University of Technology, Sydney 21854 Innovation, Creativity & Entrepreneurship (Postgraduate) Autumn 2017 Subject Coordinator: Dr Tim Williams Version 15 Feb ASSESSMENT DESCRIPTIONSAssessment Task 1: Analytical Report (Individual) – ‘Business Model Analysis’ (40%) Due Tuesday 18 April – week 6 (on UTS Online by 23:59) Background Making money from your idle capacity – be that time and skills, or assets such as your spare room, car, or driveway – is made easy by firms offering platforms to connect supply and demand in the collaborative economy. Indeed, drivers for Uber or ride-sharing platform Lyft, hosts on AirBnB, or “taskers” doing odd jobs on TaskRabbit, are increasingly described as “micropreneurs”. Internationally, the collaborative or sharing economy, encompasses everything from labour hire (TaskRabbit; Handy) to pet care (DogVacay; PawShake), parking (ParkHound; MonkeyParking) and equipment rental (Spinlister; Snapgoods). Such platforms, many initially based on connecting neighbours and communities, and/or driven by a social purpose (hence the earlier label of the sharing economy), have also led to the emergence of global giants, some with capital valuations of over US$40 billion. Their profit-driven business models are also disruptive for traditional industries, such as transport, accommodation, and logistics. These ‘peer to peer marketplaces’ are also emerging in more specialized industries such as professional services, for instance, online marketplaces for legal services. Peer to peer market places are also emerging in financial services with crowd sourced equity platforms for start-ups (www.crowdcube.com), peer-to-peer lending (www.zopa.com), insurance (www.friendsurance.com), to disrupting traditional forms of philanthropy (www.chuffed.org). The rise of collaborative innovation or the sharing economy is fundamentally reshaping how consumers buy and sell services. The main attraction for suppliers, or rather “workers”, on these platforms, is – unsurprisingly – the flexibility they offer in earning extra income. But on the down side, a lot of uncertainty comes with such work. This wouldn’t surprise those who are already freelancers, moving from gig to gig. Newcomers, however, have to come to grips with having less security and no guaranteed income, fixed benefits, or other standard worker protections. From a government perspective, while these services have proven popular with consumers, they often exist in a regulatory grey area or in outright contravention of existing laws. Furthermore, they often raise serious issues in relation to public safety, workers’ rights, tax (such a tourism and hotel taxes) and accessibility. Task The Australian government, like many governments globally, is attempting to respond to the rise of collaborative innovation and the phenomena of ‘micropreneurship’. Your task is to provide an analytical report to inform such government inquiries. For the purposes of this assignment, you are to: 1. Briefly explain the advantages and disadvantages of the collaborative economy – for workers, businesses and the government; 2. Select one industry that is being challenged by a collaborative economy model. Explain this industry’s traditional business model (incumbent model) and means of creating and capturing value (you may use an example of a leading incumbent firm here, as well as a description of the traditional industry);3. Select one existing collaborative economy firm within this industry (as described above) and analyse how this new business model is able to create and capture superior value. Include consideration of how (or how not) this challenger model may maintain a competitive advantage; 4. Identify and reflect upon some of the unintended consequences of the success of this model (as analysed above) in terms of who wins and who loses. This report needs to also be succinct, no more than 2500 words (excluding references). You may use sub-headings. You must submit on UTS Online, using the ‘Assessment 1 Drop Box’ as listed. You will be assessed as follows: Understanding of Collaborative Economy and associated debates 5% Industry and traditional firm analysis - Appropriate selection of industry, sufficient research conducted - Identification of incumbent(s), traditional models of creating and capturing value, drivers of innovation and level of competition - Use of appropriate references, diagnostic tools and frameworks 10% Collaborative economy (challenger) firm analysis - Appropriate selection of challenger firm, sufficient research conducted - Analysis of how it creates and captures value, using appropriate analytical tools - Compare and contrast to incumbents - Consideration of sustainability of its competitive advantage 15% Conclusions - Identification of unintended consequences of the success of this model – for example, for firm, industry, workers, government 5% Clarity of writing, grammar, spelling, references 5% Recommended background information: https://theconversation.com/uber-micropreneurs-signal-the-end-of-work-as-we-know-it-42483 http://www.collaborativeconsumption.com http://rachelbotsman.com https://hbr.org/2015/01/the-sharing-economy-isnt-about-sharing-at-all https://hbr.org/2015/10/what-customers-want-from-the-collaborative-economy https://hbr.org/2014/09/sharings-not-just-for-start-ups http://www.fastcoexist.com/1679903/the-rise-of-the-micro-entrepreneurship-economy Cannon, S., & Summers, L. H. (2014). How Uber and the Sharing Economy Can Win Over Regulators. Harvard Business Review, 13. Cohen, B., & Kietzmann, J. (2014). Ride on! Mobility business models for the sharing economy. Organization & Environment, 27(3), 279-296. Cusumano, M. A. (2015). How traditional firms must compete in the sharing economy. Communications of the ACM, 58(1), 32-34. Hamari, J., Sjöklint, M., & Ukkonen, A. (2015). The sharing economy: Why people participate in collaborative consumption. Journal of the Association for Information Science and Technology.Assessment Task 2 – Entrepreneurial Presentation (Group) (30%) Due Monday 22 May – week 10 (on UTS Online by 23:59). Each group will present in the lecture or tutorial venue in weeks 10-12. Background Consider that you are employees of a large and successful venture capital firm. The board of the firm is deciding upon its current round of investments and strategic direction. Each group in the firm is making a pitch to the board and their colleagues to try and secure funding for their identified opportunity. This could be a new or existing start-up, new piece of technology, an existing business looking to scale. For example, your board is open to considering future investments in renewable energy markets, mobile technology platforms, global professional outsourcing, social enterprises etc. The board is meeting in Weeks 10-12 of this semester, and your group will need to make a pitch and submit a supporting strategic report to the board. Convincing the board to invest in your identified opportunity is essential as your job depends on it – the firm operates on a promotion system of “up or out”! Task In groups of 3-4 (pending class size), identify a promising new venture or investment that will appeal to the board. The board will most certainly need to understand the start-up’s wider competitive environment, business model, financial viability and amount of investment required (and corresponding equity on offer). Your group needs to consider: - Assessment of opportunity - technology, market and organizational capabilities o Understanding of current baseline/problem/market. o Description of the “technology” or idea under question (that solves a problem). - Analysis of the business model or areas of industry investment o How does this model create and capture value? - Opportunity details such as: § Financial - What is the financial viability of this investment? § Marketing - Market size, target market, sales and distribution § Operations – management team, key personnel Presentations will be made by each group (10 minutes maximum) followed by a 10 minute Q&A session by the class. All members must participate in the pitch. You must submit a Pitch Deck (your PowerPoint slides – no more than 15 slides) and your Background Report (to be used as supplementary material to your pitch deck, rather than a comprehensive business plan) in hard copy in the tutorial in which you are presenting. The written report should be no longer than 2000 words, excluding references. During the Q&A, other groups in the class will also be assessed on their analysis of your presentation i.e. there should be a lot of participation! (The tutor will record contributions in the Q&A by each group). You will be assessed as follows: Pitch deck - quality of slides - clarity, comprehension, visual appeal - clear identification of problem/gap/opportunity, value proposition - rationale to support value proposition and investment 12% Pitch delivery - enthusiasm, engagement, presentation style - preparation and organisation of group members - management of Q&A (responses to questions and queries) 10% Strategic Analysis Report - Description of key issues – marketing, environment, management team - Appropriate financial forecasting - Clarity of writing, spelling, grammar 5% Q&A contribution - Contribution towards analyses of other group pitches (graded throughout the 3 ‘pitching weeks’) 3% Tips: o Use the universal pitch deck – http://www.pollenizer.com/universal-startup-pitch-deck/ o Go to pitching competition’s (Friday afternoon’s at Fishburners or the UTS Hatchery): http://fishburners.org or http://www.uts.edu.au/currentstudents/opportunities/hatchery/overview - they use the universal pitch deck! Yes, it’s real! o You can take the position of being members of a start-up and pitching to the board, or as colleagues within the firm who have found a new start up to pitch. o Clearly identify the problem you are solving or issue you are addressing. o Pitching your ideas and projects is a skill necessary for entrepreneurs seeking angel financing, but also for those within firms where you must ‘sell’ your projects and strategies (i.e. making a business case) to senior management or shareholders. o Develop a unique way of communicating what is most important in the industry or market, particularly using your own new graphs, tables, or diagrams. o The Background Report is a supporting document (that can show your depth of research and analysis, and insights that cannot fit on to your slides). Please note this is NOT a business plan. Other background information: Frederick and Kuratko – Chapters 13 and 14 Guy Kawasaki – The Art of the Start (2004): Chapter 3 - .http://www.guykawasaki.com/downloads/ http://www.slideshare.net/kipmcc/2010-sample-investor-vc-pitch-deck http://www.slideshare.net/BryanStarbuck/alliance-of-angels-pitch-deck-template www.garage.comAssessment Task 3: Final Report (Individual) (30%) - ‘Experiential Open Innovation and Cocreation’ Due Monday 5 June – week 12 (on UTS Online by 23:59) Background The concept of open innovation (Chesbrough, 2003) has developed in concert with the advent of new online technologies that have facilitated this approach (Howe, 2008). There are three emerging models of crowd sourced innovation or co-creation: 1. Crowdsourced competition - involves soliciting ideas or solutions from a wide range of contributors (Afuah and Tucci, 2012; Jeppesen and Lakhani, 2010). For example, the Innocentive platform (http://www.innocentive.com/) 2. Community-based competition - some firms have developed dedicated online communities as part of online competitions, where contributors may interact with each other. For example, Threadless (www.threadless.com), Local Motors (www.localmotors.com), OpenIDEO (www.openideo.com) 3. Open source co-innovation – is what some describe as the ‘ideal type’ of co-created value in use. Here the product or service is created by the users for the users. It is both open in the process of the creation of the service and open in the outcome. Examples of open source coinnovation, the most open of the open-innovation approaches include Linux operating system and also Wikipedia (Boudreau and Lakhani, 2009). In the last decade, open innovation practices have increasingly attracted research and practitioner interest. Pedersen (2010) outlines a number of empirical studies that have demonstrated the relevance of open innovation techniques (e.g. Huston and Sakkab, 2006, Rohrbeck and Hoelzle 2009; Dodgson and Gann 2006; Chesbrough and Crowther 2006) yet others have found varied results regarding the relationship between open innovation and firm performance, thereby concluding that evidence is inconclusive regarding the effectiveness of open innovation techniques. Furthermore as Chen et al (2011) outline, the shift towards openness fundamentally changes value creation in the business model. These types of open innovation and open co-innovation challenge some of the basic tenets of traditional business innovation strategy, especially the need to have ownership over the resources that are applied to create new value (Chesbrough and Appleyard 2007). Task Your task is to participate in an online open innovation platform. You are to participate in the process over the duration of the semester and produce a report and analysis based on your experience, the strengths and weaknesses of these platforms, and open and ‘co-innovation’ more broadly. You are now a researcher. Your report is to be no more than 1500 words. You need to demonstrate an understanding of open innovation and co-innovation, document your real participation and engagement, and based on your experience and readings, reflect on the implications for organisations such as firm strategy, performance, idea generation, business models, intellectual property protection etc. It will be important to engage several times over the course of the semester i.e. you can see what the public think of your contributions, or follow another participant over time to provide a valuable report on how this process works and its impact. PLEASE NOTE: You will not be able to produce a high quality reflection and report by visiting a website in Week 11! You will be assessed as follows: Participation and Engagement in online open innovation platform - Frequency and intensity of engagement - Evidence of engagement (interaction with community members; ratings; postings/discussion boards/forums; screen shots etc) - Quality of participation 15% Organizational implications - Understanding of open innovation and co-innovation principles, debates in the relevant literature (see reference list) - Analysis of impact and value for organizational/firm strategy, structures, processes etc - Consideration of time and resources required to engage; challenges in engagement; community norms; public reaction to contributions etc 10% Clarity of writing, grammar, spelling, references 5% Tips - You may have more meaningful engagement (and hence a better report!) in platforms such as OpenIDEO, rather than simply rating t-shirts on Threadless - You may like to strategically select the role you will play in an open innovation process. This will impact on your analysis. For example: o You may like to participate in multiple platforms and compare the experience o You may like to review others’ participation on a current competition (e.g. Local Motors), if you do not have the specific expertise required (e.g. if it requires engineering expertise) o You may like to both contribute to a platform (e.g. contribute content to Wikipedia) and also review others’ content (e.g. Wikipedia) - You may like to include a timeline of your participation and significant events/interactions that occurred during your participation - You should consider engaging across the duration of the semester – rather than a once off visit to the website in Week 11! Possible platforms (please check with tutor if you would like to explore others): www.openideo.com www.threadless.com www.localmotors.com www.innocentive.com www.quirky.com http://99designs.com.au/ http://www.ninesigma.com/ https://www.collaborationjam.com/ (IBM) http://www.kfcollaborationkitchen.com/EN/Pages/Home.aspx (Kraft) **Or go here to access a list of over 100 open innovation sites:http://www.boardofinnovation.com/list-open-innovation-crowdsourcing-examples/ References and suggested readings for this final assignment: Boudreau KJ and Lakhani KR. (2009) How to Manage Outside Innovation. MIT Sloan Management Review 50, 69-76 Chesbrough, H. (2003) The Era of Open Innovation. MIT Sloan Management Review, vol. 44, pp. 35- 42, 2003. Chesbrough, H. (2011). Bringing open innovation to services. MIT Sloan Management Review, 52(2), 85-90. Chesborough, H., and Appleyard, M. (2007) Open Innovation and Strategy. California Management Review. Vol. 50,NO. 1 Fall. Chesbrough, H. and Crowther, A.K. (2006). Beyond high tech: early adopters of open innovation in other industries. R&D Management 36(3): 229-236. Chen, J.S., Tsou, H.T., and Ching, R.Kk (2011). Co-production and its effects on service innovation. Industrial Marketing Management, 40(8), 1331-1346. Christensen, J. F. (2006). Wither core competency for the large corporation in an open innovation world. Open innovation: researching a new paradigm. Oxford, 36. Dahlander, L., and Gann, D.M. (2010). How open is innovation?. Research Policy, 39(6), 699-709. Dodgson, M. and Gann, D. (2006). The role of technology in the shift towards open innovation: the case of Procter & Gamble. R&D Management 36(3): 333-346. Howe, J. (2008). Crowdsourcing: How the power of the crowd is driving the future of business. Century. Huston, L., & Sakkab, N. (2006). Connect and develop. Harvard business review, 84(3), 58-66. Lichtenthaler, U. (2011). Open innovation: Past research, current debates, and future directions. The Academy of Management Perspectives, 25(1), 75-93. Rohrbeck, R., Hoelzle, K., & Gemünden, H. G. (2009). Opening up for competitive advantage–How Deutsche Telekom creates an open innovation ecosystem. R&D Management, 39(4), 420- 430. West, J., & Lakhani, K. R. (2008). Getting clear about communities in open innovation. Industry and Innovation, 15(2), 223-231.