Notekeeper – Innovation & Entrepreneurship https://innovation.disi.unitn.it/iebasics/2017 The Innovation And Entrepreneurship 2017 Site Thu, 25 Jan 2018 21:37:10 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.8 https://innovation.disi.unitn.it/iebasics/2017/wp-content/uploads/2017/10/social_innovation_logo_icon.png Notekeeper – Innovation & Entrepreneurship https://innovation.disi.unitn.it/iebasics/2017 32 32 The Class Reminiscences of Dec 11 and 18 https://innovation.disi.unitn.it/iebasics/2017/index.php/2017/12/22/the-class-reminiscences-of-dec-11-and-18/ https://innovation.disi.unitn.it/iebasics/2017/index.php/2017/12/22/the-class-reminiscences-of-dec-11-and-18/#respond Fri, 22 Dec 2017 17:23:14 +0000 http://innovation.disi.unitn.it/iebasics/2017/?p=975 The Class Reminiscences of Dec 11 and 18!!!

Since the aim of the wrap up class was to exchange reflections, the interaction was the tonic during the class on December 11. Indeed, the professor outlined each relation between Battles and topics. So, apart the evident polarization pursued by a Battle, such experience also was conceived to approach gradually the teaching material. For instance, the Battle of Bill Gates against Steve Jobs was under the notion of technology entrepreneurship, the Battle of Uber versus Taxis exposed the opposing organizational structures, the Battle of Security against Privacy addressed the variability of the environment, the Battle between Cars and Horses approached the customer centric tendency, the Battle of Weak against Strong Artificial Intelligence embraced the decisions in distinct environments, the Battle of Politics versus Ideologists revealed an ambiguous scenario, and the last Battle put in the balance the visionary ideas and the financial results of Elon Musk under the umbrella of network effects and social capital.

From this journey, it appears unavoidable the discussion about ethical implications, but first ¿does the innovation have an ethical value? Since a constructive intention can be undermined by wrong presumptions, the innovation can be conceived as a neutral arena with respect to ethics.  Moreover, the value creation and the transformative potential of innovation can overcome the single aim of economical value, to reach a balance in the social good shaping the social innovation.

Nonetheless, the generation of non-economical value is not trivial and implies a process oriented view and also the policy impacts. Some examples from the process oriented sight, it is the evolution from the short message service (SMS) to the dissemination of instant messaging enriching texts by capacity and aesthetics, another example is the digital dating experience (or the way to approach a person) is also going beyond a superficial interaction to become a meaningful relationship. Some examples from the policy impacts, it is the effect of social networks connecting people to share content and the privacy affairs.

The already mentioned impacts let us think about three new categories of innovation; narrow view, societal challenge and systemic transformation. Firstly, a narrow view is concentrating efforts in one direction to address vulnerable groups in the society and embracing charitable actions. For instance, shelters for vulnerable people, discounts in transportation, and access to vaccinations to vulnerable children, among others. Secondly, the broader sight of a societal challenge addresses the society as a whole considering its wider challenges. To exemplify, the European Union project Horizon 2020. Lastly, the systemic transformation is a bottom-up approach where the empowerment of the society is an essential characteristic followed by the co-creation between many actors. In such active societal atmosphere the policies are target of constant mutation, and the sustainability of such policies is a prominent concern.  From here, it is plausible that the common goods of communities can be manage by themselves, such as, the fishing stock who use the resource and make the fish sustainable over time, then the limitations become regulated as a result of a co-creation effort. Even though, what if this approach goes wrong, such as, when a bank is untied from the central government and it decides to move further and out of the limits of control, it could be the case of Bitcoin.

Hope it helps! Happy Holidays!

Berioshka, Notekeepers Team

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Theory Lesson 11 https://innovation.disi.unitn.it/iebasics/2017/index.php/2017/12/13/theory-11/ https://innovation.disi.unitn.it/iebasics/2017/index.php/2017/12/13/theory-11/#respond Wed, 13 Dec 2017 08:16:02 +0000 http://innovation.disi.unitn.it/iebasics/2017/?p=949 Social Capital

What the social capital means and how actually it can benefit?

The importance of social capital for both establish companies and startup firms.

Social capital is the accumulation of active connections among people in a network. On the other hand, some people think that social capital is whom do you have in your network of contacts. But another group of people think that social capital is resources that are part f and bass of the relationships. Meanwhile, the dichotomy have two opinions too: set of resources that are based on the relations or set of relations that create resources.

In recent years, the meaning of social capital is a bit changed to social capital represents an ideal means how to put all of your resources together in a effective way.

The forms of relationships can vary from informal to formal. The more formal the relationships is the more strong the relationships is. Strategy alliance is the strongest element among them and it stands between two or more firms that are to cooperate with one another. If they work by only themselves, it would be hard to achieve a goal.

Ways the social capital benefit to your companies: way of exploiting a business opportunity; there is mutual advantage to be gained; true partners can form a new team.

Form of cooperation: it is from market transaction to merger acquisition. Outsourcing(e.g. IT, telegram service) and licensing(e.g. software, music industry, insurances, lawyers, taxi drivers) are market transaction. The space between this stages usually include: production, R&D and so on.

What do we achieve with alliance:

  • Access to knowledge or competence like share know-how, R&D complementary technology. Where it could be? Real example: telecommunication company.
  • Access to new markets and internationalization like market knowledge, local party required. It can be benefit but sometime there are drawbacks for them. When the first product of APPLE was produced, users can only sign a contract and use AT&T operate, do you think it is right or wrong? Apple was totally new product at that time. They lacked knowledge at that time and if you use iPhone is U.S., at least your security of telecommunication can be guaranteed.
  • Efficiency like scale, specialized partner;
  • Clients do not want product is but tailored solutions like satisfy a need, not  a demand; e.g. mobile in Africa. They do not have enough money to invest and research so they work with google and some other companies in order to come up with a solution.
  • Risk sharing like pool resources and portfolios.

The opportunity to combine knowledge in unexpected combinations to create new product concepts is an important motive for alliances as well. The failure rate is 50%.


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Battle 7 https://innovation.disi.unitn.it/iebasics/2017/index.php/2017/12/13/battle-7/ https://innovation.disi.unitn.it/iebasics/2017/index.php/2017/12/13/battle-7/#respond Wed, 13 Dec 2017 08:13:05 +0000 http://innovation.disi.unitn.it/iebasics/2017/?p=943 True Group

Who is Elon Musk?

Elon Musk is born in 1971 and died in 2017. He wants to save the whole world. During his life, he is the founder of SpaceX and his markable contributions are March exploring and Tesla industry. He believes Open AI and neural-ink. Climate change becomes a big issue in our planet’s future and Elon Musk wants to save our world with his effort by exploring other plants.


Fraud Group

Is Elon Mush a Innovator or Fraud?

Why he is a fraud:

  1. His company Tesla is losing money all the time, 8000$ per minute.
  2. He sold his products even he can not support and validate them.
  3. SolarCity is hanging on a cliff. The quantity of MW/acre decreased every year. The expected MW is much higher that the actual MW.

One thing he was good at is exploiting the market. And where ie the money come from?? U.S. governments along gave him a lot. He stole the money from government.


Questions for True Group:

  1. How many rockets can come back and be reused actually?
  2. If I have a lot of money but I did a lot of unsuccessful projects, am I a inventor?
  3. You say Tesla actually makes a lot of profit but can you provide evidences what you said?   N
  4. Who made the decisions when you receive investment from government? Are you going to share with government?
  5. Tesla has a low productivity compared with other car companies. It can be regarded as invention?    N
  6. Do you know how many Tesla quarterly deliveries were promised before?
  7. Companies work for stockholders since they need to make money. Tesla can not sell their products at the beginning, how can sell more in the future?

Questions for Fraud Group:

  1. In your presentation you said Tesla did not profit at all but do you know the Tesla repaid all his debt?
  2. Elon Musk knows a lot of pollution, environment and actually he is trying to do his best. You just denied his financial situation, but can you deny his achievements?
  3. You gave us a lot of figures in your presentation but how you can prove they are true?
  4. After two years of product issued, government stoped the “tax-break” policy of Tesla. Why did government do that?
  5. How you can disapprove his ideas and how you can say all his ideas are fraud?
  6. How about project: PayPal? Elan Musk supported this project even it is not a idea generated by him.
  7. Why electric cars are not the solution in future?     N

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The Class Reminiscences of Dec 4 https://innovation.disi.unitn.it/iebasics/2017/index.php/2017/12/10/the-class-reminiscences-of-dec-4/ https://innovation.disi.unitn.it/iebasics/2017/index.php/2017/12/10/the-class-reminiscences-of-dec-4/#respond Sun, 10 Dec 2017 09:55:05 +0000 http://innovation.disi.unitn.it/iebasics/2017/?p=884 This occasion the class began with an invitation from Victorino Filippo to the next startup Lab coming the next semester. The experience is designed to boost and refine ideas in one goal direction; meanwhile the soft skills are also developed.  The work starts with a customer problem solution, and then it is followed by a first pitch session before the team selection and building. During the journey the students are facing changes and receiving mentoring, before reach the final open pitch.

From another stance, the elements present in the start up Lab are not far from the scope of social capital, since we are recognizing competencies that are not only technical. Certainly, it is well known that the initial start up stage is fuelled by personal resources, and the funds are limited. Nevertheless, there is more capital on the table than just money, so the active connections among people are also the resources that are the basis of social capital. Furthermore, such connections can be characterized from different perspectives, namely the relations in the social network and the resources created by people relations.  So, ¿How do you put all the resources together to form the organization? Currently, the partners involved in the formation of a company can increase the variety of resources available, and the growing process as well. In fact, through formal partner relations the positive impact is higher, driving strategic alliances based on mutual and compatible purposes, such as, the shared economy. So ¿What are the benefits of social capital?, mainly exploiting business opportunities. For instance, the lack of knowledge can be perceived as an opportunity to involve new players. Moreover, it is also feasible to make a link between market transaction and acquisition through any strategical alliance. To exemplify, the health industry and insurances by sharing part of the equity.

In general, if we need access to knowledge we can derive in a complementary R&D extension, such as, the alliance between Apple and AT&T. Another example, if we are looking for access to new markets and internationalization possibly we reach further market knowledge. By seeking efficiency we can promote the introduction of scaling up partners. By producing tailored solutions to clients we can satisfy needs instead demands for standards products. To exemplify, a low cost mobile phone system in Africa allowing an alliance between the Government and the telecommunications industry. Another example, it is risk sharing where there is an opportunity to pool resources or portfolios together. Also the combination of knowledge can derive in new products, such as, Apple and BMW, Adidas and Goodyear, among others.

To close the class, the artistic intervention of the collective Incanti installed the vision of a multidisciplinary theatre. The Incanti project tends to translate the characteristic meaning displayed by the environment into a renovated energy that is disseminated in a particular space by the body language acting as a medium. So, the voice progression of a singer who is crossing the space in circular movements produces a magnetic field that attracts the audience attention, transforming the spatial energy. The project Incanti considers the innovation as a bridge between theatre and the University, so the invitation is open to participate in this project and other social initiatives, such as the park interventions for common good.

Hope this helps! All the best,

Berioshka, Notekeepers Team

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Elon Musk: a Visionary or a Fraud Battle https://innovation.disi.unitn.it/iebasics/2017/index.php/2017/12/10/elon-musk-a-visionary-or-a-fraud-battle/ https://innovation.disi.unitn.it/iebasics/2017/index.php/2017/12/10/elon-musk-a-visionary-or-a-fraud-battle/#respond Sun, 10 Dec 2017 09:52:15 +0000 http://innovation.disi.unitn.it/iebasics/2017/?p=881 This special edition attempts to register the traces left by the referred last battle. So here there is one interpretation of the main questions discussed that day.

A Visionary

  1. ¿How Musk’s companies can be sustainable and feasible? Ans.: We are doing researching development and experimentation in the field of cars, space exploration and clean energy, and the Government is consistently supporting us to boost sustainability in the long term.

 

  1. If Tesla is not getting profits ¿Why to invest in Tesla? Ans.: Electrical cars are disruptive in the market, so Tesla must be treated as a research business instead a traditional carmaker. Indeed the production timing is longer and there are losses per car. Even though, the aim is to reduce environmental damage that’s why the company is diversifying the car offering; from luxury to mass market models.

 

  1. ¿How is the Government following their investments? Ans.: The Government is permanently investing and the balances are transparent, and also the stock market demonstrates the returns every period. So, this is a researching company producing gains and losses as well.

 

  1. ¿How many rockets can be reused? Ans.: All rockets are reusable, but we cannot say a rocket can travel 30 times to Mars.

A Fraud

  1. ¿Why are you judging financial losses instead the vision behind the companies? Ans.: According our figures, the income is going down every year and still they are losing money, which is a public financial support. Furthermore, Tesla usually is partially repaying debts, i.e. around 20%, and then asks for new loans increasing the time window to repay once again. We can associate such behavior to the Ponzi scheme fraud, where the value is given by external capital or in the form of financial instruments, instead from the real production.

 

  1. ¿Where are the references to support such lack of profits in Tesla? Ans.: Tesla produces around three cars per day, and meanwhile others are producing thousands of cars, so the production is very low. For instance, Ford is manufacturing a car 10 times faster. If you are not able to produce enough cars you are not doing an innovation.

 

  1. ¿How do you prove that Tesla production is unsuccessful? Ans.: We used statistical references from Internet, where it is also possible to read about many failures in Falcon 9 rocket. So, from the financial state the innovation is not successful, that’s why we insist and ask ¿what does a company work for?

Hope this helps! All the best,

Berioshka, Notekeepers Team

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The Class Reminiscences of Nov 27 https://innovation.disi.unitn.it/iebasics/2017/index.php/2017/12/04/the-class-reminiscences-of-nov-27/ https://innovation.disi.unitn.it/iebasics/2017/index.php/2017/12/04/the-class-reminiscences-of-nov-27/#respond Mon, 04 Dec 2017 23:15:13 +0000 http://innovation.disi.unitn.it/iebasics/2017/?p=859 As we can foresee, moving forward in the journey of innovation is not free, since the resources are limited and the sustainability is crucial. Thus, seeking for financial support becomes a priority in order to assure growth. Then, ¿how does a company grow and receive such funding?

From the private arena, there is a realm of venture capitalists highly interested in provide funding for growing business. Additionally, since the startup company is conceived as a daring journey for capitalists the venture financing implies risks. From the public arena, the seed capitals are distributed according the public policies while the taxes can restrain a fast innovation adoption. Indeed, there is also a direct relation between country welfare and the company growth.

According to a Fortune 500 study, Apple steadily increased from 2011 to 2014, in contrast to Hewlett Packard for the same period. An equivalent rising is displayed by Microsoft and Amazon, yet below Apple. Google also had a steady growing after Amazon, whilst the notorious backward motion was exhibited by Nokia. Despite that the mentioned companies are far from being a startup since are mature brands, the successful companies usually follow the same financing cycle. The beginning is as a seed venture, and then it turns into a startup, after that it moves to the first stage, then it becomes consolidated to finally reach maturity. Any seed is well recognized as a risky and ambiguous early stage where the own resources are invested, usually from family or friends (FFF) and some angel investor. An early growth can attract more business angels and venture capitalists during the startup and the first stages. Through a continual growth, the consolidation stage arises increasing the cash flow. Conversely, the risk steadily decreases through the later stage, and the company maturity allows the access to private equity funds, bank loans and the stock exchange.

Furthermore, the debt capital it is a sort a loan or a temporal form of funding excluding ownership of the company since the contract only fix returns and additional interests. The risk capital is a stable contract assuring a dividend from the company profits and granting a voice and vote in the governance as a co-owner. From the private equity fund stance, it is possible to encompass several sorts of investments pursuing a limited and temporal partnership, such as, angel investors, venture capitalist and corporate investors. As a corporate investor we can consider the example of Google Ventures, they invested in Uber roughly $258 million Dollar in 2013. As business angels the investment capability is limited since are physical persons or specialized firms, they invest from 50 mil Euros to 250 mil Euros, fixing a return of investment above 20% per year. As a venture capitalist, the focus is on highly risk companies expecting certain equity on total shares based on enterprise estimated value, and such strategy can be extended from medium to long terms, roughly 7 years. Some examples of venture capitals are HP, Apple, Sun Microsystems, Intel, Microsoft, Google, Facebook, among others. The selection criteria behind such ideas are the market opportunity, the value proposition, management team, and the financials. Moreover, the fundraising is competitive and follows different review stages. For instance, one reason behind an unsuccessful first review could be a not promising deal, or an incomplete business plan as a second review, even a sustainability gap can justify a lack of due diligence. So, it is not an easy job to get the financing. Yet,    some successful examples are Amazon, Apple, Body Shop, ML Labs., and AirBnB, among others.

Hope this helps! All the best,

Berioshka, Notekeepers Team

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Strong vs Weak AI Battle https://innovation.disi.unitn.it/iebasics/2017/index.php/2017/11/30/strong-versus-weak-artificial-intelligence-battle/ https://innovation.disi.unitn.it/iebasics/2017/index.php/2017/11/30/strong-versus-weak-artificial-intelligence-battle/#respond Thu, 30 Nov 2017 17:27:57 +0000 http://innovation.disi.unitn.it/iebasics/2017/?p=846 Strong versus Weak Artificial Intelligence Battle of Nov 28!!!

This special edition attempts to register the traces left by the referred battle. So, here there is one interpretation of the main questions discussed that day.

Strong AI

  1. ¿Is the project feasible in the near time? Ans.: This is the starting point, and we are actively working in researching.
  2. ¿How a machine can be better than a real teacher? Ans.: The strong point here is the human improvement in the robot, since the machine is adapting through the interaction with the students. Consequently, we are not trying to replace a teacher.
  3. ¿How do you plan to achieve empathy with this machine? Ans.: We are actively working in researching to clarify that point. Nowadays, we cannot assure 100% certainty since we perform under an uncertainty environment.
  4. ¿How can you persuade people if your project is reliable with such uncertainty? Ans.: There are not advertisements, since we are making researching. We are far from the idea of marketing.
  5. ¿Is this outcome software or hardware? Ans.: A robot.
  6. ¿How can you build an affordable solution in comparison to a personal tutor? If the tutor is expensive as you said. Ans.: We reaffirm that a tutor per student is much more expensive than one robot for many people.

Weak AI

  1. ¿What is your sustainability plan? ¿Why to invest in your project? Ans.: The niche is health industry and our value is accuracy.
  2. ¿What is the originality or novelty contribution behind your idea? Ans.: We apply predictive algorithms and we innovate over the existing technology.
  3. ¿How do you think to become strong AI in the near future? Ans.: Currently, we cannot anticipate external conditions. The focus of our sensors is gathering real time data instead an adaptive approach.
  4. ¿What about liability considering a mistake in a medical diagnostic? Ans.: There are sensors measuring real time information in the form of smart watches. Gathering health conditions like heartbeats, pressure, etc. Through continual improvement we can get more precise results reducing false negative and false positives.
  5. ¿How do you handle the legal aspects in order to control the privacy of the data sets? Ans.: The data is anonymized. Additionally, we consider non disclosure agreement clauses in the contract.
  6. ¿Is the model considering inputs from “relatives/family” to make relations to anticipate inherited diseases? Ans.: We do not use such criteria.
  7. ¿How are you handling your budget? Ans.: We have a business model based on our smart watch sensor.

Hope this helps! All the best,

Berioshka, Notekeepers Team

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Battle 6 https://innovation.disi.unitn.it/iebasics/2017/index.php/2017/11/29/battle-6/ https://innovation.disi.unitn.it/iebasics/2017/index.php/2017/11/29/battle-6/#respond Wed, 29 Nov 2017 08:12:20 +0000 http://innovation.disi.unitn.it/iebasics/2017/?p=835 Short Questions from Audiences/public

I-Heater Group (Weak AI):

  1. After you develop a product, you must set this product. Probability of adding to a product is really hard, why I should prefer you rather than them? Why I choose something others can do easier, where is your substantial point in sharing market? Y
  2. What is your original advantage of your group? How you convince one to put money into your project for 7 years? What is the novel of your project? Y
  3. (it is a question to other group, but this group still answer it same with question 4 in strong AI) Y
  4. How about privacy? Y

[Related questions: 4.1 Who is the data controller? 4.2 How you deal with the content of users information according to regulations and policy? 4.3 What if users ask you to move their information in your application?]

  1. Liability problem. As a user, if the tool forecast I will have a high possibility to have a heart attack recently two days, what should I do and what your project will do? Y
  2. Is the model relative to family situation? Y
  3. Data collecting problem. Why do you think they will give you their data? Y
  4. How you are going to spend your money? Y
  5. In your system, you mentioned that you train data to predict but what if I add some wrong information? Y

 

Strong AI Group:

  1. I do not think your project is clear since AI is complicated, why you strongly recommend AI as a teacher? Why it is called strong AI? Y
  2. How should strong AI react? How should it could be better than real teacher? Y
  3. How you system launch strong AI? How do you plan to achieve EMPATHY with your machine? Pending
  4. Why do you really need strong AI in your project? How you can develop Strong AI within 5 years? Why you tell me something related to weak AI (achievement problem)? Y
  5. Is your website a software or hardware? Y
  6. How can you make this totally new technology in low price, comparing with tutor? You have to put your product into market at the end and if your product is expensive, your idea will be useless. Y
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Theory Lesson 10 https://innovation.disi.unitn.it/iebasics/2017/index.php/2017/11/29/theory-lesson-10/ https://innovation.disi.unitn.it/iebasics/2017/index.php/2017/11/29/theory-lesson-10/#respond Wed, 29 Nov 2017 08:10:38 +0000 http://innovation.disi.unitn.it/iebasics/2017/?p=832 Venture financing

Today’s topic is more hand-on learning, so we start to know some specific words.

Reasoning on sustainable growth

Start with question: do you think is there any direct and indirect relation between country welfare and companies’ growth? In another word, do you think does the culture, environment, welfare of country influence companies’ growth?

Opinions from students: It depends, like tax is very relevant issue with companies’ growth. Country use tax to develop education, medicine system and so on.

Fortune global 500 is a list of 500 biggest companies in the world in terms of income. Recently, the tendency of Apple is growing rapidly while Microsoft stay stabled and Nokia dropped sharply from 277 to more than 400. There are so other cases, like Spotify, Uber.

The financing cycle for ventures is from seed, start-up, first stage, consolidation and maturity. The seed, it is called FFF focused on idea or project fine tuning, which means you develop product with your own time and resources which can not be sold and made money, that is why in the first stage it declines. Then, we go to second part: business angles who are interested in your product and ideas. If the program is attractive, we start venture capital where the cash and resources flow increases rapidly. When company is successful enough and a lot of people are willing to buy our product, we can go to stock exchanges where we make money and add value in stock market. Another part of this graph is risk. It is deceasing from seed to maturity. Some elements are not found in ordinary companies like shops since it is more suitable for creative and huge companies.

Investment type in seed stage is structural costs and intangible assets. The investment extent is restrained and usually the financial dimension is below 0.25 million. In start-up phase, it focus one prototype, device or product launch. The investment type is working capital and a combination of tangible and intangible assets which is quite substantial.


Debt Capital, Risk Capital and Venture Capital

Debt capital is typical what bank give us o it is a temporary form of funding. It foresees a specific debt remuneration plus the capital reimbursement.

Risk Capital is a totally different type of funding. It is a stable form of funding provided through a company governance agreement. It does not foreseen contractual remuneration but only dividends and capital provider has the right to participate.

Private Equity

Private equity means investing a company and becoming the core of that company. It includes Angel Investors, Corporate Investors and Venture Capital. Eg. Uber is a corporate investor with google.

Business angle

Usually they are physical persons or specialized companies who privately intervene in a start-up Capital. They can support start-ups to growth using management expertise, market knowledge and technology.

Venture Capital

Usually they are financial entities but also physical persons. (rare since it asks for a huge amount of money) Based on investment amount, they receive a certain equity on total shares. They put money in highly risk companies but aim at earring big profits at disinvestment time. Venture capital originated in medieval age from Islamic culture where the partnership between investor and entrepreneur was preferred to loans.

How VC criteria select ideas? Questions involves with market opportunity, value proposition, management team and financials.


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The Class Reminiscences of Nov 21 https://innovation.disi.unitn.it/iebasics/2017/index.php/2017/11/28/the-class-reminiscences-of-nov-21/ https://innovation.disi.unitn.it/iebasics/2017/index.php/2017/11/28/the-class-reminiscences-of-nov-21/#respond Tue, 28 Nov 2017 12:05:33 +0000 http://innovation.disi.unitn.it/iebasics/2017/?p=829 After the Graham Bell’s invention advent, the telephone was spread through networks increasing the telecommunication value to the square of the number devices interconnected, as the Metcalfe’s law asserts.

The network effect exemplifies those qualities that a consumer extracts from a product and how that demand scales as a positive feedback. Even though, there is a distinction between a direct and an indirect network effect, namely the increase in usage and the increase in complementary goods correspondingly. Then, the adoption of such inventions can still increase proportionally to the current amount of buyers, if potential customers hope on the bandwagon of the best option available. So, at first sight the price is not the only reason to choice. Consequently, the positive feedback can be favourable for stronger competitors and the opposite for weak competitors. For instance, the VHS and betamax battle was won by the virtuous VHS, so the vicious Betamax became obsolete losing the videotape format. In order to resist such competitiveness it is needed a critical mass, or that point when the value obtained is greater or equal than the price paid for the good or service, then ¿How to attract users prior to reaching the critical mass?. Probably, the early adopters are the chosen ones, and from those first interested plan an expansion in the future. Therefore, we need to think about user retention, and such strategy can vary from an easy migration path to a revolutionary strategy. Hence, the strategy can be either open to assure the necessary features available or controlled to maintain the control power in the proprietary system. Nonetheless, through the technological switching the users are exposed to vendor lock-in due to the substantial costs. For instance, the smart phone vendors lock-in the user to avoid the migration of the customer to another brand, or the case of SAP where the purchases are tie up to trainings.

From another stance, as we can infer the buyer’s decisions are not strictly rational. Thus, since the price is not the only factor of influence, and the bandwagon behavior is explicit then the reputation is relevant. Nonetheless, a certainty environment where the analysis is not needed and neither a choice, can induce to an Olympic decision making following a linear sequence of actions. Conversely, it is still possible to find a global optimum from such sequence if the probabilities are given in order to estimate risks. Then if the risks are identified the choices must be judged and the entrepreneurial mindset can decide in terms of a win and loss context. Yet, if we need to find the probabilities and make assumptions in uncertainty, the decision will be the best according the evidence available. For instance, the Cuban missile crisis between URS and US where the information gathered was decisive in the conflict. Moreover, the decisions including ambiguity offer the opportunity to create new environments by induction of novel ideas, since I know nothing I select randomly. On the other hand, a retrospective decision making is supported by proved experiences. So, there is space to act first and justify later, as a Doctor must do under an emergency, although there is still a degree of uncertainty. Lastly, from the garbage can theory (Cohen, March an Olsen), it is stated that there is a continual incoming and outgoing flow of problems, solutions, participants and choice opportunities. Then, the problems are stick to solutions by a matter of chance, although decision makers must recognize all the implications before make a rational decision.  So, do you think the fox did make a rational decision in the Fox and the Grapes fable?

Hope this helps! All the best,

Berioshka, Notekeepers Team

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