Spring 2, 2011

Instructor: Jon Fjeld                                                email: fjeld@duke.edu

The Fuqua School of Business                                Phone: 919-660-8052

Duke University                                                       Office: A105F

                                                                                Assistant: Nancy Gump, 660-7838

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The class sessions are available for viewing here.

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Course Overview

The focus of this course is the successful creation and early execution of a new venture. The course will concentrates on new enterprises based on substantial innovations with potential for high growth and funding by venture capitalists.

The course is primarily based on case discussion, with the intent of allowing students to derive practical lessons from experience (both successes and failures) in actual ventures.

The topics to be covered include:

·      Understanding whether there is a market

·      Competitive position

·      Growth

·      Financing a new venture

·      Building a team

·      Early sales and marketing execution

·      Building an operating plan

This course is a complement to the Entrepreneurial Strategy course.

Requirements:

Case write-ups (40%)

The course will require three 2-3 page case analyses written up over the course of the term. The case write-ups may be done individually or in teams of up to 4 students.

You may hand in a write-up of any cases except Estee Lauder. The write-up must be turned in before the case is discussed in class.

Final project (40%)

The final project for this course is the identification and analysis of an opportunity for a new venture. The following elements should be included in your analysis:

·      The problem to be solved or need to be addressed

·      The target customer

·      Some articulation of how widespread the need is (size of the opportunity)

·      Elements of a possible solution

·      An articulation of the value of a solution

·      A brief statement of possible barriers to adoption.

Please note that the assignment is not to create a business plan.

Your write-up should be no more than 6 pages, single spaced. This assignment must be completed individually.

The final project is due on April 28.

In Class Participation (20%)

Because every class will be based on a collective analysis of a case or reading, it is critical that you come to class prepared to participate actively in the discussion. The outline of the classes below should help you prepare for class. Learning for everyone in this class is enhanced through debate, different perspectives and new insights that come from you.

Keep in mind that your goal should be to contribute high quality comments, not high quantity. You detract from class discussion if you talk a lot and do not make a clear point. To contribute high quality comments, you must also listen carefully to the comments of your classmates. You should try to extend or qualify their comments while avoiding repeating them.

To keep class conversations interesting and widely distributed across students, priority will be given to those who have spoken less. Occasionally, students will be called on directly to contribute.

At the end of the class, you will be asked for feedback on the value to your learning experience of the contributions of your classmates.

Course Grading:

Grading will follow the Fuqua grade distribution for elective courses.

Class Schedule

1.      March 21, 2011

(PLEASE COME TO THE FIRST CLASS PREPARED TO DISCUSS THESE READINGS.)

Topic: Elements of a new venture

·      Course objectives and summary

·      Class requirements

Case: Estee Lauder

Reading:

Arthur Rock, “Strategy vs. Tactics from a Venture Capitalist.”

2.      March 24, 2011

Topic: What is an opportunity for a new venture?

·      Sources of opportunity

·      Identifying opportunity: market research

·      Characterizing the target customer

·      What is a solution?

Case: Juniper Networks

Reading:

Clayton M. Christensen & Michael Overdorf, “Meeting the Challenge of          

Disruptive Innovation.”

Clayton M. Christensen, Scott Cook & Taddy Hall, “Marketing

Malpractice.”

Peter Drucker, “The Discipline of Innovation.”

3.      March 28, 2011

Topic: The business plan

·      Early planning and execution

·      Framework for analysis

Case: Kate Spade

Case: “Why Wasabe Lost to Mint”

Reading:

William A. Sahlman, “How to Write a Great Business Plan.”

Richard G. Hammermesh, Paul W, Marshall, Taz Pirmohamed, “Note on

Business Model Analysis for the Entrepreneur.”

4.      March 31, 2011

Topic: Strategy & competitive position

·      Vertical vs horizontal strategy

·      Implications of strategy for marketing & selling

·      “Crossing the chasm”

Case: Documentum, Inc.

Reading:

Geoffrey A. Moore, “Darwin and the Demon.”

Guest Speaker:

Jesko von Windheim

5.      April 4, 2011

Topic: Growth and the market research process for a new venture

·      What are the questions you need to ask?

·      Identifying the right niche

·      Managing growth

Case: Burt’s Bees: Leaving the Hive

Case: Intuit

6.      April 7, 2011

Topic: Financing and acquisition scenarios

Case: RightNow Technologies.

Reading:

Amar Bhide, “Bootstrap Finance: The Art of Start-Ups.”

Michael J. Roberts & Lauren Barley, “How Venture Capitalists Evaluate

Potential Venture Opportunities.”

Howard H. Stevenson & Michael J. Roberts, “New Venture Financing.”

Bob Zider, “How Venture Capital Works.”

Guest Speaker:

Fred Hutchison, Hutchison Law Group

7.      April 11, 2011

Topic: Financing a new venture

·      How much money do you need?

·      Sources

·      Implications of financing strategies

·      Financing strategies and business model

In class case: HyTower

8.      April 14, 2011

Topic: Team issues

·      Incentives

·      Organization

·      Culture

·      Hiring & retention

Reading:

Robert B. Reich, “Entrepreneurship Reconsidered: The Team as Hero.”

Guest Speaker:

    Scot Wingo, Founder and CEO, ChannelAdvisor

9.      April 18, 2011

Topic: Team issues, continued

Case: Visionary Design Systems

Case: Cypress Semiconductor (A)

Reading:

James N. Baron & Michael T. Hannan, “Organizational Blueprints for

Success in High-Tech Start-Ups.”

John Hamm, “Why Entrepreneurs Don’t Scale.”

T. J. Rogers, “No Excuses Management.”

10.  April 21, 2011

Topic: Sales & marketing execution

·      Market launch

·      Sales plan

Case: Zaplet

Reading:

Michael C. Mankins, “Turning Great Strategy into Great Performance.”

11.  April 25, 2011

Topic: Building an operating plan

·      Projecting demand

·      Planning capacity

·      Balancing growth and cash

Case: Align Technology, Inc.

12.  April 28, 2011

Topic: Summary of elements of a successful venture

Case: Howard Schultz and the Starbucks Coffee Company

Final projects due