Scott Shane is the 2009 Winner of the Global Award for Entrepreneurship Research.  This essay (in Small Business Economics 2009, 33(2):141-149) is the Prize Lecture he gave upon receipt of the Award in May 2009 in Stockholm, Sweden.   The essay draws on his book: Illusions of Entrepreneurship: The Costly Myths that Entrepreneurs, Investors and Policy Makers Live By. Yale University Press, 2008.

In this paper, Shane argues that policy makers should avoid subsidizing the typical start-ups and instead focus on high-growth firms.  His rationale is that high-growth firms, sometimes called ‘gazelles’, are the source of economic vitality and job creation.   Using various sources of data, he demonstrates that  typical start-ups are headed by people not necessarily motivated by growth, in industries in which most start-ups fail, and not necessarily the best entrepreneurs, hence not generating innovation, jobs and wealth as policy makers would like to believe. He argues that this is not just a U.S. phenomenon since studies conducted elsewhere show similar results.

This is a rather strong argument given that most government officials do not want to ‘pick winners’ to support.  Yet, Shane argues that start-ups with a high probability of generating jobs and enhancing economic growth can be identified.

In Canada, several, such as Wells and Hungerford (Policy Options, September 2011), are advocating that high-growth entrepreneurship is key to Canada’s future economic success.

Questions (to my entrepreneurship students but open to all to comment):

1) What are Shane’s key arguments against policies to support more people to become entrepreneurs?

2) What is your opinion of this paper: do you agree? disagree? why?

3) What is the situation in Canada? (Hint: google the Policy Options paper I mentioned above as one source of information)

(Note:  Click on the text bubble next to the title of this post to leave your comment.)

Technology entrepreneurship rarely succeeds in isolation; increasingly, it occurs in interconnected networks of business partners and other organizations. For entrepreneurs lacking access to an established business ecosystem, incubators and accelerators provide a possible support mechanism for access to partners and resources. Yet, these relatively recent approaches to supporting entrepreneurship are still evolving. Therefore, it can be challenging for entrepreneurs to assess these mechanisms and to make insightful decisions on whether or not to join an incubator or accelerator, and which incubator or accelerator best meets their needs.

In a recent article in Technology and Innovation Management Review, I discuss five key factors that entrepreneurs should take into consideration about incubators and accelerators are offered. Insights are drawn from two surveys of managers and users of incubators and accelerators. An understanding of these five key success factors (stage of venture, fit with incubator’s mission, selection and graduation policies, services provided, and network of partners) and potential pitfalls will help entrepreneurs confidently enter into a relationship with an incubator or accelerator.

– See more at: http://timreview.ca/article/656#sthash.G9uvzT1X.dpuf

Zara – a Spain-based  high-fashion, low-cost retailer, stunned investors and analysts by revealing that its profits climbed 30% in the first quarter of this year along with an increase in sales of 15%.  Yet, 70% of its revenues come from Europe, and it is based in a country where the macro economic situation is  quite challenging.   Zara is the flagship chain store of the Inditex group and is considered a Spanish success story. How is Zara doing it so well while other eurozone firms have stuggled?

Well, Zara has a unique business model.  Innovation in business models does create value, and is generally cheaper than product and technology innovations.    Countless companies  such as IKEA, Dell and Zipcar are highly successful due to innovative business models.

Questions (2nd individual reflection for my 3810 students but open to all to comment):

  1. What is unique about Zara’s business model compared to more traditional fashion retailers?
  2. How does Zara create value to customers?
  3. What do you consider Zara’s competitive advantages to be?
  4. What about its online strategy?
Business planning cards

Business planning cards (Photo credit: plantoo47)

I went to an interesting seminar last week at HEC Montréal (Hautes Études Commerciales, business school affiliated with the University of Montreal) on pedagogical methods and trends in the teaching of entrepreneurship.  Highly diverse and enthusiastic bunch, willing to share their teaching methods, tricks, and challenges.

One aspect in particular caught my attention: that is the trends of not ‘teaching’ business plans to students in entrepreneurship.  As can be expected, this was not a unanimous position….    the trend started in the US  (Standford, Harvard, etc.) where there is now less emphasis on teaching about business plans.  Apparently, Canadian business people spend 2 to 3 times more effort preparing business plans than in the US…

That brought me back to my long experience as an Industrial Technology Advisor with the National Research Council’s Industrial Research Assistance Program (IRAP).  IRAP’s mission is to help Canadian companies grow stronger, faster and bigger with innovation and technology.  A lot of my client SMEs (in several parts of the country) were high-tech start-ups with little more than basic stuff, few people, even fewer financial resources but with a great idea partially developed into a product/process/service.  I recall in particular a minimalist biotech start-up that had a sheet of plywood and two saw horses as a conference table… but talk about knowledge and advanced IT systems in that firm…  In any case, my point is that most of these firms were led by engineers or scientists with few resources, if any, to hire personnel to complement their skill-sets.  Not surprisingly, they were often at a loss as to what to include in a business plan and how to go about it…. I would get comments like: ‘but Diane, what do YOU want to see in this business plan?’ well…. that was not MY business plan nor MY firm….. Most of them had a fairly good vision of what they were trying to accomplish and most importantly, how, but packaging this into a detailed business plans with market and financial forecasts what a challenge, to say the very least.  Some hired consultants to do it so that they could satisfy a variety of demands (government programs, lenders, etc). They obviously did not ‘own’ the plan then as it was prepared by someone else.   I’m not saying that a business plan is useless… But my observations  are that it generally takes way too long for  business people to put a traditional business plan together, often with mediocre results, and obviously it becomes obsolete as soon as Print is pressed on a keyboard, if not sooner…..    Yet, the pace of everything is so much faster that if we want our Canadian firms to succeed in this global world, there’s got to be a better way…  So  it is refreshing to see new trends along the lines of developing the opportunity (Kawasaki, Ries etc), and new approaches to teach entrepreneurship.

What do you think?  any direct/indirect experience with business plans for start-ups? let’s hear it!

and it’s a go….

Posted: August 25, 2012 in Uncategorized

Finally… after months of deliberation, coaxing from nice colleagues, blogs from my students,  (and a glass of nice redwine)… I’m ready to get started with my blog for the new school year!

So what will this blog be about?  it will primarily focus on topics related to my teaching, that is entrepreneurship, international business and marketing.  It builds from a decently long career in the private sector with MNEs, even longer one with the public sector (Canadian federal laboratory) and several years now of teaching experience.   The challenge, of course, is to make this interesting and relevant….  there is so much out there as it is!  I, for one, can’t manage to empty my inbox on a weekly (let alone daily) basis anymore…. way too many newsletters, journal alerts, and a myriad of other interesting updates.  And this is not mentioning twitter, FB, LinkedIn etc etc…..   So the purpose here is to focus on topics of interest to my students, and hopefully to a few others out there.  

 

Looking forward to comments and feedback on the posts.

 

diane