Launching a High Risk Business

Only available on StudyMode
  • Download(s) : 552
  • Published : March 8, 2009
Open Document
Text Preview
Table of Contents
Before Launching3
Major Sections4
Research & Development4
Human Resources4
Marketing & Sales6
Achievements and Results Obtained8
Key Lessons Learnt8


Launching a high risk/ high return business is not a simple process. There are several key factors and criteria that need to be met in order for your venture to have a chance. Ignoring them would most likely result in complete failure, and this is why a large number of startups fail in their early stages. This simulation is meant to help me identify the key pitfalls and factors of success.

The purpose of this report is to communicate how I approached the problem of launching the high risk business, and the key lessons I learnt from this simulation.

Before Launching

In this section I will discuss the early decision I made before running the simulation and the mistakes and lessons I learnt.

Hiring Laurie Vs buying the patent

I had to make an early decision of whether to hire Laurie, make her my partner or buy the patent. After studying the proposal, reading the e-mails and meeting with Laurie, I decided to hire her as part of my R&D team. This is because she is one of the few people (10 individuals) who are experts in the area of radiophone. I realized early on that hiring her is crucial to the speed and success of my research and development. I have also decided not making her a partner since she is purely a technical person and I did not believe that I would gain much benefit making her a partner. I wanted to save the equity for bigger fish later. I also believed that making her a partner would distract her from doing her technical job and thus slow down my company’s progress. I did not try any of the other options since that is what I would do if I really did get this opportunity, and I firmly believed in my choice

Working Part-time Vs Full-time

When I first ran this simulation I decided not to leave my Job and work part-time. I was scared of taking the risk of quitting my job in case I failed. As a result, My Company crashed instantly. I learnt that in order to be successful, you must jump in with your hands and feet in order to have a chance at success

Amount of Personal Finance Invested

Initially I put in a part of my personal finances (I did not put in the amount I could receive from credit cards and Second Mortgage). But as I ran the business I noticed that I will need to put in all my money anyway, and thus every other time I ran the simulation I would go in with all my money. A startup needs a lot of money; it’s a big risk however with a high return if successful.

Major Sections

Research & Development

Initially, in my first few runs I would grant 100% of the requested funds only when I had a good sum of cash. However, I would decrease the amount granted when I was low or close to bankruptcy. The reason I used to decrease the amount of funds granted to R&D when I was low on cash was due to the fact that the R&D was very expensive. However, I learnt that this was not a sound decision. By not granting the requested amount I was falling into major problems:

1. The R&D team performance level would fall since I did not give them what they wanted. My R&D VP would become unhappy, and the employees would become unmotivated or agitated and angry. It was a devastating blow to my chances of success

2. R&D is the heart and soul of my business. By not giving them the necessary funds, I could not develop new models, come up with new breakthroughs. Thus, my competitors would overrun me and I would ultimately fail

So, I always granted the Research and Development Team the funds they needed even when I was low on cash, and it proved to be a major factor in my later successes.

Human Resources

Hiring Experienced Vs Inexperienced VPs

I realized early on the importance of a strong management team:

• With a strong Management team I...
tracking img