The New Venture Setting（一）.pptVIP

Perfect Information is Rare Touch my new car and I will have you arrested. If you smoke in the office, you will be fired. If you guess the exact number of red balls, you win that new Cadillac STS. The New Venture Setting Extreme Information Imperfection New Venture Characteristics (with a focus on THE IDEAL TYPE - new / unique high potential, high growth ventures) Asymmetric information Asymmetric expectations Thin markets Urgency Surprise threats and opportunities Very scarce resources = highest uncertainty = highest risk The extreme situation affects - Business strategy Evaluation Valuation Financing What is Imperfect Information? Non existent information Right information but Difficult to find Changing rapidly Too complex to comprehend Secret Wrong information Variables Gravity: Is an answer valuable? Nature: Is the domain technical or efficiency related or both? Do options exist? What is the resource cost to get the information? Human Financial Time What resources are in hand? Situationally Specific Tacit / Explicit Knowledge Money Time Solutions – Adaptation Give up on new information Bricolage (decide with information and other resources in hand) Improvisation (novel action using information and other resources in hand) (extemporaneous composition and execution of novel action) Effectuation (decide with resources in hand, but focus on the effects) Intuition (gut feel) (supernatural) Heuristics (flash routines based upon ACE – mental shortcuts) Solutions - Incremental Actions to Gain Information Low cost Information gaining Trial and Error (experimentation without a small sample focus) (action evaluation and reformulation) Real options thinking Tacit knowledge (ACE) Experimentation (small sample focus plus intentional trial and error) Real options thinking Tacit knowledge Solution – Risk Sharing Subcontracting Partnering Licensing Joint venturing Strategic alliances Financiers’ Additional Responses Diversification Personal relationships with the venture