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Summary of the Book
Rob Ryan’s book ‘Smartups’ answers some basic questions like ‘Why the people or customers need the product or services offered by entrepreneurs?’. Along with this question, Ryan’s book explains the understanding of importance of competitors’ presentation of the products for an entrepreneur as it may help in planning for success.
Hence, the book details the way the entrepreneurs deal with their products or services. It further explains the strategies necessary to build a niche for them. Ryan’s strategies explain the ways and means to make the products or services that can be offered to the customers unique in the market. His strategies are regarding financial aspects while dealing with venture capital issues.
He emphasizes that it is important for an entrepreneur to have budget allocations so that the money would not run out before the company builds up a product or is able to offer a service successfully. The next point, the book stresses is the good team necessary for a company to bring out the product successfully and market it.
The extent of perfection in planning decides the advantages or disadvantages that are derived from a business strategy. While discussing financial options; getting sufficient investment in right time has been emphasized in the book. After that discussion; good team, products or services that are different from others and have more utility value for the customers were discussed. Ryan’s book also concentrates on cost saving on the products or services of a company.
The book calls attention to the facts that the cost saving is capable of increasing profits by increasing margin or enabling the company to sell products at cheaper prices than competitors. As a whole, the book from beginning to the end deals with making of a product, getting investment for it and answering investors. The information about answering an investor helps any entrepreneur to reach the goal of getting the money and using it to manufacture the product and sell it to the customers as well.
Summary of ‘Sunflower Model’
In the chapter ‘Sunflower Model’ Rob Ryan explains the necessity of core competencies. He puts emphasis on the point that core competencies should be different from the ones the competitors in the same sector have. Moreover, the product manufactured using those core competencies should also be more useful for the customers when compared to the competitors’ products when it comes to utility value.
He cites the example of ‘smartlook’ search engine belonging to Readers’ digest and suggests its owner to do better than anybody else. He explains the ‘sunflower model’ as each part of the flower representing a crucial element of the firm. The company’s core competency according to Rob Ryan is one of the elements of sunflower model.
He compared the petals to different products in various markets. The underlying assumptions of the company on which the model of the business; for example a web portal is based on can be considered the stem of the flower. Hence, instead of searching for a lot of customers, the company can offer content or services to the companies who have lot of customers to serve. Eventually, the sunflower model of Rob Ryan gives new direction by pin pointing the core competencies of a company.
If the content is the core competence, the company can supply it to other businesses, which are in need of it instead of posting on a web portal and looking for advertisements. If the company’s core competency is production, it can undertake the production activities of other manufacturing companies in which the client company does not have much expertise. However, continuous development and enhancement can improve core competencies and ensure the sustenance of the business in the market place.
It is important to know that cracking new markets instead of rolling out new products is the essence of sunflower model proposed by Rob Ryan. The secret of getting success in the just mentioned aspect is to find products from the view point of customers to create and capture new markets. One such example can be derived from the manufacturing of DTH sets for the televisions when households all over the world are watching television programs on their cable networks.
Though there is no difference in the programs watched by audience, making them free of cable network and enabling them to watch Television without the help of cable operators made DTH sets popular. In this aspect, the manufacturers cracked new markets or, in other words, grabbed customers from cable operators by rolling out a new product that offers the same service independently and hassle free.
This is due to extra expertise the DTH sets have over cable network and the options they offer to the customers in selecting channels they want to watch. As a result, the core competency aspect of the sunflower model was also followed in the context of introducing DTH television set top boxes.
This type of innovation in products and capturing markets will happen when the CEOs or the management of a company create chaos that leads to new ideas or leverage the old core competency into a new market. Regarding ‘direct to home’ television set top boxes, the manufacturers leveraged the old core competency into a new market by innovating the service into a form of product that offers the same service in a flexible way and at viable prices.
Personal Experience While Reading ‘Smartups’
Reading the book ‘Smartups’ is an experience about securing venture capital. One can enjoy it and simultaneously develop expertise as well. The reader’s feeling would be a holistic one as Ryan’s propositions to secure Venture Capital deal with core competencies as well as quality and utility of the product. Though, the different chapters deal with the product enhancement and production as well as marketing strategies that are necessary to impress investors, one can find it interesting to read as at no point the content is boring.
The first chapter of this book ‘Which Wanna-be are you?’; deals with slowing down your pace in business activities, when you are not ready to deal with the investors. In this regard, one can quote the market entry of ‘AKAI’ televisions in India. Though the company introduced television sets for price that is costlier to Indian Market, soon it realized the lapse and stopped them.
Soon it manufactured the Television sets using cost saving methods and introduced them for a lesser cost than in the past to compete with other firms in the Indian Market. After this stage of slowing down or changing the strategy, the next chapter prompts the reader to prepare for the questions that investors ask by finding answers to them in the form of a well organized business plan. Eventually, the reader of this chapter understands that it is necessary to do homework before approaching an investor.
However, Rob Ryan’s indication about the investor, who asks about the customers and prototype of the product seems crucial in business activities as it is important in dealing with different teams in the company. He also suggests that it is necessary for an entrepreneur to have an idea of customer base for the product and its prototype before approaching an investor as that enables a person to answer the questions of investor.
Consequently, the point of discussion turns to product development in ‘Do the Dogs like the Dog food?’ and the author advises that the presentation of product should make customers die to get it. Here, the reader can find a critical customer in Rob Ryan, who guides an entrepreneur towards an innovative product that has utility value. To do this, it is important to build a core competency to manufacture a product and model like ‘sunflower model’ to bring out a product into market.
After the identification of the core competency, the suggestion of Ryan to do the home work necessary to talk with the investors is important as they would be keen about the awareness of the entrepreneur, on whom they are planning to invest. After reading the book, any entrepreneur would prepare a plan to answer the questions of them. They might be about value, differentiation, scalability and stickiness of the product as well as value proposition.
The next chapters emphasize the significance of testing the ideas of entrepreneur on customers. This also makes sure that the product is having the quality that can offer new utility value. This happens when entrepreneurs recognize competencies of their team or develop them according to the necessity in making a product. The book shows the way for entrepreneurs to turn their idea into a reality, which is a product and present it to the investors.
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