Offered comments today on Washington Post article “The Boss in the Mirror” reviewing new ventures created by student entrepreneurs and entrepreneurship education in universities- check out http://tinyurl.com/79kt79f
Business
Comments on EY Article “Global entrepreneurs changing the world”
Posted Comments on EY Article –“Global entrepreneurs changing the world” -An interesting article about how global entrepreneurs can take on big multinationals.
http://tinyurl.com/3uuyepo
Interesting insights here- thanks for sharing. Outstanding group of global
entrepreneurs. I am involved in this area and one number in article that jumped out at me is only 53 percent of 300 entrepreneurs interviewed believe important to adapt products to meet local market needs.
As we know, major ‘transnational’ competitors face global competition and pursue two key strategies- either cost leadership or product differentiation – cost leaders do minimal local market customization to compete globally (think soap and consumer products), but leading global product differentiators do need to create scale to achieve lowest cost possible, but still have added costs to meet local market needs- achieving balance here is tough as all know.
Many case studies to illustrate this – I like to use IKEA which most know- profitable , successful, undifferentiated, low cost Scandinavia supplier of low cost, easy to assemble furniture in many European markets – entered a major market – the U.S. – and results poorer than expected. Why? U.S. consumers wanted changes ranging from longer beds (we are taller here) and increased quality among other changes – these changes were made, improved results but decreased margins in U.S. market.
For IKEA and many others, global undifferentiated product strategy had to change to succeed in US (and other) market(s).
Lessons for entrepreneurs?
–Global market is excellent opportunity and entrepreneurs
should pursue through organic strategy and alliances (JV, acquisition, other) .
–To achieve long term sustainable, defensible business, I do think the need to
customize to meet local market needs will increase not decrease – this impacts
margins so favors larger global firms who have ‘scale’.
–What this means for entrepreneurs is need to look closer at local market trends – entering overseas market and securing initial market share with an innovative product or service is a great accomplishment- important though to understand the longer term “lessons learned’ by many firms about need to customize as competition intensifies and margins impacted
— Do what you need to learn about “going global’ – clearly this is where there are outstanding global opportunities emerging in all sectors and entrepreneurial companies can play a major role
Paul Silverman
Emerging Opportunities – Internet TV, Ads, New Services
Emerging Opportunities – Check out NY Times Media Article Today–Ads and Services in Internet TV Sector
I track this area closely – note projected 50 percent of all homes will have at least one digital TV by year end. What is coming is crossover of many
exciting new business and consumer services that build on this new infrastructure (e.g., e-couponing, on-line ordering, mass-customized ‘perfect fit’ clothing, home health care services, and many others).
Advertisers have been missing link so this is positive and expect others will follow – still need to evaluate user reaction to ads but I see this being resolved. High potential area and some creative and exciting new business models are being developed here from what I have seen so far…
Here is article and link…
LG Brings Ad Capability to Internet-Connected TV
By STUART ELLIOTT
Published: November 1, 2011
A LEADING marketer of consumer electronics is adding an advertising capability to its Internet-connected televisions through an agreement with a video advertising technology company. And a charter sponsor has already been signed to join them….. more
I will be adding more info on this topic in next few weeks at https://paulbsilverman.com/blog/
We Need More Focus on Intrapreneurship Not Less
Involved in Global Entrepreneurship Week at many levels – contributed to New Zealand’s interest in promoting intrapreneurship – posted following comments today:
We Need More Focus on Intrapreneurship Not Less
Very important topic and should be supported. Glad to contribute.
We see changing technologies, market shifts, new competition and a changing regulatory situation challenging major players in all sectors. The ability to understand and effectively respond to these changes is how I define intrapreneurship. I frequently use 3M, GM and Google when discussing intrapreneurship- all provide insight.
Most know 3M invented innovative products for notes, waterproofing and adhesives, and some were developed ‘by accident.”
Was these pure luck or serendipity? It sure looks like 3M’s success was random and unplanned, and many might think so. Look a bit deeper, however, and you get a different perspective and learn a lesson or two.
At 3M, researchers are expected and encouraged to push the envelope, make
mistakes, and pursue new opportunities. 3M management reinforces this by
mandating that all researchers spend at least 15 percent of their time pursuing ideas that have nothing to do with their normal tasks—pushing the envelope, looking beyond mistakes to take the time to understand, research, dig deeper—all consistent with 3M’s innovation management leadership position. And 3M’s commitment to innovation is reinforced in the company’s mission statement: “To solve unsolved problems innovatively.” Sounds boring to some, but make no mistake- mission statements drive companies.
Further reinforcing this commitment is 3M’s impressive $1.4 billion R&D budget in 2008, about 4 percent of net sales revenue. But these emerging new technologies create disruption, and the need for new business processes, retooling and efficiently managing production, marketing, logistics with major business segments changing every several years. And 3M does it well, an example of effective “tops down” intrapreneurship and change management skills.
Now look at Google. Google, founded in 1998, started as a basic search engine,
ramped up sales to about $17 billion in 2007, and achieved a market cap of about $220 billion in November 2007. Note while Google looks like a high growth entrepreneurial venture which it obviously was, Google had
to acquire the same ‘intrapreneurship’ skills needed to grow,i.e., change
management, adapting business processes, focused R&D/product development, skillful competitive analysis/strategy development and so on. No small task for a “startup” like Google but they did it well
Finally look at GM. Started in 1908, a ‘traditional’ company, a “flagship” automobile brand from 1931 to 2007, and valued at less than $20 billion in late 2007, less than 10 percent of Google. Even after a $50 billion government bailout in 2009, today General Motor’s market cap is only about $51 billion, about 29 percent of Google’s $173 billion.
You can argue I selected a dramatic example here, maybe argue that Google “was in the right place at the right time,” at the cusp of the Internet revolution, while GM is stuck in a mature business, auto manufacturing, with nowhere to go but fight for market share in a tough, competitive global market. I consider this ‘traditional thinking’ that really doesn’t work well with markets and technologies morphing, emerging global players, and intense competition from nontraditional players.
Remember the minicomputer market, with players like WANG, DEC and others who missed the PC market shift, failing to acquire ‘intrapreneurship’ skills or “think entrepreneurially,” a term I defined in my recent book.
Bottom line – intrapreneurship is a critically important management tool that should widely promoted if major players are to effectively respond to todays ‘entrepreneurial age tsunami’ now impacting all market sectors.
Paul B. Silverman
Author: Worm on a Chopstick : Understanding Today’s Entrepreneurial Age: Directions, Strategies, Management Perspectives https://paulbsilverman.com/books/
Comments on Report Accelerating Entrepreneurship in the Middle East and North Africa
Recommend read “The Young Global Leaders Forum and Booz & Company released a report on Accelerating Entrepreneurship in the Middle East and North Africa” http://www.wamda.com/2011/10/10-steps-from-young-global-leaders-and-booz-for-accelerating-entrepreneurship-in-mena –was co-authored by Wamda’s CEO and Young Global Leader Habib Haddad. Excellent perspective on the entrepreneurial opportunities in this region. I have met with senior government staff in recent years – this report confirms my view this is an area of high potential
Submitted following comments in response to report:
Excellent insightful report I recommend all read – one key finding clearly shows that investing in new policies that drive growth of ‘microenterprises” (defined as value less than $15,000) has great potential to drive regional economies.
As noted given size these can be dismissed as irrelevant – look deeper and you see in Saudi Arabia, microenterprises account for 40 percent of all jobs, in Morocco 65 percent, similar in other countries
Other key point – solution to grow and improve survival rate of microenterprises is not just more funding as many may expect – cultural, education,mentoring all play a role. I have discussions in progress with a partner now to contribute in-region with new approaches addressing entrepreneurial education and many exciting initiatives in progress here.
Clearly very active entrepreneurial community exists within the MENA region and not sure many realize this. Also opens doors for alliances with U.S. partners, another opportunity I see developing quickly. Many implications for US also – while we may not have as many “necessity-driven” entrepreneurial ventures here, small/medium enterprises (SMEs) , with effective policies, can drive new jobs and economic growth.
Teaching High School Students Entrepreneurship Drives Jobs and Economic Growth
Posted comments today on Washington Post article today “Trade Geometry Class for Entrepreneurship” http://www.washingtonpost.com/national/on-innovations/whats-the-big-idea-replace-high-school-geometry-with-entrepreneurship/2011/10/24/gIQAhYfSCM_story.html
We do need more entrepreneurs driving innovation, job creation and economic growth, and high school is a great place to start, but we also need engineers and scientists. Here are my posted comments:
Teaching High School Students Entrepreneurship Drives Jobs and Economic Growth
Promoting entrepreneurship among high school students is an excellent idea, but not at the expense of geometry and sciences- we need more engineers and scientists, not less.
Rather than a one time single course, what is needed and would work is a 2 to 4 course entrepreneurship program that provides students with an introduction to entrepreneurship, shows sample business models, provides background on the business planning process-what is it is, how it works, how to prepare a plan, and an overview of financials- how to do a forecast, develop a budget and forecasts. One entrepreneurship teaching technique I have used is to break up classes into teams of 5 students and during the semester each team creates a new venture business plan using tools and templates learned in the course. Typically you also review several case studies of real businesses (Mrs. Fields Cookies is a good one), and key concepts such as ethics, financing, legal and related issues covered as you work through the new venture development process.
These programs really create what I define as ‘entrepreneurial thinking’ which empowers students to be creative, to “think out of the room” as I define it, and help create our next generation of entrepreneurs and in-company entrepreneurs (or “Intrapreneurs”).
What I find most exciting is targeting these programs to address inner-city students to promote job creation and economic growth – a new Entrepreneurial Empowerment Program (“EEP”) I am involved with, integrating both government and private sector business resources, addresses this opportunity- I foresee real opportunity here to spur job creation and economic growth.
Keep in mind teaching entrepreneurship at the high school level is not a new concept. The University at Buffalo School of Management, Babson College, Lehigh University and many other institutions are all developing and exploring high school entrepreneurship programs.
What is needed is a more pro-active national, structured program with clearly defined objectives, standards, metrics, and courses – our high school students are a valuable, untapped resource to help us create our next generation of entrepreneurs who will help drive innovation, create jobs and spur economic growth.
Can Mission Statements Help Me Grow My Entrepreneurial Business and Create Value? Absolutely!
You ask your entrepreneurial management team to join you in the conference room to develop the company’s mission statement. Reaction from your entrepreneurial team may be “ho-hum” , “do we really need to waste time- we know what business we are in,” or maybe ” let’s spend our time designing, developing, selling- doing ‘real business’ ”. Understandable response in today’s fast moving, entrepreneurial companies.
But mission statements drive companies, especially startups seeking to secure a sustainable business creating high value. Mission statements provide many benefits- here are three examples:
1. Ensures all staff is in sync, understands where the company is heading, how it will get there
Emphasize that the company will be the lowest cost provider sends one message; emphasize providing the highest quality, differentiated products sends another. Remember these not-too-subtle differences drive corporate strategy, operational plans, and often define an organization’s future success.
2. Communicates what the company thinks is most important, what are its core values
Emphasize customers, products, technologies, staff development or ethics sends different messages to the company’s ‘community of interest’ (i.e., staff, customers, investors, suppliers, etc.). You need to ensure these messages are clear and focused.
3. Defines the “reach” of the company’s business- what are the real business targets going beyond today’s technologies, markets and products.
Defining how your company will evolve, to what extent you will protect a current business or create new ones, and similar issues, define your company’s ‘reach’ and strategy roadmap. For dealing with investors, this is particularly important.
My counseling with many entrepreneurial firms shows that spending time to define mission statements and particularly “reach” provides high value.
As an example, in my recent book, Worm on a Chopstick: Understanding Today’s Entrepreneurial Age: Directions, Strategies, Management Perspectives , I compared Google and GM’s mission statements. First, here is GM’s:
“G.M. is a multinational corporation engaged in socially responsible operations, worldwide. It is dedicated to provide products and services of such quality that our customers will receive superior value while our employees and business partners will share in our success and our stock-holders will receive a sustained superior return on their investment.”
Now here is Google’s mission statement:
“To organize the world’s information and make it universally accessible and useful.”
It sure looks like Google is reaching for the stars here.
And the results? Google, founded in 1998 by two Stanford University students, started as a basic search engine, ramped up sales to about $17 billion in 2007, and achieved a market cap of about $220 billion. Compare that to General Motors, started in 1908, led sales for seventy-seven consecutive years from 1931 to 2007, and valued at less than $20 billion in late 2007, less than 10 percent of Google. Even after a $50 billion government bailout in 2009, today, GM’s market cap is only about $51 billion, less than one third of Google’s $173 billion.
You can argue I selected a dramatic example here. You may also argue that Google “was in the right place at the right time,” at the cusp of the Internet revolution, while GM is stuck in a tough, mature business, automobile manufacturing, with nowhere to go but fight for global market.
I consider this traditional thinking that really doesn’t work well with markets and technologies morphing, emerging global players, and intense competition from non-traditional players. Looking deeper, like many major traditional companies, we learn GM had opportunities to improve competitive positioning but did not pursue them for various reasons.
To succeed today, what’s needed is ‘entrepreneurial thinking’ driving mission statements and all facets of a company’s business, whether you manage a startup entrepreneurial company or a large traditional company like GM.
When you and your team leave the conference room after creating your company’s new mission statement, you may be excited that you are now on track to create the next “Google”. Maybe, but I expect it is more likely you now have a strategic roadmap that will drive your company’s operations at all levels, send a coherent message to all, and help you grow the company and create value.
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If you want to learn more about the the author’s perspectives on new developments, trends, insights, management tools and tips that can help you grow your business, sign up now for a FREE Subscription to the Global Entrepreneurship Forum Newsletter.
Paul B. Silverman is the author of a new entrepreneurial management strategy book Worm on a Chopstick: Understanding today’s Entrepreneurial Age: Directions, Strategies, Management Perspectives; serves as CEO of Sante Corporation creating a new vision for personal health care management; and is an Adjunct Professor in the Center For Entrepreneurial Excellence in the School of Business at George Washington University.
Tagged entrepreneurial business, Management, startup, Strategy, Ventures
Innovation Management – The Failure of Eastman Kodak
Posted the following comments today on interesting Forbes.com article ” The Entrepreneurial Failure of Eastman Kodak” submitted by Panos Mourdoukoutas examining why Kodak failed to capitalize on the digital film market. I like to use 3M as an excellent “best practices” model for managing and leveraging innovation. My posted comments are as follows:
Entrepreneurial failure is a key driver, but I suggest think about two other related factors that determine corporate success- disruptive innovation and a ‘willingness to fail’ corporate culture. I like to use 3M as an excellent example to make these points. Innovation drives 3M, starting with their mission statement “To solve unsolved problems innovatively”, and an impressive $1.4 billion R&D budget in 2008, about 4 percent of net sales revenue.
New technologies create disruption, and the need for new business processes, the need to retool and efficiently manage production, marketing, logistics with major business segments changing every several years. And 3M does it well, an example of effective “tops down” innovation management. It also takes courage to innovate and change current business directions given public market impact- 3M, Corning and others do this well- Kodak not so well.
Next look at corporate culture. At 3M, an innovation-driven corporate culture mandates that researchers are expected and encouraged to push the envelope, make mistakes, and pursue new opportunities. 3M management reinforces this by mandating that all researchers spend at least 15 percent of their time pursuing ideas that have nothing to do with their normal tasks—pushing the envelope, looking beyond even mistakes to take the time to understand, research, dig deeper—all consistent with 3M’s innovation management leadership position. Given today’s technology innovation tsunami, leveraging disruptive innovation and developing an innovation-driven corporate culture are today’s critical success factors which separate winners from losers. Looking at the digital film revolution, Kodak clearly missed the mark here.
Paul B. Silverman is the author of a new entrepreneurial management strategy book Worm on a Chopstick: Understanding today’s Entrepreneurial Age: Directions, Strategies, Management Perspectives; serves as CEO of Sante Corporation creating a new vision for personal health care management; and is an Adjunct Professor in the Center For Entrepreneurial Excellence in the School of Business at George Washington University
Tagged Innovation, Management
Interview Today on Rita Cosby Radio Show to Discuss Pres. Obama Jobs Plan Speech
I was invited today to provide my insights on President Obama’s job plan in an interview on Rita Cosby’s syndicated radio show WOR 710 (link : The Rita Cosby Show WOR 710)
I offered perspectives on the current jobs plan and also emphasized the point that 64 percent of all new U.S. hires are driven by firms with less than 500 employees, smaller firms, not major corporations, really drive U.S. innovation, and we can and should do more to help drive growth of emerging firms. I also shared some perspectives on the role of emerging companies in China and other countries and what they are doing to support their emerging business sector. A podcast of the show and interview (interview starts at minute 19:00) is available at
The Rita Cosby Show- September 8, 2011
I expect to be discussing the above in other forums and with the administration in coming weeks.
Comments on Thomas Friedman To United States: Innovate Or Else
Gregory Ferenstein posted a Fast Company piece Tue Sep 6, 2011 on his discussion with blockbuster author and New York Times columnist Tom Friedman about his new book, “That Used To Be Us,” which contends that prioritizing innovation can turn around America’s free-fall from superpower status. http://www.fastcompany.com//1778214/that-used-to-be-us-thomas-friedman#disqus_thread
We can do more to address our national innovation challenges and I believe creative new policies driving growth of entrepreneurial firms provides the ideal framework. I posted the following comments on the Fast Company site
Excellent article Greg- thanks.
Innovation is absolutely a critical economic driver and I find it is counterintuitive to many that innovation is really driven by smaller, entrepreneurial firms (less than 500 employees) rather than our nation’s largest corporations as many believe.
I recently posted comments “Think Small. Create Jobs. Win-Win” on Fareed Zakaria’s Washington Post blog thread related to Job Creation Fareed Zakaria Wash Post Blog, reinforcing the point that we need to look at the numbers to build defensible new policies. I find the media has missed the mark here on the role innovation plays in our economic growth and Tom Friedman’s book sounds like an excellent vehicle to help jumpstart discussions. Here are 3 key highlights from my perspective:
- We need to reinforce the point that smaller, entrepreneurial firms (less than 500 employees), more so than major corporations, are the real drivers of U.S. innovation, job creation and economic growth. SBA statistics show that during the past 15 years, entrepreneurial firms accounted for 64 percent of net new hires in the U.S. and pay 44 percent of the U.S. private payroll. Exact percentages vary year to year but these are the facts.
- Most technology innovation is really driven by smaller, entrepreneurial firms who provide the rocket fuel driving our technology innovation engine. SBA statistics show small firms produce 13 times more patents per employee than large patenting firms; and these patents are twice as likely as large firm patents to be among the one percent most cited. Many other statistics also support this fact.
- Major corporations do account for the bulk of U.S. exports, representing 71.1 percent of total exports in 2006. But of the total number of firms exporting goods and services, 97.3 percent of the total were entrepreneurial firms with less than 500 employees. And in 2006, the entrepreneurial firms with less than 500 employees accounted for 28.9 percent of the total $910.5 billion in U.S. exports.Again, a statistic not widely mentioned in the media.
The above provides support for developing new national incentives and policies for driving innovation and economic growth. And we should not forget that while we proceed, other countries, such as China, recognized these same points long ago and are well ahead of us. Again look at the numbers, always a good starting point.
In a Washington Post OpEd several years ago (“New Ideas Needed as Jobs Shift”, Washington Post, Mar 3, 2008), I noted China’s smaller businesses drive economic growth, employing about 75 percent of all urban employees, holding about 60 percent of all invention patents and accounting for about 80 percent of new products. China is also pursuing a comprehensive plan to create 10,000 mostly small and medium-size companies each year, hoping to create 100,000 new jobs. And China’s growth was not by accident but through careful planning- we have lessons to learn here. I also noted Malaysia’s MSC initiative, managed within the prime minister’s office, has an impressive track record, attracting 2,006 companies representing about 63,000 knowledge workers- creative entrepreneurial policies such as R&D credits, tax incentives, strategic financing are some of the policies used to drive innovation and growth here.
Tom Friedman’s book hopefully will play a role in helping shape new policy initiatives to address our global innovation economic growth challenges. I may be more passionate than most about entrepreneurship driving innovation, value creation and economic growth and do have a vision here. Clearly exciting times lie ahead.
Paul B. Silverman
1. Comments On Educational Gaming Article
2. Entrepreneurship. TV Interview. Nov 30th
3. Forbes-Roundup Analytics, Big Data, BI, IOT
4. Surge Rate Of Hispanic Entrepreneurship
5. Entrepreneurship-Interview-Aug 7th
6. TV Interview “Entrepreneurship, Jobs, Econ Growth”
7. WSJ Article: “VCs Should Back Gadgets For The Sick, Not The Healthy, Doctors Say”
8. Comments On Forbes Article – Millennials Want To Be Entrepreneurs, So Why Aren’t They Starting Businesses?
9. $9 M Google Ventures Funding… And Shows Future Of Digital Publishing
10. Comments On Business Models At “For Entrepreneurs”
