In the following experiment, you will solve two decision problems. These problems arise in the context of building a new company for an imaginary product. A detailed description of the product follows this introduction.
Although the product is imaginary, it is technically feasible and financially viable. The data for the problems have been obtained through realistic market research—the kind of market research used in developing a real world business plan. So far, the entrepreneurs who participated in this study found the project both interesting and feasible.
Before you start on the product description and the problems, I do need one act of creative imagination on your part. I request you to put yourself in the role of the lead entrepreneur in building this company—i.e., you have very little money of your own to start this company, and the experience you describe above.
You have created a computer game of entrepreneurship. You believe you can combine this game with some educational material and profiles of successful entrepreneurs to make an excellent teaching tool for entrepreneurship. Your inspiration for the product came from several reports in the newspapers and magazines about increasing demand for entrepreneurship education; and the fact that a curriculum involving entrepreneurship even at the junior high or high school level induces students to learn not only business-related topics but math and science and communication skills, as well.
The game part of the product consists of a simulated environment for starting and running a company. There are separate sub-simulations of markets, competitors, regulators, macroeconomic factors and a random factor for "luck." The game has a sophisticated multi-media interface—for example, a 3D office where phones ring with messages from the market, a TV that will provide macroeconomic information when switched on, and simulated managerial staff with whom the player (CEO) can consult in making decisions. At the beginning of the game, the player can choose from a variety of businesses the type of business he/she wants to start (For example: manufacturing, personal services, software, etc.) and has to make decisions such as which market segment to sell to, how many people to hire, what type of financing to go for, etc. During the game, the player has to make production decisions, such as how much to produce, whether to build new warehouses or negotiate with trucking companies, etc.; marketing decisions, such as which channels of distribution to use, which media to advertise in, and so on; management decisions involving hiring, training, promoting, and firing of employees, and so on. There is an accounting subroutine that tracks and computes the implications of the various decisions for the bottom line. The simulation's responses to the player's decisions permit a range of possible final outcomes—from bankruptcy to a "hockey stick."
You have taken all possible precautions regarding intellectual property. The name of your company is Entrepreneurship, Inc. The name of the product is Venturing.
Who could be your potential customers for this product?
2. Who could be your potential competitors for this product?
3. What information would you seek about potential customers and competitors—list questions you would want answered.
4. How will you find out this information—what kind of market research would you do?
5. What do you think are the growth possibilities for this company?