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Typology of Ventures

K. Kumar
Entrepreneurial Management
PGP Term III 2015-2016
28 December 2015

K.KUMAR

Typology of New Ventures


Revolutionary ventures
Niche ventures
Ventures that are propagators of
new technology or innovations
Hustle ventures
Speculative ventures

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Revolutionary Businesses
Characteristics

Focus of Actions
and Exploration

Fit with
entrepreneurs

Revolutionary idea,
innovation or concept
new processes/
manufacturing
techniques
Can shake up a
matured industry
Can create a new
industry
Examples?

Difficult to estimate
the growth rates and
profitability
Superior value
proposition
How customers will
buy and use the
product or service
Focus to create and
protect proprietary
assets

Suits those who


want to win or lose
on a grand scale
Should be clear
about harvest and
role in the future
growth of the
venture
Should have
extraordinary
organizing
capabilities

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Niche Ventures
Characteristics

Focus of Actions
and Exploration

Fit with
Entrepreneurs

Need not be a
radical concept or
idea
Serve segments
with a unique need
not served by
mainstream offerings
Examples?

Existence of a
segment with
distinctive need
Perceived value of
the offering by the
niche market
Can the higher costs
of specialized
offering be recovered
and profits made?
Will the profits be
significant enough?

Entrepreneurs with
insightful knowledge
of the larger market
and the niche in
particular
Entrepreneurs with
moderate growth
ambitions and
limited resources

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Propagatory Businesses
Characteristics

Focus of Actions
and Exploration

Fit with
entrepreneurs

Propagate an
emerging technology
or a product no need
for great innovation
or strategy
Speedy execution
and operational
efficiency
Quickly capture
share to dominate a
fast growing market
Examples?

Is the market
showing signs of
early adoption of
the product or
trend?
Is the product or
service defined
well enough to
quickly produce
and market?
Is it a growing
market?

Proven superior
capability to
execute
Entrepreneurs
with competence
in deal making and
fund raising to
support growth

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Hustle Ventures
Characteristics

Focus of Actions
and Exploration

Fit with
Entrepreneurs

Fragmented
industries- mostly
services
Entry and exit not
noticeable
Investments can be
staged as the
business grows
Soft differentiatorsVision, Values,
culture, quality of
resources
Examples?

What aspects of
superior execution
can the venture
count on?
Is there a need and
value perceived by
the customer?
Can it grow in an
evolutionary way if
the concept is
compelling enough ?

Entrepreneurs with
limited resources
and modest growth
ambitions
Source of
professional
satisfaction
Can not provide
extraordinary growth
Limited exit options

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Speculative Ventures
Characteristics

Focus of Actions
and Exploration

Fit with
Entrepreneurs

An opportunity to
buy low and sell high
Financial risks
depend on the terms
of the deal
No staged
commitments- fully
exposed once the
deal is made
No focus on
organization building
and rapid growth
Examples?

Is there an arbitrage
opportunity?
How robust are the
assumptions about
the price
movements?
Do I have the
staying power to see
the deal through to
completion?
Assessment based
on personal insight
and intuition

Suits those who


want quick profits
and are willing to
take commensurate
risks
Should have the
financial strength to
go through the deal

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Use of Typology
For understanding the broad strategic
issues
For assessing the focus of action and
learning to get the venture off the ground
For assessing the growth potential and
sustainability
For assessing the fit between the venture
and the entrepreneurs preferences
Types are neither mutually exclusive (often
overlap) nor exhaustive
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