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Introduction to Entrepreneurialist Culture

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Title: Execution Counts, Ideas are Not Enough Author: Bruce Firestone Last modified by: Firestone Created Date: 3/10/2007 3:00:55 PM Document presentation format – PowerPoint PPT presentation

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Title: Introduction to Entrepreneurialist Culture


1
Introduction to Entrepreneurialist Culture
  • ADM 3396 The Road to Financial Security and
    Independence
  • Date Nov. 2009
  • Professor Bruce M. Firestone, B. Eng. (Civil),
    M. Eng-Sci., PhD. Entrepreneur-in-Residence,
    Telfer School of Management, University of
    Ottawa Founder, Ottawa Senators Executive
    Director, Exploriem.org Real Estate and Mortgage
    Broker, Partners Advantage GMAC Real Estate
  • http//twitter.com/ProfBruce
  • http//www.eqjournalblog.com/

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Introduction to Entrepreneurialist Culture
  • Create significant value for yourself and your
    family.
  • A business that you own and control.
  • Greater control over your own destiny both
    professional and financial.
  • Also for intrapreneurs who work in large
    companies, public service, NGOs, charities,
    museums, hospitals, universities, public school
    administration...
  • Artists, architects, writers, musicians and other
    creative persons are also entrepreneurs.

3
Introduction to Entrepreneurialist Culture
  • The entrepreneur skill set includes
  • creativity, innovation, adaptability, discipline,
    focus,
  • business modeling and planning,
  • bootstrap capital, finding launch clients,
  • smart marketing (guerilla marketing and social
    marketing),
  • checking everything,
  • doing everything in parallel,
  • ability to think on their feet and
  • sell, sell, sell.
  • (HIGHLY VALUED IN ESTABLISHED ORGANIZATIONS TOO.)

4
Introduction to Entrepreneurialist Culture
  • Kevin Rose, Founder, Digg.com.
  • Spent his last 5,000 on Digg instead of a house.
  • His girlfriend left him.
  • He made 60 million in the next 18 months.
  • How did he do that?

5
Introduction to Entrepreneurialist Culture
  • Web 2.0.
  • A new model for a newspaper uniquely adapted to
    the Internet.
  • Readers are contributors.
  • Readers dig up interesting stories from all over
    the web and post brief synopses to the site and
    links to them whereupon other readers vote on
    themthe most popular ascend the page.

6
Introduction to Entrepreneurialist Culture
  • The site harnesses the competitive instincts of
    the readers/contributors to compete to see whose
    story will lead.
  • The site works because of its homogeneous
    demographiccontributors only post stories that
    will be of interest to the group.
  • The site is dynamicleading stories change by the
    minute or hour.

7
Introduction to Entrepreneurialist Culture
  • Digg.coms cost for headline writers ZERO.
  • Digg.coms cost for journalists ZERO.
  • Digg.coms cost for editors ZERO.
  • Digg.coms cost for distribution ZERO (at
    least, the marginal cost is practically zero).

8
Introduction to Entrepreneurialist Culture
  • Diggs sustainable competitive advantage (pixie
    dust) is its business model and its readership.
  • You might be able to knock off its business model
    but it is extremely difficult to knock off its
    millions of dedicated (mostly males 15 to 55)
    readers/contributors.
  • The key is that the readership is relatively
    homogeneous and has similar interests.

9
Introduction to Entrepreneurialist Culture
  • How to first populate Digg.com?
  • Each co-Founder personally called 1,500 people in
    a month.
  • Thats 50 calls a day for 30 consecutive days.
  • Then they let scalability and network effects
    take over. (No pushing on a string.)
  • The more readers, the more contributors, the more
    contributors, the more readers.
  • Clients (readers) are also suppliers!

10
Introduction to Entrepreneurialist Culture
  • Harnessing the Internet effectively means
  • you can make money while lying on a beachi.e.,
    your enterprise can run without you being there
  • the enterprise is scalableoutputs grow
    non-linearly with inputsi.e., more hours worked
    will produce way more money for you
  • you have reversed out the worklet your suppliers
    and customers do the work for you like, say,
    Digg.com does
  • you can mass customize products and services for
    clients in a cost effective manner
  • you can connect with new clients and customers in
    a cost effective manner using things like social
    marketing!

11
Introduction to Entrepreneurialist Culture
  • Why not sell it for 60 million?
  • Go lie on a beach somewhere?
  • Ideas are in infinite supply. Execution counts.
  • Just try counting from zero to infinity!
  • Kevin trapped lightning in a bottle. (According
    to http//siteanalytics.compete.com/ Digg.com
    had 39.7 million visitors in July 2009.)
  • Hard to do, twice.
  • Build and hold!

12
Introduction to Entrepreneurialist Culture
  • Scottys story
  • Butcher in local supermarket.
  • Arthritis before age 30.
  • Buys a PC and cutter/self-teaches sign making.
  • Mr. Charming sell, sell, sell.
  • Donates one 25 banner to the Ottawa Senators.

13
Introduction to Entrepreneurialist Culture
  • Can he produce?
  • Works out of his basement/moves to warehouse.
  • Delivers on time and on budget.
  • Outcompetes march larger, more established rival.
  • Turns one banner into 3 million in sign sales.

14
Introduction to Entrepreneurialist Culture
  • Competitor offers to buy him out for 2
    million/should he sell?
  • Imagine me, a former butcher, with 2 mil!
  • Whoa, wait a minute, Scotty.
  • 150,000 salary/Francis another 60k. One truck
    and one car fully paid for by the co.
  • Plus 250,000 increase each year in retained
    earnings.
  • Total value nearly 500k per year versus 1.5
    million gt taxes invested at 3 p.a. 45k per
    year!

15
Introduction to Entrepreneurialist Culture
  • Would you trade 500k per year for 45k per year?
  • Sustainable.
  • Recurring revenue.
  • No matter how much money you start with, if you
    spend more, you will eventually run out.
  • Scotty would need to re-start within 3 years.

16
Introduction to Entrepreneurialist Culture
  • What is a PB4L?
  • Stable business.
  • Fallback position.
  • Bootstrapped so you end up owning it.

17
Introduction to Entrepreneurialist Culture
  • How would you like
  • To work half days.
  • Be profitable less than ten days after launch.
  • Make 120,000 per year.
  • Start your business for less than 100.

18
Introduction to Entrepreneurialist Culture
  • Ryan North, (now famous) online comic
  • Cant draw (he is a brilliant IT specialist).
  • In 2003, he creates Qwantz.com, an online
    dinosaur comic.
  • Six panels using clip art/characters that never
    move.
  • Only dialogue changes, day-to-day.

19
Introduction to Entrepreneurialist Culture
20
Introduction to Entrepreneurialist Culture
  • Key facts
  • Turns disadvantage (cant draw) into advantage.
  • Guinness Book of Records application longest
    running comic strip where characters never
    change/move.
  • Quirky personality.
  • Revenue streams merchandise sales/book
    sales/appearance fees/advertising by Project
    Wonderful, PW.
  • PW created by Ryan profitable lt 10 days gt launch.

21
Introduction to Entrepreneurialist Culture
  • Startup Budget
  • 15.00 for domain name www.poo.ca.
  • 15.00 for domain name www.qwantz.com.
  • Web hosting 35 per month.
  • Fulfillment costs outsourced.
  • Won 500 in 2003 Business Model Competition.
  • Startup Budget -400.

22
Introduction to Entrepreneurialist Culture
  • Marketing
  • T-Rex cardboard cutouts.
  • Placed around campus with this domain on them
    www.poo.ca.
  • Resolves to www.qwantz.com.
  • Ryan is a wealthy person today with plenty of
    time to explore new ideas

23
Introduction to Entrepreneurialist Culture
24
Introduction to Entrepreneurialist Culture
  • How would you like to own a business that made
    you 100,000 per year and took about 200 hours of
    your time (500 per hour)?
  • Richard Rutkowski, former Kanata City Councillor,
    REALTOR, Owner, Best of Kanata.
  • 600 per page to advertise in book.
  • Lots of pages.
  • Books sell at retail for 20 each.
  • Two main sources of revenues.
  • Each book buyer becomes a member and gets 10 off
    at all participating retailers using BOK CARD.

25
Introduction to Entrepreneurialist Culture
  • Secret sauce his advertisers are also one of
    his main distribution channels.
  • They buy books to sell to their customers at 20
    and keep 10.
  • If a full page advertiser sells 100 books, the
    cost of their ad is -350!
  • What a great value proposition BUY AN AD IN THE
    BEST OF KANATA FOR A VE 350.

26
Introduction to Entrepreneurialist Culture
  • Another channel charities and minor
    hockey/soccer groups buy the Books for 5 and
    sell them for 20.
  • Low tech.
  • Richard can SELL.
  • Richard is trusted.
  • Advertisers pay 50 on signing contract and
    balance on delivery of books.

27
Introduction to Entrepreneurialist Culture
  • Pre-sold enough advertising to pay for first
    printing and then some.
  • Cash required to start BOK -ve!
  • This biz is scalable.
  • Maybe there is a market for
  • Best of Dartmouth,
  • Best of Cole Harbour,
  • Best of Lower Sackville,
  • Best of Manhattan!

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Introduction to Entrepreneurialist Culture
  • NEVER, NEVER sell this.
  • It is like
  • a sinecure,
  • a franchise,
  • a license,
  • a concession,
  • a Personal Businessfor life.

29
Introduction to Entrepreneurialist Culture
  • Perhaps, we should each have one micro business
    that we hang onto for life
  • It would be pretty cool if every man, woman and
    child on the planet each had their own Personal
    Business.
  • Its a fallback position or, as my Dad used to
    say, your iron reserve.

30
Introduction to Entrepreneurialist Culture
  • A PB4L does not include things like the guy who
    tells you "I can show you how to make a million!
    Just send me ONE dollar, and I will tell you
    how."
  • And, of course, the answer is "Get a million
    fools to each send you a dollar to tell them
    how..."

31
Introduction to Entrepreneurialist Culture
  • They have to be real businesses.
  • One way to find inspiration might be to go get a
    copy (from your library) of the Encyclopedia
    Britannica and look for crafts from the 1930s.
  • Say, for example, making high end paper for
    writers, socialites and important persons who
    want acid-free paper to preserve their writings.
  • Or a high end chef sells his restaurant to his
    employees and canning his recipes (like smoked
    canard) which he then sells with his two partners
    at shows and high-end shops in Québec and
    elsewhere

32
Introduction to Entrepreneurialist Culture
  • Bootstrap Capital, BC
  • Self-capitalization.
  • Allows you to start with no money down (or little
    money down).
  • Allows you to control your own destiny and not be
    beholden to (or slowed down by) Banks or VCs.
  • You end up owning the enterprise not them.

33
Introduction to Entrepreneurialist Culture
  • Bootstrap Capital
  • When student entrepreneurs or others tell me that
    cant start because they have no money thats
    just an excuse.
  • So how do you start?
  • Another example the NHLs Ottawa Senators!

34
Introduction to Entrepreneurialist Culture
  • Franchise cost 50,000,000 USD in 1990.
  • Pre-sold 15,000 PRNs for 25 each for a team that
    does not yet exist.
  • Pre-sold 500 Corporate sponsors for 500 each.
  • Pre-sold 32 Original Corporate Sponsors for
    15,000 each.
  • Pre-sold media rights for radio and TV for
    250,000 and 4,000,000, respectively.

35
Introduction to Entrepreneurialist Culture
  • Pre-sold 30-year arena management contract for
    15 million a corporate guarantee.
  • Pre-sold pouring rights for 3 million.
  • Pre-sold product rights for 1 million.
  • Pre-sold 10,000 season tickets 22 months before
    the first game for 22 million in cash.
  • Pre-leased 100 suites at 100,000 per suite per
    year or 10 million per year for 5 years
    50,000,000.

36
Introduction to Entrepreneurialist Culture
  • Bought 600 acres for 12k per acre, won a NHL
    franchise, built a MCF (Major Community Facility
    aka, Scotiabank Place) in the middle and sold
    extra 500 acres for 112k per acre to make
    50,000,000.
  • You get the picture PRE-SELL, PRE-SELL,
    PRE-SELL find launch clients before you launch.

37
Introduction to Entrepreneurialist Culture
  • Oh, this doesnt apply to me!
  • Yes, it does.
  • No excuses.
  • Two former students start Maple Leaf Design and
    Construction.
  • They have NO MONEY.
  • They have ideas, energy, focus and dedication.

38
Introduction to Entrepreneurialist Culture
  • They purchased options on 20 housing lots for
    500 from a friendly landowner.
  • They set up in a field in a trailer with nice
    signs and two handsome smiling faces plus a lot
    of cool floor plans and elevations.
  • Pre-sold 10 homes and got deposits of 20k per
    home.
  • Now they had 200,000 in their bank account.

39
Introduction to Entrepreneurialist Culture
  • They negotiated 90 to 120-day terms with their
    suppliers.
  • They pledged their Agreements of Purchase and
    Sale to their Bank for a LOC.
  • (In effect, they borrowed the credit rating of
    their customers.)
  • They made 40k per door and after three years and
    20 homes, they had 800,000.
  • Now they are multi millionaires and still in
    their 30s.

40
Introduction to Entrepreneurialist Culture
  • Does this also apply to large companies?
  • You bet it does!
  • People in established firms who have the skill
    set of entrepreneurs are called intrapreneurs.
  • They like the role of an entrepreneur but not the
    risk profile of actually being one.
  • They know how to take initiative, be innovative,
    create terrific B. Models and B. Plans, find
    launch clients, use bootstrap capital and smart
    (guerrilla and social) marketing, check
    everything, do everything in parallel and sell,
    sell, sell
  • They also require zero babysitting and get
    promoted fast!

41
Introduction to Entrepreneurialist Culture
  • I could bootstrap a Lunar Colony!
  • Just ask me how!

42
Introduction to Entrepreneurialist Culture
  • There is a lot of real estate on the moon it has
    a surface area of approximately 37.8 million sq.
    kilometres.
  • Thats about the size of the US, Canada and
    Russia.
  • What if living in 1/6th gravity helped you live
    20, 30, 40 or 50 years longer and let you boogie
    like a teenager too?

43
Introduction to Entrepreneurialist Culture
LIVE FOREVER!
44
Introduction to Entrepreneurialist Culture
  • Now maybe I could convince 100,000,000 people to
    move to my Lunar Colony when they turn 70 or 80.
  • I might charge them 15,000 per month for their
    condos.
  • Thats 18,000,000,000,000 in revenue per year
    (18 trillion dollars, about 1.35 times the GDP of
    the United States)!
  • I would ask for one years rent up front!
  • I could build a lot of spaceships and lunar
    condos with 18 trillion dollars!

45
Introduction to Entrepreneurialist Culture
  • So dont tell me you cant pull yourself up by
    your bootstraps you can.
  • Primary sources of bootstrap capital
  • Soft capital (Mom, Dad and rich Uncle
    Buck),
  • Home equity loans,
  • Future customers, clients or launch clients
    (pre-sales),
  • Future suppliers,
  • Strategic partners,

46
Introduction to Entrepreneurialist Culture
  • Primary sources of bootstrap capital (contd)
  • Consulting,
  • Partners,
  • Receivables factoring,
  • Financial leasing,
  • Sponsors,
  • Trading activity,
  • Credit cards,

47
Introduction to Entrepreneurialist Culture
  • Primary sources of bootstrap capital (contd)
  • Co-guarantor,
  • Extended family savings,
  • Retainers and deposits,
  • Franchising,
  • Sweat equity.

48
Introduction to Entrepreneurialist Culture
  • Build and HoldThe Difference between being Rich
    and Being Wealthy
  • Let me quote actor and comedian Chris Rock
  • Shaq (Shaquille O'Neal who plays in the NBA) is
    rich but the man who signs Shaqs pay check is
    wealthy.

49
Introduction to Entrepreneurialist Culture
  • Remember Scotty, the former butcher?
  • Why go through all the trouble, risk and stress
    to capture lightning in a bottle just to sell it
    or see someone else take it over?

50
Introduction to Entrepreneurialist Culture
  • The Impeccable Warrior
  • Ever wonder how Actors get Shakespeare right? How
    do they memorize all the lines in Hamlet, for
    example, and deliver them so eloquently and
    profoundly?
  • They practice. A lot.

51
Introduction to Entrepreneurialist Culture
  • Malcolm Gladwells (Outliers) research says that
    it takes at least 10,000 hours to master a craft
    (or a business).
  • Terry Matthews, a tech billionaire in Ottawa says
    it takes 7 to 12 years to create a great biz.
  • If it takes Terry 7 to 12 years, itll take you
    and me a lot longer.

52
Introduction to Entrepreneurialist Culture
  • Be someone others can have trust in. Trust is the
    foundation of a successful life in business and
    in your personal situation.
  • Dec. 6, 1990, the NHL awarded franchises to the
    cities of Ottawa and Tampa.
  • But really they awarded them to Phil Esposito
    (for Tampa) and Bruce Firestone (for Ottawa).
  • They trusted us.

53
Introduction to Entrepreneurialist Culture
  • Lydia Leeder calls us the day before we were
    awarded the franchise and says its like the
    Canada-Russia series of 1972, everyone is
    counting on you.
  • 15,000 PRNs, 500 corporate sponsors, 32 Original
    Corporate Sponsors, 100,000s of Canadians in
    Ottawa are counting on you.
  • Now thats pressure.

54
Introduction to Entrepreneurialist Culture
  • The night before You will never, EVER get a
    franchise for Ottawa.
  • Did we give up? No way!
  • The next morning, we keep campaigning from 6 am
    until they close the doors to the BOG meeting at
    8 am.
  • So does Phil Esposito.
  • Our theme song Tom Pettys DONT BACK DOWN.
  • We get a unanimous vote from the NHL!
  • In entrepreneurship, results count.

55
Introduction to Entrepreneurialist Culture
  • In ADM 3396, you learn
  • Select the right idea for your next startup 
  • Create business models for the 21st Century that
    produce great results so that the harder you
    work, the more money you make 
  • Add differentiated value and 'pixie dust' to your
    business model 
  • Create a compelling value proposition and learn
    how to clearly demonstrate it to customers and
    clients. 
  • Self-capitalize (bootstrap) the new enterprise so
    that you end up owning it and not a VC firm or
    other investors or partners 

56
Introduction to Entrepreneurialist Culture
  • And
  • Use smart marketing (guerrilla marketing) so you
    can acquire customers and clients cost
    effectively 
  • Use social marketing-a new form of reaching world
    markets effectively and inexpensively, using the
    blogoshere, social networking, news agglomeration
    sites and other new Internet tools.
  • Mass customize products and services using the
    Internet so that, for the first time in history,
    you can get custom outputs from standard inputs 
  • Reverse out some of the work to your clients,
    customers and suppliers using the Internet so
    that you create a scalable enterprise that can
    produce more value than if you had a JOB 

57
Introduction to Entrepreneurialist Culture
  • And
  • Execute expertly 
  • Innovate and improve constantly
  • Make your own rules 
  • Learn how to use negative cost marketing and
    co-branding to deliver your message and capture
    customers by 'intricating' them in the process
  • Exercise leadership 
  • Compete effectively with hard charging
    entrepreneurs from China, India and other Tigers
    by having a business model that can not be easily
    duplicated or dislodged and gives you a lasting,
    sustainable competitive advantage and concession
    or franchise. 

58
Introduction to Entrepreneurialist Culture
  • Open to
  • Business students 
  • Engineers
  • Others with an interest in Entrepreneurship and
    Intrapreneurship. 

59
Introduction to Entrepreneurialist Culture
  • Requirements
  • Business students some prerequisites ECQ
    Test 
  • Engineers and Others must write the online ECQ
    Test (6 minutes).
  • http//www.dramatispersonae.org/ECQTest/ECQ(ns)Tes
    tAuto.htm

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Introduction to Entrepreneurialist Culture
  • Assignments
  • Done in teams of 2 to 4 persons. 
  • Create your own Business Model and launch it!
  • Final exam.

61
Introduction to Entrepreneurialist Culture
  • Competitions
  • Business Model Competition (prize money of
    1,500). 
  • Wes Nicol Business Plan Competition (prize money
    of 9,000).
  • National Wes Nicol Comp.

62
Introduction to Entrepreneurialist Culture
  • Incubator
  • Exploriem.org Lincoln Fields Shopping Centre.
  • Free workstation access, meeting rooms, mail
    handling, mentoring, 1,500 early stage grant.

63
Introduction to Entrepreneurialist Culture
  • Bootstrap Awards
  • 10 categories and prizes.
  • Top prize announced at OCRI Awards.

64
Introduction to Entrepreneurialist Culture
  • Find Prof Bruce
  • http//twitter.com/ProfBruce
  • Thank you.
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