cleanness and success, investor may get interested and consider committing resources in our proposition.
High uncertainty is a major factor of risk when it comes to financing. Thus, in order to establish a new venture, each and every partner of the start-up, including myself, would have to bring in its’ personal savings and asset along with the help of other third parties.
The company will thrive in the long run, benefiting from large numbers of customers willing to buy the product we are offering, and thus strengthening relationships with the existing investors.
Another important focus is bundling new relationships that will provide more capital which we can invest in further developing or updating our product in order to satisfy every need discovered in our targeted customers.
Due to the act that a new business that just entered the market lacks in administrative history, loyal customers or partners, cannot refer its reputation for performance; and also lacks in shared experience, therefore it can only rely on current resources. In order for the business venture to be a complete success, there are some vital requirements such as strategy, solid concepts and execution; but the overlooked ones, that are equally important, are the composition and development of initial resources. Each resource must be unique, rare, inimitable and valuable. Moreover, they must have its designated purpose and must fit the opportunity perfectly, that way it can generate competitive advantages that lead to wealth creation.
Pricing is a very important aspect, and since we are the only ones on the market with a product with such a feature, we can benefit from using a targeted pricing. In other words, targeted pricing is a cost oriented approach, which will determine the correct price that will give us a specified target rate of return on our total costs at an estimate standard volume. Furthermore, we chose a cost oriented pricing, instead of demand or competition pricing, due to the fact that, since we are a start-up, our primary goal is to have profits or at least break even, and also due to high uncertainty about demand. The phone will have a price of 700 pounds, making it a medium to premium product.
First, we must penetrate the market, and instead of setting a relatively low price in order to capture a large share, tactic approached by most of the companies, we will set a medium to high price due to the fact that our product will be a premium one. The market skimming objective states that there are a lot of people out there that are willing to pay a higher price for a product that is valuable to them, and we are going to take advantage of this group of the market, whilst focusing on the medium-class too.
In modern marketing management, promoting tools are essential in advertising. Advertising is crucial since is your first contact with the customer, thus it has to be effective and must set a place in the mind of the customers, therefore persuading them, to some extent, in a buying preference for our product.
Our company’s task is to come up with the best marketing programme that guarantees to maximize its profits. Thus, in order to do this, we must make a fair guess of its’ competitors plan and assume their reactions to our plan. We need to understand how customers see the other competitive, leading brands, what influences their buying decision, their perception in technology, and why they prefer the competing brands. Our main direct competitors are Apple, Samsung, HTC, LG; but, in comparison to them, we will provide the unique feature of a drone phone, amongst with an excellent price and customer service.
Critical reflection of the business model design process
Business models are used by entrepreneurs to guide them and also to be appealing and to create interest for new investors. Developing a business model means looking at a mirror, seeing exactly who you are and what you have to offer, to whom can you offer value, what resources are at hand, where and how are you going to make it happen and finally, why are you different, what do you have that others do not.
On the same note, there are some key values without which the business model is incomplete. The product must be novel, useful and feasible, the price must be fair and must suit the product, has to be accessible in terms of location and time and finally, has to make a difference through customer service and must deliver an exceptional experience in order to be “the whole package”.
In addition, one example of the most famous and ingenious entrepreneurs is Harry Gordon Selfridge (1858-1947) who changed the way people of Britain shopped. He was an American retailer, who had frequent visits to London, and saw a rising opportunity. Selfridge helped change British society, liberating women, shattered class divisions and finally, reinvented shopping. He was the first to introduce goods out to touch, fragrance at the entrance, tickets to theatre or train in the store, ladies restrooms, stories for the window shoppers and who did not push people into buying. Furthermore, he changed the media, made the publicity stunts respectable, supported the Suffrage Movement, introduced the fixed, bi-annual sale and changed the way women dressed. Finally, he knew how to draw peoples’ attention, how to deliver them value and quality, not just a product, but a story, an experience.
Concluding, entrepreneurs should have an extraverted attitude, with a high degree of confidence and optimism, have the ability to take risks while maintaining the focus on achieving the ultimate goal.
As it is well known, start-up companies in their early stages must have few important key features such as being founded on unique capabilities that are rooted in innovative combination of resources. An entrepreneur plays the most important role, meaning that he or she must have the capacity to generate and exploit novel and creative ideas, pitch them into the correct market through targeting and positioning, in order for the new venture to create and capture value. In today’s market place change is inevitable, therefore gaps can create, allowing the entrepreneurs to discover opportunities and take advantage of them. “The goal of the entrepreneur is to grab as much of the existing universe as possible.” (Kotler, 1991)
New venture creation requires from an entrepreneur a broad understanding and knowledge in disciplines such strategic planning, accounting, market research, marketing promotion and advertising, human resource management, and lastly, knowledge in operating environment. Furthermore, through past work experiences an entrepreneur must know how to carefully select its’ employees in order to develop an entrepreneurial team that pursues the same goal.