INNOVATION IN BUSINESS ENTREPRENEURSHIP MANUAL

INNOVATION IN BUSINESS ENTREPRENEURSHIP

MANUAL

MANUAL INNOVACIÓN EN EL EMPRENDIMIENTO EMPRESARIAL

INDEX

EXECUTIVE OVERVIEW

3

1.

BUSINESS MODELS What is a Business Model?

4

1.1. 1.2.

5

The Project Team

12

2.

THE ENTREPRENEURSHIP PROJECT

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DESIGN AND ELABORATION OF A BUSINESS PLAN Structure of an Enterprise or Business Plan Example Executive Summary of a Business Plan

21 22 22

3.

3.1. 3.2.

4.

THE FINANCING OF AN ENTREPRENEURSHIP PROJECT

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Business Angels Financing

4.1.

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EXECUTIVE OVERVIEW

Technological and scientific advances, such as the Internet, have been made available to the general public, turning information into a commodity; a basic and generic commodity. In this way, a series of structural changes have taken place in the business environment that have highlighted the importance of intangibles such as the power of brands and the intellectual capital of companies (Davis & Davis, 1999) in generating sustainable competitive advantages.

At the heart of this human capital are creativity, innovation and organisational entrepreneurship. The importance of these elements derives from the development of new processes, products and services that they entail and which, in turn, will ensure the survival and success of companies in the industry.

It should also be noted that technology and the digital transformation of business allows new entrepreneurship projects, at a personal or corporate level (intra-entrepreneurship), to be tackled with fewer barriers to entry than in the past, especially perhaps of capital, and thus facilitating the emergence of new opportunities for entrepreneurship projects. What does seem appropriate to point out is that an entrepreneurship project, whether personal or corporate intra-entrepreneurship, requires a necessary training process around the search for the business idea, the project management team, the development of the critical elements of the project (business plan) and the search for the instruments of its financing. It is clear that the realisation of this business plan is not sufficient for the success of the project, but it is clearly necessary.

In this course, we will address the process of entrepreneurship using the necessary tools of innovation. We will also describe the parts of the Business Plan as well as the financing mechanisms of the Project.

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1. BUSINESS MODELS

We could say that innovation is creativity applied to a business model. We have already said that to innovate is to monetise, it is to add value to something that is accepted by our customers. The innovation process crystallises in a business model. Today we talk a lot about "business models", and especially about the search for "new business models" that also have "digital attributes". Successful innovation management requires: a balance between short-term profit and long-term sustainability. 90% of senior managers do not question the business model of their companies. Rethinking how to develop innovative business models or investigating other types of business models for your company is one of the main tasks that anyone with responsibility in Startups, SMEs or established companies should be doing. "Questioning" our business model involves thinking about how our company or entrepreneurial business project provides value to customers and how they pay for the value they receive. In addition, it is important to understand the type of market in which we operate and what other factors influence it. The evolution of society, uncertainty, the speed of change, the Internet, technological advances and the emergence of new needs and therefore new opportunities, has forced companies to generate new innovative business models as alternative ways of generating revenue. If we look back, there are some examples of innovative business projects in Spain, introduced by large global companies, which dared to innovate, to rise from the ashes. Examples of innovation such as IBM or Gillette illustrate this "resurgence" when their market positions were threatened. Others, however, failed to see what was coming to them from their privileged position, such as Kodak. Once one of the most innovative businesses in the world, it collapsed with the advent of digital photography.

A business model requires action and questioning on three levels of action: but is the search for an innovative business model important? ....

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Moreover, innovation in business models is the one that shows the best returns and growth of the company's operating margin in relation to innovation in products/ services and/or operations... Are the business models of Google, Airbnb, Uber, Spotify, Apple, Amazon, Alibaba, etc. innovative? Why is business model innovation important? .....: • It is the main element of differentiation and sustainable advantage. • Critical to improving performance • Medio para adaptarse quickly to change and seize opportunities.

• Key to the commercialisation of new technologies

1.1. What is a Business Model?

An entrepreneurial business model refers to the way in which the company creates, captures and delivers value to its customers. In other words, it is the way in which the company creates value for itself and its customers by transforming raw materials into a finished product and selling the final product to the customer. In 2003, IBM changed its business model and its way of doing business from manufacturing and selling computers and hardware to a business based on providing innovative services and information technology (IT) solutions. It sold European Open Business School

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its PC development unit to Lenovo, its hard disk drive unit to Cisco and its printer unit to Lexmark.

With this example of innovative thinking, at the time, IBM became the world's largest outsourcing, consulting and enterprise data recovery services company, turning the previously known types of business models on their head.

A business model is a plan or diagram that is used to make or describe how companies or organisations compete, (use their resources, their structures, their relationships, interfaces with customers), and create value to sustain themselves with the profits generated.

In essence, a business model answers four questions, which result in the creation of value in the company. These are: Who, What, How and How much?

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Sometimes these new business models are very disruptive. "In 2015, Uber, the world's largest taxi company owns no vehicles, Facebook the world's most popular media owner creates no content, Alibaba the most valuable retailer has no inventory, and Airbnb the world's largest hotelier owns no real estate" In the generation of new business models, the digital vector is very important. In a Business Model, you have to build the "Magic Triangle": "Who" (who is your target customer (segment), "What" (what is the value proposition), "How" (description of the value chain) and "Value" (the revenue model): The creation of new businesses involves the hybridisation of the digital and physical world. In this new Disruptive World of People, Business & Things, Digital Business is expected to create a new market of 309 M Euros of technology products and services by 2020. And where to innovate, means changing the "What", "Who", "How" and/or "Value". ………

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Take, for example, Nespresso's business model innovation:

The value added by the change in Nespresso's business model was a disruption in the before and after of its strategic lines.

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An interesting exercise would be to describe your company's current business model by answering the four key questions: "Who", "What", "How" and "Value".

An interesting element is that this methodology can be used for all industries and companies, although "one size does not fit all", each organisation requires a specific analysis for that particular company. An entrepreneurship project needs to start with a business idea. Everything we have seen regarding Innovation tools and Business Models will be useful. In relation to business ideas, there are some critical questions: a) What to look for? (in the search for the business idea of the Entrepreneurial Project) b) Where to look? c) How to look?

 What to look for? The key is NEEDS AND WANTS ("the pain factor") that we think are not sufficiently well satisfied today with the current offer, and that our project, with the designed differentiation elements, will make our customers choose us and pay for it.

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When we talk about Needs/Wants, several questions arise:

1) Are these needs/wants very "buried" or very visible? It is difficult to satisfy needs/wants that are still very latent, or very "buried", it is only within the reach of a "market maker", it requires a significant financial effort (for example, Apple is a market maker, who would have thought just 6 years ago that we would have the desire/need to have a tablet). On the other hand, if the need/desire is very "visible", there may already be an important and extensive offer that tries to satisfy it. 2) For the few or for the many: although an offer for the "few" allows the offer to be focused, perhaps the correct answer in this case is "for the many". If the need/desire is for many, if we get the value proposition right, scaling business growth will be easier. 3) It does not matter that there is already an offer (competition) for those needs and desires, the key is how to make our offer "better", without forgetting that "better" can have many attributes: design, financing conditions, pre and post sales service, delivery, price, quality, etc  where to look? (in the search for the business idea): the "where" to look in the search for the business idea has a "certain order": 1) Perhaps the first place to look is "inward" - what do I know and/or have experience of? In Jim Collins' book, "Good to Great", it is clear that "successful entrepreneurs knew a lot about their business". They have looked into their professional and life experiences and thought that there was a different (better) way of doing things. Almost all successful entrepreneurs have this pattern: they have done it in areas that are close to them, that they know very well. Guy Laliberté came from the world of the traditional circus, Amancio Amancio Ortega started working in a clothing shop in La Coruña, Felix Tena of Imaginarium learned the toy business from a previous venture he had with some Italian partners (although the project turned out badly), Lucas Carne and José Manuel Villanueva of Privalia knew very well the critical competencies of an Internet outlet, not to mention the founders of Google, Larry Page and Sergey Brin, who knew their business very well.

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2) Sometimes, you don't have a deep knowledge of an industry to find an innovative business idea, but you have an extraordinary passion around that business. This is a great driver for generating innovative business ideas. Usually if the entrepreneur has a special passion for a certain business, the passion will have led to a deep understanding of the business and with it perhaps the possibility of finding an innovative business idea. 3) Another interesting "place" to look at innovative business ideas can be to look at experiences that have been successful in other markets, with other segments, etc. Think, for example, of successful car sharing experiences imported from other European cities, the Privalia model "imported" from the successful French model of Vente Privée, etc.  How to look? You can only find innovative business ideas if you look with curious eyes, those that emanate from the "drivers" of passion and the search for that "pain factor" with respect to the current status quo. Technology is a natural driver for generating business ideas, but not the only one. Innovation is a higher concept than technology. What it does seem is that the product-only business model is dead. Nike doesn't just sell trainers, that was in the past, now they have built a platform that connects a person's smartphone with data and information of value to the person wearing their trainers. Being very futuristic and disruptive, could it sell people's data in the future and almost give the shoes away for free? Another interesting "place" to look at innovative business ideas can be to look at experiences that have been successful in other markets, with other segments, etc. Think for example of successful car sharing experiences imported from other European cities, the Privalia model "imported" from the successful French model of Vente Privée, etc. Platform economies" are developing: businesses based on the use of cloud platforms, smartphone apps and social networks to manage business activities.

Ideas and business models based on collaborative economy platforms with more or less specialisation (verticality) are also undergoing extraordinary development.

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1.2. The Project Team

Launching a start-up, entrepreneurship or innovation is a complex task that requires a high dose of motivation. The risk of failure is very high; studies indicate a mortality rate of 80%, with only 2 out of 10 surviving. It is interesting to analyse the critical elements of entrepreneurship in the world that the GEM report (Global Entrepreneurship Monitor, www.gemconsortium.org) has been carrying out for many years. In these reports, the panorama of entrepreneurship in the different countries of the world that collaborate in the study is observed through elements such as: age of the entrepreneurs, gender, training, sectors in which they have undertaken, financing of the project, etc. A very interesting topic related to the launch of a start-up is the project team. It seems natural to think that the complexity of running a company today would lead to the need for different types of talent: a) Finance and management control talent: accounting, finance, management control. b) Market interaction talent: marketing, commercial, online and offline c) Operations talent: technology, logistics, human resources, production, legal and tax. , These are three main types of talent, different from each other and probably very necessary in the management of any start-up. It therefore seems logical that the start- up's founding and management team should bring together these different types of talent, a functional diversity of talent. In a start-up of a highly technological nature (app development), it seems natural to think that technology is the core of the business and therefore there should be a founding partner responsible for its design, development and management. In fact, this "functional diversity of talent" seems to come naturally to successful start-ups: A start-up is a human organisation that has to launch innovative products under conditions of high uncertainty. The leadership team at Apple Computer in 1978 consisted of three people, each with different skills and personalities. Steve Jacobs was the charismatic leader who motivated workers and talked to computer enthusiasts.

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Mike Markkula was the leader of the business development and marketing area. Stephen Wozniak was the lead engineer, and creator of the company's computers. This balanced team created Apple Computer, and made it a landmark in business.

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2. THE ENTREPRENEURIAL PROJECT

Steve Blank's (one of the most prestigious modern authors on entrepreneurship) definition of a start-up places the business model at the core of the company: "A start-up is an organisation created to discover a repeatable and scalable business model". Remember that an entrepreneur is someone who is launching a new product or service in an environment of high uncertainty, with high risk-taking and a clear vision of the future. For Eric Ries Eric Ries, influencer and author of the bestseller The Lean Startup, (another successful author of modern entrepreneurship) does not depend on whether it is done from a small start-up or from a large corporation. What matters are the challenges you face and the circumstances you face. And this can happen equally in all kinds of sectors, if the circumstances described above are met. This definition includes in the same group the more traditional view of someone who creates a company from scratch and the intra-entrepreneur as someone who launches new projects within a large company or institution. Lean Startup is a business management system aimed at startups and entrepreneurs. It is a methodology for launching new business projects, which seeks to create profitable and scalable companies by reducing risk to a minimum. The aim of this methodology is to shorten product development cycles, mainly based on three tools:

1.) Business Model Canvas: System for defining the business model and asking yourself the necessary questions.

2.) Customer Development o Desarrollo Orientado al Cliente: The ideal formula for obtaining the information you need from the environment and potential customers. Useful for validating hypotheses or withdrawing them.

The traditional model of bringing products to market until the advent of the term coined by Steve Blank, Customer Development, was to simply do a product development that covered the following phases:

• Conceptualise a product or service. • Develop the product or service . • Conduct a test. • Launch the product or service on the market.

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The problem with this way of doing things is that Start Ups focus on product development, leaving the market encounter for the last phase. When you launch a product on the market without doing customer development, you never know if your product or service is really going to be purchased by someone, if you are going to have customers or not. Most Start Ups and companies that want to innovate fail because they do not have customers for their products and not because of failures in product development. . Nowadays, at the technical level you can do almost anything, but what you cannot do is sell something that nobody wants. So why do companies insist on a product development process, but not a customer-oriented development process?

The Customer Development methodology has the following steps:

• Discovering the customer • Validate with the client • Co-creation of products and services with the customer • Create the business model underpinning the business project.

The Customer Development methodology strives to know what your customer is like, what problems they have, to know what they want and therefore to be able to offer them an appropriate solution to their problem

3.) Agile Development: It allows the validity of a business idea, product or service to be tested with agility and with the minimum consumption of energy and resources through Agile methodologies.

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Lean Startup allows investing fewer resources in the learning and testing phase of the business idea, to invest more resources or ask for funding when knowledge and chances of success are high. The starting point is to consider that traditional management systems may not be well adapted to startup management, but that startups require a management system that has "scientific" principles behind it. It can be seen that there is a mix of elements from very different industries, but they have common characteristics, among which the simplification and shortening of processes and their deadlines, a strong orientation towards product creation and, above all, its validation against the market. In the Toyota Production System, it has created a "discipline": Lean manufacturing, which is based on a management model that creates a flow in order to give maximum value to the customer while minimising the resources used.

Agile software development methodologies are software engineering methods based on iterative and incremental development, so that both requirements and solutions evolve collaboratively within the development team.

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The Customer Development Cycle is a model that highlights the importance of the customer as the centre of the development of any product and service, where their opinion is what validates the success of the work done. In fact, it has to be linked to the agile development phase. It invites us to lose our fear and to validate "on the street" with the real customer what we do, experimenting with our hypotheses, with metrics that will vary according to the business and the company. The use of short cycles appears again, as well as managing an environment of uncertainty and some chaos. He also addresses the issue of cash (money), where he gives a conservative view while testing and inviting to spend when we already know what for and we are clear (and measured) where we are going and what results are expected.

The Lean Startup model consists of three phases: • Build • Measure • Learn

This is the guideline for the entire Lean Startup method. It involves short cycles (as in Agile development or customer development) in which a new version of a product or service is created, launched on the market (in a more or less limited test: focus group, betatesters...) and the results are measured. Based on these results, learning takes place and new decisions are taken, which may include continuing along this path, taking a step back and trying another alternative..... And they can affect the definition of specifications, product development, marketing, pricing, commercialisation... the process is the same regardless of the area in which we are working. Validated learning: everything that is done must have validated learning, that is, not as an excuse of "I have failed, but I have learned" but as something measurable in concrete parameters that allow the business to move forward. Every action we design must be accompanied by metrics that measure the success or otherwise of the action. These metrics will be those that really contribute to the business, project, company that we are developing, differentiating them from the "vanity metrics" that can talk about repercussion, popularity... but not about key business factors. These metrics have been prefixed and are completely aligned with the "ultimate goal" of the business, to avoid adjusting them "a posteriori" depending on the results.

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Pivoting: this involves changing aspects of the business, product, marketing... depending on the results obtained in one of the cycles. Once the learning has taken place, it is time to decide what the next step will be. Pivoting has to do with changing and it is very common for a project to change (pivot) numerous times during its development, in such a way that what is finally developed is nothing like what was initially planned; but the success metrics obtained in each step will indicate that this "unexpected" final project is more appropriate than the preconceived idea (and untested in the market) that we initially had. This should not be confused with randomly changing things in the project at any time and without reasoning accompanied by business metrics. Pivoting is not about catering to whims, it is about making reasonable decisions after a full cycle from which valuable learning has been extracted for the project. In the Lean Startup method, learning from customers is paramount. This also appears in Steve Blank's Customer development and customer validation method. Customer development is a scientific approach valid for entrepreneurs and startups that helps products to succeed by improving knowledge about users and understanding them better. The virtue of Customer development is that it explains very well the different phases of the company and this situates the entrepreneur very well as to which phase he is in and which objectives he should focus on:

In this table we can see the phases in the creation of a company. The first two correspond to the experimentation part, where the entrepreneur's hypotheses have to be validated and are closely linked. Through the pivots, different cycles of both are carried out until they are validated and move on to the third and fourth phases. The last two cycles correspond to the "company" phase, where the company grows from the validated learning obtained in the first two phases.

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Thus the four phases would be as follows: 1. Customer discovery: • Adjustment problem solution

• Minimum viable product proposal • Proposed "funnel" conversion funnel 2. Customer validation • Product-market fit • Business model • Marketing and sales plan 3. These first two parts form in themselves a test cycle after which the pivots are carried out. 4. Customer creation • Execution of the scalable model Company building • Scaling up (growing) the organisation • Scaling up operations Everything mentioned for startups, which has to do with testing, mistakes, changes, is limited to the first two cycles. This is where testing makes sense, as these are discovery phases, where you have to understand the customers, adjust the product, see how it is positioned in the market, see how to reach the customers, make a plan for it and obtain metrics that allow you to evaluate it. And what is fundamental, discovering and validating the business model, which should also be scalable Once all these steps have been taken, the objectives of creating a business idea have been met, from there onwards a more entrepreneurial part, of executing that model and putting it into practice, would be considered to begin Much of an entrepreneur's fear of getting it wrong, of failing customers, of giving a bad brand image, as well as the need for high investment and the like make sense, but in this consolidation phase. Understanding that the first two phases have different objectives (basically to obtain validated learning) but that they are fundamental to building the next two phases is fundamental to the success of a project. In this process it is essential to have the Minimum Viable Product (MVP).

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The Minimum Viable Product (MVP) is the one that has only the characteristics to be marketed and no more. It is generally launched to a group of potential customers with the aim of getting their opinions and receiving proposals for improvement, and serves as a "marketing test" to test the launch and its commercialisation possibilities. The main objective is to obtain as much "validated learning" with as little effort, and resource consumption, as possible. It could also be considered as a "controlled experiment". In short, it is about avoiding building products that are costly to produce and that customers don't want. Applying the Customer Development vision has a clear function: to "get out of the building", i.e. to force the entrepreneur to check his hypotheses and validate them. In the creation process, a series of hypotheses will have been established about what the customer wants and other hypotheses about how the product comes to solve those first hypotheses, that output. Getting out of the building" refers to actions that have direct contact with potential customers, tests, interviews, sales or attempted sales. A real approach to the market and with interaction with the customer to obtain his opinion and sensations. To design this product we should think about which of the problems we are going to solve we can solve in the easiest and quickest way and for which those future customers would pay us. For some authors (e.g. Ries) the objective is not so much sales but learning. It does seem advisable to force this step, because if not, key business issues will not be tested, and also the attitude and demands of the customer of a free version differ from those of a paid version. It is not exactly about marketing, but about marketing to a small group of people. This group are the so-called "early-adopters", the first to try out a product (generally everything in a particular sector that interests them) or "earlyvangelists", evangelists of the product who help to spread the word about its benefits. It is also important to try to clear up any doubts and uncertainties that may exist about the business model, which should also be clarified even before finding out whether the early evangelists pay for the product, or their feedback. For example, if there is a market problem, we need to find out how big the market is, how important and urgent the problem is for the target customers, whether there are competing solutions (there are bound to be some, albeit with different products), how existing solutions are valued....

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3. DESIGN AND ELABORATION OF A BUSINESS PLAN

Once we have validated the business model, we also have to draw up a Business Plan. "If you don't make a plan, your plan could fail.

If you want your business to continue to exist over the years, you need to start thinking about and planning for its future. One of the shortcomings of small businesses is that their activities are not properly planned. Lack of planning is a dangerous cost factor that can cause a business to fail by wasting money, time and opportunities.

A business plan is a formal statement of a set of business objectives, which is a projection and evaluation phase. It is used internally by management for planning tasks, and assesses the need to approach banks or potential investors to provide funding for the business. The business plan can be a business representation of the model to be followed. It brings together the verbal and graphical information of what the business is or will become. It is also considered a synthesis of how a business owner, manager, or entrepreneur will attempt to organise an entrepreneurial endeavour and carry out the necessary and sufficient activities to make it successful. The plan is a written explanation of the business model of the company to be launched. Business plans often become obsolete, so a common practice is to constantly renew and update them. A common belief within business circles is that the true value of the plan is underestimated, yet it is believed that the most important thing is the planning process, through which the manager gains a better understanding of the business and the options available. The preparation of a Business Plan has two specific objectives: Internal and External. • Internal as a guide for business planning. It serves as a guide to the degree of development and execution of the company's business activity. • External as an instrument of dialogue with the agents of the ecosystem, especially if funding is to be sought. The Business Plan is also intended to be the letter of introduction of the entrepreneurs and the project to third parties.

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3.1. Structure of a Business Plan.

Presentation. Executive Summary/Introduction

•

Business Description

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Market and Company Analysis

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Situation Analysis/Diagnosis

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Strategic Approach.

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Marketing and Sales Operational Plan

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Plan of Operations. Timetables and deadlines

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Corporate Issues. Organisation and Human Resources

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Economic and Financial Study

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Control Systems, Scorecards and Contingency Plans

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Conclusions.

•

A business plan summarising the most sensitive and interesting points is shown below:

3.2. Example Executive Summary of a Business Plan The executive summary of a Business Plan is described below in order to be able to analyse its different parts:

Executive Summary 1. The idea

Free time is an increasingly scarce commodity in advanced societies. Obligations, last-minute unforeseen events and small everyday tasks rob us of the little free time we have - they are the "time thieves". The answer is VenGo®, a multichannel marketplace, for buyers and sellers. The aim is to provide time and services for the performance of unskilled daily tasks so that, by working together, they can improve each other's lives. European Open Business School

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 People who need time off will be considered demanding: people with a chronic or occasional lack of time, willing to pay in exchange for help with everyday tasks and errands.

 The providers of time and services will be called vengos: people of legal age, mainly students, with free time and interested in generating income on an occasional basis, without the need to maintain an employment relationship.

Ilustración 1. Home de www.ven-go.com ( Source : own elaboration)

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2. The context

VenGo® was born in the context of the collaborative economy, a new model that is booming and which presents success stories in different sectors of activity. Prestigious publications such as Time1 or Forbes2 magazines, or institutions such as MIT, predict a great future for the new collaborative models. Consultancy firm PwC predicts that, by 2025, the sharing economy sectors will generate as much revenue as their traditional counterparts, with much higher growth rates. This would mean a market share of 5% in 2013 to 50% in 2025:

Ilustración 2. Comparativa entre el sector tradicional y el corporativo (Fuente: http://www.pwc.co.uk/issues/megatrends/collisions/sharingeconomy/the-sharing-economy-sizing-the-revenue- opportunity.jhtml)

1 http://content.time.com/time/specials/packages/article/0,28804,2059521_2059717_2059710,00.html 2 http://economia.elpais.com/economia/2014/06/20/actualidad/1403265872_316865.html

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The current growth, together with future forecasts, make it a very attractive model, with funding increasing exponentially in this type of project in recent years, both nationally and internationally. VenGo® is currently seeking funding for its start-up

Ilustración 3. Fondos conseguidos por proyectos colaborativos por año (Fuente: https:/ / docs.google.com/ spreadsheets/ d/ 12xTPJNvdOZVzERueyA- dILGTtL_KWKTbmj6RyOg9XXs/ edit?pli=1#gid=812252114, Web Strategy, Jeremiah Owyang)

Although the collaborative economy model for personal services is still in a niche phase in the Spanish market, some companies are emerging that are trying to seize the moment to position themselves, imitating proven success stories in international reference markets. Some examples of these companies are Glovo, Multihelpers, etece.es and Winding.

3. Market research The Business Plan is supported by a market study, the main figures of which are as follows: • In relation to the plaintiffs:  There is a variable potential market which, for the first year of activity, stands at 320,000 potential applicants (households), made up of: couples with children, DINKs (Double Income No Kids), single-parent families, singles who work full time and displaced workers. Of this universe, 36.7% show a positive willingness to hire VenGo®.

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 Potential customers estimate an average of 17 services per year.

 The optimum price, in the consumer's mind, is on average around €7/hour per service.  A typical service would take 2.10 hours on average to perform.

• •

In relation to revenge:

 There is a variable potential market which, for the first year of activity, is situated in a community of more than 200,000 students in Madrid. Of this universe, 62% are willing to provide specific services through VenGo®.  Each student would dedicate an average of 12 hours per month to collaborate as I come.  The expected revenues are in line with the price that the claimants are willing to pay.

Therefore, the market study confirms that there is a sufficient number of people in society with a need for more time, who would be willing to pay for it, as well as students interested in sharing their time for a fee.

4. Key Success Factors

As the collaborative economy is still in its infancy, key success factors are derived from market research: (See next page)

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5. The team VenGo® is formed by a group of entrepreneurs with multidisciplinary backgrounds and experience in finance, marketing, technology, law and market research, who believe in an innovative and exciting project with a relevant, timely and clearly defined "Pain Factor". 6. Strategic Approach VenGo®'s corporate strategy focuses both on the development of services (digital platform that supports the marketplace: app, website, etc.) and on the development of markets. This strategy will be implemented progressively, concentrating the first two years of activity in the Community of Madrid, in order to expand the business to three other Spanish cities (Barcelona, Valencia and Seville) in the third year of activity and, from the fourth year onwards, to include the internationalisation phase with a presence in two Spanish cities (Barcelona, Valencia and Seville) in the third year of activity and, from the fourth year onwards, to include the internationalisation phase with a presence in two Spanish cities (Barcelona, Valencia and Seville) in the fourth year of activity. European Open Business School

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European cities (Berlin and London). In the fifth year, we plan to consolidate the markets in which we are already present.

VenGo®'s competitive strategy is based on exploiting its differentiating factors compared to potential competitors: • Service flexibility: VenGo® does not restrict itself to a limited catalogue of services but, within legal limits, a wide range of non-qualified day-to-day services can be requested via the platform. • Free pricing: VenGo® does not set the price of the services, the price being agreed between the claimant and VenGo®. • Customer focus: VenGo® places its two types of clients (demanders and sellers) at the centre of its activity, offering them specific functionalities, as well as the necessary tools so that both groups can interact with each other. 7. Marketing and Sales Operational Plan The marketing strategy is focused on publicising the VenGo® service, as well as on attracting and retaining the loyalty of its community, which supports the expected sales forecast. The bottom-up model on which VenGo® sales forecasts are based is shown below. The calculation of these forecast turnover figures has been carried out using the PITA (Population x Incidence x Transactions x Amount) model for estimating demand.

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Table 2. VenGo's annual turnover based on PITA model (Source: Own elaboration)

VenGo®'s main turnover will derive from a fixed fee charged to applicants, which will be 20% of the cost that they agree with VenGo® for the provision of a specific service. In addition, revenue is expected to be generated through sponsoring and co- registration for the platform's partners, through the B2B model.

Because it is a digital business, with low investment and high scalability,

VenGo® shows an exponential sales potential.

The development of the forecast sales plan is supported by a significant

marketing investment, as shown in the table below:

In order to reach this level of forecasted sales, a communication and promotion plan has been developed for the first year:

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During the second year, the same line of communication and promotion will continue, increasing it according to the growth in sales and sales forecasts. It is estimated that the budget will grow by 40%. For the third year, an investment of €250,000 for SEM and €600,000 for offline advertising is foreseen, plus a 40% increase in marketing investment over year two.

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In the fourth year, the previous year's investment in in-house marketing doubled, with a 20% increase in marketing expenses through an agency compared to the third year. This is due to the start of the internationalisation process in two European cities, following the same expansion model as in Madrid, so that international operations this year will be carried out only in the urban centres of these cities. For the fifth year, the investment is doubled with respect to the previous year, in order to maintain the investment throughout Spain and to have the same investment allocations for the two new cities where VenGo® wants to position itself and continue to grow. The expected increase in awareness in the markets where VenGo® will develop its activity is shown below:

8. Plan of Operations The VenGo® operations plan is designed based on processes aimed at achieving an exceptional user experience. This experience must contribute to eliminating any initial barriers that may exist, ensuring full user satisfaction and promoting the virality of the business idea.

The VenGo® process map and service map are detailed below.

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Based on the principles of Design Thinking 3 , and from the study of the competition and the market research carried out with potential customers and vengos, a map of the user experience in VenGo® has been drawn up. This map represents the complete experience of a customer using VenGo® for the first time, from the emergence of a specific need that can be covered by VenGo® to its satisfaction.

Illustration 5. VenGo User Experience Map (Part I) (Source: Own elaboration)

3 This is Service Design Thinking. Editorial: John Wiley & Sons. Autores: Marc Stickdorn y Jakob Schneider

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Ilustración 6. VenGo User Experience Map (Parte II) (Fuente: Elaboración propia)

9. Legal and Corporate Aspects With regard to the legal sphere, the collaborative economy in general, and VenGo® in particular, operate within a legal framework that is characterised by two aspects: vagueness and uncertainty. The impact of the most representative legal aspects is analysed below:

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• CONSUMERS:

The most relevant aspect here is: what responsibility does the platform, which operates as a channel, have? What responsibility could VenGo® have? The starting point for answering these questions is to define very well the terms of use of the platform itself, so that the responsibility of the company acting as intermediary is limited as far as possible. – in this case, VenGo®- and its participation in the transactions carried out through it. It should be noted that the collaborative economy, and VenGo® in particular, implements its own consumer protection mechanisms, both for claimants and vengos.

• LABOUR RELATIONS AND SOCIAL SECURITY:

VenGo® shall act strictly as an internet operator, under the terms and conditions established for this purpose by the Law on Information Society Services and Electronic Commerce.

• TAXATION AND TAXATION:

In the case of VenGo® and, as mentioned above, no vengo may collaborate on a regular basis, and the platform establishes measures, such as a maximum number of hours of collaboration per month, to avoid such regularity. As far as personal income tax is concerned, the vengo must integrate the profits obtained, unless there is no obligation to file an income tax return, according to the thresholds established by law, which, with some exceptions, will be usual given the group of vengos. In terms of invoicing, and given that VenGo® will act as a payment platform, there will be an obligation to issue a valid invoice in accordance with the Invoicing Regulations.

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• SECTORAL REGULATION: This sectoral regulation does not apply as these are non-qualified services that do not require any professional qualification, and the clauses of the platform - legal notice - expressly include a prohibition on activities outside this scope. • LIABILITIES AND INSURANCE: It is essential to use effective clauses that cannot be declared null and void in the future, especially for all disclaimers. Notwithstanding the above, it is advisable to take out liability insurance, as well as to clearly inform all your users about the liability regime vis-à-vis other users. By way of conclusion, the regulatory uncertainty that, in many cases, operates in all those classic legal matters within a company and, particularly, in the case of labour relations, taxation and relations with Social Security and, finally, the system of responsibilities of operators, users, etc., stands out, although there are mechanisms to minimise the risks associated with entrepreneurship within the collaborative economy. However, in recent times, something is changing and a wide variety of public and private spheres, associations, entrepreneurs and institutions are demanding clear and concrete regulation. As for the legal form, VenGo®, given the nature of its activity, the existence of several founding partners (five partners), the planned expansion and growth plan and, finally, the advantages and disadvantages of the different legal formulas for incorporating a company under Spanish law, is that of the Limited Liability Company (S.L.).

10. Human Resources and CSR

In terms of human resources, VenGo® will have a staff of three people in the six months prior to the start of commercial activity:

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The CEO Business Development Manager, a position

•

held by partner Javier Ballesteros.

The Marketing Manager, a position held by partner Elena

•

Pascual.

The IT Manager, a position which will be filled by a

•

professional recruited for this purpose.

The objective is to carry out all the key activities that will make it possible, six months later, to start commercial activity.

•

At the time of the start of commercial activity, VenGo® will have a staff of five people, increasing the staff in accordance with the planned expansion, both nationally and internationally, and attending to the needs associated with the aforementioned expansion. In its fifth year of activity, VenGo® will have a staff of fifteen people, to which another person will be added for each country it enters.

The following table shows the HR needs of VenGo®, by year of activity:

Table 8. VenGo's five-year HR plan (Source: Prepared by VenGo itself)

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The VenGo® organisation chart for years 1 and 5 is shown below:

ORGANIGRAMA INICIAL (AÑO 1)

CEO Business Development Manager (1)

Administración/Finanzas Manager (1)

Customer Service Manager (1)

Marketing Manager (1)

IT Manager (1)

Illustration 9. VenGo Year I Organisational Chart (Source: Own elaboration)

Ilustración 10. Organigrama VenGo año V (Fuente: Elaboración propia)

Illustration 10. VenGo Year V Organisational Chart (Source: Prepared

In terms of corporate social responsibility, the nature of VenGo®, its values and its vision regarding the development of the collaborative economy and, therefore, of society itself, mean that the company is committed to the following five principles

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