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Chapter
Summary
There are many types of new ventures, ranging from a small business or consulting firm to a high-growth start-up.
Important social organizations are often established as nonprofit ventures. Other organizations start out operating in a niche market and grow into a broader market. Other new ventures emerge within larger existing corporations and are granted autonomy so they can fulfill their promise. Corporate ventures are an important part of the entrepreneurial world and account for many new innovations.
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3M
Optical Systems: Managing Corporate Entrepreneurship
Focuses on the decision faced by a middle-level division manager
concerning whether he should support an investment request
to support a third attempt at launching a new product developed
by a struggling business unit. Describes the long, difficult
process by which the unit has developed the product--a computer
privacy screen--after years of problems and continuing losses,
and its absolute faith in the project. Also presents the division
manager's concerns about the need for discipline and control,
setting up a tension that is focused on the launch decision.
Teaching Purpose: Focusing on the role of the first line and
middle-level general manager, the subject matter also allows
an exploration of the challenge of creating and sustaining
entrepreneurship in large organizations--in a company that
has managed it with great success for decades.
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Internal
Entrepreneurship at the Dow Chemical Co.
Describes how a corporate entrepreneur shapes an internal
growth venture within the company, mobilizes the resources
that are needed to implement the venture, and achieves success.
Complementing his entrepreneurial behavior, however, is the
support that he receives from several senior managers in the
firm. Allows a careful examination of the challenges for corporate
entrepreneurship in a large multinational firm and the roles
that senior executives have to play to support it.
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PlaceWare:
Issues in Structuring a Xerox Technology Spinout
Xerox has established a process to spinout technologies it
develops that do not fit with its current business needs.
To structure these "spinouts," a number of issues
arise on how to treat people and intellectual property. PlaceWare
is the first technology to go through this process. Teaching
Purpose: Commercializing technology, corporate entrepreneurship. |
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Carol
Bartz: Spinoffs - The concept behind buzzsaw.com
In 1999, Autodesk spun out a company called Buzzsaw.com. The
concept was to provide a hosted environment for the construction
industry. The problem: There are many people who come together
one time for a project--architects, engineers, construction
managers, contractors...that combination of people makes a
building. They interact infrequently, but their collaboration
is essential to the success of the building. This clip discusses
Buzzsaw as a spinoff--how the opportunity was recognized,
and realized, and the lessons learned. |
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Carol
Bartz: Entrepreneurship in Established Companies
How is the internet going to change the market we represent
and the world we live in? Being an entrepreneur doesn't necessarily
mean that you are the single person who started something--when
I joined Sun it had $9 million of revenue, which is not even
their average order today...and less than 100 people. 3M and
Autodesk. I am of the strong belief that good leaders bring
entrepreneurship mainstream. It isn't that you're an entrepreneur
in a small company --entrepreneurship in a large company in
more important. Companies that survive, survive because they
know how to change, take risks, and know how to reward that
type of organizational behavior. |
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Designing Corporate Ventures in the Shadow of Private Venture Capital
Private venture capital casts a long shadow over corporate ventures, in part because they compete for the same entrepreneurial talent. Corporate venturing may improve its performance by emulating certain practices of private venture capital but will never achieve the structures that private venture capital can create. Instead, the design principles for corporate ventures should embrace potential structural advantages of corporate venturing and leverage those advantages. These potential advantages include: an indefinite time horizon, the ability to commit very large sums of capital, the ability to coordinate complementarities with non-tradable corporate assets, and the ability to retain greater group and organizational learning from failed venture experiences. Lucent's New Ventures Group adopts many useful practices of private venture capital, but retains some of the potential structural advantages of venturing within an established firm.
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