1. Starting Up Characteristics Lifecycle
Emerging vs. Established Companies
“Let yourself be silently drawn by the
strange pull of what you really love.” ~ Rumi
Salman Azhar & Friends in 2018

2. Salman Azhar & Friends in 2018
What is Entrepreneurship?
Are these entrepreneurial ventures or not?
Enzos, Taco Bell
Plug and Play, Y-combinator
Duke Manor (apts.), Airbnb
Apple, Google
Lyft, Uber, Uber Driver?
Accenture, AzharConsulting
Salman Azhar & Friends in 2018

3. Salman Azhar & Friends in 2018
Entrepreneurial Ventures
Most entrepreneurial ventures start as a small business
All small business are not entrepreneurial ventures
Characteristics of entrepreneurial ventures?
Innovative
Product, process, or service
Scale up
Pivot to adapt to changes
Capture a new market
Often financed (VCs/angels)
By Presidência do México - Flickr, CC BY 2.0,
Salman Azhar & Friends in 2018

4. Entrepreneurial Organizations: Start
The organization is centered around the founder(s)
What happens with a startup, is that an original network builds with the entrepreneur(s) at the center.
As problems boil up, subnetworks then get created within the network as needed.
As the company gets bigger, these informal networks will continue to grow, solving problems as they come up.
Organizations grow organically as it evolves
The structure is unknown at the start
Salman Azhar & Friends in 2018

5. Entrepreneurial Organizations: Growth
The company gets so big that these networks have to be propagated throughout the organization to get any kind of alignment.
What ultimately ends up happening is that the company gets so big that these networks & solutions must be propagated throughout the organization to get any kind of alignment. Without someone else can come in with a deliberate, aligned strategy and beat them…
Vulnerability?
Become vulnerable to internal and external challenges
Salman Azhar & Friends in 2018

6. Entrepreneurial Organizations: Mature
What ultimately ends up happening is that the company learns what works in the market, but so do other people. At this point, they have to switch to a deliberate strategy to make sure all these people are aligned. The network doesn’t work anymore.
What will end up happening is the processes that are aligned with the strategy will become more important than the people. Think Management Consulting firms, where the consultants are essentially replaceable because of the methodologies.
Deliberate strategy
Processes aligned with the strategy & organization
Align
Learn the market
Structured organization
Processes become more important than the people
Salman Azhar & Friends in 2018

7. Entrepreneurial Organizations: Evolution
That means that as a company evolves, it’ll need to go from entrepreneur to network to hierarchy, where the value of the organization moves from its people to its processes.
These are two completely different stages and they require completely different skills. Note how many firms fail when they try to move from startup to large organization. It’s just two completely different skill sets
Unfortunately, what that means is that when agility is needed, a large organization doesn’t have it.
Value moves from people to processes
Logarithmic Time Scale
Salman Azhar & Friends in 2018

8. Salman Azhar & Friends in 2018
Entrepreneurial Organizations: Evolution
Risky transition
Manage transition
Different skillsets
In reality, most of the “time” of a business is in the deliberate strategy phase. However, note you can’t get there without getting through this phase, which is where our entire focus will be.
That means that as a company evolves, it’ll need to go from entrepreneur to network to hierarchy, where the value of the organization moves from its people to its processes.
These are two completely different stages and they require completely different skills. Note how many firms fail when they try to move from startup to large organization. It’s just two completely different skill sets
Linear Time Scale
Salman Azhar & Friends in 2018

9. Skillsets for Different Phases
Key: Alignment, Deliberation
UNDERSTAND the existing market
Structure your organization
Create/execute strategy
Aligned way (ops/strategy)
What skills are necessary during emergence?
What skills are necessary for scale?
Key: Learning, Agility, Innovation, Small-scale leadership
LEARN the market
CREATE new markets (innovation)
Get the right people
Create those linkages between the people on your team
Emergent:
Ability to LEARN the market
Ability to create new markets (innovation)
Ability to create those linkages between the people on your team
Ability to get the right people
Learning/Agility/Innovation/Small-scale leadership is key
Deliberate:
Ability to UNDERSTAND the existing market (marketing)
Ability to order your organization in a structured, aligned way (ops/strategy) Ability to create/execute strategy
Alignment is key
Salman Azhar & Friends in 2018

10. Salman Azhar & Friends in 2018
Emergent vs Deliberate Strategy
Emergent Strategy
An unintended strategy
Emerges from a series of unintended actions not
Unintended order created throughout an organization
Deliberate Strategy
A fully intentional strategy
Based on conscious and analytical decision-making
An intentional order created via a top-down approach
With a large business with a KNOWN customer and a known value proposition, etc. this is what you push on.
Salman Azhar & Friends in 2018

11. Salman Azhar & Friends in 2018
Processes & Organization: Evolution
Emerging
Create new markets
Few talented people
Agile & dynamic coordination
Established
Dominate the market
Robust processes
Structured organization
Numerous people
Varying skillset
Agile but not scalable
Scalable but not agile
Unfortunately, what that means is that when agility is needed, a large organization doesn’t have it.
Salman Azhar & Friends in 2018

12. Innovation in Established Organization
How do established organization innovate?
Acquire a startup (YouTube)
Simulate a startup (Waymo)
Personal Examples
FleetAdvisor (MicroFlex  Eaton)
ClaimsFlo Passport (ClaimsFlo  ADP)
What could go wrong?
Challenging in transforming culture
Acquisition doesn’t adapt to established culture
Spinoff doesn’t adapt to agile culture
Beat Google Video
Spinning off smaller divisions
Salman Azhar & Friends in 2018

13. Salman Azhar & Friends in 2018
Entrepreneurial Organizations: Evolution
This course
Idea
Validation
Pivoting
Managing Risks
That means that as a company evolves, it’ll need to go from entrepreneur to network to hierarchy, where the value of the organization moves from its people to its processes.
These are two completely different stages and they require completely different skills. Note how many firms fail when they try to move from startup to large organization. It’s just two completely different skill sets
Unfortunately, what that means is that when agility is needed, a large organization doesn’t have it.
Other I&E Courses
Salman Azhar & Friends in 2018

14. Salman Azhar & Friends in 2018
Entrepreneurial Ventures: Recap
Characteristics of entrepreneurial ventures
Innovative product, process, or service
Scale up the company
Pivot to adapt to changes
Capture a new market
Often financed by VCs/angels
Lifecycle of entrepreneurial ventures
Start
Growth
Mature
Evolution
Salman Azhar & Friends in 2018

15. Salman Azhar & Friends in 2018
Emerging Companies: Recap
Emerging companies
Create new markets
Few talented people
Agile & dynamic coordination
Key: Learning, Agility, Innovation, Small-scale leadership
LEARN the market
CREATE new markets (innovation)
Get the right people
Create those linkages between the people on your team
Salman Azhar & Friends in 2018

16. Salman Azhar & Friends in 2018
Established Companies: Recap
Established
Dominate the market
Robust processes
Structured organization
Numerous people
Varying skillset
Key: Alignment, Deliberation
UNDERSTAND the existing market
Structure your organization
Create/execute strategy
Aligned way (ops/strategy)
Salman Azhar & Friends in 2018