Global Entrepreneurship and the Successful Growth Click to edit Master subtitle style Strategies of Early-Stage Companies A world

Economic Forum Muhammad Faheem Sultan Report ME-01-118

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Authors
Professor George Foster, Professor Antonio Davila, Professor Martin Haemmig, Professor Xiaobin He, Professor Ning Jia,

From the World Economic Forum

Max von Bismarck, Kerry Wellman,
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Total Pages: 380

Content
Section 1 Alternative Strategies of High-Growth New

Ventures
Section 2 The Early-Stage Entrepreneurial Company

Journey

Section 3 Early-Stage Company Growth and Decline Section 4 Early-Stage Company Growth: Evidence and

Analysis from Fast Growth Company Published Rankings

Section 5 Early-Stage Company Growth: Management

Systems Adoption as a Growth Accelerator Evidence from CEO and CFO Surveys
6/11/12 Section 6 Venture Capital Investment Activity for

Section 1: Alternative
Section 1 gives a new framework of eight different growth

strategies that early-stage companies from around the globe are adopting. These include
wave ventures, new product in new category ventures, new product in existing category ventures and idea transfer/transplant ventures. This new strategy framework adds more structure to the

Strategies of HighGrowth New Ventures

seemingly large amount of diversity in the stream of new ventures that start in many countries.
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Executive Cases
Microsoft (1975, US start-up) Bill Gates, co-founder: By

delivering a strong PC operating system, Microsoft provided the platform that was essential to making software and PCs high-volume industries. We worked with a lot of software companies and PC companies to help get them off the ground and create a market for both software and PCs. Building this ecosystem was critical to our success.

Air Arabia (2003 United Arab Emirates start-up) Adel

Abdullah Ali, co-founder and CEO: Air fares in the Middle East were overpriced.

6/11/12 Looking for alternatives and having monitored the progress

Executive Cases
Skype(2002 Luxembourg start-up) Niklas Zennstrm, co-

founder: Having people around the world communicate with each other in a clear way for free is a status quo changing idea. Hundreds of millions of people around the globe would be interested in this idea. My belief was that if you could successfully address this basic idea you probably could create a good business out of it.
Suntech Power(2001 China start-up) Zhengrong Shi,

founder and CEO: I always say we are swimming in the ocean and often encountering waves. Our main strategic response to such government incentive risk is trying to reduce manufacturing costs.
Silicon Spice(1996 US start-up) Vinod Dham, chairman

and CEO: The founding team had the initial idea to build a single communications modem chip that would greatly 6/11/12 bandwidth problems. The chip failed in late 1998. It reduce

Section 2:The EarlyStage Entrepreneurial Company Journey

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Executive Cases
Scribd (2007 US start-up) Trip Adler, co-founder and CEO:

Hiring great engineers accelerated our growth. Building a great product and making changes quickly requires amazing engineers to make this happen. The difference between a good and a great engineer is enormous, so we worked hard to attract the best talent and create an engineering-focused culture.
Tiny Prints(2003 US start-up) Laura Ching, co-founder and

chief merchandising officer: We have invested a significant amount of time in ensuring that we offer fanatical customer service, so that our people and our relationships with our customers continue to be a point of differentiation.

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Executive Cases
WPP(1985 % start-up) Sir Martin Sorrell, founder and CEO:

The period from 1990 to 1992 presented the biggest challenge. People would say we nearly went bankrupt. I overleveraged the company in 1989, and with the Ogilvy acquisition forgot that convertible preferred stock in a recession becomes preferred stock. In those dark moments in 1991 and 1992, I never ever thought that we were going to go down. Not even for one second.
IGN Entertainment(1999 US start-up) Mark Jung, co-founder,

CEO and president: Laying off the majority of your employees, especially those that you have personally recruited, is not a task that I would wish on anyone. I will never forget the words of an employee who said to me when I gave him layoff notification: Ive stuck with you through thick 6/11/12 and thin, have always been a believer and in return, you shred me, and toss me into the street. Is this how you

Executive Cases
Ctrip(1999 China start-up) James Liang, co-founder and

chairman: The SARS epidemic. Our sales dropped almost 90%. We faced a tough situation of how to survive this period. We worked with our employees to implement a pay cut so that we did not have to lay off too many people.
Kaspersky Lab (1997 Russia start-up) Natalya Kaspersky, co-

founder and chairwomen: The early years were the real dark years we needed everything from an office to international business expertise. In addition to this, in 1998, Russia went through a major economic crisis. Most of our customers focused on covering their basic needs rather than spending on other goods. There was nearly no demand for our product and nearly no chance for a small IT company to survive. The contract with a famous IT firm from Finland was a lucky 6/11/12 strike for us.

Section 3 and 4: EarlyStage Company Growth

Key aspects of successful growth management of early-stage companies around the globe include:
(a) taking early actions to reduce the magnitude of down

years, including reducing the likelihood of a subsequent downward spiral, and engine for future growth.

(b) taking lessons from the down years to build a stronger

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Section 5: Early-Stage

Company Growth
This section is about Systematic analysis of the

importance of companies adopting management systems in their early years. rate of management system adoption are associated with differences on their concurrent or subsequent growth. Companies that had the highest adoption of management systems by either Year 2 or between Year 2 and 5 had the fastest increase in headcount in their first five years.

It enables analysis of whether differences in the

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 Up-to-date evidence on global trends in venture capital (VC)

Section 6: Venture Capital Investment Activity for Early-Stage Companies Around the Globe

investment.

It analyzes these trends using data on VC investments made in

companies based in North America, Europe, Israel and Asia. There are dramatic differences in the types of VC investments being made in different parts of the world. likely to be at later stages in their development and more likely to be in the consumer segments of the economy vis--vis VC-backed companies in North America and Europe.

For example, venture money invested in Chinese companies is more

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My assessment
This report provides a better understanding of the

genesis of early-stage entrepreneurial companies and compared their growth paths across different geographies, and explore the impact of these companies on employment and innovation. entrepreneurship and the executive cases of entrepreneurs.

This tells us detailed information about global

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Thank style you Click to edit Master subtitle

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