A Note on Managing the Growing Venture

The earlier modules of The Entrepreneurial Manager have focused primarily on getting into

business--finding an attractive opportunity, developing a viable business model and systematically

reducing the risks associated with it, attracting financial and other resources required to actually start

the venture, and managing the early phase of operations.

In this module of the course we will move beyond that initial phase to a stage in the life of the

venture where the original business model is arguably proven, and the concern of the entrepreneur--

*as well as the management team and investors--shifts to growing the venture. Typically, this

involves expanding the scope of activities to new geographic or product markets and/or finding new

groups of customers to serve. For an organization that has been focused solely on its survival, this

impetus for growth represents a new--and fundamentally different--set of challenges for the

entrepreneur and the organization.

Creating a venture and leading it through a prolonged period of growth may require different

skills. By definition, many start-ups must rely on assets not controlled by the entrepreneur. The

vision and values of the founder can be communicated directly by an entrepreneur who may perform

many tasks personally while directly supervising an entire implementation effort. By contrast, the

challenges facing an entrepreneurial manager in the high-growth phase are those of organizing tasks,

attracting talent, delegating responsibility and authority, fighting bureaucratic "creep" and the

natural tendency to acquire assets vs. leveraging others' assets, and in general maintaining

momentum while communicating the vision and values to a larger and larger number of people.

The fact that many organizations fail to make the transition to a sustainable, financially successful

business is well-known. Even the most successful venture capital firms rarely "make money" on

much more than 50% of their investments. Firms fail for a wide variety of reasons including those

related to strategy, organization, and execution.

During