Jeff Warren

Bezos Buffett
112.0 84.0
Billion Billion

Mark
Bill Zuckerberg
Gates 71.0 Billion
90.0
Billion
Failure
● 21.2% in first year. 51.2%
in five years
● 99.7 % small business in
United States
● Reasons for failure: cash
flow problems, lack of
market needs, cash
issues...
Thesis

● To create a successful business, one has to innovate, market, and have

a strong business plan and strategy.
How to Get Rich (Not a Scam)
EQ: How can one create a
successful business?
● Innovation is key for a successful business.
● Marketing is central to a business’s success.
● A business strategy/plan is important for business.
Innovation

● Organization’s process for introducing or improving

○ New ideas, products, methodologies
● Build on previous ideas
○ convenient , efficient, and effective
Risk

● Does not always work

● Investment in the unknown
● Lost in money, time, growth
● Risk is better than being stagnant
● Big risks=big rewards
Process

● System to minimize risk

● Lead to excellent and consistent results
● 5 steps to successfully innovate
Idea generation/mobilization

● Born from an atmosphere of

○ Competition
○ Freedom
○ Creativity
● New or improvement on existing products.
● Mobilization: idea moves to another firm or department
Screening/advocacy

● Narrowing and evaluating

based on pros and con
● Best idea stays
● Standardized and
transparent process for
effectiveness
Experimentation

● Testing as a pilot or a prototype

● Gathering information on performance and usage
● Findings should not be discarded
● Results can influence other ideas
● Set aside for later development
Commercialization

● Shift from development to persuasion.

● Prep for launch by
○ Meets their audience
○ Evaluating cost and benefits of launch
○ Marketing
Diffusion/implementation

● “Diffusion is the company acceptance of an innovative idea, and

implementation sets up everything needed to develop or produce
innovation”

● Company needs to be on same page

● Receiving feedback to see what the next demands are
Marketing

● “The activity, set of institutions, and process for creating

communicating, delivering, and exchanging offerings that have value
for customers, clients, partners, and society at large”

● Includes product life cycle and the process of innovation

● Creating demand for product and fulfilling customers needs
Purpose

● Build interest and attention

● Enables business to gain
○ Recognition
○ Reputation
○ Potential customers
Purpose

● The ultimate goal of marketing is to match a company's product or

service to the people who need and want them, thereby ensuring
profitability”
Advertising vs. Marketing

● Single part of marketing

process
● Gets word out of your product
or service
● Ad placement and frequency
● Marketing: customer support,
sales strategy, public relations,
product pricing, marketing
research, and media planning
Understanding Concept

● Concepts of marketing
○ Customers
○ Competition
○ Industry
● Help business
○ find profitable customer base
○ Develop strong marketing plan
Customer

● Center marketing strategies around customers

● Learn about target customers, industry trends, and competition
● Demographics can help define target customers
● Failure to understand target customer can lead to
○ Realization of no potential customers
○ Weak marketing plan
Competitor

● Understanding competitors (same customer group)

● Unique niche
● Others can copy niche and improve it, beating the original
Industry

● Understanding industry and

economic conditions
● Hoping on or avoiding trends
● Texas removes factory farm
meat because of New York
● Restaurants and Bakeries
adapt to low carb trend
Marketing Research/ 4 P’s

● "Marketing mix" is a general phrase used to describe the different

kinds of choices organizations have to make in the whole process of
bringing a product or service to market. The 4Ps is one way – probably
the best-known way – of defining the marketing mix”

● 4 P’s is a foundation model and common tool used in marketing

Product

● Good or service that will fulfill demands of customer

● To know: demands, utilization, features, and benefits
● Market decisions: product design, branding, and product assortment
Price

● Amount customer will pay

● Affects profit margins, supply,
demand, market shares, and
marketing strategy.
● Market decisions: price
strategy, price tactics, and price
setting
Promotion

● Communication of information between product and customers

● Market decisions: advertising, public relations, sales promotion, and
social media
Place

● Where product is sold

● Distribution affected by the type of product being sold to capture the
most sales

● Distinct but interdependent

Business Plan/Strategy

● “A written document that describes in detail how a business, usually a

new one, is going to achieve its goals. A business plan lays out a written
plan from a marketing, financial and operational viewpoint”

● Blueprint and provides structure

● Outlines and analyzes a business and future projections
Business Plan/Strategy

● Shows business’s strengths and weaknesses

● Secure funding from bank/loaners
● Frequently updated to guide growth
● 50 hours to write
How to Write a Business Plan

● Numbers and projects are inaccurate/imaginary

● Belong in the end
● 3 interdependent factors
● People, opportunity, context
People

● What they know? Whom they know? How are they known?
● Knowledge of industry, have connections, and recognition from others

● Arthur Rock, venture capital legend associated with Apple and Intel,
says “I invest in people not ideas”
Opportunity

● Is the total market for the venture’s product or service large, rapidly
growing, or both?
● Is the industry now or can it become structurally attractive?
● Large industry=less saturated with competitors
● Structurally attractive industry=profits
Context

● Economic activity, government

rules/regulation, tax policies,
technological limitations
● Effects on business and
reaction to change should be
stated
Context

● “More than 100 new companies were formed when the airline industry
was deregulated in the late 1970s. The context for financing was also
favorable, enabling new entrants like People Express to go to the public
market for capital even before starting operations. “
Strategic Management

● Development and implementation of strategies that fulfill business’s

goals and objectives
● Analyzing internal/ external strengths and weaknesses and
formulating, executing evaluating, improving action plans.

● “It has been estimated that more than 100,000 businesses fail in the US
every year and most of these failures are to do with a lack of strategic
focus and strategic direction”
Next Step

● 80% of jobs
● Competition for large companies and help economy endure tough
conditions
● Government can: provide fair legal system, encourage a diverse
funding, and simplify tax laws
● Education
Conclusion

● Low success rates

● Innovation, marketing, and business plan/strategy
● Innovation: idea generation/mobilization, advocacy/ screening
commercialization, diffusion/implementation
● Marketing: Product, Price, Promotion, Place
● Business plan: People, Opportunity Context