Leading High Growth Businesses - Harvard Business School · • Understand your role and the role of others in your “ecosystem” Define your mid-field position “How will we win?”

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© Lynda M. Applegate, 2017

Leading High Growth Businesses: Lessons from Successful Women Entrepreneurial Leaders

Lynda M. Applegate, Baker Foundation Professor, Harvard Business School

March, 2018

Copyright © President & Fellows of Harvard College.


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Define your playing field “What game are we playing?• Identify “What’s changing” on your “Field of Play”

• Define the size of the opportunity space

• Assess the number of “white space” opportunities where you can make

a unique contribution

• Define boundaries (what you won’t do)

• Understand your role and the role of others in your “ecosystem”

Define your mid-field position “How will we win?”• Identify potential focused product-market positions to enter the “field of

play” and opportunities to scale your entry business and expand into

new products and/or markets or launch new growth businesses

• Identify resources and capabilities needed to enter and grow your

business

• Identify how you can leverage your entry position to pursue growth

opportunities

Define/Execute the tactical plan “What’s our game plan?• Develop cash flow forecasts + assumptions driving cash flow

• Identify projects and initiatives needed to reach your mid-field position

• Identify sequencing and timing of projects and metrics and milestones

needed to measure performance at achieving your strategic goals

• Execute your tactical plan and learn how others respond to the moves

you make

Leading High Growth Businesses

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Meet a High Growth Woman Entrepreneur

“Before we started Endeavor [in 1997] I was incredibly frustrated with what I saw in Latin America: if you were an entrepreneur, you could get a $100 micro loan or a $150M private equity investment (if you came from a known family!) but nothing in between.

All development attention was on the micro level, but funding individuals had little collective developmental impact.

Another challenge was a lack of trust and local role models: Investors didn’t trust people outside of their network and entrepreneurs with bright ideas worried that investors would steal them.

I wanted Endeavor to be an aquarium where you feed the little fish to growth them bigger, not to eat them.”

Linda RottenbergCEO and Co-Founder

Endeavor


Endeavor: Operating Model 4

Endeavor Global Board

Endeavor Global Office

Endeavor Local Board

Endeavor Local Office

Managing Director + a Few Staff

Search and Selection Services• Identification and Selection of Local Entrepreneurs with Potential for

Global Expansion • Country and Local Office Selection and Mentoring of Staff

Global Entrepreneur Services:• Global Mentoring Program• eMBA Program Fellows and Harvard / Stanford Programs• Global Immersion Tours and Summit• Global Ecosystem Development (e.g.,Mentors, Investors, Industry Experts)• Endeavor Insight Research

Local Services• Identification, Selection and Mentoring of Local Entrepreneurs• Quarterly Feedback to Endeavor Entrepreneurs• Local Ecosystem Development, including Mentors, Industry Experts,

Educational Programs

Endeavor Global Headquarters: 501C3 in New York City

Endeavor Local Offices: 501C3 in Emerging and “Submerged” Markets

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© Lynda M. Applegate, 2017Expanding the Endeavor “Field of Play” 5

What does changing the mission do to the size of Endeavor’s playing field and the opportunities it can pursue?

Stop &

Think

Before the Global Economic Crisis After the Global Economic Crisis


Endeavor Turns 20Creating High Impact Entrepreneurial Ecosystems

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Linda RottenbergCEO & C0-Founder

Endeavor Global1997 - 2017

25 countries and 52 cities around the world

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FORMER EMPLOYEE

INSPIRATION

FOUNDER

MENTORSHIP

INVESTMENT

Size of circlereflects the

number of outgoingconnections of

entrepreneurs ateach company

Note: Entrepreneurs are represented by their most prominent companies.

AMTEC

CRITERIA

SIA INTERACTIVE

ASIGNET

DERECHOGRATIS

INTERMARKETING

OPENWARE

POINT

PUERTOWEB SIA

SISTEMAS

TECHNISYS

FULLSALES

BUMERAN

DESPEGAR

CORE

E-MIND

DECIDIR

BEBESNET

NETKIOSK

WEDDINGWEB

COFFICE

CUPONESONLINE

OFFICENET

PATAGON

CONEXIA

DATOSCLAROS

MERCADOLIBRE

DEREMATE

MULTIPIN

GETSENSE

AXG TECNONEXO

CUBIKA

INVERTIRONLINE

GLOBANT

DIGITALVENTURES

THREEMELONS

DISENOPORTENO

EPEXO

LATIN3

BANCOLEMON BRANDIGITAL

DATAM

DOSMONOS

EVOLUTIONGROUP

FNBOX

RECARGA

TARJETASBUBBA

TARJETASTEL

PROGEN

GUIAOLEO

PERCEPTIONGROUP

OLX

INZEARCH

DINEROMAIL

DEPAGINAS

AXIALENT

CONFRONTE

DEPRESTAMOS

ESTILO3D

INDEXTANK

LEMON

1990–1996

1997–1999

2000–2006

YEARFOUNDED

AMTEC

CRITERIA

SIA INTERACTIVE

ASIGNET

DERECHOGRATIS

INTERMARKETING

OPENWARE

POINT

PUERTOWEB SIA

SISTEMAS

TECHNISYS

FULLSALES

BUMERAN

DESPEGAR

CORE

E-MIND

DECIDIR

BEBESNET

NETKIOSK

WEDDINGWEB

COFFICE

CUPONESONLINE

OFFICENET

PATAGON

MERCADOLIBRE

DEREMATE

MULTIPIN

FONGETSENSE

AXG TECNONEXO

CUBIKA

INVERTIRONLINE

GLOBANT

DIGITALVENTURES

THREEMELONS

DISENOPORTENO

EPEXO

CONEXIA

DATOSCLAROS

LATIN3


DATAM

DOSMONOS

EVOLUTIONGROUP

FNBOX

RECARGA

TARJETASBUBBA

TARJETASTEL

PROGEN

GUIAOLEO

PERCEPTIONGROUP

OLX

INZEARCH

DINEROMAIL

DEPAGINAS

AXIALENT

CONFRONTE

DEPRESTAMOS

ESTILO3D

INDEXTANK

MINDSET STUDIO

HARREN MEDIA

SOCIAL METRIX

SMOWTION

CREATIONFLOW

FACTORIT

GEELBE

POPEGO

SOCIALSNACK

SONICO

STEADYLAB

STREEMA

TPVBOOKING

VOSTU

WORMHOLEIT

ZAUBER

AVANTRIP

AXESO5

CINEMAKI

DIOUI

FUTBOLS.N.

INTELLIGNOS

KEEPCON

PEDIDOSYA

THEMIND

COMPANY

ALAMAULA

ALTODOT

WIPSTUDIO

DIANDI

GOODPEOPLE

JOINCUBE

JUNAR

MAPPLO

OKEYKO

ONTRADE

VURBIATECH

WARAGON

WEEMBA

ADSMOVIL

BIXTI

BUKEALA

CLUBPOINT

CONVERGENCY

CUPONICA

DEALANDIA

DEDALORD

FLIPZU

HUNTMOBILEADS

INTEXTUAL

LARALA

LINKEDSTORE

NUBING

OONY

PARSIMOTION

PIGMALIONREALREF

RESTORANDO

SPLITCAST

TAGGIFY

TFXMEDIA

UWALL.TV

WASABIT

COMENTA.TVECUALIA

FLARE3D

IDEAME

INBED.ME

LEMON

OPINAIA

PIXOWL

RELEVANCE

SHUTTLEMEDIA

SINIMANES

SOCIALRADIO

TACTIVOS

TIENDANUBE

TRENDSETTER

UBURO

WIROOS

SUMAVISOS

ADFUNKY

ADNETWORKS

AFLUENTA

EMERGINGCAST

GROUPARGENT

SOCIALAD

ZETANET

1990–1996

1997–1999

2000–2006

2007–2011

YEARFOUNDED

1996 1999

2006 2012

Source: Endeavor Insights Research

Measuring Ecosystem Evolution:Endeavor Insight’s research illustrated how Buenos Aires’s tech ecosystem evolved over time time


AMTEC

CRITERIA

SIA INTERACTIVE

ASIGNET

DERECHOGRATIS

INTERMARKETING

OPENWARE

POINT

PUERTOWEB SIA

SISTEMAS

TECHNISYS

FULLSALES

BUMERAN

DESPEGAR

CORE

E-MIND

DECIDIR

BEBESNET

NETKIOSK

WEDDINGWEB

COFFICE

CUPONESONLINE

OFFICENET

DEREMATE

MULTIPIN

FONGETSENSE

AXG TECNONEXO

CUBIKA

INVERTIRONLINE

GLOBANT

THREEMELONS

DISENOPORTENO

EPEXO

CONEXIA

DATOSCLAROS

LATIN3


DATAM

DOSMONOS

EVOLUTIONGROUP

FNBOX

RECARGA

TARJETASBUBBA

TARJETASTEL

PROGEN

GUIAOLEO

PERCEPTIONGROUP

OLX

INZEARCH

DINEROMAIL

DEPAGINAS

AXIALENT

CONFRONTE

DEPRESTAMOS

ESTILO3D

INDEXTANK

MINDSET STUDIO

HARREN MEDIA

SOCIAL METRIX

SMOWTION

CREATIONFLOW

FACTORIT

GEELBE

POPEGO

SOCIALSNACK

SONICO

STEADYLAB

STREEMA

TPVBOOKING

VOSTU

WORMHOLEIT

ZAUBER

AVANTRIP

AXESO5

CINEMAKI

DIOUI

FUTBOLS.N.

INTELLIGNOS

KEEPCON

PEDIDOSYA

THEMIND

COMPANY

ALAMAULA

ALTODOT

WIPSTUDIO

DIANDI

GOODPEOPLE

JOINCUBE

JUNAR

MAPPLO

OKEYKO

ONTRADE

VURBIATECH

WARAGON

WEEMBA

ADSMOVIL

BIXTI

BUKEALA

CLUBPOINT

CONVERGENCY

CUPONICA

DEALANDIA

DEDALORD

FLIPZU

HUNTMOBILEADS

INTEXTUAL

LARALA

LINKEDSTORE

NUBING

OONY

PARSIMOTION

PIGMALIONREALREF

RESTORANDO

SPLITCAST

TAGGIFY

TFXMEDIA

UWALL.TV

WASABIT

COMENTA.TVECUALIA

FLARE3D

IDEAME

INBED.ME

LEMON

OPINAIA

PIXOWL

RELEVANCE

SHUTTLEMEDIA

SINIMANES

SOCIALRADIO

TACTIVOS

TIENDANUBE

TRENDSETTER

UBURO

WIROOS

SUMAVISOS

ADFUNKY

ADNETWORKS

AFLUENTA

EMERGINGCAST

GROUPARGENT

SOCIALAD

ZETANET

PATAGONWences Casares

MERCADOLIBRE

DIGITALVENTURESAriel ArrietaDamian Voltes

Marcos GalperinHernán Kazah

1990–1996

1997–1999

2000–2006

2007–2011

YEARFOUNDED

Measuring Entrepreneurial Impact

Note: Shade of orange in the chart above illustrates the degrees of separation from the top three firms: 1 = 75% shaded and 2 = 50% shaded. Top 3 are 100% orange.

The 3 Endeavor Entrepreneurs

highlighted in dark orange influenced

>80% of the Buenos Aires

Ecosystem Impact


• By 2012, the Buenos Aires tech ecosystem yielded 30,000 new jobs and $1.7B in revenue (~0.5% of Argentina’s GDP)• Similar research

conducted in Amman, Istanbul and Santiago found similar network effects

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2

3

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What Would the Buenos Aires Entrepreneurial Ecosystem Look Like Without Endeavor?

Note: Shade of orange in the chart above illustrates the degrees of separation from the top three firms: 1 = 75% shaded and 2 = 50% shaded. Top 3 are 100% orange.Source: Endeavor Insights Research


Measuring the Strength of Ecosystem Connections: Net Promoter Score

Loyal, Engaged Fans

(80% of referrals + Easy for employees

to deal with)

Unhappy Customers

(80% of negative word of mouth)

Source: http://www.netpromotersystem.com/about/measuring-your-net-promoter-score.aspx


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Measuring the Strength of Connections:Net Promoter Score



High Impact Entrepreneurial Leaders

HBS Research

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As pace of change picks up ALL firms need Entrepreneurial Leaders who ScaleDo you agree??

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“The reason why “many” entrepreneurs fail toscale—that is, adapt their leadership capabilitiesto their growing business needs—remains fuzzy.It’s assumed that there’s an entrepreneurialpersonality and an executive personality—andnever the twain shall meet. I don’t think that’strue. Leaders who scale…”

• Listen to and seek input from others and are willing to shift their outlook• Quickly deal with problems and weed out non-performers

• See past distractions and establish strategic priorities

• Make concerted, sometimes uncomfortable, efforts for the sake of the business and its stakeholders

• Learn to work with and communicate with diverse employees, customers, and other constituencies• Make the company’s continuing health their top priority

© Lynda M. Applegate, 2017Working Knowledge 2016 14

Entrepreneurial Leadership:Self-Confidence on Behaviors and Skills

Associated with Successful Entrepreneurs

by:Lynda M. Applegate

Tim ButlerJanet Kraus

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© Lynda M. Applegate, 2017Preliminary Research Method

1. Comprehensive literature review to identify major domains of entrepreneurial skills and

behaviors

2. Developed Entrepreneurial Leadership Self-Assessment Questionnaire then vetted it

with successful entrepreneurs and investors and modified it based on feedback

3. Administered the Questionnaire to over 1300 HBS graduates (entrepreneurs and non-

entrepreneurs)

4. Used factor analysis to create11 Skills and Traits

5. Conducted validity and reliability studies to differentiate Founders vs. Non- Founders,

Male vs. Female Founders, and Serial vs. First-Time Founders


Self-Confidence on Behaviors and Skills: Founder vs Non-Founders

Categories of Behaviors & Skills of Successful High Growth Entrepreneurs

Founders Non Founders

Identification of Opportunities Significantly Higher

Vision and Influence Significantly Higher

Comfort with Uncertainty Significantly Higher

Assembling and Motivating a Team No Significant Difference No Significant Difference

Efficient Decision Making No Significant Difference No Significant Difference

Building Networks Significantly Higher

Collaboration and Team Orientation No Significant Difference No Significant Difference

Management of Operations No Significant Difference No Significant Difference

Finance and Financial Management Significantly Higher

Sales No Significant Difference No Significant Difference

Preference for Established Structure Significantly Lower

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Self-Confidence on Behaviors and Skills: Male vs Female Founders


FemaleFounders

Male Founders

Identification of Opportunities No Significant Difference No Significant Difference

Vision and Influence Significantly Higher

Comfort with Uncertainty Significantly Higher

Assembling and Motivating a Team No Significant Difference No Significant Difference


Building Networks No Significant Difference No Significant Difference


Management of Operations Significantly Higher

Finance and Financial Management Significantly Higher

Sales No Significant Difference No Significant Difference

Preference for Established Structure No Significant Difference No Significant Difference


Self-Confidence on Behaviors and Skills: Serial vs First Time Founders


Serial Founders First-Time Founders

Identification of Opportunities Significantly Higher onall items

Vision and Influence No Significant Difference No Significant Difference

Comfort with Uncertainty Significantly Higher onall items

Assembling and Motivating a Team Significantly Higher on someitems


Building Networks Significantly Higher on someitems


Management of Operations No Significant Difference No Significant Difference

Finance and Financial Management Significantly Higher on all items

Sales Significantly Higher on someitems

Preference for Established Structure No Difference At All No Difference At All

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© Lynda M. Applegate, 2017Working Knowledge: Coming Soon 19

Leading High Growth BusinessesAdvice from Successful High Impact Women Entrepreneurs

by:Lynda M. Applegate

Janet Kraus Marla Malcolm Beck


Previous Research Focused on Women who DON’T Build High Growth Businesses 20

Source: Women-Owned Businesses, SBA: https://www.sba.gov/sites/default/files/SBO_Facts_WOB.pdf

Amount of Start-up FinancingWomen were much more likely than men to indicate they did

not need startup financing (30.3 percent v. 19.5 percent)

Source: Gender Differences in Startup Financing, SBA: https://www.sba.gov/sites/default/files/files/Gender%20Differences%20in%20Startup %20Financings.pdf

https://www.sba.gov/sites/default/files/SBO_Facts_WOB.pdf

https://www.sba.gov/sites/default/files/files/Gender%20Differences%20in%20Startup%20Financings.pdf

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Previous Research Focused on Women who DON’T Seek VC Financing 21

Bloomberg study:

• 6% of founders who raised VC financing were female

• Women founders who raised VC capital raised $77 million vs. $100 million for male founded startups

Source: “Who Gets VC Funding?,” Bloomberg, https://www.bloomberg.com/graphics/2016-who-gets-vc-funding/

(in Billions)


Why are there more VC-Backed Women Entrepreneurs in Mid-Atlantic and New England? 22

Source: http://pitchbook.com/news/articles/what-percentage-of-u-s-vc-backed-startups-are-founded-by-women

https://www.bloomberg.com/graphics/2016-who-gets-vc-funding/

http://pitchbook.com/news/articles/what-percentage-of-u-s-vc-backed-startups-are-founded-by-women

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Our Research 23

Rather than study why women aren’t building high growth businesses, we decided to

talk with women who had built successful high growth firms.

We then asked them how they did it and if they had advice for women entrepreneurs.

• 30 In-depth Interviews with women entrepreneurs of high velocity startups

• Interviews with VC who backed the 30 women entrepreneurs

• Interview notes and key findings discussed with interviewees

• Focus groups with male and female entrepreneurs and with those who finance them


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“Surround yourself with people who are goodat what you’re not good at.”

“[My co-founder] had more of a sales andmarketing background, and I had a financebackground. Her skills were in the thinking ofbig, creative, strategic ideas, and I was verystrong on the execution.”

Sample Advice from High Growth Women Entrepreneurs

“No one funds ideas.They fund thebeginnings of a business. You have to beable to create a dotted line to somethingthat’s really, really huge.”

Build big companies, not small ones,because they take the same amount oftime as big ones, but you get a verydifferent reward. And it’s worth it.”

“Be very strong in whatever area of technicalexpertise you come from, because peopletrust you first by what you bring to the table. Ifyou are a scientist, be a kick-ass scientist..”

“I made a spreadsheet and collected everysingle contact that I thought could beinterested and passionate about my business.I “cold-called” and asked for an ‘informal’meeting. Every time I’d leave a meeting, I’dsay, do you know anyone else that you think Ishould talk to?”

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© Lynda M. Applegate, 2017New Research: Starting in 2018 25

Focus: Global study on high impact entrepreneurs and business ownerso Use Endeavor Insight Data to compare male and female high impact entrepreneurs around the

world Ø Examine density and evolution of entrepreneurial ecosystems and strength of relationshipsØ Conduct surveys of Behaviors and Skills Ø Develop Case Studies and Profiles of High Impact Women Entrepreneurs

o Impact Measures include:Ø Financial Capital: Financial Performance, Capital Raised from all sources, Contribution to GDP…Ø Human Capital: Jobs Created, Wages Paid, Skills and Capabilities, Unemployment Rates…Ø Intellectual Capital: Educational Programs (at all levels); Intellectual Property…Ø Social Capital: Network Density, Strength of Connections, Engagement…Ø Cultural Capital: Inspiring Stories …

Focus: Alumni Exec Ed Program for entrepreneurs and business owners

o Working on proposals for new alumni exec ed offerings that include field studies with MBA studentsØ We need your helpØ I will be around for the rest of the day to discuss your ideas


Closing Thoughts

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Building a Business While Building a Life

Work Family

PersonalMotivations

Why I love to work with entrepreneurial leaders!!! You don’t compartmentalize. You bring your total self to the business – It’s PERSONAL


Asked entrepreneurs at the end of their career: “Are you happy with the way your life turned out?”

1. Have you achieved what you wanted to achieve—in your career, your family life and your personal life?

2. Is what you achieved significant?

3. Are you building something that will endure and make a difference?

Building a Business While Building a Life

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https://www.ted.com/talks/regina_dugan_from_mach_20_glider_to_humming_bird_drone#t-876303

14.36 “The Internet is home to…”17.71 “What would you attempt to do if you knew you could not fail?”

Meet Regina Dugan

April 2016 to present: Head of Building 8 (newly launched tech research group)March 2012 to April 2016: Google VP Engineering and

Head of Advanced Technology and Projects GroupATAP will stay with Google and link to Alphabet

July 2009 to March 2012: 19th Director of Defense Advanced Research Projects Agency (DARPA); Also worked at DARPAfrom 1996 – 2000

2005 to 2009: Co-Founder and CEO, Dugan VenturesBS & MS Mechanical Engineering, Virginia PolytechPh.D.

https://www.ted.com/talks/regina_dugan_from_mach_20_glider_to_humming_bird_drone

Leading High Growth Businesses - Harvard Business School · • Understand your role and the role of others in your “ecosystem” Define your mid-field position “How will we win?”

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