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Assignment II : Descriptive Questions

Deadline of Submission: 5th Nov, 2022

 Attempt all the questions. All questions carry equal marks.

 Be original and use illustrations/ examples wherever relevant.

1. Peter Baskerville, Founder of 30 retail and hospitality businesses, writes:

When I first discovered Saras D. Sarasvathy's research into the different reasoning used by
entrepreneurs, it was a real 'aha' moment for me.

See, I was never really comfortable with teaching entrepreneurship as a process that followed
the traditional planning norm of conducting market research to find or develop an idea/goal
and then diligently selecting and organizing the resources needed to best achieve that pre-
determined idea or goal  ... because in the many businesses that I had successfully started, I
have never followed this path.

I have always started my business with … Thankfully, Saras D. Sarasvathy's research

legitimized my flipped and non-traditional approach to business development, which she
titled the 'effectual reasoning' of entrepreneurs: i.e. imagining new ends, using a given set of
means"

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 Causal reasoning on the other hand is typically used by managers and is the 1-2-3 of
corporate management.

Other researchers have discovered that while many different types of people create economic
value in a society, the way entrepreneurs do it is quite unique, and it is this unique mindset
that earns them the tag of being entrepreneurial.

(The passage above is an excerpt from an article published in Forbes on November 5, 2013
titled “How do Entrepreneurs Think?”)

Question: Continuing on Peter Baskerville’s train of thoughts, explain your understanding of

this Unique Entrepreneurial Mindset, what makes the Entrepreneurial mindset different from
the “traditional approach to business development”. Assist your explanation with an artful
compare and contrast between the effectual logic and causal logic. Use examples where
relevant.

2. The field of Entrepreneurship is riddled with myths around and among the youths
specifically, few of them are:
a. To be an entrepreneur you must invent something truly novel
b. Entrepreneurs are introverted loners
c. Entrepreneurs are risk-taking gamblers
d. You hate bosses. That is reason enough to become an entrepreneur
e. With a great idea and enthusiasm, anyone can achieve entrepreneurial success

Question: Explain each of these myths elaborately justifying the reasons for them being cited
as myth.

3. Peter Drucker refers to innovation as the effort to create purposeful focused change in an
enterprise’s economic or social potential. Innovation must begin with an analysis of
opportunities, in a systematic and organized way. The starting point in innovation is
identifying the scope for improvement with respect to customers, suppliers and internal
processes. Innovations must be market focused. Opportunities to innovate are provided by
new customer segments which are just emerging; customer segments that existing
competitors are neglecting or not serving well, new customer needs which are emerging and
new ways of producing and delivering products to customers. In his book “Innovation and
Entrepreneurship,” Drucker has listed seven sources of opportunity for innovative
organizations. Four are internal to the enterprise and three external. In order of increasing
difficulty and uncertainty, they are as follows: Unexpected success or failure, The
incongruity between what actually happens and what was supposed to happen, The
deficiencies in a process, that are taken for granted, The changes in industry or market
structure that catch everyone by surprise, Demographic changes, Changes in perception, The

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 changes brought about by new knowledge. Describe and explain any three of these sources of
opportunities with suitable examples in context of Nepalese entrepreneurial ecosystem.

4. Linda Hill, a renowned economist and an ethnographer discovered that what many of us
think of as great leadership does not work when it comes to leading innovation. She had been
using the methods of anthropology to understand the questions in which she is interested. So
along with three co-conspirators, she spent nearly a decade observing up close and personal
exceptional leaders of innovation. They studied 16 men and women, located in seven
countries across the globe, working in 12 different industries. In total, they spent hundreds of
hours on the ground, on-site, watching these leaders in action. They ended up with pages and
pages and pages of field notes that they analyzed and looked for patterns in what our leaders
did. She says – ‘The bottom line? If we want to build organizations that can innovate time
and again, we must unlearn our conventional notions of leadership.’

Few of the important lessons she shares (in her TED video) are as follows:

 Leading innovation is not about creating a vision, and inspiring others to execute it.
Leading innovation is about creating the space where people are willing and able to
do the hard work of innovative problem solving. The leaders focus on building a
sense of community and building three capabilities (given below in the third point).
Leader’s task is to create the space where everybody’s slices of genius can be
unleashed and harnessed, and turned into works of collective genius.
 Innovation is not about solo genius, it’s about collective genius. You have to unleash
the talents and passions of many people and you have to harness them into a work
that is actually useful. Innovation is a journey. It’s a type of collaborative problem
solving, usually among people who have different expertise and different points of
view.
 Innovative organizations are communities that have three capabilities: creative
abrasion, creative agility and creative resolution.
o Creative abrasion is about being able to create a marketplace of ideas through
debate and discourse. In innovative organizations, they amplify differences,
they don’t minimize them. Creative abrasion is not about brainstorming,
where people suspend their judgment. No, they know how to have very heated
but constructive arguments to create a portfolio of alternatives.
o Creative agility is about being able to test and refine that portfolio of ideas
through quick pursuit, reflection and adjustment. It’s about discovery-driven
learning where you act, as opposed to plan, your way to the future. It’s about
design thinking where you have that interesting combination of the scientific
method and the artistic process. It’s about running a series of experiments, and
not a series of pilots.

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 o Creative resolution is about doing decision making in a way that you can
actually combine even opposing ideas to reconfigure them in new
combinations to produce a solution that is new and useful.
 Why it is that Pixar and Google are able to innovate time and again? It’s because
they’ve mastered the capabilities required for that. They know how to do
collaborative problem solving, they know how to do discovery-driven learning and
they know how to do integrated decision making.
Explain and rationalize these points given by Linda Hill – connecting them to the theories/
concepts/ frameworks and ideas you’ve studied during the course of Entrepreneurship and
Innovation. (Provide necessary examples and illustrations to back up your explanation). Also
provide additional prescriptions to the leader (positional) of a typical Nepali corporate entity
for making their organization more innovative and managing the collective creativity.

5. Read the following case and answer the questions provided at the end: (Do not make a
mistake of not answering all the given questions)

HipBar: Reserve your whisky on the cloud, say cheers anywhere

VISHAL KRISHNA (www.yourstory.com), 8 MARCH 2017

This startup is going after the $35-billion liquor industry in India, and will enable people to use
smartphones to buy their favorite spirit bottle on their app, which can be redeemed by portion in
any hotel across the country.

Prasanna Natarajan and Prashant Adurty are two individuals who understand the retail industry
and the gaps in the trade. Since they were also familiar with the workings of the liquor industry,
they decided to work around the regulations that bar the sale of alcohol on digital channels to
build a business.

Their app, HipBar, allows liquor connoisseurs to buy full bottles of their favorite booze and later
redeem it in any restaurant or hotel across the country. For example, if the connoisseur buys a
bottle of expensive whisky for Rs 5,000, he can consume even a small portion of, say, 30 ml in
any bar. The hotel or bar will then charge the connoisseur for the portion, which will be paid
through the app. The app will immediately reflect a reduction in the volume of the bottle. The
bottle of whisky that was purchased will stand as a prepaid instrument and its value will diminish
as the customer opts to consume the whisky later on.
"We are a fintech company and also a platform for liquor companies to promote their brands on,"
says Prasanna, founder of HipBar.
Connoisseurs may not know where their favorite liquor is available while they are travelling.
HipBar integrates high-end bars across the country, and cuts deals with the liquor industry to
promote their finest spirits on the app. Additionally, it provides liquor companies a platform to
discover data on younger connoisseurs who will be future spenders on fine spirits.

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A world of opportunity

Since direct advertising of spirits is illegal in the country, the Indian liquor industry has
leveraged surrogate advertising on digital channels. But it is yet to use a fintech and promotional
platform, which does not fall under the regulatory gamut, to promote premium spirits.
Various reports put the Indian liquor industry at $30 billion, with at least $2 billion spent on
annual marketing activity. The industry harnesses all forms of marketing, using print and digital
paraphernalia and outdoor initiatives to promote its products. However, it needs disruption and is
yet to use dynamic engagement on digital platforms.
The liquor industry works like the fast-moving consumer goods (FMCG) industry, where cases
are bought by a stockist, or a bonded warehouse of the government, before being retailed to
stores and hotels. The gap in consumer expectations arises when a liquor connoisseur does not
find his choice of spirit at a store or a restaurant. Often, they make do with options that they do
not necessarily like or resort to experimenting with brands they are not familiar with. "This is
why HipBar makes sense, because it helps you discover your favourite drink and the place you
want to redeem it at," says Prashant. He heads operations at HipBar.

Currently, HipBar is piloting in around 80 restaurants in Bengaluru and has one of India's largest
liquor companies backing it on product support. The company has also invested Rs 7 crore to
build the business. It works like any fintech and retailer app but allows the customer to pre-load
the wallet with a liquor bottle instead, and the retailer's app will generate the order and will
accept payments from the consumer app. Payments will be based on codes generated by HipBar,
which can be redeemed with the retailer. The platform will also make money from in-app
advertising.
HipBar customers get a discounted rate; they are and will not pay a premium like other
customers. This way, the volume consumed is commensurate with the value paid for the bottle
on the app. Says Prasanna,

"We decide the rates with each restaurant and make sure our customers do not pay a higher
rate. We also work with liquor companies on the rates."

Where did the learnings come from?

Prasanna has his own liquor manufacturing unit where he designs high-end liquor, manufactures
and distributes them. But he found that the traditional way of distributing liquor lacked
uniformity. Some state governments - like Karnataka - exercised strict control by making sure
that all liquor went to their warehouses, while some others - like West Bengal - allowed
wholesalers to distribute the liquor. In Tamil Nadu the retailing and wholesaling is controlled by
the government. With different States carrying different rules there is a lack of uniformity, which
affects the supply of high-end liquor to the market, from the manufacturer to the retailer. To fight
this discrepancy in supply Prasanna decided to change things around. For the last decade,
Prasanna has spent time understanding how pricing and advertising of liquor work. So, in 2015,
he roped in Prashant, who has worked as a consultant in many global firms and also put in time
during the boom period of Indian brick-and-mortar retail, between 2006 and 2010.
Businesses that provide this kind of a service with technology, mostly on the B2B side, are
companies like Sabonka Technologies (Shotang) and Mobisy Technologies (BizOm). But they

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work in the handset and FMCG industries, and do not have a direct connect with the consumer.
HipBar provides this connect directly to the liquor manufacturers and retailers.
"These businesses have to scale up soon or else they will end up burning more cash to acquire
customers," says Naganand Doraswamy, CEO of IdeaSpring Capital.
Prasanna and Prashant are going all out with their 32-member team to build a big business. It is
only a matter of time when the connoisseurs take to the app to reserve their drink on the phone.

Questions:

a) What kinds of GAPs in the market are being harnessed by the HipBar as business
opportunity? What are the opportunity related hypotheses this business model is holding?

b) Do you consider this business a start-up in Indian market? Provide justifications.

c) Should HipBar target all the available market within its target customer segments? Give
reasons. Provide the characteristics of its early adopters.

d) Create a lean canvas for this business model.

e) Do you think this business model will take off in urban cities of Nepal? Provide
justifications for your position.

f) What kinds of risks do you think the hypotheses related to this business model carry?
Prioritize them in order to their likelihood and severity.

g) Create a brief lean start up plan for this business model. What would be your objectives
for such plan if you were one of the founders of this business?

The lean start up plan should have the plan for the followings:

 Explain in brief first what would be your lean start up approach for this business and
then explain the aspects in following sections)
o MVP and its introduction
o Early Adopters
o Risks and their categorizations
o Key Action Plan for first year (Deliverable - Outcomes and Milestones- Time
of achievement of Outcome) – in tabular form
o Key Metrics to Measure in each step of Action Plan
o Aspects of Unfair Advantage (Competitive Advantage) to be created in near
future.

Evaluation Criteria:

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1. Structure and Standard:

Clarity; Logical Flow; Coherence of the structure – Introduction, Body and Conclusion;
Clarity of plan of coverage, clarity of line of argument/ viewpoint/ conclusions; Reference
citations; Sentence and Paragraph composition – a standard that is appropriate to the
postgraduate level of study.

2. Converge:

Demonstrates good knowledge and understanding of the principle areas, features, boundaries,
terminologies, theories, concepts and principles of the topic – enough discussions around the
given topic.

3. Critical Analysis/ Engagement:

Has critically analyzed and engaged around the established thoughts, theories and concepts
around the topic of essay.