Entrepreneurship by Design: The entrepreneur, the designer and the ideal startup (full thesis)

ENTREPRENEURSHIP BY DESIGN
The Entrepreneur | The Designer | And the ideal Startup
by Julien KERLIDOU

Abstract
21st
century is marked by a fast-changing world qualified as ‘VUCA’ (volatile,
uncertain, complex and ambiguous) facing exceptional mutations (digital revolution,
environmental concern, multiplication of crises, emergence of new ways to work,
produce, consume, collaborate...).
In this new paradigm, companies and societies have the injunction to innovate to
find new models. If large companies - which dominated the 20th century – lack of
agility and experiment trouble to manage change, two new figures emerged as
potential heroes of this 'new economy': the entrepreneur and the designer.
But, surprisingly, no link is ever made between these two fields.
This thesis will explore research on entrepreneurship (part 1) and design (part 2) to
determine potential similarities, complementarities and specificities of these two
emerging figures (part 3). It will notably suggest opportunity, innovation and value
creation as the common ground, explore the role the designer can play in a startup.
It will finally propose a model for the ideal startup (Entrepreneurship by Design) and
underline the need for new hybrid profiles. These proposals will be illustrated
through the author's own hybrid experience between Entrepreneurship and Design in
a startup.
Le 21e siècle est marqué par un monde en évolution rapide qualifié de « VUCA »
(volatile, incertain, complexe et ambigu), faisant face à des mutations
exceptionnelles (révolution numérique, préoccupation environnementale,
multiplication des crises, émergence de nouvelles façons de travailler, produire,
consommer, collaborer ...).
Dans ce nouveau paradigme, les entreprises et les sociétés ont l'injonction d'innover
pour trouver de nouveaux modèles. Si les grandes entreprises - qui dominaient le
20e siècle - manquent d'agilité et peinent à gérer le changement, deux nouvelles
figures émergent comme des héros potentiels de cette « nouvelle économie » :
l'entrepreneur et le designer.
Pourtant, aucun lien n'est jamais mentionné entre ces deux domaines.
Cette thèse explorera la recherche sur l'entrepreneuriat (partie 1) et le design (partie
2) afin de déterminer les potentielles proximités, complémentarités et spécificités
de ces deux figures émergentes (partie 3). Elle proposera notamment l’innovation
comme socle commun, et explorera le rôle que le designer peut jouer en startup. Elle
proposera enfin un modèle de startup idéale (Entreprendre par le Design) et
soulignera le besoin de nouveaux profils hybrides. Ces propositions seront illustrées
par la propre expérience hybride de l'auteur, évoluant entre entrepreneuriat et design
dans une start-up.

Acknowledgements
"We can not solve problems by using the same kind of thinking we used when we created
them." (Albert Einstein).
Life is a long journey of learning, curiosity, openness to other areas, other ways of life, and
simply to others. This master thesis marks the end of one of these stages of learning, within
the 1st group of the MBA Management by Design jointly proposed by a school of design, Strate
School of Design, and a school of management, PSB Paris School of Business.
In this context, I would like to thank all the speakers of this 'new generation' MBA, especially the
'Design Dream Team' (Charlotte, Eric, Sylvain), Frédérique Pain, director of the program, Brigitte
Borja de Mozota , director of this thesis, for her experience, commitment to design and sound
advice. I also thank all the people I met on my way, these ‘meetings made by chance’, the ones
that inspired me, as well as all the sources mentioned in this thesis.
I also thank Smart Impulse, all the team and particularly Charles Gourio for having believed in
the relevance of this training and for his daily confidence.
Finally, I thank my wife, the one who inspires me every day and without whom all this would
have less flavor, for her unfailing support … and excuse me for these many weekends, evenings
and holidays saved for research and writing of this thesis.

Table of contents
ABSTRACT................................................................................ 3
ACKNOWLEDGEMENTS ..................................................... 5
TABLE OF CONTENTS .......................................................... 5
INTRODUCTION.................................................................... 10
INNOVATE OR DIE ............................................................................................................. 10
THE ENTREPRENEUR AND THE DESIGNER, FIGURES OF THE 21ST CENTURY?.................................. 14
THE ENTREPRENEUR .........................................................18
HISTORY OF ENTREPRENEURSHIP......................................................................................... 18
A FIELD NEGLECTED FOR A WHILE ...........................................................................................18
FIRST THINKERS ...................................................................................................................19
THE SCHUMPETERIAN ENTREPRENEUR AND INNOVATION..........................................................20
ENTREPRENEURSHIP AT THE HEART OF MANAGEMENT SCIENCES...............................................22
SMES, STARTUPS AND THE ‘NEW ECONOMY’.......................................................................... 23
WHAT’S A SME?..................................................................................................................23
WHAT ABOUT A STARTUP? ....................................................................................................23
SMES AND STARTUPS, NEW ENGINE OF THE ECONOMY.............................................................24
THE ENTREPRENEUR ......................................................................................................... 26
WHO IS THE ENTREPRENEUR? ................................................................................................26
THE ENTREPRENEUR IN MANAGEMENT SCIENCES .....................................................................29
THE ENTREPRENEUR’S TRAITS................................................................................................30
THE ENTREPRENEUR’S PROCESS .......................................................................................... 32
HOW DO ENTREPRENEURS?....................................................................................................32
OPPORTUNITY: FROM ENVIRONMENT SCREENING TO OPPORTUNITY.......................................33
INNOVATION: FROM OPPORTUNITY TO PROJECT...................................................................36
RESOURCES: FROM INNOVATION TO THE ENTREPRENEURIAL VENTURE ....................................45
VALUE CREATION: THE ART OF EXECUTION .........................................................................57
SYNTHESIS ..................................................................................................................... 63

THE DESIGNER..................................................................... 68
DESIGN ..........................................................................................................................68
DESIGN: A FIELD STILL POORLY KNOWN .................................................................................. 68
DESIGN IS EVERYWHERE........................................................................................................ 69
DESIGN HISTORY .................................................................................................................. 70
DESIGN INFLUENCES............................................................................................................. 77
DESIGN DEFINITION .............................................................................................................. 78
THE DESIGNER .................................................................................................................80
THE DESIGNERS’ SKILLS AND ACTIVITIES ................................................................................. 80
THE DESIGNER INNOVATES TO CREATE VALUE ......................................................................... 82
ABOUT ‘GOOD DESIGN’ .......................................................................................................... 85
THE DESIGNER’S PROCESS..................................................................................................... 86
DESIGN IMPACT ...............................................................................................................89
THE DESIGN LADDER: DESIGN IS STRATEGIC............................................................................. 89
DESIGN IMPACT ................................................................................................................... 90
TOWARDS DESIGN DIFFUSION................................................................................................. 95
SYNTHESIS .....................................................................................................................96
THE DESIGNER ENTREPRENEUR ............................... 102
COMMON GROUND AND SPECIFICITIES.................................................................................102
SYNTHESIS ........................................................................................................................ 108
THE ENTREPRENEUR, A DESIGNER?....................................................................................... 110
THE DESIGNER ENTREPRENEUR............................................................................................ 112
DESIGN IN STARTUPS.......................................................................................................... 114
THE IDEAL STARTUP........................................................................................................127
THE DESIGNER FOUNDER ..................................................................................................... 128
DESIGN VCS...................................................................................................................... 130
NEED FOR NEW HYBRID PROFILES......................................................................................... 131
MY EXPERIENCE AT SMART IMPULSE..................................................................................132
ABOUT SMART IMPULSE ..................................................................................................... 132
ABOUT ME ......................................................................................................................... 132
BUSINESS X DESIGN X TECH BRINGS VALUE .......................................................................... 132
CONCLUSION.......................................................................139
BIBLIOGRAPHY...................................................................143
TABLE OF FIGURES ...........................................................148

10 |152 World is changing Julien KERLIDOU | MBA Management by Design 2018
Introduction
Innovate or die
We live in a very fast-changing world. Over the last 20 years, technology has rapidly and deeply
changed the way we live, communicate, create, learn, travel, buy, consume, listen to music or
watch movies, … The speed at which the environment is evolving has made any planning effort
impossible (forecast, prospective …): markets are indeed increasingly complex to understand
and anticipate. We now live in a ‘VUCA’ world1
(volatile, uncertain, complex and ambiguous).
Figure 1 | Characteristics of our ‘VUCA’ world (source: Bennett et al., 2014)
1 The ‘VUCA’ concept was introduced in the 1990s by the US Army War College and is now widely used to qualify our fast-changing
world in both social and business perspective.

The entrepreneur, the designer and the ideal startup World is changing 11 |152
Indeed, our society knows exceptional mutations, among which we can note:
▪ Exponential acceleration of technological breakthroughs: From the Internet and
Social Networks to Artificial Intelligence, Internet of Everything, Big Data, Algorithms,
Predictive models, Biotechnologies, Machine Learning, robots, transhumanism,
blockchain …
▪ New geopolitical balances: Globalization, emergence of new economies (BRICS),
population growth, urbanization, aging society …
▪ Global and ultracompetitive economy, startups disrupting large companies: access
to a global offer through Internet, Fight between Uber and Taxis, AirBnB and hotels,
Amazon and booksellers …
▪ Multiplication of crises: 2008 financial crisis, confidence crisis, political distrust,
deregulations, liberal economy, growing inequalities …
▪ New ways to consume: higher level of requirement from consumers, access to global
competition offer, economy of trust and notation with rating platforms,
transformation from property to use, circular/sharing economy, peer-to-peer and
resources pooling, ‘Collaborative commons’, new aspirations for bio/healthy
products, fair trade, permaculture …
▪ New ways to produce: democratization of design and manufacturing tools with free
digital tools, Open Source, 3D printing revolution, fablabs/makerlabs, Do It Yourself
trend, self-production, tomorrow all bloggers/youtubers/producers, ‘homo faber’, new
era of the cultural creatives.
▪ New ways to collaborate: The ‘Co-‘ economy, co-creation, crowd intelligence,
communities, the new ‘collaborative human’, social networks …
▪ New ways to work: precarious work, disintermediation, platform economy /
‘uberisation’, new employment models, multiple jobs, nomadism, shared offices,
coworking, from organizational chart to horizontality, multidisciplinary skills,
cooperatives, …
▪ Quest for meaning, sense and emancipation: need for trust, truth and transparency,
values, growth of spirituality …
▪ Quest for experiences: From industrial to service and ‘experience’ economy, human-
centered focus, role of emotions, seamless user experience …
▪ Environmental concern, scarcity of resources: Green design, new renewable
energies, Smart grid / smart buildings, upcycling, COP21 …
▪ Social concern: social business, social and solidarity economy, sharing resources …
▪ Information and knowledge era: digitalization, always connected (mobile-first), real-
time, experience economy, available knowledge in 1-click, …

Figure 2 | Accelerated mutations in VUCA world (source: Frank Diana, https://bit.ly/2jkWBvF)

To face this VUCA world, Johansen (2012) suggests that leaders in the future will need to have
Vision, Understanding, Clarity and Agility to turn negative VUCA effects into positive
opportunities, what he called the ‘VUCA prime’. In more details, future leaders must seek out
experiences and opportunities to learn and apply 10 new skills:
1. Maker instinct: Ability to exploit your inner drive to build and grow things, as well as
connect with others in the making. Leaders need the basic skill to make and remake
organizations.
2. Clarity: Ability to see through messes and contradictions to a future that others
cannot yet see. Leaders must be clear about what they are making but flexible about
how it gets made.
3. Dilemma flipping: Ability to turn dilemmas — which, unlike problems, cannot be
solved — into advantages and opportunities.
4. Immersive learning ability: Ability to immerse yourself in unfamiliar environments
and to learn from them in a first-person way.
5. Bio-empathy: Ability to see things from nature’s point of view — to understand,
respect and learn from nature’s patterns. Nature has its own clarity, if only we
humans can understand and engage with it.
6. Constructive depolarizing: Ability to calm tense situations where differences
dominate, and communication has broken down — and bring people from divergent
cultures toward positive engagement.
7. Quiet transparency: Ability to be open and authentic about what matters — without
being overly self-promoting.
8. Rapid prototyping: Ability to create quick early versions of innovations, with the
expectation that later success will require early failures. Leaders will need to learn
from early setbacks and learn to fail in interesting ways.
9. Smart mob organizing: Ability to create, engage with and nurture purposeful
business or social change networks through intelligent use of electronic media or in-
person communication.
10. Commons creating: Ability to seed, nurture and grow shared assets that can benefit
all players – and allow competition at a higher level.

The entrepreneur and the designer,
figures of the 21st
century?
To face these new stakes and answer to new uses and lifestyles, governments and companies
have the injunction to innovate. These new challenges require agility and new skills to
understand and anticipate ongoing changes and use imagination to reinvent new models.
However, large companies which dominate a 20th
century market based on a logic of dominant
supply have favored over time bureaucracy, centralized power, hierarchized structures and
silos, with pressure on short term results. Large companies thus today have trouble to reinvent
themselves and manage innovation and change to adapt to a more and more turbulent
environment.
On the contrary, two new figures stand out in this ‘new economy’ paradigm, until sometimes
called ‘heroes of modern times’:
▪ The entrepreneur, and his/her ability to seize opportunities, bring innovative
solutions to meet emerging needs, adapt in the long run through agile process and
finally create value for all stakeholders,
▪ The designer, and his ability to focus on people through empathy, to make sense and
build high-quality user experiences, to improve the quality of life, and finally to make
the link between people, business and technology.
Although we hear more and more talk about the designer and the entrepreneur and their roles
in the new economy, there is surprisingly no link mentioned between these two fields: design
is never mentioned in entrepreneurship books or research papers, entrepreneurship neither in
design papers. Would they be two totally different fields? Do they ignore each other?
This master thesis will aim to answer these questions, by exploring who entrepreneurs and
designers are, what they do, how they think, to finally determine if a potential common ground
exists and to determine specificities and complementarities of these two fields. To do so, it
will rely on a deep literature review on both fields and will be put in perspective of my own
experience as an ‘hybrid’ profile between entrepreneurship and design in a startup.
Figure 3 | Problematic and structure of this master thesis
ENTREPRENEUR DESIGNER
The The
PART 1 PART 2
Common ground
Specificities
Complementarities
PART 3
General conclusion
World is changing

Figure 4 | Harvard Business Review most recent covers, underlying exceptional mutations

18 |152 The entrepreneur Julien KERLIDOU | MBA Management by Design 2018
The entrepreneur
This 1st
part aims to dive into the world of entrepreneurship, to understand how the
entrepreneur works and thinks, with a view to compare it with that of the designer. It will be
notably based on the main concepts of the French reference book in the field (Janssen, 2016).
History of entrepreneurship
A field neglected for a while
Appeared in the literature as early as the 18th century, entrepreneurship and small companies
has however remained a field neglected by economists for a long while.
First, this model was then notably incompatible with classical and neoclassic economic
theories, and with the dominant model of the Large company of the 20th century, in a context
of mass production/mass consumption. In this paradigm, large companies are the main creator
of employment and value, and benefit from economies of scales. The SME (Small and Medium-
Sized Enterprise) is then perceived as a simple stage in the life of the company (Janssen &
Surlemont, 2016), large size being inevitable to compete and survive.
Secondly, enterprises are virtually devoid of entrepreneurs. Indeed, in these economic theories,
competitive forces compel companies to always self-regulate itself « automatically » to
maximize profit in all circumstances, in line with Adam Smith’s “invisible hand” (Smith, 1776),
until an exogenous shock modifies one of the data of the problem (Schmitt, Janssen, Baldegger,
& Giacomin, 2016), as for instance a major change in technology. In this paradigm, the decision
of the company owner is then reduced to a simple calculation mechanism. These theories,
adapted to a world where information is perfect, forecasting and planning possible, leave no
room for entrepreneurial initiative. The role played by the entrepreneur in the market
dynamics here is totally neglected.
Figure 5 | The entrepreneur and the SME in neoclassical economic theory
20th century
Neoclassical theory and domination of the large companies model
Mass production
and consumption
Theory of economies
of scale
Market self-regulation
(supply and demand,
the “invisble hand”)
Company self-regulation
(“automatic” profit
maximization)
Role of the
entrepreneur ?
Role of
SMEs ?

The entrepreneur, the designer and the ideal startup The entrepreneur 19 |152
First thinkers
“It is essential to resolve the tension that exists between the invisible
hand of Adam Smith and the all-too-visible hand of the entrepreneur”
(Casson, 2003)
From the 18th
century, the early thinkers noted the special role of small businesses in economic
development and, within these SMEs, the central role of the entrepreneur:
▪ Richard Cantillon (1755) assigns a specific role to the entrepreneur in the economic
process, who takes the risk of running a business on his own, for profit, while faces a
certain uncertainty.
▪ Jean-Baptiste Say (1841), known for his “law of markets” according to which the
supply creates its own demand, defines the entrepreneur as the individual who
creates a new utility for himself, either through a new product or by shifting economic
resources from a lower productivity into an area of higher yield.
▪ The German School (Thunen, Knight) point out the importance of risk in
entrepreneurship, with profit as the reward of the risk against which he cannot insure
himself and residual income as the costs of uncertainty (Knight, 1921)
▪ The Austrian School (Von Mises, Hayek, Menger) focus mainly on notions of
information and opportunity.
- For Menger, obtaining information about the economic situation is one of the
central elements of entrepreneurial activity. The entrepreneur must be aware of
the situations that lead to economic change and understand them.
- Kirzner (1982) defines entrepreneurship as vigilance against opportunities.
According to him, his function is to detect what others have not been able to see.
Being attentive to market imbalances is the distinctive characteristic of the
entrepreneur and these imbalances represent new opportunities to make profits.
- The entrepreneur then becomes an "information processor", based on
information signals detected in his environment. This information asymmetry
reflects the uncertain and relatively risky nature of entrepreneurship (Palich and
Bagby, 1995). The success of the entrepreneur is essentially understood in terms
of his ability to absorb and transform this information into action.
▪ The English School, on the other hand, defines the entrepreneur as "someone who
specializes in making judgmental decisions about the coordination of scarce
resources" (Casson, 2003). The entrepreneur makes judgment decisions his specialty,
including better reallocation of resources, thanks to his different perception of the
situation, linked to different access to information or different interpretation of it. The
judgment of the entrepreneur differs from that of other economic agents.

The Schumpeterian entrepreneur and innovation
Even if the theories above put back the entrepreneur as an economic agent, mainly reacting to
changes in the economic environment, it will be necessary to wait till the beginning of the 20th
century and the work of Joseph Schumpeter to gives him a central place in the economic
function.
Whereas the neoclassical approach describes the market as static and self-regulated, leaving
aside the role of technical progress, the reasons for economic growth and finally the role of the
entrepreneur, Schumpeter totally breaks this prevailing approach and recognizes the
entrepreneur a central role in economic mechanisms (1935).
Indeed, for Schumpeter, the dynamic imbalance created by change is the norm of a healthy
economy. In this economy, the entrepreneur plays a central role through his different
perception of reality and his ability to become aware of change and new opportunities before
other economic agents. The entrepreneur becomes therefore a dynamic, proactive and
endogenous agent, which is essential to lead innovation and economic development. The
entrepreneurial function is therefore, above all, to innovate in a search for profit and success,
challenging the economic status quo through innovations, and finally “breaking the routine”.
Schumpeter distinguishes invention, the discovery of new technical or scientific knowledge,
from innovation, the commercial application of an invention through the introduction or new
combinations of:
▪ Product innovation: new or different quality products
▪ Process innovation: new technical or manufacturing processes
▪ Market innovation: new outlet or markets discovery
▪ Supply chain innovation: new sources of supply or raw materials
▪ Organizational innovation: new forms of organization
Schumpeter describes the economic growth as “destructive creation” process, a process
linked to innovation, at the heart of capitalism, which constantly revolutionizes the economic
structure from within, continually destroying its aged elements and continually creating new
ones.
He also introduces the concept of ‘business cycles’ (Schumpeter, 1939) with phases of
growth/expansion, crisis and deceleration that characterize capitalist economies.
With Schumpeter, the entrepreneur thus becomes the “revolutionary of the economy” and an
essential creator of innovation, at the origin of the creation of wealth, employment, technical
progress and the improvement of well-being. He describes him as the ‘heroic figure of
capitalism’, endowed with exceptional qualities of vision, willingness, ambition, taste of risk
and his ability to dream (principle of pleasure) and calculation (principle of rationality). He can
see things without being able to justify them, by intuition, and to give himself an unknown
horizon, radically uncertain, which does not depend on rational anticipation.

He is especially the spearhead of innovation: he combines the spirit of decision and the
capacity to discover, in the mass of scientific innovations, those which allow, on the one hand,
to increase productivity (process innovations, production mode, raw materials), and secondly,
to satisfy a demand that has not yet been revealed (product innovations, market outlets).
Following Schumpeter, many theorists will combine notions of entrepreneurship and
innovation (Schmitt, Janssen, Baldegger, & Giacomin, 2016), as Penrose (1972) who defines
entrepreneurship by the predisposition to seize profitable opportunities and to look for new
unknown possibilities, ie the introduction of change.
Figure 6 | Schumpeter approach vs neoclassical one
Market imbalances
Dynamic economy
(Business cycles)
Information asymmetry
High risk and uncertainty
Innovation
Progress / rupture
“Creative destruction”
Market equilibrium
Static economy
(status quo)
Information available
No uncertainty, no risk
‘Automatic’ self-regulation
Optimization
The entrepreneur
Schumpeter theoryNeoclassical theory
What
How
« Invisible hand »
The producer
Who
VS
VS
VS

Entrepreneurship at the heart of management sciences
During the 1970s and 1980s, in a context of economic recession then recovery and the advent
of the information economy, researchers and governments gradually realized the economic
importance of new businesses. In 1981, Birch shows that new jobs in the US came primarily
from small businesses. The OECD will show year after year that this trend will continue in most
countries (OCDE, 2017).
On the other hand, some researchers show the limits of economies of scale: these actually vary
with changes in technology, and would be largely offset by diseconomies of scale, including
control costs and bureaucracy (Julien, 2016). With the progressive deterioration of the large
company model in a more uncertain world, the failure of planned economies, and the
emergence of liberal which emphases the private initiative as the opportunity for everyone to
enjoy the fruits of their own work (Schmitt, Janssen, Baldegger, & Giacomin, 2016) – or to create
their own job – entrepreneurship has gradually emerged as the engine of economic and social
development worldwide (Julien, 2016).
The academic field of entrepreneurship really took off in the 80s (scientific journals,
conferences ...), then accelerated considerably in the 90s (creation of training programs in all
schools of the world, ...) (Janssen & Surlemont, 2016). The field of entrepreneurship is now
firmly established in research.
Entrepreneurshipand the role of the entrepreneur were neglected for a long while,
becauseof their incompatibility with neoclassical dominantparadigms.
The entrepreneur appeared in the litterature in the 18th but gained a central place
in economy only in the 20th with Schumpeter.
Entrepreneurshipis now firmly established in research.

SMEs, startups and the ‘new economy’
What’s a SME?
According to the European Commission (Recommendation 2003/361/EC of 20/05/2003 Article
2) and the French law for the modernization of the economy (LME, Article 51, Decree No. 2008 -
1354 of 4 August 2008, Article 3), the category of small and medium-sized enterprises (SMEs)
consists of enterprises:
▪ With a workforce of less than 250 people
▪ Of which the annual turnover does not exceed 50 million euros or whose total annual
balance does not exceed 43 million euros (considering the degree of independence
of the company)
Figure 7 | SME definition adapted from OCDE (2017).
What about a startup?
The term 'startup', widely used nowadays and appeared just after the Second World War with
the emergence of the first venture capital companies, also deserves a definition.
For Eric Ries (2011), author of the bestseller ‘The Lean Startup’, a startup is "a human institution
designed to create a new product or service under conditions of extreme uncertainty".
< 10 ≤ 2 ≤ 2
< 50 ≤ 10 ≤ 10
< 250 ≤ 50 ≤ 43
> 250 > 50 > 43
Micro
Small
Medium-
sized
Large company
Staff headcount
(annual work unit)
Annuel turnover
(million €)
Annual balance
sheet total
(million €)
S
M
E
OR
OR
OR
OR
OR
According to distribution of capital and voting rights

For Patrick Fridenson, a business historian and director of studies at the Ecole des Hautes
Etudes en Sciences Sociales (EHESS), it is neither age, nor size, nor sector of activity, that
make a start-up company, but the following three conditions:
▪ the perspective of high growth,
▪ the use of new technology,
▪ the need for massive funding, through fundraising.
In this thesis, we will retain the following definition: A startup is a young, innovative company
with a high potential growth, in the construction and exploration phase (product development,
test of an idea, validation of a technology, construction of the model economic). It develops an
activity on a new market, in a high uncertainty environment where the risk of failure is
important.
Figure 8 | Definition of a startup
SMEs and startups, new engine of the economy
“The obvious winner [of new business world] are the mid-sized and
smaller companies looking to increase market share. These are the
companies that have nothing to lose, but more important, they realize
that they have a lot to gain by changing the rules of the game“
(Godin, 2009)
STARTUP
High risk / uncertainty High potential growth
Need for
important funding
Innovative company
(new product, service,
market, technology,
business model)

According to the European Commission, “small and medium-sized enterprises (SMEs) are the
backbone of Europe's economy”. Indeed:
▪ SMEs represent 99% of all businesses in the EU,
▪ SMEs have created in the past five years 85% of new jobs, and provided two-thirds
of the total private sector employment in the EU,
Besides, SMEs create value and stimulate entrepreneurship and innovation (development of
new products, services, technologies …), helping to foster competitiveness, ensuring
economic growth, employment, value creation for the consumers and social integration in
Europe. They contribute to national prosperity and to national GDP (Gross Domestic Product).
Finally, entrepreneurship makes it possible to develop one's own job, especially in times of
crisis.
Figure 9 | SMEs as the backbone of European economy
“We now live in an “entrepreneurial economy” (Audretsch & Thurik, 2001)
99SMEs
1 large
company
15% 85% of new jobs
SMEs are small businesses with less than 250 employees and 50 million euros turnover.
Among them, startups are innovativebusinesses in the exploration phase, characterized
by high potential growth in high-riskenvironments, needing importantfunding.
SMEs havea central role in economy (innovation,employment, growth, value, …).

The entrepreneur
Who is the entrepreneur?
In some cultures, the entrepreneur is presented as the hero of modern times. But, as Julien
(2016) said: "The small entrepreneur is not necessarily the singular hero as Schumpeter saw it,
but one of the key mechanisms of a more general entrepreneurial culture at the very heart of
the entrepreneurial spirit”. The entrepreneur can thus be characterized by both a state of mind
and a dynamic of action, the entrepreneurship.
Defining simply the entrepreneur is a hard task because of its multidisciplinary nature.
Verstraete & Fayolle (2005) then believe that entrepreneurship is a domain that is too complex
and heterogeneous to be limited to a single definition. Accordingly, there is no universally
accepted definition of entrepreneurship in research.
Janssen & Surlemont (2016) identified 4 different paradigms that describes entrepreneurship:
▪ Business opportunity, or the ability of the entrepreneur to create or identify
opportunities to exploit (Shane & Venkataraman, 2000), to gather resources to pursue
the opportunity (discovery, evaluation, exploitation).
▪ Creation of an organization (Gartner, 1990), not reduced to enterprises (projects,
associations)
▪ Value creation, as a process that creates value, whether individual, economic or
social, and the link between entrepreneurship and economic growth (Ronstadt
(1984), Bruyat & Julien (2001)).
▪ Innovation: For Schumpeter and many other researchers, innovation is the foundation
of entrepreneurship. According to Carland et al (1984), innovation would differentiate
entrepreneurs from owner-managers of SMEs.
In summary, to keep Janssen et al’ definition (2016), the entrepreneur “is an individual [or a
group of individuals] who succeeds in identifying an opportunity in his environment and who
manages to gather the necessary resources to exploit it in order to create value”.
The entrepreneurial logic then includes 4 main components that it articulates, as shown in
Figure 6:
▪ The business opportunity to identify, assess and exploit
▪ The resources to assemble, leverage and organize
▪ The value creation, crucial to develop the enterprise
▪ The innovation at the origin of value creation

Figure 10 | Definition of the entrepreneur and main concepts
ENTREPRENEUR
(centralrole)
Necessarilylimited.
Financial,human(skills),
materialorimmaterial.
OPPORTUNITYIdentifiesorcreates
Evaluatesthenexploits
INPUT
VALUECREATION
Theentrepreneur,throughadifferent
perceptionofreality,isthefirstto
becomeawareofchangesinthe
environment,aswellastoidentifyand
exploitthemasopportunities.
Economic,social,personal,…
Utilityforallstakeholders:the
entrepreneur,employees,customers,
shareholders,societyasawhole
(socialandeconomicprogress)
Deliversnewsolutions
(“creativedestruction”)
RESOURCES
INNOVATION
Newproducts,markets,
businessmodels,processes,
supplychain,organization...
OUTPUT
ORGANIZATION/PROJECT
Assembles/mobilizes
Leads,leveragesandexecutes
(Organizationandmanagement)
Createsnewcombinations
Meetsaneedandleadschange
(Strategyandinnovation)
Toexploitan
opportunity,the
entrepreneurmust
organizeand
mobilizeresources
Tomobilize
resources,the
organizationmust
createvaluefor
thestakeholders
Toinnovate,we
mustsearchfor
andexploit
business
opportunities.
Tocreatevalue
andensurethe
organization’s
development,we
mustinnovate.

The entrepreneur must thus be differentiated from:
▪ The small business owner-manager. According to Frederick, Kuratko, & Hodgetts
(2007), entrepreneurial ventures are those for which the entrepreneur’s principal
objectives are innovation, growth and profitability, based on entrepreneurial vision,
whereas the owner-manager is rather driven by personal and family aspirations,
paternalistic management as prolongation of his personality (Carland, Hoy, Boulton, &
Carland, 1984), more concerned about the survival and stability of his enterprise rather
than growth (which usually means loss of power through capital distribution or
expanded organization chart). Actually, entrepreneurs are a minority among new
businesses (Drucker, 2014).
▪ The traditional corporate manager. Wickham (2006) compares “conventional
management” to the entrepreneurial based on their scope, objective and main focus,
as shown on Figure 11. However, even if entrepreneurship is commonly attributed to
SMEs and startups, innovation being facilitated by more agility and a flatter and more
flexible structure (to be compared with bureaucracy, inertia of stability and status quo
which often suffer large businesses), large enterprises now foster “corporate
entrepreneurship” – also called “intrapreneurs” – as a mean to transform organization
through strategic renewal or create new venture within. Pinchot (1985) defines it as
a ‘holy grail’ for management as it has ‘the promise of entrepreneurial dynamism,
agility and adeptness in exploiting opportunities combined with the stability, market
power and low risk of the established business’.
Figure 11 | Entrepreneurial vs conventional management (source : Wickham, 2006)
ENTREPRENEURIAL
MANAGEMENT
Whole
organization
Create
change
Pursue
opportunity
Part of
organization
Maintain
status quo
Conserve
resources
Scope
Objectives
Focus
CONVENTIONAL
MANAGEMENT

The entrepreneur in management sciences
Entrepreneurship research mainly focused on 4 questions concerning the entrepreneur (Fayolle,
2002):
▪ Who is the entrepreneur? Characterized by the ‘school of traits’ (behavioral and
psychological theory, start in the 60's and hour of glory in the 80's), the goal here was
to identify the specific entrepreneur’s personality, competencies and characteristics
in order to draw a typical profile of people more likely than others to start a business
and predict the entrepreneurial intention and behavior. Research on traits was not
able, however, to establish an absolute scientific profile of the entrepreneur or to
predict entrepreneurial behavior (Fillon, 1997).
▪ What is he doing? (economic role of the entrepreneur, importance of the sociocultural
environment, …)
▪ Why is he doing it? (motivations)
▪ How does he do it? (entrepreneurial process, tools and methods)
Since the 2000s, research on the emotions and cognitions of the entrepreneur has developed
(Grégoire, Cornelissen, Dimov, & Burg, 2015), notably trying to know how the entrepreneur made
sense of the world around him to imagine, identify and design products, services or business
models.
Sarasvathy (2001), in particular, tried to understand the reasoning of entrepreneurs in terms of
decision-making, hence opening a new paradigm for entrepreneurship research: Effectuation
(described later in this chapter).
Figure 12 | Entrepreneur as a central topic for management sciences

The entrepreneur’s traits
Research led on the entrepreneur’s traits show that there is no typical profile of the
entrepreneur nor specific entrepreneurial capabilities. Indeed, these capabilities can become
entrepreneurial when they are combined in an entrepreneurial context. Capacities are
therefore less important than their combination and the coherence of the latter with respect to
the entrepreneurial situation (Janssen & Surlemont, 2016).
Entrepreneurship refers to both a state of mind and a dynamic of action. Among the
characteristics and entrepreneurial capacities often listed are (adapted from Janssen, 2016):
▪ Strategy and innovation
- Inventive spirit: A spirit of initiative, creativity and innovation.
- Ability to identify, assess and leverage opportunities
- Ability to create and develop new solutions / new value
- Ability to apprehend and drive change, foresight
- Optimism, resourcefulness, flexibility
- Receptiveness to new ideas and suggestions
- Sensitivity to the environment and to the others
- Tolerance with risks, uncertainty, ambiguity and paradoxes
- Taste for challenges
- Ability to seek and analyze information. Eager to learn (sometimes from
mistakes)
▪ Management and organization
- A sense of responsibility
- Strong motivation and commitment, determination, pugnacity, perseverance,
courage. Empowered by passion.
- Influence, negotiation and leadership, strength of conviction. Self-confidence.
- Efficacy, hardworking, dynamism.
- Ability to create, manage and develop an enterprise
- Ability to plan, organize and manage effectively projects
- Ability to align goals and resources, and to find and manage resources
- Ability to solve problems and make decisions quickly
- Execution: goal and results orientation, making happen something new
- Ability to communicate and share ideas. Cooperativeness
- Strategic, social and relational competencies.
▪ Multidisciplinary (knowledge of product, market, technology, business, …)
▪ Global / holistic vision
▪ Passion
The school of entrepreneurial orientation proposes, in turn, 5 dimensions specific to the
entrepreneurial orientation: innovativeness, risk-taking, proactiveness, competitive
aggressiveness, autonomy.

Figure 13 | The entrepreneur’s multidisciplinary skills
By the same way, there is a plurality of motivations which lead to be an entrepreneur, as each
project can be personal, although it is important to notice that often the prime motivation of the
entrepreneur is not the pure profit seeking. Among the classical motivations, we can
remember:
▪ Lucrative motivations (search for profit)
▪ Non-lucrative motivations:
- Need for achievement, assertiveness, success and self-realization
- Need for independence, autonomy, not to depend on hierarchy (“be your own
boss”, “control of your own destiny”)
- Desire to work on a subject that fascinates him/her
- Desire to produce quality products or new solutions to unsatisfied needs
- Desire to create positive social change, creating a new and better world (or to
combine an economic project and a social purpose), …
These different motivations can lead to different types of entrepreneurship (technological,
social, academic, family businesses, associations, intrapreneurship, …).
Strategy
MarketingCommunication
FinanceLegal
CommercialHuman
Production
Defining entrepreneurship is a hard task because of its multidisciplinary nature.
Despite the qualities generally attributed to entrepreneurs, School of traits was
not able to draw the entrepreneur’s typical profile.
The entrepreneur must be differentiated from the traditional business owner-
manager. His principal objectives are innovation, growth and profitability.
The entrepreneurial logic is based on 4 main concepts:
> The business opportunity to identify, assess and exploit
> The resources to assemble, leverage and organize
> The value creation, crucial to develop the enterprise
> The innovation at the origin of value creation

The entrepreneur’s process
How do entrepreneurs?
The entrepreneurial process is defined as the process used by the entrepreneur to start his
business and achieve his objectives. This process always involves the ability to identify,
assess, and take advantage of the opportunities that can arise in a market (the environment)
and exploit them to create value.
Main features of this process are valid during the creation of the company, but also during its
development. At each stage of development, the process is not linear but iterative.
Figure 14 | The entrepreneurial process and main notions
DISCOVERY /
EXPLORATION
PRODUCT-MARKET FIT ▪ Project/solution design
▪ Conception, development, POC, feedbacks (iterative)
▪ Methods: Lean Startup, Design thinking, Blue Ocean
Strategy
▪ Financial: founding, investment, treasury, risks
▪ Human: complementary skills, recruitment, loyalty
▪ Material (offices, …), immaterial (brand, IP, …)
▪ Organization, management, vision, Effectuation.
▪ Art of execution and delivery (operations)
▪ Business model canvas
▪ Customer acquisition / retention
▪ Development: growth, international., transfer, failure
▪ Permanent monitoring / scan of the environment and
competitors, Information management
▪ “Opportunity windows”
▪ Opportunity identification, evaluation, exploitation
Opportunity
Innovation
Resources
Value creation
EXPLOITATION
GOALS-RESOURCES FIT
EXECUTION
RESOURCES-VALUE FIT

OPPORTUNITY: from environment screening to opportunity
“Finding the problem is the hard part”
(Kevin Systrom, co-founder of Instagram)
As described earlier, the first characteristic of an entrepreneur is to identify before others
changes in the environment and opportunities. This means, at the beginning of the business
venture but also all along its development, to lead a permanent screening of (or vigilance about)
the environment, the competitors, the customers, regulations, trends, to be able to identify
opportunities of creation or development.
Therefore, the Austrian School emphasized the importance of information and qualified the
entrepreneur as an ‘information processor’. These opportunities can already exist in the
environment while not yet discovered and exploited, but, for Timmons (1994), opportunities can
also be built by the entrepreneur.
New ‘windows of opportunity’ open and close permanently. The savvy entrepreneur must
identify these windows to get into it and make the most of the opportunity. Seven factors can
influence the opening or closing of these windows (Surlemont, 2016):
▪ Specific events (eg Olympic Games),
▪ Sociologic trends (evolution of thee needs, lifestyles, way of consuming … eg demand
for bio products, global warming),
▪ Demographic trends (eg inversion of the age pyramid and the silver economy),
▪ Regulations (eg deregulation of electricity generation)
▪ Technological changes (eg augmented reality)
▪ Political and economic developments (eg emerging countries)
▪ Competition
This permanent and structured scan of the environment has also the aim to see things coming,
to be able to adapt in permanence the company’s offer (where Kodak, for instance, has been
surpassed in digital photography), which requires agility.
The identification of a “good idea” is often one of the main concerns of aspiring entrepreneurs.
But contrary to popular belief, it does not need a good idea to start a business (Kawasaki, 2008).
The opportunity sometimes comes from exploiting a new business model relating to an existing
product / service, as done for instance by Uber or AirBnB (Surlemont, 2016). Most successes
are associated with the success of ideas that are a priori classic, even banal. The difference
is often the identification of the right market niche, the implementation of the right strategy
and, most importantly, the flawless execution (“5% inspiration, 95% perspiration”). The
entrepreneur must therefore transform this information and opportunity into action.

According to Surlemont (2016), an idea can become an opportunity when the best way to
exploit it is identified. An opportunity is therefore an idea that is refined through market
research, identification of the right strategy, development of a business model and adaptation
to feedback from the environment. It is therefore first the meeting of an efficient supply and a
demand to which it is adapted that generates an opportunity, and not necessarily the
uniqueness of an idea.
In a second step, the entrepreneur must evaluate the opportunity, often in a context of high
uncertainty and ambiguity, leading to important risks. He/she must seek solutions to problems
not yet perfectly defined, find applications ideas, explore potential commercial outlets. With
very little time, funding and attention. For some researchers, the main ability of the entrepreneur
would be to rapidly judge the value of an opportunity.
An opportunity is an idea that creates value, first for the entrepreneur, and for the other
stakeholders (customers, employees, shareholders, society, …). To validate the existence of an
opportunity and leverage it, the added value must be the highest for the company, so the return
on equity is as high as possible and the cost of capital as low as possible. This can notably be
led with good combinations of:
▪ Market
▪ Marketing strategy (product, price, place, promotion …)
▪ Supply strategy
▪ Ability to generate barriers to entry (eg exclusivity of a contract)
▪ Ability to generate benefits in a sustainable way
Once the opportunity selected, the entrepreneur must shape the solution proposed, test it and
plan a consistent project (creation or development of the company), and imagine the different
steps of the product development (identification of opportunities, development, test and
marketing).
Figure 15 | The entrepreneurial opportunity recognition process (source: Ardichvili et al (2000))
Education
Experience
(personal + work)
Prior knowledge of
markets and
customer problems
Entrepreneurial
alertness
Networks
Successful
opportunity
recognition
To identify and leverage opportunities beforeothers, the entrepreneur must complete a
permanent screening of his/her environment, turning information into opportunity and
action while staying agile, both for the business’creation and development.
The entrepreneur must seek solutions to problems not yet perfectly defined in a context
of high uncertainty, with little time, funding, resourcesand attention.

Figure 16 | The art of opportunity (source: Sniukas et al (2016))

INNOVATION: from opportunity to project
“Innovate or die” (the business world)
Innovation is crucial in our post-modern word characterized by more actors in the market
(globalization), new way of consuming, more uncertainty and complexity, which imposed the
companies to be more flexible and agile. Nowadays, it is impossible to ensure one's
performance and even survival without considering innovation.
Innovation is defined as “the implementation of a product (good or service), or a new or
significantly improve process, a new method of marketing or a new organizational method in
business practices, workplace organization or external relations” (OECD, 2005). This broad
definition of innovation – conform to Schumpeter’s vision – shows that innovation is multiple
and not restrained to products, but covers also notably:
▪ Process innovation (“better do things”), eg reduce production and delivery times, and
associated costs, increase flexibility and production capacity
▪ Marketing or sales innovation (“better meet and serve the needs”), eg differentiation
in sales methods, e-business (Tediber).
▪ Organizational innovation, eg create a climate conducive to different forms of
innovation, creativity and flexibility of the company, work methods, knowledge
management, participative management ...
Successful innovation is therefore global. This holistic vision of innovation is an important of
success (St-Pierre, 2016). This holistic vision is well visible with the Business Model Canvas
method that will be described just after. Innovation is at the heart of entrepreneurship and
brings many benefits to SMEs, notably:
▪ To distinguish from the competition (products, services, execution)
▪ Favor the chances of success of a new project
▪ Attention to the needs of customers
▪ Develop new markets
▪ Increase product quality and customer satisfaction
▪ Provides flexibility, making them better able to quickly adjust to changes in their
environment
▪ Favor the motivation and satisfaction of staff in their work environment, stimulate
creativity and the desire to contribute to the success of the company.
▪ More efficient and effective use of resources, increase productivity and profitability.
▪ Creativity of the company, ability to discover new opportunities

St-Pierre (2016) evokes 3 great reasons to innovate, as described hereunder:
Figure 17 | 3 reasons to innovate (St-Pierre, 2016)
At its creation, the company is typically an “incubator of innovation”, since it must both
develop its products and markets, master its ways of doing things and build relationships with
external partners. As it grows, it aims more to consolidate its activities and invests mainly to
maintain its market share by innovations that could be less radical than at its origin. The main
stages of development of an innovation are the following:
1. Initial phase of issuing ideas
2. Phase of research activities, to show the potential
3. Prototype and development stage
4. Large scale manufacturing, industrialization
5. Go to market (growth > maturity > decline)
6. Removal or replacement of the product
One of the most important characteristic of entrepreneurial innovation is that the process is
not linear but iterative. At the creation of the company, the entrepreneur is going to imagine
the global solution (product, service, business model, operations …) that can answer to the
problem encountered, then make quick prototypes (the famous POC, aka ‘Proof of Concept’),
even not functional, to be able to test the feasibility, profitability and attractiveness of his/her
ideas and iterate several times according to customers feedbacks. This step is important and
is often primordial to reassure investors, and attract a dream team (cofounders, …).
To innovate, entrepreneurs often rely on several methods and tools, which can be
complementary and share common values (Witmeur, 2016) as:
▪ The need to put the customer at the center of the project development process
▪ The importance of going on the field (“GOOB: Get out of the building”)
▪ The relevance of an iterative approach by trial and error
▪ The desire to start working with the means on board.
Become
indispensable
Be competitive
Reduce risks
and uncertainty
▪ Get closer to the market and react quickly to new trends and demands
▪ Develop a niche and be specialized according to customer needs/market trends
▪ Implant a culture of continuous innovation (products, equipment, processes,orga.)
▪ Redefine strategy and reduce or relocate non-value-added activities
▪ Use new technologies for production, management, marketing
▪ Maintain the skills and efficiency of the staff and retain their "best elements"
▪ Implant a culture of internal and external collaboration
▪ Regularly monitor and evaluate the situation to correct it quickly

Innovation + Lean startup
"Turn great idea into great business. “Lean” is changing everything
you know about starting a new venture“ (Blank, 2013)
Lean startup emerges in the early 2000s with
the work of Steve Blank, and made popular by
Eric Ries, his student, with his book “The Lean
Startup: How Constant Innovation Creates
Radically Successful Businesses” (2011) which
benefits from an important communication
campaign. Its objective is to develop business,
products and services.
The authors note that many entrepreneurs “begin with an idea for a product that they think
people want”. Entrepreneurs used to devote their precious resources (time, capital, team …) to
create and perfect products supposed to meet hypothetical needs of users that are also
hypothetical and were often attacking the market too late. In other words, one of the main
difficulties of young entrepreneurs stems from the lack of knowledge of the needs and
characteristics of their future clients, and the best way to meet them (Witmeur, 2016).
Innovation was not enough centered on the user.
The Lean Startup, inspired by the Lean manufacturing set up by Toyota (to minimize waste and
losses) and “agile” methods in computer development (decomposition of the project into
multiple small steps called ‘sprints’, contacts with the customer throughout the process,
importance of flexibility in an extremely changing context), is a school of thought adapted to
and centered on entrepreneurship. The Lean Startup provides a process, a methodology, a
scientific approach to creating and managing startups, validate assumptions, eliminate
uncertainty and finally design a product that meets the demand (“product-market fit”).
The Lean Startup methodology has as a premise that every startup is a grand experiment that
attempts to answer a question. The question is not "Can this product be built?" Instead, the
questions are "Should this product be built?" and "Can we build a sustainable business around
this set of products and services?". It’s a combination of working in short incremental and
iterative product development cycles, and by adopting a hypothesis-driven experimental
approach and validated learning.
To do so, the method emphasized the importance of quickly and inexpensively validate new
products and services directly with their future users, through the validation or of a maximum
of assumptions about the business project, before making much larger investments. It is based
on 5 principles:

▪ Entrepreneurs are everywhere
▪ Entrepreneurship is management: a startup is an institution, not just a product, so it
requires a new kind of management specifically geared to its context.
▪ Validated learning: this learning can be validated scientifically, by running
experiments that allow us to test each element of our vision.
▪ Innovation accounting: measure progress, plan milestones, prioritize.
▪ Build-measure-learn: The fundamental activity of a startup is to turn ideas into
products, measure how customers respond, and then learn whether to pivot or
persevere. All successful startup processes should be geared to accelerate that
feedback loop.
A core component of the Lean Startup methodology is the build-measure-learn feedback loop,
with speed of execution as a critical ingredient to product and startup development. An
entrepreneur, team or company’s effectiveness is thus determined by its ability to ideate
(turning ideas into products), quickly build a minimum viable product of that idea, measure its
effectiveness in the market through customers’ feedbacks, learn from that experiment and
then decide whether to persevere or pivot the idea, as follows:
Figure 18 | The lean startup loop
BUILD
MVP, experiments
MEASURE
Metrics, feedbacks
LEARN
perservere or pivot
PRODUCT
MVP, prototype
DATA
analyze
IDEAS
hypotheses
LEAN STARTUP
Minimize total time through the loop

1. BUILD: The first step is figuring out the problem that needs to be solved. The process
generally starts when the entrepreneur has an idea, often relying on his intuition, and
is considering a project. He/she will have to identify the different hypotheses
underlying this intuition and prioritize them in a “backlog” (Witmeur, 2016). The goal
is then to test these fundamental business hypotheses and begin the learning process
as quickly as possible by developing a minimum viable product (MVP) to carry out
the experiment. The MVP is defined as the “version of a new product which allows a
team to collect the maximum amount of validated learning about customers with the
least effort”.
2. MEASURE: Each experiment, mostly led on early adopters, must be conceived to get
maximum quantitative and qualitative feedbacks and must be defined by specific
metrics. These metrics must allow to validate or not the hypothesis(es), learn from
the targeted customers and decide in which direction to continue.
3. LEARN: Main objective is quick and iterative learning, through systematization of
early interaction cycles with customers. Once the data collected, the entrepreneur
will be able to decide to persevere (pursue) and tests the next set of hypotheses, to
refine his project, or to pivot (“try and fail fast”). The pivot is a “structured course
correction designed to test a new fundamental hypothesis about the product,
strategy, and engine of growth.”
This process allows incremental and continuous innovation, at the creation of the business but
also all along its development and can be repeated as many times as necessary.

Innovation + Other methods used by entrepreneurs
▪ Blue Ocean Strategy, or “How to create uncontested market space and make the
competition irrelevant” (Kim & Mauborgne, 2015). This method, created by W. Chan
Kim and Renée Mauborgne, suggests companies to stop competing with face to face
rivals in an overcrowded market (the red ocean) and rather to create “blue oceans”
of uncontested market space ripe for growth. Such strategic moves—termed “value
innovation”—create powerful leaps in value for both the firm and its buyers, rendering
rivals obsolete and unleashing new demand. It provides a systematic approach and
tools, and highlights the six principles that every company can use to successfully
formulate and execute blue ocean strategies.
Figure 19 | Blue ocean strategy key concepts (adapted from Kim & Mauborgne, 2015)
▪ Design thinking is a user-centric approach for non-designers to problem solving,
inspired by the designers’ way of working, which wants to be a synthesis between
analytical and intuitive thought. It was formalized in the 1990's by David Kelley and
Tim Brown of IDEO, and made popular in 2000s. It is today widely used in startup and
corporate innovation, even if following a design thinking approach does not mean to
design.
Figure 20 | Design thinking main concept (source: Nielsen Norman Group)
COST
BUYER VALUE
VALUE
INNOVATION
ELIMINATE
Which factors that
the industry has long
competed on should
be eliminated?
REDUCE
Which factors should
be reduced well
below the industry’s
standard?
RAISE
be raised well above
the industry’s
standard?
CREATE
be created that the
industry has never
offered?
NEW
VALUE
CURVE

▪ UX design is the process of enhancing user satisfaction with a product by improving
the usability, accessibility, and pleasure provided in the interaction with the product.
"User experience" encompasses all aspects of the end-user's interaction with the
company, its services, and its products (Don Norman). As user experience has now
became essential in business, entrepreneurs now integrate more and more UX design
in the innovation process
Figure 21 | UX Design approach (source: UX Republic)
▪ Agile development process: Agile software development is a set of methodologies
based on iterative development, where requirements and solutions evolve through
collaboration between self-organizing cross-functional teams with a disciplined
project management process that encourages frequent adaptation, teamwork, self-
organization and accountability. It was put in place in order to allow for rapid delivery
of high-quality software, and a business approach that aligns development with
customer needs and company goals. (see http://agilemanifesto.org/). More than just
dealing with software, Agile represent today the way entrepreneurial ventures
innovate.
Figure 22 | Traditional development vs Agile development

Figure 23 | Agile project management
Finally, some actors suggest mixing these different methods to one single process. But, more
than the methods themselves, what is important to understand is the entrepreneur’s state-of-
mind and way to innovate (user-centric, iteratively through test and learn rather than building
a perfect solution that does not meet customers’ needs while engaging a lot of resources).
Figure 24 | Mixed approach (source: AXA Group Digital Agency)

RESOURCES: from innovation to the entrepreneurial venture
“No innovation without resources”
Once the main lines of the project are described and to start make it real, the entrepreneur must:
▪ Gather financial, human and material resources to start the activity. To do so, he must
most time redact a business plan that will be able to attract investors and/or co-founders
▪ Complete the administrative and legal formalities to launch his organization
This step, sum up in just 2 lines, is one of the most important task and difficulty of
entrepreneurship.
Resources + The business plan
The main goal of the business plan is to synthesize the different technical, human and financial
data of the innovation project (can be suited for both business creation, development, new
activity or intrapreneurship). This document is intended mainly for bankers and investors likely
to finance the project but can also help the entrepreneur to clarify its long-term strategy
(typically from 3 to 5 years), structuring the entrepreneurial approach, and to attract co-founder
and/or employees. With its role of matrix on which the other tools are grafted, it has occupied
therefore a central place in entrepreneurship for years (Veronique et al, 2016).
The development and formalization of a business plan (hard and long-consuming task, about 4
months) reflects the mastery of the essential elements by the entrepreneur or cofounders
team for the success of the project and reflects the quality of its preparation. It naturally
addresses the main issues facing the entrepreneur and those who must trust him, and must
notably allow to:
▪ Context and problematic: Describe the problem to be solved
▪ Idea / opportunity: Demonstrate the relevance of the idea or the opportunity pursued
through a coherent business project.
▪ Offer / value proposition: Analyze the market (extended market study: environment,
customer segments, competition, existing or alternative offers …), the potential of the
innovation (solution proposed, business model, distribution …) and its originality (What
does make the project unique? What’s the competitive advantage?). As far as possible, it
will integrate first field feedbacks based on a POC (Proof Of Concept).
▪ Resources, feasibility, viability: Describe the resources needed to develop and market the
innovation (finance, organization of the company, human resources, skills, partners …) and
the constraints (technical, legal, …) to check the feasibility and viability of the project
▪ Factors of success and risks: Assess the factors of success and risks associated to the
project (often based, according to investors, on the co-founders team), the different
possible options for exploiting the opportunity, the alternative scenarios.

▪ Action plan: Design the action plan / business roadmap through clear priorities,
development stages and measurable objectives, both strategic, operational and financial
(strategic business planning: R&D, production, marketing, sales, administration …)
The financial plan translated afterward this action plan in the form of provisional financial
states and its sensitivity to main hypotheses to check the economic relevance of the project.
Figure 25 | The business plan (adapted from Véronique et al. (2016))
Although the “sacrosanct” business plan remains almost indispensable for negotiating
financing and convincing new partner, it is now strongly criticized since the 2000s for many
reasons:
▪ Not demonstrated effectiveness
▪ Impossibility to plan everything as we live in a world full of uncertainty
▪ Time-consuming and incompatible with the logic of reflection and action of
entrepreneurs, which consists in confronting the field must faster (pout the customer
at the center of the project development process), proceeding with successive
iterations by trial and error (lean startup method, …) and get by as best you can (with
available means and resources)
Resources + Funding
▪ The business vision, mission and culture
▪ The business model
▪ SWOT analysis
▪ Stages of development, growth
▪ Marketing and sales strategy
▪ R&D, IP and production
▪ Organization, management and governance
▪ Income statement
▪ Treasury
▪ Balance sheet
▪ The entrepreneur and the team
▪ The problem, opportunity and value proposition
▪ The market, its trends and dynamic
▪ The competition / competitive advantage
▪ Risks and sensitivity analysis
▪ Scenarios and « plan B »
▪ Key success factors
▪ Amount
▪ Funding mode
▪ Planning
Strategy
development
Definition of
the roadmap
Financial plan
construction
Context
analysis
Definition of
safety margins
Search for
financing

Financing entrepreneurship is often a key element of success for a new company, as it is
essential to start the activity and ensure rapid growth (recruitments, investments, fees, …)
beyond the first customer revenues. To finance the different steps notably in early stages, these
finance resources often come from (adapted from Van Wymeersch & Schwienbacher, 2016):
▪ Self-financing from the founding partners (personal savings, assets or bank loans)
or from their close circle called ‘FFF’ (Family, Friends and Fools), often too limited to
ensure a sufficient growth. The more an entrepreneur invests, the more it limits its
dilution in the capital and the more it demonstrated to third-party investors its
motivation and conviction.
▪ Crowdfunding, which often consists in proposing the product in early-stage in
exchange for money, allowing the entrepreneur to get some funds to start and to test
a first prototype of his offer.
▪ Business Angels, who are often former entrepreneurs and can bring money,
experience and expertise. They generally invest between 50 000 € and 500 000 €.
▪ VCs (Venture Capitalists), mainly interested in the financial return on investment
(dividends and ‘exit’ value, ie capital gain on the future sale of shares)
▪ Public subsidies
▪ Working capital (suppliers and customers) and revenues from sales: Shareholders'
equity increases by the profits the company realizes and does not distribute.
These equities can be split in 2 types:
▪ Borrowed capital (debt or credit, with banks or other lenders, suppliers, …), with
remuneration in the form of an interest and capital refund
▪ Own capital (shareholders’ equity), represented by shares of the company distributed
to investors who then become “shareholders”. The company has no contractual
commitment to its shareholders for compensation or reimbursement.
Figure 26 | Example of fundraising stages
Founders
2 000 000 €
20 000 shares
Control 100%
100 €/share
Founders
2 000 000 €
20 000 shares
Control 66%
100 €/share
Founders
6 000 000 €
20 000 shares
Control 66%
300 €/share
Investors
3 000 000 €
10 000 shares
Control 33%
300 €/share
Investors
1 000 000 €
10 000 shares
Control 33%
100 €/share
Founders
200 000 €
20 000 shares
Control 100%
10 €/share
Year 3
Fundraising
Post-money value:
3 000 000 €
Year 3
Before investment
Pre-money value:
2 000 000 €
Year 1
Creation
Initial investment:
200 000 €
Year 7
Exit
Exit value:
9 000 000 €
Investors invest 1 M€ in the company.
For this type of investment, they expect a
return rate of 32 %/year, either for an exit in 4
years a payback value of 1 M€ * 1,32^4 = 3 M€.
With an expected value of the company at the
exit of 9 M€, they expect a share of 3 M€ / 9
M€ = 33% of the company.
The company value after investment (post-
money) is 1 M€ / 33% = 3 M€, and before
investment (pré-money) 3 M€ - 1 M€ = 2 M€,
either a share value of 2 M€ / 20 000 shares =
100 €/share.

The use of external capital, whether owned or borrowed, offers growth potential that, if
properly exploited, should compensate the founders for the gradual loss of control over the
project (Van Wymeersch & Schwienbacher, 2016). For equity, the entrepreneur must consider:
▪ Cost of financing, or the share of capital to offer to investors to compensate the
investment risk and information asymmetry (hence the necessity of a solid business
plan and project). For startups, the remuneration of the investor mainly comes from
the capital gain realized on the future sale of its shares (exit value).
▪ Control sharing, as each new external equity investment corresponds to share of
capital and control (voting rights at the general meeting).
▪ Importance of the valuation of the company (pre-money before and post-money after
the investment, and expected value of the company at the exit).
A project is economically profitable if its annual return is greater than the cost of capital. If, at
the creation of the company, funding is almost secured by own equity, as the risk is still too
high to attract lenders or VCs, financing evolved over successive stages of the company's life
(Baron and Shane, 2008) as shown in the figure below:
Figure 27 | Typical steps of funding and funders
The balance sheet represents, at a precise moment, the situation of all sources of financing of
the company (own and borrowed) and of all the uses of this capital (fixed and current assets
including treasury). In a young company, cash flow monitoring is essential, since liquidity that
allows the payment of equipment, personnel, purchases of materials and supplies, interest on
debts, social security contributions, taxes, etc.
SEED
Concept
Founders and FFF
Subsidies
CREATION
Prototype
Business angels
LAUNCH
Market entry
Crowdfunding
Little VCs
GROWTH
Investment
Big venture
capilists
DEVELOPMENT
Success
IPO (Initial Public Offering)
Company buyout
Risk
uncertainty
Company
value

Financial resources are very important to understand in entrepreneurship as the success of the
company then becomes a question of survival and may engage the entrepreneur’s own
resources.
Figure 28 | ‘How to make money the startup way’
(source: Funders and founders, https://bit.ly/2FBIivK)
Resources + The dream team
To start the project and build a solid organization, the entrepreneur cannot be alone. She must
also gather around her a dream team of co-founders and employees. Actually, for most VCs,
the founders and the quality of the team are most time cited as the #1 reason of success,
more than the idea.
For them, it is essential not to be ‘solitary’ entrepreneur, for both the success of the project and
to demonstrate the entrepreneur’s ability to convince people about the relevance of the
opportunity. Recruitment and fidelity of the best talents, qualified and engaged, is often a very
hard task at the company creation and can be a hard brake on innovation and execution, hence
the necessity to lead an aggressive recruitment and incentive compensation policy, to value the
key personnel, to train the team and to create a stimulating working environment.

The entrepreneur also relies on his network as a key success
factor to build partnerships, find suppliers, mentors, share
expertise and potential risks, outsource tasks which are not
strategic to the company, or simply to get feedbacks from
potential users or other entrepreneurs.
All studies showed that the entrepreneurial organization is
the entrepreneur’s extension. The entrepreneur therefore
plays a central role and must become an authentic leader,
that defines the mission, shares a vision, define goals and
leverage the team’s skills.
Resources + Risk management
Managing risks and uncertainty is the everyday of entrepreneurs. For some researchers (the
German School), it’s even one on the main feature of entrepreneurship. Innovation is inherently
risky, and the propensity for risk-taking is key for the entrepreneur (St-Pierre, 2016). Fiegenbaum
& Thomas (2004) observe that risk-taking leaders are the most innovative and those who
initiate the most change.
But taking risks without identifying and managing them would be absurd. To protect his
business, the entrepreneur must therefore identify the main risks and measure their criticality.
Once the risk is identified, it can be managed, and its consequences reduces. Risk management
is becoming increasingly an important strategic capability.
To minimize risks, it is also essential to talk about the project to a maximum of people to have
feedback, including investors, business angels, experts, people with similar or different
experiences, or from other sectors. The diversity of information sources is one of the key
factors.
2 main failure factors achieve unanimity among VCs:
▪ the lack of financial resources (“ran out of cash”)
▪ the lack of competencies of the team for certain steps of the innovation (“not the
right team”).

Figure 29 | The entrepreneur as a leader (source: https://read.bi/1YwFVON)

Resources + Effectuation: a new resource-led paradigm for entrepreneurship research
« The entrepreneurial journey is more than just taking the most efficient
path to an easily defined future. It’s a process of exploration. And when
you’re exploring, objectives change with new facts from the market and
with new resources. The best entrepreneurs balance decisions between
the resources at hand and affordable losses.” (effectuation.org)
Sarasvathy (2001), under the mentorship of Nobel Laureate Herbert Simon, upset the field of
entrepreneurship in 2011, creating a new paradigm in research. This multi-entrepreneur did not
find herself in the research theories of entrepreneurship and wanted to translate the way
experienced entrepreneurs really think and act and was looking “what makes entrepreneurs
entrepreneurial”.
After having observed expert entrepreneurs across industries, geographies and time from a
cognitive science-based study, Sarasvathy find that entrepreneurs do not think and act as
others. She calls this way of thinking “effectuation”. Effectuation articulates a dynamic and
iterative process of creating new artifacts in the world. It takes the future as fundamentally
unpredictable, yet controllable through human action.
What makes great entrepreneur isn’t genetic or personality traits, risk-seeking behavior, money,
or unique vision. Effectuation research found that there is a science to entrepreneurship and
that great entrepreneurs use a common logic, or thinking process, to solve entrepreneurial
problems. Effectuation makes entrepreneurship learnable, it promises a method that everyone
can follow to start and grow a business.
Effectuation is a pragmatist paradigm of entrepreneurial thinking, which opposes to the causal
or predictive reasoning of the manager:
▪ Managerial thinking = Causal reasoning (predictive, goal driven): focuses on the
precise goal to reach, then on the means and optimal trajectory to achieve it. “If I can
predict the future, I can control it.”
▪ Entrepreneurial thinking = Effectual reasoning (means-driven): starts from a set of
available resources / means from which it constructs the attainable effects. In the
process of deploying these means, goals gradually emerge. “If I can control the future,
I do not need to predict it.”

Figure 30 | Basic differences between Causal and Effectual thought (Sarasvathy, 2011)

Effectuation comes with 5 action principles that translate the entrepreneurs’ way of thinking
and doing (Sarasvathy (2011) and effectuation.org):
Bird-in-hand – Start with your means
Don’t wait for the perfect opportunity. Start taking action, based on
what you have readily available:
▪ who you are (traits, tastes and abilities),
▪ what you know (education, training, expertise and
experience)
▪ who you know (social and professional networks)
Most often, the entrepreneur uses a combination of her closest
means, starts very small while imagining possibilities and moves
almost directly into implementation without elaborate planning (i.e.
without business plan).
With each action, possible outcomes are reconfigured.
The end goals are the combined result of the imagination and
aspirations of the entrepreneur and the people she has interacted
with during the process.
Affordable loss principle – Set affordable loss
In traditional business world, a manager analyses the market and
chooses segments with the highest expected value, following a
single mantra: maximize returns by selecting the optimal strategy for
your target.
Expert entrepreneurs turn this logic on its head—they think in terms
of affordable loss rather than expected returns. The entrepreneur
then uses the process of building the project to bring other
stakeholders on board and leverage what they can afford to lose
together.
By allowing estimates of affordable loss to drive decisions,
entrepreneurs stop depending on prediction. Instead, they focus on
cultivating opportunities that have a low failure cost and that
generate more options for the future.
This combination enables cheap failure and learning that can be
applied to the next iteration of the opportunity. Evaluate
opportunities based on whether the downside is acceptable, rather
than on the attractiveness of the predicted upside.
Lemonade Principle – Leverage contingencies
If you come across lemons, make lemonade! Turn the unexpected
into the profitable. Expert entrepreneurs learn not only to work with
surprises but also to take advantage of them. Because
entrepreneurs do not tie their idea to any theorized or preconceived
“market,” anything and everything is potentially a surprise that can
lead to a valuable opportunity. Embrace surprises that arise from
uncertain situations, remaining flexible rather than tethered to
existing goals.

Crazy-Quilt Principle – Form partnerships
The crazy quilt principle is the focus on building partnerships rather
than beating competitors. Since entrepreneurs tend to start the
process without assuming the existence of a predetermined market
for their idea, they don’t know who their competitors will be, so
detailed competitive analyses have little value.
Instead, entrepreneurs generally take the product to the nearest
potential customer. Some of the people they interact with make a
commitment to the venture, committing time, money and/or
resources and, thus, self-select into the new-venture creation
process. Obtaining pre-commitments from key stakeholders,
suppliers or customers helps reduce uncertainty in the early stages
of creating an enterprise.
Form partnerships with people and organizations willing to make a
real commitment to jointly creating the future — product, firm,
market — with you. Don’t worry so much about competitive analyses
and strategic planning.
Pilot in the Plane Principle. Control the controllable.
The four specific principles above represent different ways
entrepreneurs interact with the environment to shape the
environment. Of course, not everything can be shaped or controlled,
but effectuation encourages you, as the pilot of your venture, to
focus on those aspects of the environment which are, at least to a
certain degree, within your control.
Many entrepreneurs instinctively recognize the importance of
personal control: many chose entrepreneurship because they want
to be their own boss and choose their own course. Control enables
entrepreneurs to work on things they think are important, set their
own schedules and work with whom they want.
Figure 31 | The effectuation process (source: Sarasvathy (2011) and effectuation.org)

Effectuation is a logic and process that can be used at early stage. Expert entrepreneurs follow
the process to gain early customers and committed partners who then create new means and
new goals as resources and viewpoints are added to the mix. Thus, instead of having a stated
goal and finding means to reach it, expert entrepreneurs use the new means and new goals to
drive the creation of the venture in ways they hadn’t expected, leveraging surprises as they
present themselves. Effectuators use the process to lower the risk of the venture (by getting
customers and income early, setting affordable loss, and spreading risk to others) and finding
truly new and useful market opportunities by leveraging constraints and new information.
The effectuation theory demystifies the entrepreneur and puts an end to some misconceptions
about entrepreneurship:
▪ The entrepreneur is not a visionary: The vision is often built by action, "way making".
The entrepreneur starts from a feasible idea with his available means, not necessarily
a great revolutionary idea. The concept of idea is democratized.
▪ The entrepreneur does not appreciate free risk and does everything possible to
reduce it, or at least control it, by simply acting step by step. He tests, experiments
and continues his project if his actions bear fruits (effects / effectuation). At each
stage, the entrepreneur wonders what he is ready to lose, rather than reasoning in
terms of earnings.
▪ The entrepreneur is not an exceptional individual: Entrepreneurship is everyone's
reach. No study has ever demonstrated that there is a specific gene or trait that would
make entrepreneurs special. What makes a successful entrepreneur so is not what
he is, but what he does and how he does it.
▪ Finally, everyone can learn to be an entrepreneur. Effectuation democratizes access
to entrepreneurship.
Effectuation is today considered by many researchers as one of the most promising research
pathways for entrepreneurship (Schmitt, 2015).

VALUE CREATION: the art of execution
“Strategy is a commodity, execution is an art” (Peter Drucker)
“5% inspiration, 95% perspiration”
Now that innovation takes shape and the necessary resources – financial, human, material and
immaterial – are gathered and organized, the entrepreneur must define the way she will create
and deliver value for the different stakeholders: the customer, the end-users, the stakeholders,
the company and the team, and herself. The real work often begins here: execution is worth
millions, and idea would just be a multiplier. Thus, the most brilliant idea with no execution
would be worthless.
Figure 32 | Idea x Execution = Business (source: Kidder (2012) and sivers.org)

To do so, the entrepreneur must notably define:
▪ The organization, its mission, vision and its management
▪ The strategy to deliver value through business model and operations and to develop
the company (growth, internationalization, …)
▪ The business planning and execution and the customer development strategy
through marketing and sales
▪ Set short and mid-term goals with clear deadlines that are measurable, achievable,
relevant and rathole-resistant (Kawaski, 2008), then communicate and measure them
to federate the team. Key to success is simplifying strategy to tactical activities to
achieve goals, keep the team focused and get things done.
▪ Manage continuously people and resources, and make sure the entire company is
focused and executes.
Figure 33 | The business plan pyramid:
From the organization’s mission to short and mid-term goals
Figure 34 | Steve Blank’s model from search to execution (source: https://bit.ly/2rFkra0)
Timeless,
reason for existence
5 years+, picture of a successful future
Long term 3-5 years
Short term 1 year, functional
Quarterly
Monthly, weekly
Mission
Vision
Goals
Business objectives
Strategies
Tactics, projects, tasks

Value creation + Business model canvas
In entrepreneurship, the idea is important but its implementation is probably even more: put
the idea into action and identify the economic model of the future company (Ooms & Falize,
2016). To do this, the entrepreneur must determine the key elements that will turn the idea into
a concrete project.
The research and identification of the business model of the project, which characterizes “the
principles according to which an organization creates, delivers and captures value" through
the combination of its activities (Osterwalder, Pigneur, & Porgeauc, 2011), is one of the key
steps to validate its feasibility and viability.
Innovation can besides mainly focus on the business model while offering existing products
or services. Examples of successful businesses who chose business model innovation to
shake well-established models in their sectors are now numerous (eg Xerox with service rental
in photocopying + copy-billing, iTunes, Nespresso, Netflix, AirBnB, Uber, Cirque du Soleil …).
With its wide view of the strategy and organization, the concept of the Business Model Canvas,
made popular by Osterwalder, is a simple and effective visual tool which offers this necessary
agility by allowing to quickly describe a first strategy, to develop and select the best strategic
option and to test it on the ground. It also allows to easily share the business model with
stakeholders, notably investors. It can be assimilated to an entrepreneurial and holistic version
of the 4Ps of the marketing mix.
Figure 35 | Business Model Canvas overview (source: Osterwalder et al, 2011)
The business model canvas describes the 9 elements which constitute the bases of any
project, with 2 pillars: customer segments and value proposition.
▪ Customer segments represent the groups of customers that the company will target
and create value for. In general, they are characterized by similar need, specific
communication channels, adapted customer relationship. The objective is to
determine the most important customers and/or to search for new market
opportunities. Once they are defined, it is time to meet them (observation, interviews,

…) and to immerse in their daily lives to understand them, their needs, dreams and
expectations, to think and feel like them, to analyze what will make their lives easier
or even more enjoyable. This step requires a lot of empathy (the ability to perceive,
identify and understand another person’s feelings or emotions while maintaining an
emotional distance from them) and to put aside any judgment of value or opinion.
Once the data collected and the problem well-defined, it is important to point all the
pains (frustrations, obstacles, challenges, difficulties, risks) and the gains (economy,
time saving, dreams, simplification) that are possible. It can rely on empathy maps or
the use of personas.
▪ Value proposition is the solution that the project proposes to customers and users
to meet their needs and expectations, and to solve the problem (high gain / low pain).
Once formalized, it is important to test it rapidly on the ground (‘Quick and dirty’
prototype), to get maximum feedbacks and refine the idea. Osterwalder insists on the
fact that it is possible to prototype everything (with paper, cardboard, photo, video,
…). The objective is to converge step by step to a value proposition that is:
- Attractive: meet the needs and expectations of users and customers,
- Viable: create value for the entrepreneur,
- Feasible: technically and operationally feasible
These two elements and the associated methods are at the heart of design.
The other 9 elements are those which allow to create and deliver the value proposition to the
customer segments:
▪ Channels are the way the company communicate, make the brand known and deliver
its products / services (websites, distribution partners, …). The aim is to define the
channels that make it possible to win market shares quickly, cheaply and efficiently.
▪ Customer relationship describes the privileged link between the user and the
company (customized vs automated, self-service, …) and the strategy of acquisition,
retention and upselling of new customers.
▪ Revenue streams describes how the company capture value (eg sale, rental,
subscription, pay as you use, freemium …).
▪ Key resources are the most important assets necessary for the good functioning of
the business model (value proposition, distribution channels, customer relationships,
revenue streams). They can be physical, intellectual, human and financial.
▪ Key activities include primary (manufacturing, logistics, marketing / sales, services)
and secondary actives (infrastructure, human resources, R&D and purchasing).
▪ Key partners are all external partners and suppliers (raw material, service,
outsourcing ...) needed to ensure the success of the project. They are often important
to reach economies of scale, reduce costs, share risks or acquire resources or skills
necessary for the development.
▪ Cost structure represent the total cost of the solution proposed (fixed + variable).

Figure 36 | The business model canvas (source: Osterwalder et al, 2011)

Value creation + Customer development
One final concern for the entrepreneur when the product is launched is the way to acquire and
get loyal customers to sell the product. It is essential to remember that sales are vital from the
creation of the organization as they must finance the major part of the developments.
Entrepreneurs must face up to the technology adoption life cycle, starting from innovators to
the mainstream market. In his famous book ‘Crossing the chasm’ (2014), Geoffrey Moore
describes the chasm that exists between the early adopters, composed of visionaries, and the
early majority, composed of pragmatists, and the role of word-of-mouth and referencing.
Several startups fail to cross the chasm. To succeed, Moore notably recommends to first
create a “whole product” (complete set of features, without bugs), at a good price relative to
competitive alternatives and distributed through the right channels, and to start targeting a very
specific niche market in order to dominate it, and use it as a base for then expanding it to the
early majority (the ‘bowling alley’). Then, the organization will be able to enter the mainstream
market and reach the ‘tornado’, a time of hyper-growth, which needs to be operationally
prepared for it (resources, scalability …)
Figure 37 | Moore’s technology adoption lifecycle and whole product
(source: Theinnovationmanager https://bit.ly/2jTrEPJ adapted from Moore (2014))

Entrepreneurship by Design: The entrepreneur, the designer and the ideal startup (full thesis)

Entrepreneurship by Design: The entrepreneur, the designer and the ideal startup (full thesis)

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