Venture Management versus Corporate Management
Management of the venture-building process is
fundamentally different from corporate management that is focused
on delivering the annual operating plan.
Management of a new high-growth
business is built around a
customer-driven idea or a technology. It
entrepreneurial mindset and skills. Being first to the market is
the top priority for the venture manager.
Your core competence, the
ability to move quickly from idea to market, is a key enabler of
Entrepreneur: 10 Action Roles
What makes a venture succeed is the ability to
identify emerging attractive markets and to seize on unmet, unserved
Successful business is ruled not by the
founders' decisions, but by the marketplace. And the marketplace, in turn,
is ruled by "fears and passions". People will only buy what they want to
buy, or are afraid not to buy. And these "fears and passions" change every
"Selling is not about content, it is about fit."5
The analysis of the market potential and search for
the right fit separates the inventor from the entrepreneur. Have the market
researched, and develop an effective marketing,
advertising and selling strategy. Build a prototype and
test market your product
or service; identify the price at what you could sell it.
Hot markets do not last forever. So, be prepared
adapt quickly to the market changes. The market focus means flexibility:
watch the market dynamics, spot what has gone wrong, and move quickly to
turn market changes and your errors into opportunities.
Creating customers and better servicing them is
the true purpose of enterprise. In today's highly competitive world with many players, "you
need to be able to articulate your competitive advantage in a matter of
minutes, if not seconds. If you cannot, you will lose your prospective
customer's attention, and the business4".
positioning strategy will help you to get seen and heard in the
New Business Model
model that has dictated the structure
of every company from General Motors to Microsoft is so at odds with
contemporary economic currents that is must and will disappear."2
Traditional corporations are overstructured, overcontrolled, and overmanaged,
Top managers should rather concentrate of that handful of real
managerial leadership tasks that will bring success in the future. Thus, a
new business model is emerging, a
model where "most of key missions of the organization are distributed to the
myriad individual pieces and unity comes from the vigor of people and the
free flow of knowledge, not a burdensome central headquarters."2...
It's impossible to grow a successful business as
a one-person operation. Sooner or later, you will have to share
responsibility with one or more partners.
Thomas Alva Edison, an inventive genius who took
out more than 1000 patents, started several great companies. However, every
one of them collapsed once it got to middle size, and was saved only by
booting Edison himself out and replacing him with professional management.
You cannot achieve success with a Class A idea
and Class B management. Turning a great idea into a great business requires
professional managers and market experts. In case you cannot afford top management,
you would need to build your
management team from within, developing their own management skills.
The core team should be picked very
carefully because its business and interpersonal style becomes the
foundation of the company's culture and grows the value system. They should
have an impressive track record, skills, and depth of experience in the areas
most important to the
sustainable competitive advantage of the company.
Don't settle for a few average employees - "if you want a track team to win
the high jump, you find one person who can jump seven feet, not seven people
who can jump one foot."
When building your management team, remember
also that top-quality people often emerge from bankruptcies. Prior
bankruptcy experience is valuable - failure has its rewards. It is often
better to hire a leader who learned from mistakes than it is to hire someone
who was just lucky.
There are several types of strategies
followed by successful companies. A careful study in this area
will help you to sort out the kind of your
enterprise strategy that could be used best.
Strengths-Weaknesses-Opportunities-Threats (SWOT) analysis is to be
carried out to define your company's
sustainable competitive advantage areas
and develop an appropriate business strategy to capitalize on it.
Strengths and weaknesses of the venture's major
competitors need also to be assessed. Having that exercise completed, you
must position your company and its first products against its prime
Positioning is very hard work, and you may need to
call for help from a start-up consultant, a marketing expert, or an
experienced business executive.
strategy development exercise need to be supported by a set of analytical
The currently dominant view of
business strategy –
resource-based theory – is based on the concept of economic rent and the
view of the company as a
collection of capabilities. This view of strategy
has a coherence and integrative role that places it well ahead of other
mechanisms of strategic decision making.7
Many ventures fail because they
fail to understand capital
requirements of their
Focus on your
cash flow and start preparing for the
next stage of venture
financing well in advance.
Venture Financing Process
Make the Best of the Venture Capital
Obtaining venture funding
is really only the beginning. Along with your
funding, your level of accountability just shot up dramatically. If
you received your capital from investors, someone else now owns a part of your
business. And they will want to be reassured that they're getting their money's
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Factors for New Ventures...
DOs and DON'Ts of a Successful
Managing Radical Innovation
Succeed in Business...
Manage Less, Lead
Building a Management Team...
The Seven Skills of
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