MAIN TOPICS: - What is specific to start-up strategy? - WooRank A & B - Internet startups - About strategy --- This session is part of a 10-weeks course given to master students of the SOLVAY BRUSSELS SCHOOL OF ECONOMICS AND MANAGEMENT by professor Olivier WITMEUR.

1. www.solvayentrepreneurs.be
HOW TO START A VENTURE?
SESSION 8 (out of 10)
START STRATEGY
This session is part of a 10-weeks course
given to master students of the SOLVAY
BRUSSELS SCHOOL OF ECONOMICS
AND MANAGEMENT by professor Olivier
WITMEUR.

2. Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR
• What is specific to start-up
strategy?
QUESTIONS AGENDA RESOURCES
• WooRank A & B
• Internet startups
• About strategy
Desired Outcomes of the Session
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3. Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR
GEST-­‐S421
-­‐
Introduc2on
to
Entrepreneurship
-­‐
2014
©
Olivier
Witmeur
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WooRank A & B
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4. Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR
INTERNET START-UPS
#1
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5. Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR
Web start-ups have three potential types of revenue models
CONCEPT WOORANK
The user doesn’t actually pay for the
content or service he uses: he is
subsidized, typically through advertising
and affiliation programs
There are two categories of premium
revenue models for web start-ups:
transaction (sale) and subscription (rental)
models
This is a hybrid revenue model: it
consists in giving away something for
free and then trying to up-sell the users
• Advertising
• White Label
• Do-it-yourself tool
• Marketplace
• Shutting down the free
Freemium
Feels-like-Free
Premium
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Source: Chai, Potdar and Chang, 2007; Enders, Hungenberg, Denker and Mauch, 2008; Anderson, 2010

6. Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR
Most of the new software solutions sold are SaaS because it’s convenient
but the subscription revenue model makes future cash flows less predictable
SAAS SOFTWARE
Software-as-a-Service offers many advantages
ü One-time fee
ü Use on one computer
ü Not available on mobile devices
ü Free trial not available
ü Installment required
ü Some updates are automatic
ü Less likely has supplemental apps
ü A new version requires a new purchase
ü Mobile synchronization requires additional
software and often costly
ü Subscription fee
ü Use on any computer via internet
ü Available on many mobile devices
ü Free trial often available
ü Installment not required
ü Al updates are automatic
ü Most likely has supplemental apps
ü Users are always working from the latest
software version
ü Mobile synchronization may require additional
software, often free
TRADITIONAL SOFTWARE
2010 2011 2012 2013 2014 2015 2016 CAGR
SaaS growth 10.75% 13.46% 16.22% 19.82% 23.72% 27.94% 32.80% 19.5%
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Source: Bill4Time; Gartner

7. Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR
Inbound marketing enables web start-ups to drive high quality
prospects to the company’s website at a very low cost
• Traditional intrusive form of marketing
• Expensive
• Finding customers
OUTBOUND MARKETING INBOUND MARKETING
CONCEPT
EXAMPLES
• Permissive form of marketing
• Cheap
• Getting found by customers
Print ads Blogs, eBooks, white papers
Television ads Viral YouTube videos
Cold calling Search Engine Optimization
Trade shows Webinars
Email blasts Feeds, RSS
WOORANK MARKETING
Outbound marketing is paid whereas inbound marketing is earned
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Sources: Halligan, 2009; Godin, 1999

8. Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR
ABOUT STRATEGY
#2
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9. Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR
Mintzberg and Waters (1985) identified 8 kinds of strategies
Depending on the ability a company has to predict or control its environment,
it will have to adopt a strategy formation process that is more or less emergent
Pure Deliberate
Pure Emergent
PLANNED STRATEGY
The goal of the organization is reached without distortion through control of the stakeholders
IDEOLOGICAL STRATEGY
Organization members share a common vision, which rules their behaviour
ENTREPRENEURIAL STRATEGY
The owner imposes his vision, which he can redefine if he changes his mind
UMBRELLA STRATEGY
Management provides general guidelines that rule the behaviour of the actors
PROCESS STRATEGY
Management doesn’t control the content of the strategy but he defines its formation process
UNCONNECTED STRATEGY
A subgroup operates without falling under the same control hood as the rest of the organization
CONSENSUS STRATEGY
Strategy formation comes out of the convergence of opinions of the actors
IMPOSED STRATEGY
The environment dictates the strategy of the organization and it can only consent
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10. Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR
Deliberate and emergent strategies craft the realized strategy
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Source: Mintzberg and Waters, 1985
There is a continuum of strategies, which differ by the relative importance
of the emergent and of the deliberate in their formation

11. Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR
There are 3 main risks to learning from the emergent
No strategy
Lost strategy
Wrong strategy
The organization does not look at the
big picture anymore and evolves
without central direction
Learning can drive an organization
away from its original strategy, even
though it was working perfectly
Incremental changes made by an
organization throughout its learning
process can little by little put it in a
situation that no one ever wanted
POTENTIAL RISKS
Organizations must find the right balance between design and emergence
without falling into the extremes, considering the uncertainty of the environment
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12. Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR
The VC2 framework enables to represent company position on
value creation and value capturing on a 2x2 matrix
Creating and capturing value simultaneously
looks like a sustainable route to Heaven
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Source: Hawawin, Subramanian and Verdin, 2004

13. Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR
Here (a suggestion)
Unique Positioning:
• Market niche: FOCUS
• Core business: FOCUS
Risk reduction
• Low BREAK-EVEN
• Development STAGES
What is strategy?
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14. Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR 14
NEVER STOP
WONDERING
&
ASKING!

15. Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR
A real passion for entrepreneurship education and entrepreneurs.
• Student entrepreneurs: 2x
• Full time entrepreneur: once, in a team of 5
• Coach: 500+ projects over the last 20 years
• (Advisory) Board member in multiple new ventures
• Policy making: 2x
• Director of Solvay Entrepreneurs
• PhD in entrepreneurship in 2008
• … never as an investor
My wife (as Colombo), no kids, one dog (Vicky).
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Olivier Witmeur (Belgian, 46)

16. Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR
Solvay entrepreneurs is the entrepreneurship center of the Université Libre de
Bruxelles. We support entrepreneurs through the development of their venture, from
an idea to a successful and sustainable business.
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Solvay Entrepreneurs

17. Entrepreneurship Course – Session 8 - 2014 © Olivier WITMEUR
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172014%©%Olivier%Witmeur
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