President’s Dream Colloquium: MIT’s Scott Stern talks entrepreneurial strategyFeb 07, 2014
For many startup businesses, overcoming a lack of resources often proves to be an insurmountable hurdle, resulting in failure. Entrepreneurs would do well to examine innovative methods of commercializing their ideas and taking the time to understand the role strategy plays in order to accelerate their ventures – thereby creating and capturing value in a competitive environment.
Dr. Scott Stern, David Sarnoff Professor of Management of Technology and Chair of the Technological Innovation, Entrepreneurship, and Strategic Management Group at the MIT Sloan School of Management explored this topic recently in a public lecture at SFU as part of the President’s Dream Colloquium on Entrepreneurship.
“Ideas are, in some sense, easy to find, but what’s really hard is turning those ideas into strategy that captures value,” said Stern. “The challenge is less about coming up with ideas, but rather, commercializing it in a way that creates unique value for an end user while allowing the entrepreneur to capture value on an ongoing basis.”
Stern’s objective is to provide a novel framework that allows entrepreneurs to choose how their company evolves, and helps to align the disparate decisions made during the earliest stages of a venture.
He emphasized the importance for an entrepreneur in choosing an entrepreneurial strategy, choosing their competition, and putting the framework into practice. He also discussed a number of potential dangers for entrepreneurs who did not have a coherent strategy in place, such as suppliers stealing the entrepreneur’s idea when approached about a potential partnership.
“The power of entrepreneurship is the ability to not only identify and implement exciting opportunities but to make choices that allow you to create real value for the world and capture value for your stakeholders,” said Stern. “The more exciting and disruptive the innovation, the more important those choices are for your ability to commercialize and build a new company with competitive advantage.”
In addition to the public lecture, Beedie faculty were invited to hear Stern present his latest research paper, Control Versus Execution: Endogenous Appropriability and Entrepreneurial Strategy – the first time the paper had been presented to an external audience for feedback.
Throughout the public lecture Stern utilized much of the research he covered in his research paper, comparing the benefits of control strategies – where the entrepreneur holds the product back from market until such time as it can be thoroughly tested – against those of execution strategies – where the entrepreneur brings the product to market immediately and then refines the product based on consumer feedback.
He also touched on the benefits for an entrepreneur in experimentation and learning, suggesting that bringing a product to a smaller market in order to generate initial revenue and study the product’s performance, before launching it to the intended larger market is a viable strategy under the right circumstances.
“The process of choosing an entrepreneurial strategy requires a venture to come to terms with the core value that it will create, and the logic of how it will capture value on a sustainable basis,” Stern concluded.
The President’s Dream Colloquium brings leading thinkers to SFU in a series of free public lectures that create an interdisciplinary forum for dialogue between faculty members, students and diverse community groups.