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Assignment III

“Question and Answer”

Submitted by:

Payal Agrawal

MBA, Trimester IV

Section- ‘A’

Submitted to:

Mr. Sohan Khatri

Entrepreneurship and Innovation

ACE Institute of Management

Baneshwor, Kathmandu

18th May, 2019

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Question 1 Answer:

Entrepreneurial mindset refers to a definite state of mind which orientates human conduct
towards entrepreneurial actions and outcomes. Individuals with entrepreneurial mindsets are
frequently drawn to various opportunities, innovation and a new value creation. Entrepreneurship
is not merely starting a new venture it is a mindset which requires a certain level of skills to be
an entrepreneur. Some people are born with this mindset while others sharpen their skills and
attitude through education. Being able to take risks and accept failure is a unique skill that isn’t
relevant solely in the business world. Incorporating an entrepreneurial mindset into everyday life
will help to reduce the importance of failure and rejection in life.

The mindset of the head of the company sets the tone for the rest of the company and
influences corporate society. Being positive is something which, like all life skills, can be
learned. Most entrepreneurs are naturally creative thinkers; otherwise, they would not be inspired
to take the innovative leap to create their own business. Said that we can all learn to be more
creative and tap into our inherent talents. Entrepreneurs have a different perspective of looking at
the world around them. They tend to march to the beat of their own drum. For this reason, many
entrepreneurs may feel alone and like most people don’t get them. Due to their massive
creativity, entrepreneurs are responsible for many of the ground-breaking concepts that have
emerged throughout time. They are pioneers of their craft often discovering new ways to tackle
everyday problems. Entrepreneurs are believed to be a courageous lot. It is not easy to give up
the comfort of a steady income and take the plunge. But their passion and vision take them
forward. Still, so many startups fail in spite of doing most of the things right. So many startups
struggle for years on end before shutting shop. A lot of a startup’s success is dependent on the
strategy thought out and executed by those at the helm of affairs. While the entire team performs
the actual work, it is the entrepreneur himself who is responsible for the overall direction his
company takes.

The entrepreneurial mindset is different from the “traditional approach to business

development by various reasons which includes the causal reasoning and effectual reasoning.
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Causal Reasoning is based on having a goal and defining what means and choices can be
prepared. The opposite effectual reasoning, involves being given the means and choices and
defining what the goal is. Causal thinking and effectual thinking are two diverse, instinctive
styles of thought that are particularly applicable to business owners. Causal thinkers start with a
goal, and they take stock of the materials and means available to them, and then develop and
carry out a step-by-step plan to achieve that goal. Effectual thinkers work more fluidly,
beginning with what they have at present, such as ideas, personal strengths and materials at hand,
and then work by combining the elements available to them and adjusting their plans as they
progress. Effectual thinkers don’t begin with clearly-defined goal; rather, they allow the goal to
emerge organically out of the process. Causal thinking, which is educated in business schools
and other disciplines, is familiar to most of us. Effectual thinking, on the other hand, defines the
realm of the entrepreneur. Effectual is logic of entrepreneurial expertise. What makes great
entrepreneurs isn’t genetic or personality traits, risk-seeking behavior, money, or unique vision.
Effectual research has found that there is a science to entrepreneurship and that great
entrepreneurs across industries, geographies, and time use a common logic, or thinking process,
to solve entrepreneurial problems.

Effectual is a logic of entrepreneurial expertise that both novice and experienced

entrepreneurs can use in the highly unpredictable start-up phase of a venture to reduce failure
costs for the entrepreneur. Causal thinking is advantageous for established businesses, and for
projects that can be clearly defined. Many construction and engineering projects would fit this
description, such as building an office from a defined blueprint that follows established codes
and uses approved building materials. By specifying the steps to take, this causal project reduces
distractions and eliminates waste of materials and time. However, the causal method would fall
short if circumstances change during the project.

In addition, entrepreneurs typically possess personal qualities needed for effectual thinking,
including resilience and guts. A builder who thinks effectually would not be thrown off guard by
the client who requests the energy-efficient alternative building method. Instead, the builder
would be excited to learn about the method, and would find ways to incorporate it into the plans
while meeting the intent of the building code. If that isn’t possible, the builder might look for
ways to change the building code itself. The weakness of effectual thinking is that the
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entrepreneur may become diverted by new opportunities and projects, never pursuing any one of
them to reach a reasonable level of success.

Causal and effectual thinking both have a place in the business world, and it is possible for
the same person to employ both modes of thought. For example, the artist who creates mixed-
media pieces as their main body of work might also employ causal thinking for a custom-built
piece that must satisfy the client’s specifications. Sarasvathy notes that some entrepreneurs who
used effectual thinking to develop their businesses will shift into a causal mode as their
companies mature. However, she also notes that most entrepreneurs remain effectual thinkers
throughout their careers. This type of entrepreneur is more likely to hand off the established
company to a management team and use effectual thinking to move on to develop another,
entirely new business venture.

Question 2 Answers:

The explanation of each of these myths elaborately justifying the reasons for them being
cited as myth is as follows:

a. To be an entrepreneur you must invent something truly novel

There is no misgiving that entrepreneurs need to have creative mind, but innovative ways
also can create new business. Entrepreneurs usually observe and try to solve problem that they
face in daily life. It's not inventing something new that makes an entrepreneur. It’s about solving
problems and changing the world, answering a need no one realized they had making people's
lives easier. Some entrepreneurs may invent or create something new, but that doesn’t mean all
entrepreneurs are inventors. If we look at the most successful companies that I’ve seen in my
time in high tech, and moonshot opportunities, it always begins with a huge customer problem
that is ready to be solved. We saw it when Google said, ‘Hey, there’s a way to empower people
to navigate all kinds of information and knowledge. Larry Page and Sergey Brin were the one
who created this platform and solved problems of many people. We can take example of Metro
mask owner Tashi Gyalzen Sherpa who came up with the idea to breathe clean. He produced the
mask with advanced active carbon filtration considering the health of people. He himself created
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the market and bring awareness among the lives of people how important is to breathe clean and
protect ourselves from pollution around us. Thus, what entrepreneur make or do doesn't have to
be new, but their startup does have to involve a new outlook and provide value. Invention should
come naturally. It is a mixture of expertise, creativity and the need to find solutions to problems.
It could be that a solution already exists and you want to find a better one. If the entrepreneur
ends up inventing something very spectacular, then that would be excellent.

b. Entrepreneurs are introverted loners

Entrepreneurs may work by themselves on a business idea by tinkering in the privacy of their
garage or cave. On this myth, the wise entrepreneur knows that he or she must draw on the
experience and ideas of others in order to succeed. Entrepreneurs will keenly seek the advice of
others and will make many business contacts to validate their business ideas. The entrepreneur
who is a loner and will not talk to anybody will never start a successful business at all.
Entrepreneurs need to seek the advice of others as well. A loner will find it difficult to start a
successful business. Entrepreneurs are willing to work independently if it is necessary to
succeed. But even independent-minded people can get lonely, especially if people are working
day and night in small home-based business. Real entrepreneurs have to be skilled in the art of
marketing themselves and their business. They know that they have to grow all sorts of
partnerships to be able to execute their business ideas and plans and they know that
entrepreneurship thrives on the wings of relationships on all planes. Business is a world that
requires a lot of traits to survive.

c. Entrepreneurs are risk-taking gamblers

Entrepreneurs might be equally as keen on leveraging some chance in order to succeed, but
their chances of winning are way more probable and higher than gamblers. Entrepreneurs, much
like gamblers, see an opportunity that is attractive and place a bet on it. They bet their time,
savings, some capital and assets on an opportunity they hope to transform into a booming
business. They may depend on luck to a certain extent, but they take calculated decisions that
place the odds in their support. The right entrepreneurs never embark on a new business venture
without some advantage which will allow them to succeed in any particular business. It’s not just
about taking risks for the sake of it but it’s about taking risks for the sake of potential success
based on analyses. Moreover, what really makes an entrepreneur is their ability to make
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mistakes, learn from these mistakes and build better strategies to move forward. They are
courageous in how quickly they choose to make mistakes and embark on missions to learn from
the experience, but they never let the lesson go by. Entrepreneurs try hard for long-term success
and can deal with forgoing immediate satisfaction in order to achieve that. Although
entrepreneurs, like gamblers, do take risks and are daring, they always approach every decision
with a clear goal and an unrelenting mission that keeps them from losing it all.

d. You hate bosses. That is reason enough to become an entrepreneur

Anytime we talk to a current entrepreneur or even someone thinking about starting their own
business, usually one of the biggest motivations wants to be their own boss. However, you hate
bosses. That is reason enough to become an entrepreneur is biggest myths about
entrepreneurship. As boss, we do get to set the agenda. However, we’ll also be on call and
accountable to a range of different people, including employees, customers, the IRS, venture
capitalists, angel investors and partners. Chances are we’ll be scheduling your personal
obligations around your clients’ needs. As a small business owner, your first responsibility is to
your clients, not your own personal freedom .The safety and comfort of a superior vanishes when
they are sought out as the final authority for all issues big and small by clients and their team.
The key to client satisfaction and increased productivity is to create and manage a collection of
bosses with the confidence and support to get the job done. There is addition of responsibilities.
For example, a small-business consultant works with different clients on fulfilling their goals. As
time passes, clients systematically influence his schedule especially when he’s becoming a
sought-after. Likewise, freelancers get burned from the pressure of deadlines and timeliness. All
in all, others boss the boss in one way or another.

e. With a great idea and enthusiasm, anyone can achieve entrepreneurial success
Everyone has a business idea in them but they never think it’s good enough. This is because
people often judge early ideas against already established businesses. However, no venture ever
is started easily. Every successful idea starts small and over time can mature into greatness.
There are countless “good ideas” that die on the vine for one reason: lack of necessity. Without
a market hungering for your product, how innovative you may think it is, or it may actually be, it
won’t sell. The reality of entrepreneurship is that an idea does not have to be perfect from the get
go; nor does it have to be extraordinary. Many could-be entrepreneurs have the habit of
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dismissing their business ideas because they feel it is not big enough to take the world by
surprise. There was a person who was selling bagel burger once a week in farmer markets here in
Kathmandu. There were some customers who said where the shop is and then he thought to open
a shop in Thamel. The idea was new in Nepal but after 7-8 months he decided to close the shop
down because it didn’t work. Thus, every idea doesn’t result to success.
It is true that everyone wants to be successful as soon as possible but Entrepreneurial
journey is not easy and it takes time. So, we always have to let go of these myths and move
forward. In light of the above, the pressure we place on ourselves to come up with a
revolutionary idea is unjustified. Few successful businesses ever start that way and many great
entrepreneurs simply execute an existing idea better than everyone else has done. In other words,
you don’t need a great idea to start a business. You just need a reasonable concept to build upon.
There is no single right way to start a company. The strength of the team and the determination
to overcome obstacles as they arise is what makes successful start-ups.

Question 3 Answers:

Yes, I agree that startups and small businesses are indeed different ventures with vastly
different goals and that they need different things because in the world of business, startup goes
beyond a company just getting off the ground. The startup is also associated with a business that
is typically technology oriented and has high growth potential. Startups have some unique
struggles, especially in regard to financing. That’s because investors are looking for the highest
potential return on investment, while balancing the associated risks. A small business is being
small and recognizing consistent returns rather than growth as its fundamental goal.

However, small business enterprise are one which is self-managed and controlled by one
or two persons. A small business is a business that is privately owned and operated, with a small
number of employees and relatively low volume of sales. Small businesses are normally
privately owned corporations, partnership or sole proprietorship which has relatively small
capital, management body, employee, market and having centralized decision making on the
owner, that is ownership and control are not separated in the business. Family influence in
decision making, has an undifferentiated organizational structure, has a relatively small share of
the market depending on what kind of industry it is in the term small business can be subjective.
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Yes I think there should be different approaches to managing a startup and a small
business because the lean startup provides a scientific approach to creating and managing
startups and get a desired product to customers' hands faster. The Lean Startup method teaches
how to drive a startup-how to steer, when to turn, and when to persevere-and grow a business
with maximum acceleration. It is a principled approach to new product development. Too many
startups begin with an idea for a product that they think people want. They then spend months,
sometimes years, perfecting that product without ever showing the product, even in a very basic
form, to the prospective customer. When they fail to reach broad uptake from customers, it is
often because they never spoke to prospective customers and determine whether or not the
product were interesting. When customers ultimately communicate, through their indifference,
that they don't care about the idea, the startup fails. Using the Lean Startup approach, companies
can create order not chaos by providing tools to test a vision continuously. In the startup this lean
approach helps in following things:

 It helps to eliminate uncertainty

The lack of a modified management process has led many a start-up or, as Ries terms
them, "a human institution designed to create a new product or service under conditions of
extreme uncertainty", to abandon all process. They take a "just do it" approach that avoids all
forms of management. But this is not the only option. Using the Lean Startup approach,
companies can create order not chaos by providing tools to test a vision continuously. Lean isn't
simply about spending less money. Lean isn't just about failing fast, failing cheap. It is about
putting a process, a methodology around the development of a product.

 By working smarter not harder

The Lean Startup methodology states as a premise that every startup is a grand
experiment that attempts to answer a question. The question is not "Can this product be built?"
Instead, the questions are "Should this product be built?" and "Can we build a sustainable
business around this set of products and services?" This experiment is more than just theoretical
inquiry; it is a first product. If it is successful, it allows a manager to get started with his or her
campaign: enlisting early adopters, adding employees to each further experiment or iteration, and
eventually starting to build a product. By the time that product is ready to be distributed widely;
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it will already have established customers. It will have solved real problems and offer detailed
specifications for what needs to be built.

 Learning when it is time to pivot

A core component of Lean Startup methodology is the build-measure-learn feedback

loop. The first step is figuring out the problem that needs to be solved and then developing a
minimum viable product (MVP) to begin the process of learning as quickly as possible. Once the
MVP is established, a startup can work on tuning the engine. This will involve measurement and
learning and must include actionable metrics that can demonstrate cause and effect question.
When this process of measuring and learning is done correctly, it will be clear that a company is
either moving the drivers of the business model or not. If not, it is a sign that it is time to pivot or
make a structural course correction to test a new fundamental hypothesis about the product,
strategy and engine of growth.

 By having the validated learning

Progress in manufacturing is measured by the production of high quality goods. The unit
of progress for Lean Startups is validated learning a rigorous method for demonstrating progress
when one is embedded in the soil of extreme uncertainty. Once entrepreneurs embrace validated
learning, the development process can shrink substantially. When you focus on figuring the right
thing to build the thing customers want and will pay for you need not spend months waiting for a
product beta launch to change the company's direction. Instead, entrepreneurs can adapt their
plans incrementally, inch by inch, minute by minute.

Similarly for a small business different approaches can be used to make business better
by following:

 Task-Oriented Behavior

A professional using a task-oriented approach to business management focuses on

planning, coordinating and assigning employee tasks. This type of manager focuses on employee
behavior in terms of assignments and what's best for the business. Production is a task-oriented
manager's main concern. The emotional health of employees or social aspects of the workplace
don't factor into the decision-making process in a task-oriented behavioral approach.
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 Employee-Oriented Approach

An employee-oriented approach to business management places emphasis on the

interpersonal relationships of workers. A manager using this behavioral method doesn't place
great emphasis on production where it increases employee anxiety and damages the ability of
employees to establish strong bonds.

 Path-Goal Theory

Path-goal leadership theory is a situational style of behavioral management in which the

work environment and the characteristics of employees influence which behavioral approach to
management is most effective. Path-goal leadership has four leadership types: directive,
supportive, participative and achievement-oriented. Determining which behavioral approach to
use requires a manager to consider employee skills, experience, nature of the assignment,
dynamic of the work group and the office environment.

 Need Theories of Management

Motivating employees can be difficult if a manager doesn't recognize the needs of her
workforce. Incorporating need theories -- first pioneered by psychologist Abraham Maslow --
into a manager's behavior approach can help her improve her motivational strategies. Maslow's
need theories have five distinct types of need arranged by hierarchy: psychological, safety,
belonging/love, esteem and self-actualization. These theories also assume that humans can never
completely satisfy needs and that the need for satisfaction motivates behavior.

The difference with proper reasoning for each is as follows:

Relationship with funding: Small businesses are family funded. Apart from having
different ways of thinking about “growth,” startups seek financial investment differently than
most small business operations. Startups tend to rely on capital that comes via angel investors or
venture capital firms, while small business operations may rely on loans and grants.

Status: Small business remains small business. Startup status is temporary. It may close
or become big or even small business.
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Exit Strategy: Startups have exit strategy. Will like to be acquired or go for an IPO.
Small businesses are self-sufficient.

Scale: A small business is a self-content business. They have fixed their boundaries.
They do not want to expand and make a global impact. A startup usually has aspirations to make
a very large impact and aim to be disruptive.

Founder: The founder is usually a technocrat, an innovator and a dreamer. A small

business founder usually takes up a business what is well known in the family. They are masters
at running the small business; while, founder of startup usually need expert help.

Offering innovation: Startups normally set of their journey as an entity that is trying to
solve problems through innovation .Startups always have their eyes set on a problem and they
firmly believe that their products are the keys to solving these problems.

Emphasis on profits over risks: Once a company increases in size, it starts becoming
more risk adverse. Corporations know that for every success they get, there are more failures
coming their way. When a corporation gets larger in size, there are more things to consider such
as the well-being of its workers, its public images, and its constant growth. With so many
people’s well-being as risk, corporations can no longer take big leaps of faith. Instead, they have
to focus on what they’ve been doing and continuing that success.

Question 4 Answers

An intrapreneurship is the system where in the principles of entrepreneurship are

practiced within the boundaries of the firm. An intrapreneur is a person who takes on the
responsibility to innovate new ideas, products and processes or any new invention within the
organization. Intrapreneurship is myth as established companies are struggling to innovate and
looking for ways to up their game especially in this global business Basically all rules of an
entrepreneur’s mindset will apply the willpower required stubbornness and patience to succeed
are all minimum ingredients. Intrapreneurs like to innovate based on their entrepreneurial
endeavors. They need the freedom to operate within the organization without the red tape and
micro-management. They also need to be given the opportunity to test their ideas freely,
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regardless of whether they succeed or fail in their attempts. The Post-It note, Facebook’s “like”
button, the Sony PlayStation. These products are all held up as legendary examples of the power
of intrapreneurship entrepreneurial creativity and innovation within large, established
organizations. Since the term was coined in the 1980s, intrapreneurship has been sold to
companies as a catch-all solution for fostering innovation. It’s been promoted to workers as a
way to capture the creativity and excitement of entrepreneurship, but with more resources and
less risk.

Yes, I believe that bureaucracy is indeed the source of evil that deters large companies
from adopting intrapreneurship effectively and therefore companies should rid of all policies and
procedures that hinder entrepreneurial tendencies in employees because a traditional case has
been made that as organizations succeed and grow larger, a bureaucratic rigor mortis sets in.
Success and size generates bureaucracy too many procedures, too many routines, too many
constraints. As a result innovation becomes hampered, ventures are slowed down and the
entrepreneurial spirit is weakened. The size an age of organizations are “negatively associated
with the rates of entrepreneurship but are positively associated with the rates of
intrapreneurship.” Simply put, the assumption that as organizations grow them drive out creative
intrapreneurs is not that clear. If opportunities are given, many will stay and become
intrapreneurs.

For large companies, creating new businesses is the challenge of the day. After years of
downsizing and cost cutting, corporations have realized that they can’t shrink their way to
success. They’ve also found that they can’t grow rapidly by tweaking existing offerings, taking
over rivals, or moving into developing countries. Because of maturing technologies and aging
product portfolios, a new imperative is clear. Companies must create, develop, and sustain
innovative new businesses. The companies must become Janus-like, looking in two directions at
once, with one face focused on the old and the other seeking out the new. Most organizations
have barriers to creativity, ideas, and innovation. Some are obvious while some are more subtle.
Some barriers emerge from attitudes and perceptions of organizational leadership while others
come from organizational structure or even from the employees themselves. Since these barriers
have a tendency to eliminate creative possibilities from the organization, identifying and
removing barriers to creativity and innovation is crucial.
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The organizations who want to enhance their innovative capacity by including,

developing and retaining intrapreneurship is that long term business strategies, while useful as a
guide, have the potential to rapidly become irrelevant when organizations have to either respond
to, or initiate rapid transformational change. Innovation should not rely on a job role or title, but
should be an intrinsic organizational capability. Developing innovation processes that are
transparent, inclusive and secure. Individual innovation can be unpredictable however collective
innovation requires a process. When the organization is already being adversely impacted by
change, the proof that existing business strategies and innovation capabilities have fallen short of
the mark should be plain to see. We have seen a growing number of intrapreneurs already
changing the dynamics in corporate culture transforming businesses to generate growth through
new products and services. We can take example of PnG who has been successfully
implementing intrapreneurship and bringing in new innovations.

Question 5 Answers

The one of the huge mysteries of entrepreneurship is why businesses fail. Some people
start one successful business after another while other fails to succeed. Running an organization
is no easy task. Being aware of common downfalls in business can help you proactively avoid
them. It’s a constant challenge. We know, but it’s also a continuous opportunity to avoid
becoming one of the statistics. The worst part about a failing business is that the entrepreneur is
unaware of it happening until it is often too late. It makes sense because if the entrepreneur really
knew what he was doing wrong, he might have been able to save the business. Some
entrepreneurs live in a land of denial while others are unaware of their mistakes. Businesses fail
for many reasons. The following list includes some of the most common reasons:

No proper of planning – Businesses fail because of the lack of short-term and long-term
planning. Entrepreneur plan should include where their business will be in the next few months
to the next few years. Include measurable goals and results. The right plan will include specific
to-do lists with dates and deadlines. Failure to plan will damage their business.

Leadership failure – Businesses fail because of poor leadership. The leadership must be able to
make the right decisions most of the time. From financial management to employee
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management, leadership failures will trickle down to every aspect of your business. The most
successful entrepreneurs learn, study, and reach out to mentors to improve their leadership skills.

There is no differentiation – It is not enough to have a great product. Entrepreneur also has to
develop a unique value proposition, without it they get lost among the competition. What sets
their business apart from the competition? What makes their business unique? It is important that
they understand what their competitors do better than them. If fail to differentiate, they will fail
to build a brand.

Ignoring the needs of customer – Every business will tell us that the customer is number 1, but
only a small percentage acts that way. Businesses fail when they don’t keep in touch with their
customers. Keeping an eye on the trending values of their customers and finding out if they still
love their products is must. Some company doesn’t even to respond to negative reviews because
they think they are unimportant.

Inability to learn from failure – We all know that failure is usually bad, yet it is rare that
businesses learn from failure. Realistically, businesses that fail, fail for multiple reasons. Often
entrepreneurs are oblivious about their mistakes. Learning from failures is difficult.

Poor management – The examples of poor management are an inability to listen, micro-
managing also known as lack of trust, working without standard or systems, poor
communication, and lack of feedback.

Lack of capital – It can lead to the inability to attract investors. Lack of capital is an alarming
sign. It shows that a business might not be able to pay its bills, loan, and other financial
commitments. Lack of capital makes it difficult to grow the business and it may jeopardize day-
to-day operations.

Premature scaling – Scaling is a good thing if it is done at the right time. To put it simply, if
they scale their business prematurely, they will destroy it. For example, they could be hiring too
many people too quickly, or spend too much on marketing. They should not scale their business
unless they are ready. Pets.com failed because it tried to grow too fast. They opened nationwide
warehouses too soon, and it broke them. Even the great brand equity that they have built couldn’t
save them.
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Christensen argument, showed that once-successful companies went under not because
their managers made bad decisions, but because they kept making the same kind of decisions that
had kept their customers happy for decades. In doing so they overlooked products that other
kinds of customer might one day want, thereby missing untapped opportunities that eventually
turned into industry-transforming ones. The "dilemma" of the book's title is that doing the right
thing may turn out to be the wrong thing to do.

His caution means against the disruptive innovation are explained below:
 The common understanding of disruption IS NOT disruption according to Christensen
According to Merriam Webster, disruption is "to cause something to be unable to
continue in the normal way: to interrupt the normal progress or activity of something." If this
definition is applied to business, then really anything that enters a market and is successful can
be seen as "disruptive." Disruption is what happens when the incumbents are so focused on
pleasing their most profitable customers that they neglect or misjudge the needs of other
segments.

 Disruption can be low-end or new-market

These differences are laid out in Disruptive Strategy with Clayton Christensen. Low-end
disruption refers to businesses that come in at the bottom of the market and serve customers in a
way that is good enough. These are generally the lower profit markets for the incumbent and
thus, when these new businesses enter, the incumbents move further "upstream." In other words,
they put their focus on where the greater profit margins are. New-market disruption refers to
businesses that compete against non-consumption in lower margin sectors of a market. Similar to
low-end disruption, the products offered are generally seen as good enough and the emerging
business is able to be profitable at these lower prices. The main difference between the two types
of disruption lies in the fact that low-end disruption focuses on over served customers, and new-
market disruption focuses on underserved customers.

 Christensen's disruption is a process, rather than a product or service

When innovative new products or services – iPhone, Tesla’s electric cars, Uber, and the
like launch and grab the attention of the press and consumers, do they qualify as disruptors
in their industries Christensen cautions takes time to determine whether an innovator’s
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business model will succeed. He cites Netflix as an example that didn’t threaten Blockbuster
at first its DVDs by mail service didn’t satisfy the needs of customers who wanted to get
their hands on the latest new release instantaneously but, in shifting to an on-demand
streaming model, was able to siphon away Blockbuster’s core customers before the company
could stage an adequate response. Keeping a close eye on the process is that product or
service evolving its business model to better serve customers’ needs will help you evaluate
the extent of the threat.
 Choose your battles wisely
If we are a current incumbent and want to be on the lookout for a possibly disruptive
emerging business, the clarification of what disruption is certainly helps. Every fire that is
started doesn’t necessarily need to be put out, nor will it threaten your house. If we treat
every fire as dangerous because someone else calls it “disruptive,” we will soon discover that
it isn’t possible to put them all out, and we will waste our resources in attempting to do so.
The fires we have to worry about are the ones that truly threaten us, and understanding the
correct meaning and application of the word disruption certainly will help you in identifying
and targeting the truly disruptive fires. Understanding disruption is also helpful if we are
looking for opportunities to start or scale our business. An understanding of disruption,
coupled with Christensen’s other theory of jobs to be done can help create products and
services that will be desired by customers.
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Reference

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https://www.forbes.com/sites/quora/2013/11/05/how-do-entrepreneurs-think/

https://www.businessinsider.com/10-quotes-that-tag-you-as-a-high-risk-entrepreneur-

https://www.forbes.com/sites/stevenberglas/2012/03/02/ten-myths-about-successful-
entrepreneurs-debunked/