miércoles, 29 de febrero de 2012

Harvard Business Review on Entrepreneurship

I read this book published on 1999, I consider it gives very good ideas based on experience of authors of how to fulfill objectives when you start a business.

I consider the next ideas are the most important of the book:

  • The first step you should do when you start a business is defining your personal goals and aspirations in life, your business has to be related with your dreams.

  • Ask yourself if you have the right strategy and if is possible to achieve it, a new company's strategy must embody the founder's vision of where the company is going, not where it is.

  • Can the strategy generate sufficient profits and growth? Is it sustainable?

  • At the beginning the founders won't have a role defined, they will have to do many things in different areas. Till the enterprise grows roles will be defined.

  • When you write a business plan you have to organize four areas: the people, the opportunity, the context and risk and reward, if one of them isn't well organized your entrepreneurship will fail.

  • One of the greatest myths about entrepreneurs is that they are risk seekers. All sane people want to avoid risk.

  • By the time an opportunity is investigated fully, it may no longer exist. Is important to promote your product in market in time, if you have a delay of six months you lose 31.5% of opportunities.

  • Make a budget for two years, include an estimate of incomes and outcomes, so you will know how much cash is needed.

  • Milestones for successful venture planning:

    • Completion of concept and product testing

    • Completion of prototype

    • First financing

    • Completion of initial plant tests

    • Market testing

    • Production start up

    • Bellwether sale

    • First competitive action

    • First redesign or redirection

    • First significant price change

  • “Strategy is easy, but tactics are hard”. The key to turning a good idea into a good business comes in day-to-day management of the company. For that reason, Rock says, he doesn't evaluate financial projections in business plans. He looks at the people particularly the financial people involved with any business start up.

  • Follow the next axioms drawn from successful entrepreneurs:

    • Get operational quickly

    • Look for quick break-even, cash-generating projects

    • Offer high-value products or services that can sustain direct personal selling

    • Forget about the crack team

    • Keep growth in check

    • Focus on cash, not on profits, market share, or anything else.

    • Cultivate banks before the business becomes credit worthy.

  • Over the past year, we have examined the difference between leader and laggards in commercialization in the United States, Japan and Europe. Our study found that leading companies:

    • Commercialize two to three times the number of new products and processes as do their competitors of comparable size.

    • Incorporate two to three times as many technologies as their products.

    • Bring their products to market in less than half time.

    • Compete twice as many product and geographic markets.

  • Your priority hast to be commercialization of your products, if you don't generate enough cash your enterprise will be broken soon.

  • The commercialization process consists on the next steps:

    • Research, development, manufacturing, service.

    • Concept generation

    • Design and development

    • Manufacturing ramp-up and marketing launch

    • Ongoing improvement.

  • Products have a life cycle you must understand, for example typewriters, they dominated the market for years and as you see, now they don't.

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