Essential of Technology Entrep. & Innovation- Chapter two entrepreneurship and innovation

CS443 Course
Introduction To Entrepreneurship
p p
Spring 2009, Modern Science & Arts University

Chapter Two: Entrepreneurship and Innovation

Instructor:
Al-Motaz Bellah Alaa Al-Agamawi

Chapter Source, “chapter one: Entrepreneurship and Innovation” from “The Strategy of
Management Innovation and Technology” book, by Murray R. Millson and David Wilemon,
2008, Pearson Education Inc.
Entrepreneurship and Innovation Chapter 2 By: Motaz Al-Agamawi

Definition of Creativity and Innovation
2

Creativity: The ability to bring something new.
Creativity is the ability not the activity of bringing something new.

Innovation: Is the process of doing new things.

The distinction is important.
Id
Ideas have littl value until th are converted i t new products, services, or
h little l til they t d into d t i
processes.
Innovation, therefore, is the transformation of creative ideas into useful
applications, but creativity is a prerequisite to innovation

The Creative Process
3

Idea Preparation Incubation, Illumination, Verification,
f
Germination, , Conscious Subconscious Recognition Application
The seeding search for assimilation of idea as or test to
Stage of a Knowledge, of being prove ideas
new idea, Rationaliza Information, feasible, has value,
Recognition tion Fantasizing Realization Validation

Isaac Newton, may have been hit on the head by a failing apple, but he discovered
gravity through a lifetime of scientific investigation.
Id ll l h h i h b i i i l i
Ideas usually evolve through a creative process whereby imaginative people germinate
ideas, nurture them, and develop them successfully.
In each stage, a creative individual behaves differently to move an idea from the seed
stage of germination to verification.
f i i ifi i


The Creative Process (Germination)
4

Idea Preparation Incubation, Illumination, Verification,
Germination, , Conscious Subconscious Recognition Application
The seeding search for assimilation of idea as or test to
Stage of a Knowledge, of being prove ideas
new idea, Rationaliza Information, feasible, has value,
Recognition tion Fantasizing Realization Validation
Germination stage is a seeding process.
Exactly how an idea is germinated is a mystery; it is not something that can be examined
under a microscope.
However most creative ideas can be traced to an individual’s interest in or curiosity about
a specific problem or area of study.
For most entrepreneurs, ideas begin with an interest in a subject or curiosity about finding
a solution for a particular problem.


The Creative Process (Preparation)
5

Preparation, Incubation, Illumination, Verification,
Conscious Subconscious Recognition of Application or
search for assimilation of idea as being test to prove
Knowledge,
Knowledge Information, feasible, ideas has value,
Rationalizat Fantasizing Realization Validation
ion
Once a seed of curiosity has taken form as a focused idea creative people embark on a
idea,
conscious search for answers. Then they begin an intellectual journey, seeking information about the
problem and how others have tried to solve it.
Inventors will setup a laboratory experiments designers will begin engineering new products
experiments,
ideas, and marketers will study consumer buying habits.
In rare instances, the preparation stage will produce results. More often, conscious
deliberation ill onl o e load
delibe ation will only overload the mind, but the effort is important in order to gather
mind b t effo t impo tant o de gathe
information and knowledge vital for an eventual solution

The Creative Process (Incubation)
6

Incubation,
Subconscious Illumination, Recognition Verification, Application
assimilation of of idea as being feasible, or test to prove ideas has
Individuals sometimes concentrate intensely on an idea, but more often, they simplyvalue, ideas time to grow
Information,
I f i Realization
R li i allow Validation
l V lid i
Fantasizing
without intension effort.
Few great ideas come from thunderbolts (flashes of Genius). Most evolve in the mind of creative people while
they go about other activities.
The idea, once seeded and given substance through preparation, is put in a back burner, the subconscious mind
is allowed time to assimilate information.
Incubation is the stage of “mulling it over” while the subconscious intellect assume control of the creative
mulling over
process.
When we consciously focus on a problem, we behave rationally to attempt to find systematic resolution.
when we rely on subconscious process, our mind are untrammeled by the limitation of human logic.
y p , y g
The subconscious mind is allowed to wander and to pursue fantasies, and therefore open to unusual information
and knowledge that we can not assimilate in a conscious state.

The Creative Process (Illumination)
7

Illumination,
Recognition of Verification, Application or test to prove ideas has value,
idea as being Validation
feasible,
Realization occurs when the idea resurfaces as a realistic creation.
Illumination,
The Fable of the thunderbolt is captured in a moment of illumination
illumination.
Illumination may be triggered by an opportunity incident.
Most creative people go through many cycles of preparation and incubation, searching for
that incident as a catalyst to give their idea full meaning
meaning.
Illumination is important for entrepreneurs because ideas, by themselves, have little
meaning.
Reaching illumination stage separates day dreamers from creative people who find a way
day-dreamers
to transmute value.

The Creative Process (Verification)
8

Verification,
Verification
Application or
test to prove
ideas has value,
Validation
V lid ti

An idea once illuminated in the mind of an individual still has little meaning until verified as
realistic and useful
useful.
Entrepreneurial effort is essential to translate an illumination idea into verified, realistic
and useful application.
Verification is the development stage of refining knowledge into application
application.
This often tedious and requires perseverance by an individual committed to finding a way
to “harvest” the practical results of his/her creation.
During this stage many ideas fall by the wayside as they prove to be impossible or to
stage,
have a little value.

Alexander Graham Bell, Case study
9

http://www.youtube.com/watch?v=uuw5NOPsc08&feature=related

Alexander Graham Bell, Case study
10

Alexander Graham Bell had been fascinated with the physics of sound since childhood. He was
influenced to study human hearing systems by his mother, who had a serious hearing problem. As a young
adult. Bell taught at a school for the deaf and hearing-impaired. and he set up a laboratory for testing
new hearing devices. Many of these devices were awkward mechanical "horns" that amplified, sound
waves. Bell realized the possibilities of altering sound waves i various t
B ll li d th ibiliti f lt i d in i types of materials such as steel
f t i l h t l
wire during the 1870s, and he experimented for several years with magnetic devices in an effort to
produce a hearing aid. In 1875, his lab assistant, Thomas A. Watson, accidentally clamped a
magnetized steel reed too tightly to a magnet, and when he plucked at it, the reed came loose with a
"twang" that echoed, sending a signal along a wire to Bell's magnet receiver. Bell heard the twang and
recognized that an electrical signal had relocated the vibration caused by Watson's steel
reed. At that instant, the harmonic hearing aid became a feasible idea, but exactly when Bell conceived
of a harmonic telegraph (telephone) is unknown. It was several, years before he turned his attention to
commercial communications.
Alexander Graham Bell's example, research on harmonic sound transmission occupied a small percentage
of hi ti d i a two-decade period. Perhaps the i b ti period f th telephone could be
f his time during t d d i d P h th incubation i d for the t l h ld b
expressed as a three-decade, on-again-off again fascination with human hearing problems.

Innovation and Entrepreneurship
11

Invention The creation of Results in new
Something new knowledge

The T
Th Transformation
f ti Result in a new
of an idea or product, service or
Innovation resource into useful processes
application

If creativity is the seed that inspires entrepreneurship, innovation is the process of
entrepreneurship.
Drucker “Innovation is the means by which the entrepreneur either creates new wealth-
Innovation…
producing resources or endows existing resources with enhanced potential for creating wealth”
It is important to recognize that innovation implies actions, not just conceiving new ideas.
When people have passed through the illumination and verification stage of creativity they
creativity,
may have become inventors, but they are not yet innovators.

Elements in the Innovation Process
12

Translation of creative idea into a useful application
pp

Analytical Organizing Implementation Commercial
Planning Resources Application

• To Identify: • To Obtain: • To Accomplish: • To Provide:
• Product Design • Materials • Organization • Value to Customers
• Marketing Strategy • Technology • Product Design • Rewards for
• Financial Need • Human Resource • Manufacturing employees
• Capital • Services • Revenue for Investors
• Satisfaction for
Founders

Innovation is the development process.
It is the translation of an idea into an application
It requires persistence in analytically working out the details of product design or service to
service,
develop marketing, obtain finance, and plan operations.

Key People in the Technological Innovation
13

Creative Source Champion Sponsor

• Inventor or Originator
g • Entrepreneur or
p • Person or organization
g
who creates something Manager who pursues that backs innovation with
new through personal the idea, providing finance, advice and
vision or effort. leadership for contacts
application

A number of industrial studies reveal that for a technology innovation to succeed, there are
succeed
three important people involved and seven important conditions to satisfy.
The combination of these people and conditions satisfies the need for creativity and
implementation.
implementation


Seven Conditions Required for Success in Technological Innovation
14

An outstanding person in an executive leadership position to support strategic decision
that encourage creativity and innovation development.
An operational leader to carry out the essential tasks of converting knowledge into a
application.
commercial application
A clear need for the application by sufficient potential consumers to warrant the
commitment of resources to innovation.
The realization of the product, process, or service as a useful innovation providing value to
product process
society.
Good cooperation among the crucial players and among diversified functions in an
organization all of whom together must bring the idea to fruition.
organization, whom, together, fruition
Availability of resources and the supporting technology to succeed in the endeavor.
Cooperation and support from external source who can influence the success of an
innovation,
innovation including government agencies investors, supplier, and creditors.
agencies, investors supplier creditors


Seven Conditions continue,…
15

Beyond the world of high-tech innovation, entrepreneurs take up the creative challenge of
innovation
new ideas daily.
Many of those innovation we take for granted as we entered the 1990s, but more than half
ago.
of all our existing technologies applications did not exist two decades ago
In each instant of innovation, there has been an entrepreneurial champion who persisted in
developing a creative idea into marketable application.
In each instance the entrepreneur has been able to recognize change and envision the
instance,
opportunity.


Opportunity Through Change
16

Scientific Knowledge: Has been at the heart of many new enterprises and we can see how
enterprises,
important it is by tracing the development of computers.
Process Innovation:
Edison s
Edison’s light bulb was only a curiosity until he developed an electrical system for
supplying power to consumers.
Early computers had little value until symbolic language, operating system and data
storage techniques were developed
developed.
Industrial Change: can occur through natural events such as the discovery of oil or as a
result of human events.
Every industry is fragile and subject to sudden change New laws, the dissolution of old
change. laws
laws, economic influences, social changes and new technologies are all threats to industry
stability, providing in their wake ample opportunities for entrepreneurs.


Opportunity Through Change (cont.)
17

Market changes: The success of Henry Ford when he developed an inexpensive automobile
automobile.
Demographic Change: As a national’s demographic change, new opportunity to serve
human needs arise. By tracking these changes, entrepreneurs can identify opportunities and
them.
react to them
Social and Culture Change: Water Systems, Waste Collection, Police Services, Fire
Brigades, and Schools began to evolve in the 19th century.


In Class Activity (Open discussion for Change & Opportunity)
Data and information in the below video is not references, we are presenting it for the sake of discussing change and opportunity
18

http://www.youtube.com/watch?v=cL9Wu2kWwSY

Windows and Corridors
19

A Window is a time horizon during which opportunities exist before something else happened to
eliminate them.
A unique opportunity, once shown to produce wealth, will attract competition, and if the industry is
easy to enter, the industry will become rapidly saturated.
Every successful product and service has had an optimal period of time for commercialization.
Those introduced too early have usually failed, and those introduced too late suffered from
crowded markets.
Entrepreneurs, therefore, must not only recognize opportunities, but also take advantage of them
E h f l b l k d f h
while windows exist to be successful.
The corridor principle suggest that opportunities evolve from entrepreneurs being positioned in
similar work or h i h d experience with related venture so that when a window opens it is easy
i il k having had i ith l t d t th t h i d i
for them to move quickly into a new venture.
A corollary is that as a venture becomes expert in one activity, related oppurtunities evolve, and
many of them are more rewarding than the initial activity
activity.


Windows and Corridors, Case Study
20

Bicycles did not become viable commercial products until people needed them as transportation.
When that need occurred, hundreds of bicycles manufacturers rushed to take advantage of the
“Window of opportunity”.
A brief period of opportunity opened for electronic spreadsheets when microcomputers hit the
fast growth curve. Several entrepreneurs entered the market with a good spreadsheet products. The
first, VisiCalc, which was quite successful. But IBM Lotus 1-2-3 and Microsoft Excel Program forget
into the industry market. By 1986, Lotus had set the industry standard, then Microsoft excel takeover.
William G
W ll Gates of M
f Microsoft, f example, was firstly approached by IBM in 1980 to prgram an
f for l f l h db
operating system for the PC. This is a corridor.


Myths- Fantasies Not Facts
21

Luck is for Gamblers: More often successful individuals have been nourshing a concept for
often,
some time or working on closely related projects when a breakthrough occurs. Presistence and
determination played greater roles than luck.
Make or Break on the First Venture: Entrepreneurs is not a “boom or bust” process even
boom bust process,
though many new firms succeed brilliantly and others do not survive for long. The point is that
too much distortion exists on both issues.
Entrepreneurs Are Mavericks and Misfits: Most successful entrepreneurs, however, are from
entrepreneurs however
the rank of above average students, and they are relatively unlikely to have drugs or alcohol
problems or to run afoul of the law. Entrepreneurs are mavericks in the sense that they instigate
change and challenge the status quo but they are not “misfits”.
quo, misfits
Are Entrepreneurs Born or Made?: If the environmental theme has credence, then learning
as much as possible about the entrepreneurial process will better prepare students to succeed
in business
business.


Success Factors For Entrepreneurs
22

The Entrepreneurial Team: The term team is used because more often than not,
because, not
entrepreneurs do not start business by them selves; they have teams, partners, close associates,
or extensive network of advisers. We can infer that success is closely tied to a solid knowledge
endeavor.
base and substantial experience in related filed of endeavor
Venture Products and Services: Nearly all successful ventures start small and grow
incrementally; few “gear up” with substantial organizations for a big-bang start. Positive Cash
Flow,
Flow Profit Margins Cost Control and Overhead monitoring, are all a key success factors.
Margins, monitoring factors
Marketing and Timing: Successful entrepreneurs tend to have a clear vision of both existing
and potential customers. Charismatic Entrepreneur loaded with talent and great idea will not
convince investor that a venture is viable without valid market research There are not shortcuts;
research.
innovation requires market demand, not simply a good idea.
Business Ideology: Business ideology is defined as a system of beliefs about how one
conducts an enterprise. These beliefs include a commitment to providing customers with value
enterprise value,
the ability to take calculated risk, the determination to grow,…

Bonus Activity…
23

Nolan K. Bushnell (born February 5, 1943) is an American engineer and entrepreneur who founded both Atari, Inc and
the Chuck E. Cheese s Pizza-Time Theaters chain Bushnell has been inducted into the Video Game Hall of Fame and
E Cheese's Pizza Time chain.
the Consumer Electronics Association Hall of Fame, received the Nations Restaurant News “Innovator of the Year” award,
and was named one of Newsweek's "50 Men That Changed America." Bushnell has started more than twenty companies
and is one of the founding fathers of the video game industry. He is currently the founder and CEO of uWink, a game-
based t
b d restaurant startup, and th Ch i
t t t d the Chairman of th b d at N Ed N t
f the board t NeoEdge Networks, an advertising-based video game
k d ti i b d id
company.

Through Searching the internet, prepare a presentation about Nolan K. Bushnell…
Describe his journey in one paragraph using your own words.
List the most important milestones which made his in the list, from your own point of view.
Describe his journey through the creativity process,
Use videos, diagrams, photos in your presentation as much as possible
Include your references, be sure that it is trust worthy reference

By doing this activity you will take bonus (same weight of assignment)
Else you will not loose score
Activity Deadline: Next Week lecture.

Extra Resources for Entrepreneur of the Chapter…
24

For Henry Ford you can visit:
http://en.wikipedia.org/wiki/Alexander_Graham_Bell
http://inventors.about.com/od/bstartinventors/a/telephone.htm
// / / / /
http://www.privateline.com/TelephoneHistory/History1.htm
http://www.encyclomedia.com/video-alexander_graham_bell.html


25

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