Government leaders across Europe and North America are seeking to formulate enlightened, effective policies to create the necessary Innovation and Entrepreneurial ecosystems and help their corporations respond to severe threats of loss of markets at home and abroad. The need to better commercialize public and private investments in R&D is well understood, but does not always happen as hoped for and mandated in well-intentioned protocols.

Hope is not a strategy. We know the European Innovation Engine may not be firing on all 8 cylinders and decisive action is required, particularly since competitor governments around the world are putting more of their muscle behind their drive for innovation.

Let’s go back to basics: Innovation = Invention + Commercialization

One reason that hopeful protocols fail to deliver the needed results is that Innovation is difficult, and requires teamwork among people of different disciplines. The inventors of breakthrough ideas are rarely well equipped to lead their inventions from the cool comfort of the laboratory to the cruel crucible of the marketplace. Even the best and brightest new breakthroughs need to be SOLD. Inventors need to team up with gritty, market savvy, workaholic entrepreneurs to translate their ideas into practice, quantify the value proposition, and find and convince early “beachhead” customers. The job is not complete until years later when the new invention becomes an accepted standard, and finally achieves total global domination of the carefully chosen market niche.

The Lisbon protocol in its various forms envisions top-notch inventors achieving innovation by commercializing their ideas. How will they seek out and be more easily connected to passionate entrepreneurs, and where will Europe’s next generation of entrepreneurs come from?

The challenge is palpable for both global and local corporations, as well as
government-funded laboratories. The pace of change and the need for rapid innovation has never been greater. Today the CEOs of the top companies in the so-called mature Western economies have few tools (and little time) to help them re-engineer their organizations to be more innovative. They lie awake at night worrying that faster, more innovative, lower-cost competitors are springing up every day, eager to take big bites from their cash cows and star performers.

Indeed, according to an annual study by the Boston Consulting Group, the top 100 companies outside Europe and North America are truly globally ambitious.

These companies may also have advantages in addition to their hunger for new markets:

• ☐ ambitious, talented, hard working, non-union work forces
• ☐ flexible labor policies
• ☐ rapid permitting of new sites
• ☐ priority for water and electricity
• ☐ modern industrial plants and equipment
• ☐ equally modern and flexible supply chains
• ☐ access to global capital
• ☐ access to international markets, while their home markets may be harder for competitors to enter

In the face of increasing global competition, more and more major companies are coming to understand the value of corporate venturing, which generally aims to give large mature organizations some of the agility of their smaller competitors. Such venturing works both to improve a corporation’s standing in its existing markets and to break into new markets.

Today’s major corporations pursue different organizational strategies to achieve incremental and radical innovation. Incremental innovation is usually managed inside the Business Units, using their knowledge of evolving customer needs, manufacturing flexibility, and short term budgets. Radical innovation is best done by a team of trusted corporate veterans, reporting directly to the CEO and protected from the “NIH” backlash. Purchasing products and in-licensing from startups may also accelerate internal innovation and shorten time to market.

Large Western corporations have many advantages when competing, IF they have the will and clock speed to use them.

Charles Darwin’s conclusions about evolution also hold for business: “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.” Innovation programs such as corporate venturing can help companies evolve in the face of a rapidly changing world, and not just survive, but thrive. The role of governments is to provide a level playing field with policies that support and encourage, rather than penalize success in the highly competitive global markets.

Ken Morse is one of the Business Mentoring Program mentors. Ken has been a high performance leader in global high tech sales and sales management for over 35 years. Ken it’s also Founding Managing Director at Trust Center of MIT Entrepreneurship (formerly known as the “MIT Entrepreneurship Center“). The BMP workshops will help ambitious Romanian entrepreneurs, and their companies, to achieve their full global potential.

Bill Aulet is one of the mentors from Business Mentoring Program, a Post-Privatization Foundation brand. He is a successful leader in business, with over 25 years experience in all aspects of high-tech operations, product marketing and finance strategies. He is also Managing Director at MIT Entrepreneurship Center and a regular featured speaker at management leadership programs around the world.

What is the workshop offering and what are the advantages for Romanian entrepreneurs?
Romanians have a highly developed entrepreneurial spirit, but they are not always aware of what they can do. The purpose of this workshop is to teach them what to do and how to do it, because many of them wish to be in the business environment.
Romanian entrepreneurs work a great deal and take nothing for granted. We call this immigrant mentality: they are willing to do whatever they are able to in order to succeed.

Which would be several key elements of entrepreneurial product marketing?
The first thing we must do is realise who our client is and then we must develop a product to suit their needs. Many companies would create a product without knowing their customers; the most important aspect for any company is to actually have customers. Without them you can not say you own a business because you have no one to sell to. I can have amazing technology, but that does not mean I have a company. Until someone pays for it, I do not own a business.
Many entrepreneurs say that they have an idea. But who cares about that? Things must be approached backwards, starting with what consumers want, not with what I do.

Can you give us some simple tricks, some essential factors for achieving success?
Customers are those who make the business run; this is the first key aspect towards success which entrepreneurs must understand. Afterwards, you must define your clients. Not everyone will want to buy from you, therefore you need a profile of those consumers who would be tempted to do business with your venture. The next step is to try attracting them. Discipline is essential; we cannot afford to pay attention to everyone coming through the door – we only need those which fit our target profile.

How do we approach price policy?
Even before establishing price strategy, there are many ways of obtaining value from what you do. Of course, the first step is to create value for your consumers. Then you have to estimate the importance of your products to the consumer and how much of this value you can retain.

What is Bill Aulet’s secret recipe?
Do what you like! If you find something you like doing, then you will excel at it. Secondly, you can not do anything on your own. You need other competent people around you, people that you trust. I used to be a basketball player and I like to think of my business as a team which tries to win. Sometimes I lead, other times I allow the team to, and I feel as good as I used to feel on the field. I feel much better and more confident as an entrepreneur, than when I used to work for someone else’s company.

„Do what you like, think your products around your consumer’s needs and give your attention only to those clients that you want!”

Eusebiu Burcas is one of the jurors from the previous edition of Business Mentoring Program. Among others, Eusebiu is founder of the first independent financial education program in Romania, Management consultant, Sales and Management Trainer, Financial coach and Investor in emerging markets and online business. In a short interview, he talks about entrepreneurship in Romania and the importance of programs and events organized in order to support the entrepreneurial and business movement in Romania.

Entrepreneurship in Romania is getting more vivid every minute. More and more enthusiastic youngsters and experienced professionals want to put their business ideas in practice faster, better and with calculated risks.

However, enthusiasm is not enough in order to start, grow and lead a successful business.

Programs and events organized in order to support this entrepreneurial and business movement in Romania can be very useful in educating professionals, even experienced ones. An example of an educational program for entrepreneurs and managers that I trust and recommend is Business Mentoring Program.

This program can be a very useful source for gaining knowledge, education, skills and feedback for how to run the business. It can give an entrepreneur or manager the necessary insights in order to develop or reshape the business model, to identify the financial sources or the methods to attract the funding required, receiving quality ideas from experienced professionals, etc. On a very specific basis, businesses are analyzed thoroughly regarding both external and internal factors. Starting with your clients, your financing, your sales, marketing and promotion strategy, your cost management, employee management, monitoring and tracking methods, all these aspects will be tested, reshaped and judged upon.

The MIT professors’ team adds a high value to this program, for their knowledge, experience and skills are shared directly with the participants, Romanian entrepreneurs and business leaders.

Business Mentoring Program is not an easy course and it’s not for everyone. It is very intensive for the participants, during a 5 months period. Designed to meet the level of exigency and preparation of an MBA, this program requires from its participants a high level of involvement, dedication, openness to new and challenging perspectives, and especially focus.

If you are an entrepreneur, a business leader or executive of the management team, and you want to act efficiently under the current economic conditions in Romania or worldwide, this program may be for you.

If you plan to focus in the future on developing your company, you should have some key aspects figured out: sales strategy, marketing, shareholder value creation, operational effectiveness, leadership or financing for growth. This program addresses all these topics. For the company you represent, this program may be exactly what it needs in order to grow and become more performing.

If you need a reality check, see if you are on the right track with your business, this program is for you. Though it doesn’t directly diagnosis your business, with what you learn during this program, you can use the knowledge and experience to build your owntraffic light; you can see better when to stop (Red), pend upon and reshape (Yellow) or go right ahead (Green) with your business. This program could change your entire perception upon your business, the way you see opportunities in the market and even considering adapting a new business model.

The mentors have a very clear role in offering support and guidance to experienced entrepreneurs and managers for improving their skills and leading their organization towards excellent performance.

If you are up for the challenge, go for it!

On 30 November, Post-Privatization Foundation, an organization under whose umbrella Business Mentoring Program is taking place, releases the results of the market survey which was carried out at a national level between October and November, based on the answers provided by businesspeople and managers who are involved in different lines of work. This survey provides an overall picture of the Romanian entrepreneurship, the decisions which are made in this field against the background of the current economic situation and the business environment in general, but also the important role which business training plays in the successful development of a company. According to the survey, Romanian business people and managers believe that business education is one of the most important conditions for strengthening a business; 48% of the interviewees are already attending business training courses at a management or MBA level.

Business administration

The setting-up rate of the companies has fallen considerably in the last years – 21% of the interviewed managers are part of companies which were set up 6 or 7 years ago, whereas only 12% work in companies which were set up less than 5 years ago.

Business management has changed due to the economic crisis. 89% of the interviewed entrepreneurs resorted to planning their expenses thoroughly or cutting them. Only 31% of the respondents laid off employees in order to cope with their situation and 15% of them resorted to cutting salaries.

As to the client portfolio and the way of choosing the clients, almost half of the interviewed managers are part of companies which collaborate also with foreign clients (49%). One of the most important conditions for choosing the clients is the possibility of a long-term collaboration, an aspect which was mentioned by 96% of the respondents. On the other hand, 89% of the interviewed managers choose their clients depending on the possibility of developing their business in the field of the clients. (89%).

One of the most important ways of starting a collaboration with new clients is networking, a method which was mentioned by 75% of the respondents. As far as managers are concerned, attending events, training courses and lectures is the main way of increasing their client portfolio. They also mentioned classical methods such as the recommendations made by the clients they already had (89%).

Employee motivation

Managers are willing to investing in the training of their employees as long as the acquired knowledge has an immediate and considerable impact on the development of the company. Besides this criterion, when respondents select employees in order to send them to training courses, they take into account their performance (87%), as well as their role in the company (86%). The financial aspects are less important, they are brought up by 66% of the managers who are interested in the education of their employees.

The results of the survey indicate that 83% of the Romanian entrepreneurs believe that one of the most efficient ways of motivating their employees is sending them to training and preparation courses. Other used methods of this type are: pay rewards (89%) and creating a pleasant work environment (97%).

Business education

The entrepreneurs’ attitude towards educational programs is predominantly positive: 27% of the managers are interested in attending specialization courses irrespective of the required resources, while 29% of them show an interest in such a course provided it doesn’t take up too much time. Only 8% of the respondents showed they didn’t care at all about business educational programs.

When they were asked if they had attended a business training program before, 47% of the interviewed managers declared that they had attended the courses of such a program, especially MBA ones. Entrepreneurs tend to value positively this type of programs, 52% of them believe that employees should get this kind of training.

Survey conclusions

The entrepreneurial and professional development programs must provide clear and direct advantages: giving up theoretical courses and carrying out activities which are as practical as possible, but also networking opportunities. The Romanian managers and entrepreneurs showed an interest in keeping a long-term relationship with the professors of entrepreneurial programs. They also prefer to attend specialization courses taught by the international mentors who use world-wide teaching methods.

About the survey

The survey was carried out in Romania; its questions were answered by managers and entrepreneurs. The respondents were both men and women over than 18 years of age. The survey was carried out in November 2011.

Valentina Ion is one of the jurors from the previous edition of Business Mentoring Program. Valentina is Product Business Group Lead at Microsoft Romania since March 2010 but her career in the company began in 2007.

We have come across business people or entrepreneurs, but very few of them were trained so as to develop a healthy and sustainable business. Each of them made it empirically, assuming the risks and costs that could otherwise have been avoided.

Business Mentoring Program proves to be one of the most serious programs, due to the quality of its content and to that of the national and international business consultants involved; last year it managed to attract companies and managers that were willing to evolve professionally.

The mentors in the program are experts in their field, have decades of experience, have been exposed to both the international and national environment; they can accurately and fully assess the economic context characteristic to each participant in the program, and thus they can advise them in a pragmatic and personalized manner.

The program applies immediately and has an impact on the spot. You come to solve problems while you’re in the program.

I remember my early days as an employee of Microsoft, when I had to write my own “Elevator Pitch” so as to introduce myself to the team, bosses, customers, partners. The subject matter of the day was always: “What would you tell Bill Gates, if you were on the elevator with him?”

The person standing right in front of you has different interests, different expectations and the positioning in the business relationship that is created depends on this very “Elevator Pitch”.

This exercise has taught me that primarily it should be utterly clear to me what I want to obtain, who I am to myself, who I am to my interlocutor, what the interlocutor wants and what he can get from me. And that I need to convey all this in a clear and to the point manner, within less than a couple of minutes.

We can compare “Elevator Pitch” to Speed Dating in the business environment. I have to find the right phrases that make me look attractive to the one standing in front of me.

This kind of exercise that takes place in less than 1 minute, is in fact all about the preparation work previously done, it is a test for the participants but also for us, the evaluators.

I was impressed by the desire for education shown by the participants. The selection of participants is vital and it was well done.

This kind of program is useful to the extent that you as entrepreneur have projected and struggled so as to implement your business idea, in other words that you already envision what has to be done: financing, promotion, entry on a new market, addressing a certain audience which includes a custom-made message, cost management, business performance and employee tracking.

Participants turned out to be companies / professionals who are willing to develop long-term sustainable business, who were not infested with the easy money syndrome. We need these very entrepreneurs in Romania.

It might sound interesting for a title but I’m not going to talk about strategies and ways on how you would get a competitive advantage per se. It’s a warning, which again is kind of unusual for a blog post, but anyway I’m going to write it.

In most cases people think about competitive advantage as being a notion applicable only to companies since the term is associated most of the time with business and with management or strategic management. But what if we talk about competitive advantage from personal perspective, what if we consider ourselves as a business and we look on the market and try to identify those things that leads us to gain a competitive advantage or, even more, to create a blue ocean for us where nobody would enter, what if?

Most of the time, entrepreneurs or intrapreneurs don’t think about themselves in these terms and how they can gain advantage over competitor. These advantages come from education, but not necessarily from a formal education.

In order to be able to identify your competitive advantages you need to know what are your strengths and weaknesses in order to be able to manage them. You need to be updated with the trends and how you can introduce these trends in your life; you need to know what new approaches in solving issues are or the newest innovations in your area of expertise. These are only few things that you need to know, things that you might find it in books, articles or blogs that you might read. In addition to these sources, you will be surprised to find the most helpful ones in non formal educational programs like: conferences, seminars, or workshops or simply by participating at events. At the end everything comes to networking, networking, and networking.

We tend to underestimate the potential of these events and the main reason for that are the rules imposed by society that tells us that you can’t learn anything outside a formalized setup that nothing matters unless you have a diploma. The business skills I have now are not because of a Romanian formal school or education, are because of mentioned events; I learned more by participating at conferences, workshops or trainings. I was challenged to think outside the box, I was provoked by lectures to think and I gained competitive advantage that helped me to achieve what I’ve achieved so far. Last but not least, these events helped me build a strong networking.

Nonformal education is more learner centered that most formal education so I strongly encourage you to take advantage of all alternative ways of developing your strengths, your business skill.

Therefore, I strongly encourage you to start using alternative ways of developing your strengths and skills in order to get those competitive advantages that you need for compete on a very expansive market where I’m sure you will succeed.

As Executive Director of Post-Privatisation Foundation (FPP), the only organization in Romania focused solely on entrepreneurship and on the promotion of entrepreneurial skills among Romanians, Peter manages European-funded projects, a varied portfolio of investments and international entrepreneurial development programs for the benefit of Romanian entrepreneurs.

Creating your business plan with your team is the best opportunity to confirm, for yourselves, that your venture makes good business sense, and has the potential to achieve sustainable global growth.

You are the first and foremost “customer” of your plan: it is both, a reality, a guide, and a source of FOCUS for your business. It will also change, as your understanding of your market changes.

Potential Investors usually read business plans after they are impressed with the team and the market.

In that context, I will give you 10 tips to aid you in crafting your plan.

1. While writing your executive summary for the business plan, be brief: 1-2 pages maximum. Name your first ten customers, and why they will buy from you.
2. Your Business plan should be optimistic, but realistic.
3. Study and include your competitor’s numbers. Once again: be brief.
4. Get help from good advisors early. Remember that potential investors will call them. Seek experienced industry veterans, with grey hair, or no hair.
5. Focus on the customer’s pain, how and why prospective customers will buy from you, and pay you money.
6. Focus on milestones (more than calendar dates).
7. Get money from CUSTOMERS. Plan how to build your company without any outside investment. Then, maybe, you are ready to speak to potential investors if you can show you don‘t necessarily need them.
8. Most people who will read your business plan will focus on: Customer needs, Value proposition, Sustainability and Your Team.
9. Your potential investors should help bring you both customers and management talent. They should bring smart money that works for you.
10. Realize that Business plan competitions are an educational process.  It does not particularly matter that you win. By participating you will sharpen your game, expand your network, and improve your pitch.

Ken Morse is one of the Business Mentoring Program mentors. Ken has been a high performance leader in global high tech sales and sales management for over 35 years. Ken it’s also Founding Managing Director at MIT Entrepreneurship Center. During Business Mentoring Program workshops, Ken will teach participants to the program, among others, how to write business plans that generate success and raise money.

]]> http://www.businessmentoring.ro/blog/checklist-business-plan-suggestions/feed/ 0 http://www.businessmentoring.ro/blog/interview-marius-ghenea-entrepreneur-angel-investor-juror-at-business-mentoring-program/ http://www.businessmentoring.ro/blog/interview-marius-ghenea-entrepreneur-angel-investor-juror-at-business-mentoring-program/#comments Mon, 07 Nov 2011 11:26:35 +0000 Roxana http://www.businessmentoring.ro/blog/?p=55 Continue reading →]]> Marius Ghenea is one of the jurors from the previous edition of Business Mentoring Program. But Marius Ghenea is known in the business world, first and foremost, as businessman, business angel, serial entrepreneur and professor of entrepreneurship. In a short interview, he talks about his involvement in this program and the importance of entrepreneurial education in Romania.

The entrepreneurial education has been completely neglected until now, probably mainly due to inertial educational system that was designed throughout the communist period in Romania not only to promote entrepreneurship and entrepreneurial values, but rather to anathematize those values considered capitalist and therefore harmful to the communist system;

What is done at present in schools is still far too little; more is done by means of complementary education systems – programs such as School for Startups Romania and Business Mentoring Program;

I’m afraid we can not solve all the problems and the weak points of the Romanian entrepreneurial education only with the help of these complementary programs;

The entrepreneurial education should start gradually, from the first years of school, so that once in high-school, even before graduation, teenagers and young Romanians should already have sufficient business knowledge so as to be confident to start their own business;

Even if we were to include immediately a strategy as such in the education curricula, it would take many years until the first generation of children and young people should undergo systematically this formal education process;

I have participated as a juror in the BMP program sessions, and I have also tried to convince to join me other valuable jurors, with remarkable entrepreneurial and business experience;

In what concerns the MIT team, mentors in the BMP program, I can say that they are amazing teachers and anyone would be lucky to have them as teachers in any program whatsoever. As mentors, they were always very close to the students and interacted with great interest and empathy with all participants in the first year program;

Entrepreneurship is all about pitching, more than anything else;

Every entrepreneurial project must be presented and „sold” to various third parties or stakeholders: to the bank, customers, business partners, employees and, last but not least to the equity type investors (business angels, venture-capital, private-equity);

We need to consider pitching not as a mere presentation for investors, but as a set of presentations as well contextualised as possible for each of the stakeholders;

At BMP, a very important element in the pitching stage was the very customization of the pitch, depending on the person to whom it is addressed; in my opinion, this was an excellent lesson for all participants;

I have attended several BMP sessions and I clearly saw that, session after session, the students’ pitches have continuously improved, sometimes even dramatically;

Repetition, practice are the best ways to improve the presentation technique, and this practice was very useful for the students;

In my opinion, all participants to BMP were very interested to absorb as much useful information from the program as possible; I appreciated their interest and their dedication throughout the Business Mentoring Program;

In terms of business profile and size of business, some of the BMP participants generally came from small sized companies, start-ups, while others came from larger, more well-developed companies;

I think the best results in this program can be achieved by managers or owners of medium-large sized companies in Romania, who already have practical experience that allows them to relate effectively with the very dense information and to the high level of teaching specific to the Business Mentoring Program.

This article is for ambitious Romanian entrepreneurs, and also for the Foundations and public policy makers who want to help them achieve their full potential.
This article is based on many years of my personal experience and also upon an article written by my colleague for many years at MIT, John Preston. He was the first one who wrote about these success factors in 1997. Perhaps, after reading this article, one should be thinking: “Ahhah, those are the things I should most concentrate on: “This and that” I have control of, these things I can improve myself, and those things I know nothing about and I might want to seek some help on them.”.

Attitudes
Small companies are very important in bringing innovative ideas and products to the market. Radical innovation almost never originates with the market leader. You can be the most eager innovator in history, but once you become a market leader, unfortunately your attitudes may change. Innovators have the right attitude when they: have a strong belief that their start up venture can succeed, are willing to learn and expose themselves to success stories and case studies, are prepared to be “unusual/unconventional”, agree to embrace risk, are ready for possible failure, and are willing to leave a larger company.
Positive attitudes towards sales
Romanian startup teams may be at a disadvantage when it comes to having the necessary passion for perfection and swift seamless sales execution. Today’s bright young Romanian entrepreneurs were typically not raised to think about the importance of sales. They did not grow up running lemonade stands or going door-to-door selling girl-scout cookies. While at university, their professors may look down on sales, and were rarely (if ever) themselves forced to compete for funding. Where will their sales mentors come from? One of the most important life lessons — the importance of sales — usually comes late in the career of Romanian entrepreneurs.
My advice is gain practical, real world experience before, during and after university studies, ideally outside Romania as well. Those who get a broader perspective early shorten their way to success.

Management Teams
Try to ask a venture capitalist “which companies they would rather invest in: the one with a first-rate technology and a second-rate management team, or, with the first-rate management team with an average technology?”.
The answer will be clear: the management team is success factor number one! Entrepreneurship is not an individual behavior; teamwork creates value and success. My friend and boss at MIT for 13 years, Professor Ed Roberts of the MIT Sloan School, did a study of start-up companies and their probability of success. The results of the study show, that the probability of success increased dramatically with team size until you get up to 4 or 5 entrepreneurs founding the company. Teams of people with complementary skill sets perform better: Engineers need at least one business person on the team in order to succeed.
Building a Full Team: Recruit “A” Players
Sometimes, people who seek you out may not always be a bargain. Other times, the best people to recruit may not be looking. Therefore, create a virtual company with people and resources which may convert into permanent resources at the right time. Be prepared to share equity with new hires: share ownership contributes to passionate behavior. Training is key to success; cutting corners on training will delay the sales process.
Designing, Leading and Building a new company is an intense process, so make sure that everybody in your team is in it for the same reasons. These will be the people you will spend a lot of time with on your path to success and good communication is important. Creating a common culture from the diverse members of the team is an essential priority.Culture drives the behavior of people and their priorities. It controls what is valued, what is rewarded, who is promoted, how things are done and what people believe is possible. It affects performance: what gets done – and what is left undone.
A winning team knows what they want: positive cash flow, referenceable customers, to recruit and retain “A” players, and create a rewarding work environment, where hard and smart workers are well compensated and collaborative.
When building your team, keep it simple: CEO (Co-Founder) – has the experience and probably had the idea, Marketing (Co-Founder), CTO (Co-Founder), Business Type (may or may not be a Founder).
Excellent Leadership skills of the CEO are essential for a start-up company. The ideal profile for the CEO is the same set of skills to be used for finding a quality investor:

• ☐     Integrity
• ☐     Intelligence
• ☐     Energy
• ☐     Sales skills
• ☐     Tolerance for risk and uncertainty
• ☐     Does the work
• ☐     Passionate about customers
• ☐     Magnet for team – recruiting and retaining
• ☐     Realistic; nimble in assessing and acting
• ☐     Seeking wealth, not income
• ☐     Personal and family commitment

Consider how many boxes are checked when hiring a CEO or looking for a new investor.

Patents and Sustainable Advantage
Patents play a key role in building a business. Here is a good example why. Suppose you approach a large company and propose a partnership with them. The basis for the partnership is that you have technology that will solve some of their problems and save them an enormous amount of money. What is the first thing that is going to happen? The company is going to ask themselves: “Do we really need those people?” .
If you go in with a weak patent position, often you are going to create a competitor and they are going to say: “This is a neat idea. It works. They don’t have a good intellectual property position, so we can just go ahead and do it on our own”. So the weak intellectual property position creates competitors whereas the strong intellectual property position creates partners.

Passionate Behavior
Is obtained by distributed ownership. One of the key differences between American and European companies is that American companies are much more generous in giving shares and stock options to their employees. When employees become owners they start behaving like owners and that has a great impact on the quality and quantity of their work and the amount of effort they put into the business. A good idea is to agree in advance with your team on the ownership and a process to readjust ownership and shares, based on objective standards. Define the vesting schedule up front for the future, for example quarterly vesting over four years, which begins after the full first year.

Quality Investors
The quality of the source of money is one of the keys to determining the success of the company. Good advice is worth equity. Pick your investors and your advisors carefully.
Another key determinant of success for start-up companies is whether the venture capitalists have access to more money downstream. Companies typically need more money than the entrepreneurs originally think. Companies more often fail because they run out of money than because the technology has problems. Companies that have ambitious investors with very deep pockets will succeed more often.
When you know whom you want to see among your investors, the next challenge is how to attract them to invest in you. As I mentioned earlier what sells investors also attracts and retains talent. In other words, valuable potential employees and potential investors will look for those qualities: Competent leadership, Market validation, Passion for the business, Team players and networkers, Receptive to feedback, Adaptive to shifting market conditions.
One of the top priorities of leadership is having the financial administration in order: it will show the potential investors and bankers that you have a good understanding of the situation today and your business plans and cash flow for tomorrow. Having this in order may help prevent you from running out of cash and can put you into a position where you will be able to choose which investor you will go further with. Investors want to be sure that you know your market and its needs. Prepare to explain what your market plans are based on and you must be able to quantify the customer value proposition.

Product Quality and Speed to the Market
For those industries that are not dominated by intellectual property – where patents are not that important – speed to the market is key to success. One of the CTOs of HP once said that the value of being one month earlier to market for a typical HP product is worth more than the entire engineering and development cost of that product. He also said that being either six months earlier to market or six months later, impacted the profitability of that product by one third (35%) over its entire life. In other words if you get to market six months earlier, you will increase the lifetime profitability of that product by one third: if you are six months late you will decrease the lifetime profitability by 30-35%. Speed to market is a major factor in determining product profitability and success. Of course, there is a trade-off between speed and quality.

Flexibility
Lack of flexibility inhibits large companies from developing innovative technologies. Small organizations are more flexible when it comes to innovations and quicker to respond to customer needs. Customers know they can reach an entrepreneur on his/her cell phone on the week end, whereas calling a big company will be an exercise in doom and gloom voice mail.

Location of the Company
Prof. Michael Porter of the Harvard Business School observes that you should locate your company close to your fiercest competitors and/or close to your demanding customers. You gain regional advantages by clustering companies that have complementary or competitive skill sets. Inventors need to team up with entrepreneurs to bring their breakthrough inventions from the cool comfort of the laboratories to the cruel cubicle of the marketplace.

Ken Morse is one of the Business Mentoring Program mentors. Ken has been a high performance leader in global high tech sales and sales management for over 35 years. Ken it’s also Founding Managing Director at MIT Entrepreneurship Center. The BMP workshops will help ambitious Romanian entrepreneurs, and their companies, to achieve their full global potential.