Entrepreneurial

Operations
Learning Objectives-
• The pros and cons of various business
structures
• The lean operations philosophy
• Nuances of intellectual property
• Various labour laws applicable to start-ups
• The essentials of business licenses
 Processes : WHY AND WHAT?

Only those start-ups enter the next stage of scale-up successfully that stop working
in an ad-hoc manner and build sound processes to guide their actions. A strong
process orientation entails unrelenting commitment towards creating, controlling,
and managing business processes across the organization

Processes To be Imbibed By The Startups

TECHNOLOGICAL KNOWLEDGE
PROCESS PROCESS

FINANCIAL PROCUREMENT
PROCESS PROCESS
 TECHNOLOGICAL PROCESS KNOWLEDGE PROCESS

• This capability entails managing and • Start-ups need to build sound knowledge
integrating all organizational activities management processes which facilitate
through effective and updated identifying and codifying knowledge
technologies. about customers, competitors, market
trends, and other crucial environmental
factors.
• The amount of expenditure done
annually on technological upgradation, • Subsequently, processes need to be built to
the number of patents filed, the number ensure that requisite knowledge is
of engineers and scientists hired – are distributed and utilized across the
all reasonable proxies of a start-up’s organization.
technological capabilities.
• The same food-delivery startup: Collects
• A food-delivery startup: Uses an app to customer feedback and ratings, Tracks
manage orders, delivery partners, and which cuisines sell more in which areas,
payments, Regularly upgrades its app Shares these insights with marketing and
and backend systems, Hires software operations teams and Uses them to launch
engineers to improve routing algorithms discounts or new restaurant partnerships
 FINANCIAL PROCESS PROCUREMENT PROCESS

• Having a clear policy on the permissible • Start-ups need to establish process

financial expenses allowed to various guidelines regarding resource
activities and departments, procurements, clearly highlighting the
understanding which activities can be teams and positions that are responsible
slashed without any major implications for various procurements.
on the outcomes, making reasonable and
grounded projections of costs and • This also necessitates building processes
revenues over the next few years – are to deal with suppliers and building long
all crucial aspects of the financial term relationships with them
processes that start-ups should invest in.
• An electric scooter startup: Assigns a
• A fitness-tech startup: Decides how much
procurement manager to buy batteries and
can be spent on marketing, salaries, and
spare parts, Chooses suppliers based on
software, Cuts ad spending that doesn’t
cost and quality and Maintains long-term
bring users and Plans cash needs for the
contracts to ensure steady supply
next 2–3 years
 Lean Philosophy

What Is Lean Thinking

• A lean organization understands customer value and focuses its key processes to continuously
increase it.

• The ultimate goal is to provide perfect value to the customer through a perfect value creation
process that has zero waste.

• To accomplish this, lean thinking changes the focus of management from optimizing separate
technologies, assets, and vertical departments to optimizing the flow of products and services
through entire value streams that flow horizontally across technologies, assets, and departments
to customers.

• Eliminating waste along entire value streams, instead of at isolated points, creates processes that
need less human effort, less space, less capital, and less time to make products and services at far
less costs and with much fewer defects, compared with traditional business systems.

• Companies are able to respond to changing customer desires with high variety, high quality, low
cost, and with very fast throughput times. Also, information management becomes much
simpler and more accurate
 Lean Philosophy

Importance of Lean
Thinking

Profitable

Simpler

Sustainable
 Lean Philosophy

Steps In Lean Thinking

Studying your existing processes

comprehensively

Brainstorming ideas for

improvements

Training your
workforce

Incentivizi
ng
 Intellectual Property

Intellectual property (IP) refers to any form of knowledge generated, specific to a product,
organization or individual, that needs to be protected from the competitors in order to acquire
competitive advantage. Various form of IP provide serve varying purposes for start-ups

Type
s

Patentin Copyright Trademar

g s ks
 Intellectual Property

Patentin
g

• Patents help in appropriating scientific knowledge

• When you have a product, technology or design that needs to be protected

from a competitor, patent offers a valuable mechanism to do so

• The owner of the patent can also sell the patent to a larger organization for a
significant premium.
 Intellectual Property

Copyright
s

• Certain creative works such as music, art, books and software codes can be
protected through copyrights.

• No one can freely use or distribute a copyright protected material without the
permission of the copyright holder.
 Intellectual Property

Trademar
ks

• A unique logo, punchline, or a statement that helps customers remember an

organization – can all be protected through trademarks.

• It is not always the hidden technology or recipe which when stolen

cause loss to organizations.

• Even a logo of a large blockbuster product segment, slightly modified and misused
to sell an unknown obscure product, can also cause harm. Such miscreation can
be controlled through trademarks.
 Differences

Aspect Patent Copyright Trademark

Inventions &
Protects Creative content Brand identity
technology
Focus Functionality Expression Recognition
Example New medical device App source code Startup logo
Prevents Making/using
Copying content Using similar brand
others from invention
Duration Renewable
20 years Lifetime + years
(approx.) indefinitely
 Know Yourself

Knowledge Technology Process

Management Management Management
 Know Yourself

Knowledge
Management

• The build-up of intellectual capital is of strategic importance to management to gain competitive

advantage
• We always upgrade employees’ knowledge and skills profiles

• Our company builds and maintains virtual and physical channels for sharing and disseminating
information
• Our company manages its own intellectual assets, e.g. special techniques, patents, copyrights,
licences
• We provide time and resources for employees to generate, share/exchange and
experiment innovative with ideas/solutions
• Customer needs and expectations are effectively disseminated and understood
throughout the workforce

• Suppliers are actively involved in our new product, component, module and system
development process
 Know Yourself

Technology
Management

i. Our firm always attempts to stay on the leading edge of new technology in our industry
ii. We make an effort to anticipate the full potential of new practices and technologies

[Link] pursue long-range programmes in order to acquire technological capabilities in advance of

our needs
iv. We are constantly thinking of the next generation of technology

v. We have excellent communication processes between R&D and other departments

vi. Our R&D pursues truly innovative and leading-edge research
 Know Yourself

Process
Management

• The concept of the ‘internal customer’ is well understood in our company

• We designed the quality management systems around our business processes

• We have clear, standardised, and documented process instructions which

are well understood by our employees

• We make an extensive use of statistical techniques to improve the processes and

to reduce variation

• We are engaged in an active competitive benchmarking programme to

measure our performance against the ‘best practice’ in the industry
 Entrepreneurs need to carefully weigh the pros and cons of registering
their start- up as a proprietorship, partnership, or private limited company

Chapter It needs to be emphasized that a company registration is most suitable

for entrepreneurs with a long term and aspirational vision of their

Summar start-up, and is also considered most appropriate structure for

maintaining governance and professionalism.

y Most incubation centres insist for a company registration before

releasing grants to start- ups.

Lean thinking and concepts of efficient operations help start-ups

tremendously in competing with their larger counterparts.

While idea certainly plays a role in the success of an entrepreneurial

venture, it is the execution and day-to-day operational aspects, which
when undertaken passionately and without compromising any
processes, which can help a start-up scale up and become cost-
effective.
Envision the long-term goals and vision of
your start-up, which business structure
(out of proprietorship, partnership, and
company) do you think will fit in best?
Which licenses are required for the
line of business that defines your
start-up?
Does your idea or product require
intellectual property protection? What
will be benefits that you acquire vis-à-vis
the investments required?
Make a list of the various labour laws and
enlist the implications of the same in
running your start-up. Do you foresee any
specific labour law that you need to be
more careful about?
Think of the steps that you will undertake
to enhance the operational efficiencies
of the various activities across the value
chain of your business.