Engineering Entrepreneurship. Ron Lasser, Ph.D. EN 0062 Class #

Transcription

1 Engineering Entrepreneurship Ron Lasser, Ph.D. EN 0062 Class #

2 Housekeeping! Please with: EN62_YourName_CaseName Please name your ppt file: EN62_YourName_CaseName Please put your name on the slide in the ppt file Fancy backgrounds/layouts not required! 2

3 What is GWV's target customer and target market? Developing a killer app for mobile business professionals Potential excitement to revive the wireless Internet services marketplace 3

4 Stages of Venture Development Stage 1 Pre- Start Up Stage 2 Start Up Stage 3 Growth Stage 4 Mature Stage 5 Innovation or Decline 4

5 The TA Life Cycle Landscape The Tornado Main Street Early Market End of Life The Chasm The Bowling Alley Early Market great excitement The Chasm great despair The Bowling Alley niche based adoption The Tornado mass-market adoption Main Street after market development End of Life obsolescence and retirement 5

6 Global Wireless Ventures Timeframe: November, 2002 Context: wireless internet services in the doldrums World-wide recession Uncertainty about future in wake of 9/11 attacks in the United States 6

7 Global Wireless Ventures Founders Bjourn Magnusson PhD Royal Institute of Technology, Kista, Sweden Theresa Byers MS,BS in CS Stanford Kai Leung Ping BS in EE National University Singapore Three friends and colleagues All had learned Japanese Worked together at NTT DoCoMo in Japan since 1998 Helped to create phenomenally successful market for wireless services in Japan Desired to be at forefront of wireless internet service market 7

8 Global Wireless Ventures What they did Learned a lot by 2001 Decided to launch new company Worked nights & weekends to develop a prototype of a new wireless application for business professionals It was to be the killer app Demonstrated prototype to a small set of VCs who were leaders at funding wireless Internet ventures 8

9 Global Wireless Ventures Received multiple term sheets A term sheet is the contract against which a VC will provide funding and states what the VC will receive in return for the money provided VCs were located globally Stockholm/Kista in Sweden Singapore Silicon Valley, in California in the US VCs were convinced of enormous potential VCs offered Smart money with one catch: the world HQ of GWV had to be in the home region of the VC whose term sheet was selected 9

10 What is Smart Money Capital provided by VC with conditions attached that impact a new venture in a positive way Deals generally prefer top-tier investors, and these investors may, in turn, have a position in the market with access to better deals and a larger set of feasible investments If top-tier investors are unable, or unwilling, to serve all deals, there will be sorting in the market With sorting, the top-tier investors match with the best deals, the second-tier investors match with the second-best deals, and so forth Capital constraints or other constraints may limit the number of deals an investor can fund. 10

11 Overview of Wireless Industry 2002 Wireless industry large and complex Subscribers had nearly quadrupled from 200M in 1997 to 770M in 2001 Many players from start-ups to multinationals Market was divided up into five segments to facilitate understanding 11

12 Overview of Wireless Industry 2002 Market Segments Wireless Component Providers for baseband, RF, chipsets Texas Instruments and Qualcomm Network Equipment Suppliers physical infrastructure Nokia, Motorola, Lucent End-terminal Manufacturers laptops, mobile phone, PDAs, automotive telematics (GPS), wireless appliances Carriers mobile service providers E.g., ATT, Sprint, Verizon, Cingular in US Wireless Software Providers organized by segment Carrier-focused Enterprise-focused Consumer-focused (Newest) Network Equipment Manufacturers Consumers Wireless Component Providers Carriers Wireless Software Providers End Terminal Manufacturers Enterprises 12

13 Wireless Clusters 2002 Many hotbeds Tokyo (Japan) Kista (Sweden) Helsinki (Finland) Partly due to: Dominance of wireless giants such as Ericsson, Nokia, and NTT DoCoMo Presence of sophisticated users High penetration rates of wireless technologies in these regions 13

14 Wireless Clusters 2002 Other clusters mostly integrated with IT cluster Silicon Valley (USA) Tel Aviv (Israel) Important regions Singapore Hong Kong Taiwan Both should high penetration Early adopters of new technologies 14

15 Mobile Subscriber Penetration By Region Percent Mobile Subscriber Penetration by Region Population In Millions North America South America Western Europe Eastern Europe Asia Pacific Middle East Africa Note: Asia Pacific had lowest penetration rates, but highest in absolute numbers because of populations in Japan, Taiwan, Korea, and Singapore 15

16 Wireless Cluster Organization Consumer vs. Enterprise Consumer-oriented Asia and Europe Deep penetration of mobile phones Asia: almost every teenager has a mobile phone due to coolness factor : number of electronic gadgets owned Asia & Europe: commuter using public transportation and made dead time useful US: mobile in cars less convenient Enterprise-oriented US: IT departments implemented enterprise-wise software leaving enduser out of purchasing cycle Companies to leverage employee use of mobile via: Supply chain management Customer relationship software Enterprise resource planning 16

17 Wireless Cluster Organization Telecommunications vs. Computing Telecommunications -oriented Sweden-Finland highly innovative TC Giants Ericsson and Nokia Innovations to match their needs Computing-oriented Silicon Valley highly innovative Small clusters of microelectronics and IT centers focusing on computation needs 17

18 Wireless Cluster Organization Innovation Speed vs. Adoption Speed Japan and Scandinavia deep and broad innovation at high rates Silicon Valley much innovation and investment Singapore/Hong Kong lack of innovation centers due to scarcity of wireless experts and innovators Adoption Japan and Scandinavia extensive deployment Singapore/Hong Kong most aggressive adoption including latest cell phones and access points Silicon Valley deployment lacking thus slow in adoption rates due scarcity of spectrum and fragmented carriers 18

19 Wireless Cluster Organization Speed of Wireless Innovation & Speed of Adoption Silicon Valley Innovations were rapid Deployments were slow or lacking Low penetration rates Singapore & Hong Kong (& Japan) Innovations were lacking Aggressive deployment High penetration rates Sweden and Finland High innovation rates High levels of deployment Moderate penetration rates 19

20 Cluster Comparison (1) Silicon Valley Singapore & Hong Kong (& Japan) Sweden & Finland 20

21 Cluster Comparison (2) Silicon Valley Singapore & Hong Kong (& Japan) Sweden & Finland Government Large Corporations Other Clusters Venture Capital Law Firms Research Universities Providers Customers Software Suppliers 21

22 Cluster Comparison (3) Silicon Valley Singapore & Hong Kong (& Japan) Sweden & Finland Government Large Corporations Other Clusters Venture Capital Law Firms Research Universities Providers Customers Software Suppliers 22

23 Decision Time Early 2002 Magnuson, Byers, and Ping had reviewed information gather from: Web research Entrepreneurs VCs Industry professionals Challenge: Select best location for their worldwide HQ 23

24 Not So Fast Decision Included: Personal factors Status and age Family locations and connections Quality of life and lifestyle VCs fascinated by opportunity, technology, and business plan Needs of Company Company lifecycle and costs of doing business Company identity projected to customers and partners Innovation centers and technological support resources Competitive influences Financial incentives of local government Untapped markets in of China and India 24

25 So what did they do? Magnusson, Byers, and Ping picked 25

26 And the winner is Silicon Valley 26

27 And the outcome is The company failed 27

28 Why? Silicon Valley Singapore Sweden What were they offering? A killer app for mobile business professionals Where are their customers? 28

29 Questions What factors should Global Wireless Ventures consider in comparing the entrepreneurial contexts in Sweden, Singapore, and Silicon Valley? Conduct research about Kista, Sweden; Singapore; and Silicon Valley using libraries and the Internet. Based upon this research, what are the assets, liabilities, and risks in the context of each region? What assets (besides smart money) are most critical for a start-up like Global Wireless Ventures? What institutions are likely to help gain access to those assets in each region? 29

30 Answers What factors should Global Wireless Ventures consider in comparing the entrepreneurial contexts in Sweden, Singapore, and Silicon Valley? Accessible to customers and the problem that they want solved High numbers of customers who value the solution Ability to deliver their killer app to the customers (enduser) Singapore & Hong Kong (& Japan) 30

31 Answers Conduct research about Kista, Sweden; Singapore; and Silicon Valley using libraries and the Internet. Based upon this research, what are the assets, liabilities, and risks in the context of each region? 31

32 Answers What assets (besides smart money) are most critical for a start-up like Global Wireless Ventures? Defensible IP and customers They seem to have the first due to the wherewithal of the VCs But the second hmm I can t find them 32

33 Answers What institutions are likely to help gain access to those assets in each region? Most like the providers, i.e., the carriers who actually deliver the products and services to the customers The carriers interface directly to the customer and the markets 33

34 My One Slide for GWV What factors should Global Wireless Ventures consider in comparing the entrepreneurial contexts in Sweden, Singapore, and Silicon Valley? Accessible to customers and the problem that they want solved High numbers of customers who value the solution Ability to deliver their killer app to the customers (end-user) Conduct research about Kista, Sweden; Singapore; and Silicon Valley using libraries and the Internet. Based upon this research, what are the assets, liabilities, and risks in the context of each region? Looking at each region, customers in Asia and growth opportunities due to population and current usage is an significant asset Kista and Silicon Valley do not appear to have customers or infrastructure to facilitate growth, recession is real negative What assets (besides smart money) are most critical for a start-up like Global Wireless Ventures? Defensible IP and customers They seem to have the first due to the wherewithal of the VCs But the second hmm I can t find them not the carriers or end users in recession mode US What institutions are likely to help gain access to those assets in each region? Most like the providers, i.e., the carriers who actually deliver the products and services to the customers The carriers interface directly to the customer and the markets 34