WEEK 1 TUTORIAL QUESTIONS

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Kenyatta University *

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Nov 24, 2024

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BUS 206: WEEK 1 TUTORIAL QUESTIONS FROM CHAPTER 1 (PAGE 25) 1. Why is entrepreneurship considered important in today’s context? Explain how entrepreneurship addresses some of today’s major challenges. 2. What is transformative innovation and what role do entrepreneurs play in solving wicked problems? 4. Why do we use the French word ‘entrepreneur’ instead of an English equivalent? 6. How were entrepreneurs historically viewed? What challenges did they face throughout history? 7. In your culture, what is the history of enterprise and entrepreneurship? 9. Name four major schools of thought in entrepreneurship theory, describe them and explain how they differ. 11. What is the difference between social entrepreneurs and business entrepreneurs? 12. What is the difference between entrepreneurs and small-business managers? CASE 1.1: PAUL CAVE ‘Our job is to enable our customers to make heroes of themselves. ’Using creative thought and determination, Paul Cave, founder and chairman of Bridge Climb, has created a $50million business in just a few years, effectively monopolising an internationally famous Australian icon brand he doesn’t own, capitalising on huge advertising he doesn’t pay for and sending a personally delivered word-of-mouth recommendation through one million customer heroes to arguably 100 million prospects around the world. And this is just the beginning. Paul Cave made no fewer than 52 presentations in the late 1990s in an attempt to raise $12 million to fund a business that would enable millions of people to climb the Sydney Harbour Bridge. The predominantly merchant-banking targets, thought it was a fascinating opportunity, but not for their money. In the end, it was another entrepreneur, Brett Blundy, who Cave says ‘put money into this within 60 seconds of my telling him about it and became my first major shareholder’. Analytical minds struggle when there is no precedent to rely upon. Clearly Blundy, like Cave, was searching for opportunities where there was no precedent. Just three years after Bridge Climb opened, 300 000 people per annum (two-thirds of them international visitors) were climbing, and the business was achieving a turnover of $50 million. More than 2.5 million people have since climbed. Cave talks privately of a bottom line that would make Warren Buffett green with envy. Since commencement, the company has distributed over $1 million in special thank-you bonuses to its 280 staff. Cave isn’t really surprised at the success of Bridge Climb. After he first conceived the idea over a decade ago while on a bridge climb with his YPO (Young Presidents Organisation) forum, he was forced to take plenty of time to think the concept through. ‘As an entrepreneur, you couldn’t have found anything [the barriers] more frustrating. The first letter from the government basically gave 64 reasons why not’, he says. Having been on the receiving end of so many ‘No’ answers has made Cave decidedly a ‘Yes’ man. Having now made

it possible for blind and deaf people to make the climb, the next challenge to overcome is to allow people in wheelchairs to climb – and he is confident of success. Fortunately, Paul Cave’s analytical economics background has not masked his creative marketing ability – not only to sense a basic business opportunity that has been staring Australians in the face since 1932, but also to see beyond the simple climb to the higher-order, monopolisable value that is already generating extraordinary wealth for the company. Bridge Climb projects that it will pay an estimated $130 million to the Roads and Traffic Authority of New South Wales over 20 years for exclusive tourism rights to arguably Australia’s most internationally recognised man-made icon. This cost pales into insignificance when one considers the real value of the asset ‘leased’. While the Sydney Harbour Bridge itself is perhaps worth a billion dollars as a structure, its value as an established international brand and icon is far greater, probably in the order of tens of billions. The brand is being built further and maintained by word of mouth and advertising in an extraordinary manner. Being a world-first bridge-climbing experience gives a powerful first- mover advantage. But being on an already world-famous bridge in the centre of Australia’s largest and most visited tourist city is another monopoly. But that’s by no means all. Cave says: ‘The Australian Tourist Commission has spent some $20 to $30 million showing commercials featuring Bridge Climb to the rest of the world to bring people here. ‘Eleven hundred journalists climbed the bridge during the 2000 Olympic Games and the publicity they generated could have reached an estimated 2.5 billion people worldwide. That advertising and publicity has come to us at no cost. ’The way Cave has harnessed more than a million climbers as compelling promoters of his company’s message further exemplifies the man’s intuitive ability to market without money through customer word of mouth. The value delivery system – company culture, defined procedure, staff training, climber preparation, climber satisfaction measure and so on – is designed, as Cave puts it, to delight ‘every climber, every time and there is no exception to that’. Climbing, now permitted 24 hours a day, 7 days a week, happens as often as every 10 minutes whether it is hot, cold, raining or foggy, and 99 per cent of the customer ratings of the experience are excellent or good regardless of conditions. Price is not an issue, but providing extraordinary value is, Cave insists. The average price per person is $145 and a further $30 is spent on merchandise. He admits that the value people ascribe to the ‘Climb of Your Life’ experience is a voyage of discovery for him. Once discovered, however, his mind has pursued each aspect of that value like a dog with a bone. For example, 400 (known) proposals of marriage have been made on Bridge Climb, with only one rejection. A technique has been devised so that the ring can be passed safely and securely down apiece of cord to seal the acceptance. Integrated value indeed! The advice that Paul Cave offers budding entrepreneurs is deceptively simple when one considers the lengths to which he has gone to implement his formula: Be clear about what it is and don’t stray from that course. Keep driving in pursuit of that goal. He admits that Bridge Climb operating on the Sydney Harbour Bridge is ‘a dream come true’ and his international team is working on other icon bridges around the world.

Don’t try to be all things. Be famous for just one thing, says Cave: ‘We are doing a very simple thing. We are a facilitator only, taking people to the top of the bridge. Our job is to enable our customers to make heroes of themselves. If prospective staff find that unreasonable (that is, the ‘every climber, every time, constant measurement’ philosophy), please don’t come here’, Cave says. Source: Marketing without money’ by John Lyons and Edward de Bono, published by Pennon Publishing. Copyright ª 2003 by John Lyons. Used by permission. QUESTIONS: 1. What was the opportunity that Cave saw that allowed him to market someone else’s product without any money? 2. Cave gives meaning to the I Ching (an ancient Chinese ‘book of changes’) hexagram ‘in adversity, it furthers one to be persevering’. Give your own interpretation of this. What does Cave mean when he discusses enabling the customers to become heroes? 3. What entrepreneurial traits did Cave exhibit in starting this business?

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