Royal University of Bhutan, August 26, 2010 Dr. Guenter Faltin Entrepreneurship Department

1. Entrepreneurship and InnovationCreating and Managing New Business Models Royal University of Bhutan, August 26, 2010 Dr. Guenter Faltin Entrepreneurship Department Free University of Berlin

2. The essence of entrepreneurship is being different. Marc Casson

3. Why is the business model so important? Let´s have a look at the burst of the dot.com bubble: The companies had everything they needed for success: • huge amounts of (venture) capital • professional managers coming from big companies • cutting edge technology What was missing? A convincing business model!

4. The traditional approach to find a working business model is expensive! The traditional Trial and Error-Approach works like this: Try, fail Try, fail Try, succeed

5. The new paradigms of entrepreneurship • idea-based business models • focusing on entrepreneurship,not business administration • applying modular entrepreneurship

6. The European Paradox • Mountains of research and patents • but making use of it happens elsewhere • Ejermo and Kander, 2006,Audretsch, 2007

7. „raw material“ business model the market business administration, acceptance by customers, competition developing and refininga business model Inventions, research findings, new technologies, new ideas economic success economicfailure Success Factors for Start-Ups

8. The Golden Opportunity Emphasize on entrepreneurship! (The production facilities are located in developing countries anyway)

9. Skype and Prof. Malek‘s students... Humboldt University Berlin Institute of Information Sciences

10. Don‘t emphasize too much on technology, serve the market! Glorianna DavenportMIT Media Laboratory

11. From an initial idea to a well developed concept

12. Business model design is a part of Entrepreneurship, NOT of Business Administration Business Model Design Do the trial and error-process in your imagination, rather than with real money. It´s faster and much cheaper. Find a business model that works and maybe has the potential to change a market L AUN CH Business Administration Keep your focus on the business model and outsource most of the business operations If you belief that competence is too expensive… would you rather try incompetence? Management Entrepreneurship

13. Example 1: ebuero AG (www.ebuero.de) • Virtual office services • Call handling • Address service • Fax • Letters • Notification • Customers reduce their fix costs by 90% • Market leader in Europe • 200 Employees Started very small with the founder as the first secretary and his lawyer as the first customer.

15. Example 2 www.paperc.de The future of scientific libraries • The principle: • function, not convention • Online access • „Copyandpay“ • Completebibliographicquotations • Income-sharingwiththepublisher

16. New perspectives of entrepreneurship • idea-based business models • focus on entrepreneurship,not business administration • modular entrepreneurship

17. ? accounting reading a balance sheet controlling negotiating with financial institutions legal problems professional experience in the field of the business managing employees creating team spirit negotiating with suppliers keeping inventory on hand equipment maintenance marketing skills communicating with customers reacting to complaints representing the company in the public and media Workload Reduction Management Business-to-Business-Marketing Traditional descriptions of knowledge requirements Strategisches Management Risk management Einführung Rechnungswesen 1 Public relations Theorie und Praxis der Mitarbeiterführung Outsourcing Marketing für Existenzgründer Überblick über das deutsche Unternehmensrecht Einführung in Arbeitsrecht Interkulturelles Management Wie organisiere ich meine Gründung richtig? Steuerliche Probleme für Gründer Einführung in die busy-Software. Research and Development Finanzplanung Welche Steuern muss ich zahlen? Unternehmen und Organisation SWOT-Analyse Wie kann ich mein Unternehmen finanzieren? Zielgruppenanalyse Boring People Reduction Management Vergütungs- und Anreizsysteme Five-Forces-Analyse Internationaler Zahlungsverkehr Datensicherungssysteme Mitarbeitermotivation Förderrichtlinien der deutschen Ausgleichsbank Datenbankmanagment Business Plan Controlling und Qualitätssicherung Increase complexity and loss of supervision strategy

18. There are millions of masters of business administration, but only few masters of new concepts.

19. If I ever had gone to a business school, I would never have started the business. Anita Roddick

20. Awareness for new trends Recognizing new developments - in technology - in competition and market environment The modern concept of an entrepreneur‘s competencies Creating new innovative concepts Managing their implementation Creating enthusiasm, curiosity, humor, a sense of joy, optimism in his or her company Last ressort to solve severe problems

21. New perspectives of entrepreneurship • idea-based business models • focus on entrepreneurship,not business administration • modular entrepreneurship

22. The modular approach to entrepreneurship Concentrate on creating a sophisticated business model Use moduls for almost every function of your company

23. The entrepreneur as a composer use standardized markets, or production by order delegate accounting use service providers (for transport, storage, packaging, shipment) outsource secreterial services

24. Modular Entrepreneurship“The powerful entrepreneur“ Almost no initial investment Almost no fixed costs There are costs only when sales occur High cost savings compared to the established competitors From the beginning professional, highly efficient, virtual and global

25. Example 3: myphotobook GmbH (www.myphotobook.co.uk) • Everybody can make her own books • Free Software enables you to create your own photobook as a real printed and bound hardcover book • Download the free software • Arrange your digital pictures • Upload the file • Receive a printed and bound hardcover book • 50 employees worldwide

27. Secure a competitive edge Have a concept how to deal with imitators (“me-too“ business models) Prepare for technological obsolescence Prepare for economic obsolescence Criteria for an excellent business model

28. Criteria for a High Potential Entrepreneurial Design • Scalability • Simplicity • Minimize risk • experimental pre-start • intelligent prototyping

29. The principle: Try out first, only thereafter invest full scale. “Intelligent Prototyping“ For Example: Use Adwords at Google for market acceptance Create a website, offer a platform for critisising conventional product Check out techniques of rapid prototyping Create your own testing environment

30. Google not only helps to find products to buy, but also markets to sell to! You can buy these Ads and pay only for the clicks For 1000 THB you find out, how many people are looking for your product and how many like your offer so much that they click on it

31. Business Administration Minimizing fixed costs by means of modular entrepreneurship reduces your risk and maximizes your chances for success!

32. The trick is creativity, simplicity and vision. Take a different view of the world. Be curious, learn and free yourself of conventional rules.

33. Create something original that stands out above the masses, something with a lasting value. Above all, though, you want to be proud of your product. Such was my business philosophy . Richard Branson

34. The development of an innovative entrepreneurial idea is, above all, a creative process. Its engineering is comparable to an artistic creative act. Karl H. Vesper

35. The Golden Opportunity Create a culture of entrepreneurship: Focus on people‘s needs, use IT,tune in with society‘s values

36. Dr. Guenter Faltin Entrepreneurship Free University of Berlin www.entrepreneurship.de Tel.: +49-30-85 95 61 21

38. www.entrepreneurship.de

39. Example 3: www.wartemusik.de • The simplest company ever: • Only one product • Solves only one need • Is only sold online • A website consisting of only one page • No complexity • No employees • No fixed costs