Professional Documents
Culture Documents
MNO2009 - Session 4
Person Factors & Self-Motivation
Prof. Dr. Sarah Cheah
Recap of Session 3
Building a Founding Team
Relationships
CEO
Rewards Roles
Readings
Building a Founding Team
Read
• Cisco Just Turned 30: This Is The Dramatic Story Of How The Founders Were
Ousted
http://www.businessinsider.sg/how-ciscos-founders-were-ousted-2014-
12/?r=US&IR=T#.VuVpJ6Mj-iA
• Xiaomi’s Phones Have Conquered China
http://mobile.businessweek.com/articles/2014-06-04/chinas-xiaomi-the-worlds-
fastest-growing-phone-maker
• Founder’s agreement
http://www.jfdi.asia/terms
https://www.docracy.com/6348/founders-agreement-template
• Cheah et al. (2017) Chapter 3, Starting the Venture, Facing Down Failure, 2 edition
(Pearson online coursepack)
Watch
• Hiring the Right Employees 1 and 2 by NUS Biz School Production
(IVLE/ Multimedia)
Readings
Building a Founding Team
Read
• Jack Ma’s last speech as Alibaba CEO
https://www.techinasia.com/alibaba-jack-ma-last-ceo-speech/
• Jeff Bezos: We are what we choose
http://www.businessinsider.com/we-are-what-we-choose-2010-6?IR=T&r=US&IR=T
• Jack vs Jeff
https://www.techinasia.com/jack-ma-jeff-bezos-amazon-alibaba-billionaires-
ecommerce/
Optional Reading
• Bass, B. M. (2008). The Bass Handbook of Leadership: Theory. Research, and
Managerial Applicati ons. 4th.
• Meredith Belbin, R. (2011). Management teams: Why they succeed or fail. Human
Resource Management International Digest, 19(3).
• Zahra, S. A., Ireland, R. D., & Hitt, M. A. (2000). International expansion by new
venture firms: International diversity, mode of market entry, technological learning,
and performance. Academy of Management journal, 43(5), 925-950.
Agenda
Causation vs effectuation
Session 4:
Self-motivation &
Person Factors
L1 to L6 Topics – Where are we?
Causation vs effectuation
Source: Wasserman
Archipelago
online collaborative learning tool
• Step 1: Open email sent to you from arch-
noreply@archipelago.1.comp.nus.edu.sg this morning
• Step 2: Click on link “To Archipelago” in email
– Note this link is unique to you. Do NOT share your link.
• Step 3: In Archipelago environment, on left panel, click
on Activity 1 – you will see questions in main window
• Step 4: Key in your responses in Activity 1 main
window
• Step 5: when done, click “Submit Answer” on bottom
right of main window.
Self-Motivation & Person Factors
Typical startups
• 1st round: Raise $3m, with a pre-money valuation of $5m.
• 2nd round: Raise $5.5m, with a valuation of $10m.
• 3rd round: Raise $7m, with a valuation of $15m.
Facebook
• 1st round: Raise $0.5m, with a pre-money valuation of $5m.
• 2nd round: Raise $12.7m, with a valuation of $100m.
• 3rd round: Raise $27.5m, with valuation of $525m.
Source: Wasserman
Self-Motivation & Person Factors
How to split equity pie
First financing
Investors,
40%
Founders,
60%
Financial Gain
Failure Rich
Complete
King Exception
Source: Wasserman
The Trade-off Entrepreneurs Make
Founders’ choices are straightforward:
Do they want to be rich or king?
Few have been both
Self-Motivation &
Person Factors
Founders’ Dilemma -
Rich vs King
(Case 2)
Source: Bloomberg.com
Self-Motivation & Person Factors
Common Errors of Entrepreneurs
Causation vs effectuation
Causation vs Effectuation
Beware of
Start with goals Expected return Avoid surprise
competition
VS
Start with means Affordable loss Form partnership Leverage surprise
Causation vs Effectuation
Beware of
Start with goals Expected return Avoid surprise
competition
VS
Start with means Affordable loss Form partnership Leverage surprise
Beware of
Start with goals Expected return Avoid surprise
competition
VS
Start with means Affordable loss Form partnership Leverage surprise
Calculate downside potential & risk no more than you can afford to
lose
Case study
Silly Putty, US
Beware of
Start with goals Expected return Avoid surprise
competition
VS
Start with means Affordable loss Form partnership Leverage surprise
Beware of
Start with goals Expected return Avoid surprise
competition
VS
Start with means Affordable loss Form partnership Leverage surprise
VS
Start with means Affordable loss Form partnership Leverage surprise
Leverage Surprise
Readings
Person Factors & Self-motivation
Read
• Sarasvathy, 2001, Causation and effectuation : toward a
theoretical shift from economic inevitability to entrepreneurial
contingency, Academy of Management Review. <IVLE e-
reserves> Also available:
http://entrepreneurscommunicate.pbworks.com/f/2001_Sarasva
thy_Causation+adn+effectuation.pdf
• Onyemah, Pesquera and Ali, 2013, What Entrepreneurs Get
Wrong by HBR http://hbr.org/2013/05/what-entrepreneurs-get-
wrong/ar/1
Readings
Person Factors & Self-motivation
Optional Reference
• Wasserman, N. (2008). The founder’s dilemma. Harvard Business
Review, 86(2), 102-109.
• CISCO case: “Early days of Cisco Len Bosack & Sandy Lerner PT
2”, https://www.youtube.com/watch?v=16GJpLE2GlQ#t=15.522539
• “Bloomberg Game Changers - Sergey Brin & Larry Page Google Full
Story”, https://www.youtube.com/watch?v=YypPVcyysHc
• Dining in the dark, https://www.youtube.com/watch?v=o-ztexzaoMw
• Silly Putty, http://www.cbsnews.com/videos/accidental-inventions
• Ice hotel, https://www.icehotel.com/about-icehotel/interview-with-the-
founder-of-icehotel-yngve-bergqvist/;
https://www.youtube.com/watch?v=6MNu6b-1dJo&gl=SG&hl=en-GB
Preparation for Tutorial 3
14 Sep 2017
Pre-tutorial activities:
1. Read Digify case (ICT/Securitytech) (Pearson online
coursepack)
2. Read Cheah et al. (2017) Chapter 3, Starting a Venture, pp.
75-82, Facing Down Failure, 2 edition (Pearson online
coursepack)
3. Review Lecture 3 notes
4. Watch Hiring the Right Employees 1 and 2 by NUS Biz
School Production (IVLE/ Multimedia)
Preparation for Tutorial 3
14 Sep 2017
Please go through the readings and answer the following
questions:
1. Please evaluate the stability of the Digify team, using
Wasserman’s 3R model.
2. Digify is concerned with the two issues (softness of demand
and competition) highlighted at the end of the case. Knowing
that you are a BBA student who has taken MNO2009, Digify
would like to invite you to join them as their third partner to
contribute in the areas of your strength. What plans would
you propose for Digify? Justify why and how you think Digify
should compensate you as their third partner?
About Individual Assignment Options
How to use Facing Down Failure (FDF) cases in
Pearson online coursepack