The Lee Kong Chian School of Business Academic Year 2015/16 Term 1

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1 The Lee Kong Chian School of Business Academic Year 2015/16 Term 1 MGMT 218 ENTREPRENEURSHIP AND BUSINESS CREATION Instructor Name : Patrick Loh Title : Adjunct Professor of Strategy and Organisation patrickloh@smu.edu.sg Office : LKCSB #5081 COURSE DESCRIPTION This course traces the steps that entrepreneurs likely encounter between a first recognition of a potential business opportunity to the nascent operation of the actual company. This course teaches students the basic ingredients of a business plan and a short pitch for their ideas, yet shows the limitations of a static document in the changing marketplace. Through the use of real business cases, this course helps students understand various issues that require analysis and resolution before their company can be on a more financially sustainable footing. LEARNING OBJECTIVES By the end of the course, students will be able to: Write a business plan and develop a short description about an entrepreneurial idea, Assess the feasibility of business ideas and opportunities, Have a sense of what to expect and what to look out for when starting a new business, Understand and work toward resolving the limitations of a static business plan. PRE-REQUISITE/ CO-REQUISITE/ MUTUALLY EXCLUSIVE COURSE(S) Please refer to the Course Catalogue on OASIS for the most updated list of pre-requisites / co-requisites for this particular course. Do note that if this course has a co-requisite, it means that the course has to be taken together with another course. Dropping one course during BOSS bidding would result in both courses being dropped at the same time. ASSESSMENT METHODS Individual Class Participation 20% Team-based Case Analysis 20% Individual Assignment (4 memos) 20% Team-based Project 40% TOTAL 100% ACADEMIC INTEGRITY All acts of academic dishonesty (including, but not limited to, plagiarism, cheating, fabrication, facilitation of acts of academic dishonesty by others, unauthorized possession of exam questions, or tampering with the academic work of other students) are serious offences. All work (whether oral or written) submitted for purposes of assessment must be the student s own work. Penalties for violation of the policy range from zero marks for the component assessment to expulsion, depending on the nature of the offence. 1

2 When in doubt, students should consult the course instructor. Details on the SMU Code of Academic Integrity may be accessed at INSTRUCTIONAL METHODS AND EXPECTATIONS The course is designed to be informational, hands-on and reflective. To achieve the objectives of the course, a variety of instructional methods will be used. These include lectures, small group discussions, experiential exercises, class presentations and self-learning. Students are expected to attend all class sessions, complete the reading assignments, and be prepared to lead case studies, class discussions, etc. Evaluation methods include individual class participation, team-based case analysis (includes your team presentation), individual assignment, and a final team-based project. Readings: You are responsible to purchase the course pack from the library. If the articles are not included in the course pack, you are responsible to locate them via the Library s Praxis Catalogue. Team-based Case analysis. Every student has to read the case study of the week. The assigned group of student will be responsible to lead the case study discussion. Individual assignment. The individual assignment consists of a memo to reflect your learning experiences (both independent and in-class). Writing assignments are due in Sessions 3, 6 9, and 13. Topics of writing assignment are listed under the sessions in which they are due. Please hand in hard copies to me at the end of each class, and I will not accept late memos. The memo is 1000 word maximum (double-space, about 3 pages). You must demonstrate your understanding and ability to apply the concepts we go over in class. Team-based project. The final project will be a business plan of your start-up company. You select a team of 5-6 members; try to have at least 2-3 majors represented in your team. This will be your start-up team for the new business. You should have your team and idea for business start-up by Session 4. I will brief you more about the final project in class and time will be allocated in class to work on your project. Classroom policy. Please be punctual, be prepared and be present. Be polite to each other; keep an open-mind to comments and suggestions. Please silence your phone. Laptops are allowed but please use them effectively for class purposes. If you are absent for medical reasons, please submit a MC. Be responsible to purchase your own supplies (poster papers, markers etc.) CONSULTATIONS I will be available for consultations during break-time and by appointment. Please come in with specific issues and bring along a few alternatives or possible solutions. RECOMMENDED TEXT AND READINGS Compulsory: Robert Hisrich, Michael Peters, Dean Shepherd, International Edition 2013, Entrepreneurship (9 th ed.), McGraw- Hill [Subsequently referred to as HPS] Supplementary References: Blank S Why the lean start-up changes everything. Harvard Business Review May. How to Write a Great Business Plan (2008), by W.A. Sahlman, Harvard Business School Press [S] Zafar N, Chang V SpeedSim: Made to Exit! California Management Review 54(4): Kao & Tan, 2001, Entrepreneurship and Enterprise Development in Asia. Prentice-Hall, Singapore 2

3 WEEKLY LESSON PLANS REFERENCES WEEK 1 WEEKS 2-3 WEEK 4 WEEKS 5-7 WEEK 8 WEEK 9 WEEKS WEEKS THE ENTREPRENEURIAL SPIRIT AND ACTIONS The Entrepreneurial mind-set ; Innovator s DNA The nature of entrepreneurship and importance to the economy GENERATING & REFINING BUSINESS IDEAS Brainstorm and create ideas Test and refine business ideas Effectuation BUSINESS MODEL & BUSINESS PLANS Linking business ideas with business models Elements in a business plan Protect your ideas with intellectual property strategies CREATING AND STARTING THE VENTURE The marketing plan The organizational plan The financial plan RECESS FINANCING THE NEW VENTURE Evaluating business plans Sources of capital and risks THE ENTREPRENEURIAL JOURNEY Venture capital and going public Exit strategy & Dealing with failure PRESENTATION OF YOUR START-UP BUSINESS HPS Chapter 1 Innovator s DNA Selected articles from Harvard Business Review HPS chapters 4, 5, 6 HPS Chapter 7 Lean start-up Selected articles from Harvard Business Review HPS chapters 8 to 10 Selected case studies Discovery driven planning HPS Chapters 11 Selected articles Selected case studies from SMU Case catalogue Week 1 Introduction & Course Overview; what is entrepreneurship Why we need entrepreneurship in our economy? Who are entrepreneurs? And what do entrepreneurs do? How are they different from managers? Course overview In-class: We will do an ice-breaking activity, watch a video on entrepreneurship. Students get begin to brainstorm business ideas for start-up 3

4 Week 2 Creating business ideas and market entry HSP Ch. 3 (p ) and 4 Dyer, J., H. Gregersen., and C. Christensen (2009). "The Innovator's DNA." Harvard Business Review (December): Supplementary Creating new market space by W.C. Kim and R. Mauborgne, Harvard Business Review, Jan-Feb In-class: We will watch a video in class, Turning passion into opportunity. Brainstorm ideas and be ready to discuss them in class Week 3 Effectuation & Business models What makes entrepreneurs entrepreneurial by S. Sarasvathy (hand-out) Thomas Eisenmann s Business model analysis for entrepreneurs Harvard Business School case study and background note [In course pack: PDF-ENG] Blank, S. (2013). Why the lean start-up model changes everything. Harvard Business Review (May): p In-class: We will watch a video, What is entrepreneurial method by S. Saravathy and engage a 90 min in-class exercise on effectuation and debrief. *Your 1 st individual assignment due in in class. Writing assignment topic: What is/ are the business idea(s) that you ve identified? How would you describe your process of creating the business ideas? Week 4 Domestic and international opportunities/ Getting ready for business plan HSP Ch. 5 Case 1: Fitz-Ritter Wine Estate: 220 Years of Tradition and Entrepreneurship in International Entrepreneurship by Robert Hisrich (PDF on e-learn): read p Sahlman, W. (1997). "How to write a great business plan." Harvard Business Review July- August: In-class: Watch a video on Aramax. Week 5 Protecting your ideas and Founder s dilemma *Teams should come prepared to introduce their start-ups, ideas, and name of the company, and the IP strategy to protect them. Submit a one-page summary of the presentation (not graded, but will give feedback) HSP Ch. 7 HSP Ch. 6 Protecting the idea and other legal issues Case 2: Crafting a founder agreement at HealthCraft [In course pack: PDF-ENG] Case 3: The Birth of Dunia [post on e-learn] In-class: Watch a video on patent new invention. We will review some business plan samples. Group 1 be prepared to role-play the HealthCraft case and everyone participate in the discussion 4

5 Week 6 Marketing plan * Each start-up team brings 1 artifact reflecting the central idea of your start-up HSP Ch. 8 Supplementary Onyemah, V., Martha R. Pesquera and Abdul Ali (2013). "What entrepreneurs get wrong." Harvard Business Review May: Case 4: Babba Co., HBS Case study [In course pack: PDF-ENG] In-class: Watch a video in class on building a story around your brand. Use your artifact and brainstorm a story around your start-up and be prepare to pitch it; work on your marketing plan Week 7 The organization plan & building management team HSP Ch. 9 Organizational plan Case 5: Zipcar Refining the business model, HBS case study [In course pack: PDF-ENG] Wasserman s note: Assembling the start-up team [In course pack: PDF-ENG] In-class: Watch a clip; Group 2 come prepare to discuss the Zipcar case study. *Your 2 nd writing assignment due in class Writing assignment topic: If you were to build a dream team for your start-up (either for your own idea or for your team s start-up in class), who would you hire and how would you retain their talents? Would you draft a founder s agreement (HealtCraft case and Wasserman s note) Week 8 Recess week Week 9 Financial plan HSP ch.10 McGrath, MacMillan (1995). Discovery driven planning. Harvard Business Review July: p. 44 Case 6: Blink Booking HBS Case study [In course pack: PDF-ENG] In-class: Group 3 leads the case study. Each team has 30 min to work on the Discovery- Driven Plan for your start-up. Week 10 Source of capital and risks * Please come in with a draft of your Executive Summary for your start-up HSP Ch.11 (skim through) Beating the odds when you launch a new venture by Clarke Gilbert and M. Eyring in Harvard Business Review, May 2010 Supplementary: A.Bhide (1992). Boostrap finance: the art of start-ups. Harvard Business Review (Nov):109 In-class: Bring your business plan material; we will have a one-hour workshop with Center of English Communication. *Your 3 rd writing assignment due in in class Writing assignment topic: What would Steve Blank, author of Lean Start-up say about making marketing and financial plans, reflect on what have you learned so far in the process of working on the different parts of the business plan, do you agree or disagree with Steve Blank s framework? 5

6 Week 11 Venture Capitals and Exit strategy * Come prepared with your pitch Mulcahy, D. (2013). "6 Myths about venture capitalists." Harvard Business Review (May): Zider, Bob (1998). How venture capital work in Harvard Business Review, Nov- Dec: Case 7: Innova Technology, Part A [will post on e-learn] Supplementary material: How to negotiate with VC s by Deepak Malhotra in Harvard Business Review, May 2013 In-class: We will spend 2 hours on a role-play exercise, start-up teams are divided to play venture capitalists vs. start-ups; start-up team will give your pitch and VCs provide evaluation. Week 12 Dealing with failure Case 8: Affinity labs HBS case study [In course pack: PDF-ENG] Sull, D. N., and Dominic Houlder (2006). "How companies can avoid a mid-life crisis." MIT Sloan Management Review 48(1): In-class: Group 4 come prepare to role-play the Affinity lab case and discuss the pros and cons of each option. We will have guest speakers in class. Week 13 Team present their start-up *Your 4 th individual assignment is due in class Writing assignment topic: Refresh your memory on the effectuation logics and principles (i.e., 1) affordable loss principles, 2) strategic partnership principle, 3) leveraging contingency principle from What makes entrepreneurs entrepreneurial by Sarasvathy). Have you applied any of these principles in working on your start-up project, if yes, how; if not, what would you have done differently? Week 14 Reading week 6