“The most valuable thing you can make is a mistake – you can’t learn anything from being perfect.”

Adam Osborne

In this document we will be discussing the role of entrepreneurship theories in understanding what it means to be an entrepreneur. We will discover how these theories apply to real life entrepreneurs and how it can effect decision making in a business environment.

Entrepreneurship theories are significantly important for three main reasons; firstly, they help to understand the process underlying entrepreneurship. Second they aim to determine whether it is possible to increase the entrepreneurial population. And lastly, to determine whether an increase in the number of new enterprises being formed could be achieved through selective education and policy measures.

To begin, we must ask ourselves, ‘how do we define an entrepreneur?’ and ‘why should I study entrepreneurship?’ Regarding the latter, entrepreneurship allows us to identify the qualities required of an entrepreneur. ‘What makes an entrepreneur?’, ‘Are people born entrepreneurs or do they learn the skills required?’ By identifying the qualities required we can better understand how ordinary people can achieve extra-ordinary success. Entrepreneurship helps estimate the appropriate contribution of an entrepreneur with regards to teamwork. It is also important in the appreciation and development of training and education when mistakes are costly and it is of interest to avoid learning by doing. This is of particular importance when dealing with intrapreneurship.

There are many different aspects to be considered, such that there is no single definition. Taking the ‘multi-disciplinary approach’ we can split the issues into five concerns; Economics, Psychology, Sociology, Management and Intrapreneurship.

Economic theory and Entrepreneurship

The perspective of the observer determines the definition of an entrepreneur. There are three main types of economists that we will go into in brief detail. The first is the ‘Classical economists’ which where primarily concerned with the economy with little interest in the individual. Second, the ‘Neo-classical’ focused on maintaining equilibrium for management and decision making. And finally, the Non-economists who maintained that the entrepreneur was the key figure in economic development.

Classical:

The classical tradition was primarily concerned with risk taking, profit, motivation, management and the ability to solve problems adequately. The two most prominent theorists in the classical tradition would be Richard Cantillon and Jean-Baptiste Say.

Richard Cantillon, acknowledged by many to be the first great economic theorist, was an Irishman with a Spanish name who lived in France where he made his fortune under John Low’s schemes. He believed the entrepreneur to be a pivotal figure in the economy, a person with the required risk taking skills needed to succeed and as an individual capable of reacting to profit opportunities balancing supply and demand. His theory referred to any form of self-employment an act of entrepreneurship and as an individual capable of reacting to profit opportunities balancing supply and demand.

Jean-Baptiste Say was born in Lyons to a wealthy family of textile merchants. In 1787 Say gained a position at an insurance company in Paris upon completing his 2 year apprentice to an English merchant. Later in life he served as a French volunteer in the military campaign to expel the allied armies from France. It was during this period he began writing his theories. He believed the entrepreneur must be able to organise the factors of production and carry them out. He distinguished between the profit of the entrepreneur and the profits of capital and stressed the needs for administrative and management skills.

Neo-Classical:

In this tradition entrepreneurship is regarded as one of the economic factors of production with four considerations, land, labour, capital and enterprise. It drew comparisons between a capitalist and an entrepreneur, suggesting the two are in fact interconnected, and focused on equilibrium results vs. adjustments process. Its main flaw hid in the fact that it could not explain origins of new demand. Alfred Marshall, a Neo-Classical writer stressed the importance of the entrepreneur. He believed management be separate to entrepreneur adding a leadership aspect to tasks.

Neo- Economists:

In this tradition the entrepreneur was the key to economic development; theorist Joseph A. Schumpeter pioneered this tradition. A former product of the Austrian schools he argued those daring spirits, entrepreneurs created technical and financial innovations in the face of competition. He proposed the idea of 5 sources of innovation.

1 Developing new products and services.

2 Developing new methods of production

3 Identifying new markets

4 Discovering new sources of supply

5 Developing new organisational form

He believed the entrepreneur played the key role in generating economic development, by acting to cause rather than react to change. And that entrepreneurship is a form of creative destruction, in the sense that an entrepreneur creates a niche environment by challenging established companies and eliminating existing market structures, creating a chaotic marketplace.

For my case study, in the related field, I am going to compare and contrast two “fathers of computers” and evaluate economic traditions they could be applied to.

Adam Osborne vs. Charles Babbage.

These two men are both known as fathers of computers, one for pioneering calculating machines, which would later become the computer. The other is the pioneer of mass production of portable computers.

Both men excelled in a very similar field but through very different means and under very different terms. To be fair it could be argued that Charles Babbage was not an entrepreneur but an inventor, a purely from a profit oriental perspective his products were not commercial. But he possesses many of the skills and attributes befitting an entrepreneur.

Born in London in 1791 to a London banker, Babbage found himself as his own algebraic instructor, of which he was very passionate, and well read in the continental mathematics of his day. Clearly showing his sense of innovation and motivation, from an early age, he entered trinity college Cambridge in 1811 and found himself beyond the capabilities of his tutors. He co-founded the analytical society to promote continental mathematics, reforming the mathematics structure taught at the university.

Where he differs from more well established entrepreneurs lies in his marketing skills, or lack of. As a professional mathematician and calculating machinery enthusiast, it was this enthusiasm that led him to fame. He invented the difference engine in 1821 to compile mathematical tables, upon completion he had already moved on to a better machine which could perform not just one task but any type of calculation. It was named the analytic engine and had some of the characteristics of today’s computers.

“Errors using inadequate data are much less than those using no data at all”.
Charles Babbage

Due to technological insufficiencies it was unfeasible to construct in production. The British government suspended funding and after an agonizing waiting period ended the project. In this sense he failed to abide to any particular economic tradition, although he did possess many common traits. He proved himself a risk taker with an abundance of motivation, management skills and an ability to resolve problems. But as he failed to balance supply and demand, while reacting to profit opportunities, he falls short of being a classical tradition success story. Nor does he apply to the neoclassical. But in every sense he applies to then non economic tradition, solely concerned with the development through the entrepreneur.

Adam Osborne on the other hand was very much money orientation. Born to British parents in Thailand, the American entrepreneur trained as a chemical engineer, made a successful move in the nineteen seventies into publishing computer in books and then in 1981 at the west coast computer fare, in the same year that IBM launched the PC, he introduced the Osborne1, a 12Kg ‘luggable’ computer, the first ever portable computer.

He made significant profit selling $6 million in 1981 and $68 million the following year, at his peak shipping 10,000 units per month with 3 million units on backorder.

The ground breaking machine came with full keyboard, 5in. diagonal, monochrome built in monitor and floppy drives, nearly all the components of modern portable computers. It was fitted with: C. PM, a forerunner of DOS, and applications like ‘word star word processing’ it was even designed to fit under aircraft seats. He clearly showed he had a definite target market in mind, as the Osborne1 was aimed towards the businessman, a man with the finances to afford such a luxury.

In 1982 at a personal computer world show in London he announced his ‘executive machine’ with superior features which in effect killed the original machines sales. Perhaps in being too hasty to develop his idea, he failed to make a greater profit on the original before launching the executive. But the over hyped new model failed to appear in any quantity before the company went bankrupt. It is taught that management errors were to blame.

“Money coming in says I’ve made the right marketing decisions”.

Adam Osborne

However, following the collapse of Osborne computers, Osborne wrote a best selling memoir of the experience, “Hyper growth: The rise and fall of the Osborne Computer Co.”. Again showboating his innovation and drive.

“Anyone who chooses to judge me only by the nine months of that period when I wasn’t an officer of no corporation [sic] and running no company has got to be a victim of their own delusions”.

Adam Osborne

Following that, he went into publishing, founding the “Paperback Software International ltd. a company that specialized in inexpensive computer software. He argued that if telephone companies applied the same logic to their pricing as software companies a phone would cost $600. One of their products was an inexpensive clone of the lotus 1-2-3, which led to legal action in which lotus sued and as a result of the lawsuits; consumer confidence waned for the Paperback Software. Revenues dropped by 80 percent by 1989 preventing expansion. In the nineteen nineties, the case went to court and the court ruled the Paperback Software product, by copying of the lotus 1-2-3’s look and menu interface, violated the lotus’s copyright.

Although both men diverged in their behaviour, they shared a risk taking quality and although it may have seemed to be reckless, both men thrived on adversity, creating a profit out of a hindrance. And despite both men having possessed many required skills from an early age, both thrived on learning from their mistakes, in a constant attempt to better themselves in the true spirit of entrepreneurship.

“This is the ultimate con game – I’m having fun and people pay me to do it”.

Adam Osborne

Psychology theory and Entrepreneurship

To look at how personality traits can influence an entrepreneur’s life we are going to look at Roman Abramovich. In the short period since the collapse of communism in the U.S.S.R., Abramovich has amassed an estimated personal fortune of $13.3 billion and become governor of a large province in Eastern Russia.

Abramovich was born in Saratov, Russia in 1966. Orphaned at an early age, he was raised by his uncle in Ukhta, a bleak oil industry town outside the Artic Circle. His education was interrupted as he was drafted into the Red Army. At that time the Soviet army had a whole hierarchy set up in it, the Muscovites and Jews were especially hated.

Despite being Jewish, Abramovich was able to establish good relations with officers within the squad. It was in the army that he developed the ability to overcome privations and to depend only on himself. It is these skills of self preservation that have become prevalent in his career as an entrepreneur.

After being discharged from the army, he set up a business that made and sold dolls. His big break came with the privatization gold rush that came with perestroika. Abramovich was one of the first in Russia to discover that oil could be sold without extracting it. Instead he found that it could be sold by getting an export license and selling at world prices whilst purchasing it at domestic prices. This quickly allowed him to set up the company Sibneft with Boris Berezovsky. The vast profit he made turned him into one of the youngest oligarchs (Jewish oil baron).

Unlike his contemporaries like Berezovsky and Mikhail Khordorkhovsky, Abramovichs sense of self preservation, that had been nurtured in the army, allowing him to continue to conduct business under a changing political climate. Whilst his contemporaries are in exile and prison respectfully, Abramovich sold his 72% share of Sibneft to the Russian government. In that time he has gathered enough political sway to become governor of the region of Chukotka, where he enjoys a tax haven.

There are two key factors in the personality traits of Roman Abramovich that have allowed him to succeed in such a dynamic environment. First being the ability to react and adapt to huge changes to his environment such as being orphaned at a young age and conscription into the army. This trait seems to be in his nature as he has never had real parental figures in his life. The other is instinct of survival at all costs which appears to have been drummed into him in the Red Army. These key elements of his personality have enabled Abramovich to become one of the most powerful men in Russia today.

Sociology Theory and Entrepreneurship

The school of sociology believes that entrepreneurial behaviour of an individual depends on his interaction with the enviroment that he has been exposed to. Entrepreneurs can also completely understood in terms of their ability to adapt to the enviroment and their networking skills.

To look at how the sociological factors can influence an entrepreneurs life we are going to look at Ingvar Kamprad. He is the founder of IKEA, which currently has 186 stores in 31 countries around the world and has made its owner the richest man in the world with an estimated personal fortune of $32 billion.

Kamprad grew up on a small farm in Agunnaryd, Sweden. He began his career at an early age selling matches. When he was 17 he was given money by his father for doing well in school and with this money he started IKEA. He began a mail order system where he would deliver the goods himself in a milk van around Smaland. It is from this rocky, windswept area that Kamprad obtained the make do attitude that is reflected in his own self improving ethos: “You can do so much in ten minutes time. Ten minutes, once gone, are gone for good. Divide your life into ten minute units and sacrifice as few of them as possible on meaningless activity.”

This instinct to maximise the use of resources that come from being brought up on a farm in 1930’s Sweden are still reflected in IKEA today. During the 1990’s the company is said to have marketed a line of picture frames made entirely out of rubber offcuts from a Volvo factory.

Kamprads strong family background is present even in the names IKEA. The first two letters of which are his own initials and then proceeded by Elmtaryd (the name of his fathers farm) and Agunnaryd (the parish he grew up in).

Management Theory and Entrepreneurship

The management school takes the view of an entrepreneur as embracing the skills required to operate a business during the rapid expansion and growth phase rather than the skills for starting a business. This school is based on four principles Management, Finance, Operations and Marketing.

Google founders Larry Page and Sergey Bergin are of this ethos. They were not terribly fond of each other when they first met as Stanford University graduate students in computer science in 1995. They argued about every topic they discussed. Their strong opinions and divergent viewpoints would eventually find common ground in a unique approach to solving one of computer technologies biggest challenges: retrieving relevant information from a massive set of data.

By January of 1996, Larry and Sergey had begun collaboration on a search engine called BackRub, named for its unique ability to analyse the “back links” pointing to a given website. Larry took on the task of creating a new kind of server environment that used low-end PCs instead of big expensive machines.

A year later, their unique approach to link analysis was earning “BackRub” a growing reputation among those who had seen it. Larry and Sergey continued working to perfect their technology through the first half of 1998.

Finance:

Following a path that would become a key tenet of the Google way, they bought a terabyte of disks at bargain prices and built their own computer housings in Larry’s dorm room, which became Google’s first data centre. Meanwhile Sergey set up a business office, and the two began calling on potential partners who might want to license a search technology better than any then available and presently, perhaps the best in the world. They wrote up a business plan, put their Ph.D. plans on hold, and went looking for an angel investor eventually raising 1 million. Over the years, Google have managed to earn financial trust from several mainstream companies. Today their biggest income is advertising rights.

Management:

The sheer size of Google shows the scale of their excellent managerial achievements. Their expanded web index contains more than 6 billion items including 4.28 billion web pages plus 880 million images, 845 million Usenet messages and a growing collection of book-related information pages. There are over a 100 million search queries every day and it is available in over 26 different languages. They have maintained their high standards by continuing to train their employees in an innovative way.

The launch of Google Labs enabled Google engineers to present their pet ideas proudly to an adventurous audience. Users could get acquainted with prototypes that were underdeveloped, while developers received feedback that helped them groom their projects for success.

Operations:

By 1999, they had moved to Googleplex, its current headquarters in California. Their offices reside in all four continents. Presently, there is nearly 5000 employees worldwide.

To maximize the flexibility of the work space, large rubber exercise balls were adapted as highly mobile office chairs in an open environment free of cubicle walls. Lava lamps and dogs were a unique feature of their offices. The wellbeing of their staff was important to them, proven when they hired a company chef, bringing with him an eclectic repertoire of health-conscious recipes. Sections of the parking lot were roped off for twice-weekly roller hockey games. Larry and Sergey led weekly TGIF meetings in the open space between the desks. The informal atmosphere encouraged a good working environment with an accelerated exchange of ideas. Google employees made many noticeable improvements to the search engine itself and additional enhancements.

Marketing:

They are persistent with their young and fresh approach in all areas of their marketing strategies. Annually, Google continue to add new products and features to their web engine which include adwords, google toolbar and deskbar, discussion boards, catalogue shopping, email, digital photography, maps, games, website development, wireless technology, entertainment guides and the unusual zeitgeist which charts our shifting obsessions every year. .

Both founders are frequently rewarded with numerous awards and this feeds their hunger of personal accomplishment.

Intrapreneurship:

Mr. Pinchot coined the word “Intrapreneurship”. It involves the creation of independent business units designed to create, market and expand innovative services, technologies, or methods in the organisation. Some individuals are given the freedom to act in an entrepreneurial way without having to take on ownership responsibility.

For decades, forward-thinking corporations relied on internal entrepreneurial efforts to alter an organization’s status quo, harness the energies of talented renegades, and give sponsorship to promising businesses that were unrelated to the company. The trouble is that few companies were able to get it right. The biggest impediment was the nagging fact that even the most profitable corporations couldn’t hope to compete with the riches available to employees who left to found – and eventually take public – their own company.

Under Mr. Pinchot’s proposals for Research and Development departments, a researcher wishing to plunge intrapreneurially into some project would initially have to risk something of value to himself; such as 10% of the costs of a project, up to 20% of his salary for the duration of a project and two years thereafter. A committee within the company would then contract to “buy” the completed research in an intrapreneurial scheme for both cash bonuses and intra-capital. If a company makes £lm on a project, the intrapreneur’s share might be £100,000, of which only £10,000 might come in cash and £90,000 might come in intra-capital which the intrapreneur can invest on the corporation’s behalf in future Research and Development projects of his own choice. If he is successful again, his reward will be another cash bonus, probably larger the second time plus more intra-capital.

This system, says Mr. Pinchot, motivates creative staff to think practically and frees their individual initiative. It minimizes politics and maximizes performance as a criterion for advancement. It rapidly puts a portion of the company’s Research and Development budget in the hands of proven winners. It gives any good research employee a strong reason to stay with the company, since leaving would mean giving up control of his accumulated intra-capital.

Scratch a major innovation and you’ll find an intrapreneur. Don Estridge hid out in Boca Raton, Florida, far from his bosses at I.B.M. headquarters, to spearhead the creation of the personal computer. Steve Jobs and a group of 20 Apple Computer engineers created the Macintosh computer without “adult supervision,” mainly to compete with Apple’s mainstay, the Apple II – not to mention Mr. Jobs’s nemesis, Apple CEO John Scully. Intel’s gigantic microprocessor business got its start when Ted Hoff and a couple of engineers decided they didn’t want to do just another custom chip for a Japanese calculator maker. And then there’s James Gosling, Patrick Naughton, and the rest of the Sun Microsystems crew that holed up in a shuttered Digital Equipment research lab in Palo Alto, California, played Nintendo and created Java.

“Look back at any great business or invention at just about any big company and you can find that intrapreneurs created it”. Gifford Pinchot.

Conclusions

Considerable effort has also gone into trying to understand the psychological and sociological wellsprings of entrepreneurship. These studies have noted some common characteristics among entrepreneurs with respect to need for achievement, perceived locus of control, orientation toward intuitive rather than sensate thinking, and risk-taking propensity. In addition, many have commented upon the common, but not universal, thread of childhood deprivation, minority group membership and early adolescent economic experiences as typifying the entrepreneur.

There are similarly many questions about what the psychological and social traits of entrepreneurs are. The same traits shared by two individuals can often lead to vast different results: successful and unsuccessful entrepreneurs can share the characteristics commonly identified. As well, the studies of the life paths of entrepreneurs often show decreasing ‘entrepreneurship’ following success, which tends to disprove the centrality of character or personality traits as a sufficient basis for defining entrepreneurship.

Creativity is often not a prerequisite for entrepreneurship either. Many successful entrepreneurs have been good at copying others and they qualify as innovators and creators only by stretching the definition beyond elastic limits.

References:

Adam Osborne

Micro Computer Beginnings by Dave Mathews

http://www.davemathews.com/microbeginings.html

Jones Telecommunications & Multimedia Encyclopedia

http://www.digitalcentury.com/encyclo/update/osborne.html

Charles Babbage

http://www.brainyquote.com/quotes/authors/c/charles_babbage.html

http://ei.cs.vt.edu/~history/Babbage.html

Google

http://www.google.com/corporate/history.html

Roman Abramovich

en.wikipedia.org/wiki/Roman_Abramovich

www.forbes.com/finance/lists/10/2004/LIR.jhtml?passListId=10& passYear=2004&passListType=Person&am…

www.mosnews.com/mn-files/abramovich.shtml

Mr. Pinchot

www.pinchot.com/MainPages/About/Bios/GiffordBio.html

Intrapreneurship

www.smallbusinessnotes.com/ choosing/intrapreneurship.html

westorg.org/definitions/index.shtml

intrapreneurs.net

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This project had the honour of being selected to enter the Entrepreneurial Student Awards 2006. It was created in collaboration with 4 other students from DCU, in 3rd Year, for our module Enterprise Development Project. We had to create an innovative digital product and seek financial assistance to see it through.

Outline:

For our business project we plan to create a computer application capable of integrating actual musical instruments into a computer based digital music editing and tutorial suite.

The application will require hardware components to connect the instruments digitally to the computer. Such musical jacks exist on the market already, and can be adopted for our application. The idea behind a digital connection is to eradicate distortion from the user’s side of the operation.

Shale Hardware Overview

SHALE HARDWARE CONFIGURATION

  • The application will have initial tutorials built into its libraries which include a finite amount of reference songs. The library will include a large amount of varying songs from various genres; this is in order to encourage a larger interest in the product.
  • The user will open the desired song, connect the desired instrument digitally through the digital jack and play along with the selected song while being prompted by a tabular or musical notation display on one side of the screen. Simultaneously on the other side of the screen, a display will output the notes being played by the user into the application.
  • The application should be able to select each track on a song independently, i.e. the user can single out the guitar track, or bass, or drums, or any combination.
  • The application should also allow the user to insert any audio c.d. source and access it, if available, at the on-line resource library.
  • The on-line library would have to be constantly updated in order to accommodate a large variety of users with varying tastes and styles.
  • The application should also contain a variety of effects in order to obtain sound used by the composer.
  • It should also contain a recording and editing function to allow the user to record their progression. This function is intended to increase the functionality of the application, hence increasing the amount of interest in the product.

Why it is a good idea?

Our application creates an online learning environment which enables the opportunity to learn at a greater pace and ease. By using our product the consumer avoids having to pay the constant expense of professional lessons with music teachers. Through our learning scheme the consumer purchases the full application once or downloads the free trial version (this version of our application contains only the tutorial mode with basic libraries). There will also be an annual fee to avail of the constantly updated libraries.

Main key aspects:

  • Ease: The ‘Home Music Suite’ can be accessed anywhere at any time. The user can gain expert knowledge without leaving the house.
  • Cost: The initial price of the application and the included cost of the yearly subscription for the libraries will cost relatively the same amount as a number of professional lessons.
  • Adaptability: The various subsections in the application mean even after the user grows beyond the tutorial sections, the editing/recording suite provides an excellent home recording facility.

Assumptions:

  • People want it:  We have researched the market thoroughly and have found that people attracted to our product because of its ease of use, accessibility and the elimination of the expense of paying for lessons.
  • Finance: As people will only be paying for the application, and the on-line tutorial membership, it provides an inexpensive alternative to the traditional method of paying a teacher week in week out.
  • Premises: As this will be an online company the expense of renting premises is not an issue because the entire business can be set up from home.
  • Expert Consultant: To find experts in this particular field we would hope to avail of the lecturers in collage.

Research:

  • Online Surveys: We have carried out online surveys and gauged the public reaction to the product.
  • Focus Groups: As well as online surveys we carried out meetings with the various music societies within D.C.U. and other collages. This was aimed to be a more hands on approach and provided us with much more detailed feedback.

Target Customers:

  • Musicians: Musicians will be the main target audience for our product. We feel that this application would be an essential tool for any musician as it would eliminate the need to learn complex music notation. The steep learning curve of standard notation means that only a small percentage of musicians can actually read music. Our application would provide standard notation and also provide tablature. Tablature is a basic and simple way of reading music and means that musicians of all level of competency would be able to use and understand our application.
  • We would also be capable of reaching people form all over the world with access to a computer giving us a huge market in which to operate.

Unique Selling Points:

  • The multilayered functionality of the application means that where other similar products may concentrate on one aspect, i.e. sound editing/music tutorial, our application includes all aspects of a musical suite.
  • We aim to achieve an extensive library with full tutorials on various genres and styles for a multitude of instruments.
  • Our libraries are constantly updated, in the occurrence of a requested song not having been updated to the library we will endeavour to add a tutorial immediately upon contact.

5 Reason why it will work:

  • Our product has a unique selling point in that it combines the best attributes of currently available products and combines them with our own ideas.
  • Our product would be updated every few months with new music which could be downloaded from the website. This would mean that we would be able to keep up to speed with new music without passing on the cost to the consumer who would normally have to go out and buy the latest versions other products.
  • The company would be inexpensive to set up. As it is all online we would be able to avoid the expense of renting premises.
  • As the application is available online, people from all over the first world would have access to our product.
  • The product will be inexpensive to the user because it is the only one they will ever need. The product would be upgraded all the time so there would be no reason to buy another model. It would also eliminate the cost of getting lessons from a professional musician, prices of which generally start off at $50 per hr.

Origin of the idea:

Most of the members of our group have come into close contact with similar products and found the additional features of both a desktop suite and tutorial suite in the one application lacking in existing products. We felt that if both features could be integrated in one widely adaptable application it would possess an enormous advantage over competitors.

Product:

“Shale” is an integrated audio recording, mixing, editing and mastering software application with a built in tutorial mode which utilizes on-line accessible libraries. The aim of the recording suite is to utilize powerful creation tools to provide flexibility and control for your digital desktop studio.

There are two main features of the application, the first being a powerful desktop studio. This consists of a digital multitrack recording, mixing and editing suite featuring an array of techniques applied to utilize the systems capabilities.

The planned features are as follows:

  • Adjust the volume, pan and effects controls as playback, and record changes in real time through editable envelops. Rescale envelope points to make changes to specific tracks or points.
  • Manipulate recordings with digital signal processing tools and audio restoration tools.
  • Utilize a surround encoder to transform multitrack session into a 5.1 surround sound experience.
  • Broad flexibility with mixing tracks through the use of duplicate signals applied through an effect to be mixed in conjunction with the original track with the added ability to edit each independently.
  • Apply effects to the master channel and view without mixing down, applying the effect to each track in multitrack session.
  • Edit specific section in track through punch editing.
  • Take advantage of an unlimited number of tracks in the multitrack.
  • Record multiple live inputs simultaneously.
  • Use flexible looping tools to create a dynamic full formed sound.
  • The application should have intuitive user interface with easy to use displays through optimal organization of workspace panels.
  • The application comes complete with a vast supply of musical samples, royalty free loops in many styles.
  • Flexible, efficient processing through a broad format support.
  • Record and edit audio files with fast, accurate tools tightly integrated to multitrack.
  • We also plan to feature a variety of audio restoration tools to correct; old vinyl, microphone pops, hisses, hums, clipped audio tracks, etc. using click and pop eliminators and noise reductions.
  • Adjust pitch with pitch correction; manual and automatic.
  • Time and pitch feature to adjust tempo without shifting the pitch and vice versa.

The second powerful aspect of our application is the   unique tutorial mode with on-line libraries. This feature allows the user to upload a song from the libraries or from the template examples included with the program, and learn through the tutorial the selected song.

The tutorial mode will be accessible through a tab on the user interface or by specification through the view selection. The display will feature two split screens, one to display the tabulation or music notation and the other to display notes played by the user. The idea behind this being, to provide a user-friendly environment with excellent interaction.

The user will select the song of their choice, the instrument and adjust the speed of the playback allowing the user to control the pace at which they learn. The user can read the notation on one screen and play along, noting the incorrect timing or notes on the input screen. The aim of this feature is to identify mistakes, improving the rate at which the user learns. You will then be able to playback what you played to notice any discrepancies.

The tutorial suite will also contain the effects provided in the desktop studio enabling the user to add on effects to their instruments to resemble that of the desired song. Another important feature, the on-line libraries, will be of an enormous advantage for the user. The libraries will be constantly updated on the web to provide a wide spectrum of resource learning material. The user can download a song and specify which instrument they wish to learn, then upload it to the tutorial suite and begin practicing. The objective of the on-line libraries is to provide the user with an extensive range of resource material to utilize the capabilities of the application.

Also as a unique feature to the desktop studios the on-line libraries will act as a strong competitive force to rival products. The integration of our wide spectrum of facilities should provide a beneficial edge over leading competitors.

“Shale’s” close integration and utilization of the internet as a platform to serve customer’s will not only provide an advantage with regards competition and asset cost, it will allow for further development and expansion. This may be achieved through monitoring customer comments about the application through on-line forums and loading upgrades from the web-site. As ‘Shale’ matures so to will the expanding libraries, and through the use of tutorial forums close contact with a range of consumers will high light any faults with the program with regards user friendliness, etc. and improve customer relations. Through this form of openness we predict this will increase the rate of new customers registering and develop customer/Shale relationships.

Production:

  • Finance :

In order to develop our program to the specifications necessary to compete with leading developers in the field, we plan to develop the idea and sell it, obtaining royalty income from the manufacturing/selling rights. To do this successfully we have identified some of the leading manufactures and targeted them as possible investment partners. We have also identified products, to be used in conjunction with “shale”, we feel we could promote in order to create our initial development costs. As hardware, jacks/ports, will be necessary to create a clear digital sound, we have researched the leading producers of such hardware. We feel we could obtain sponsorship from these companies as our program could be used to promote their product to be used in conjunction with ours. This would provide their company with an advantageous edge over their competing producers.

  • Location :

As our product is on-line based there is no real need for premises. It enables the product to sell globally as we can afford to concentrate our efforts on developing our website and marketing ourselves globally through expansion. This will significantly reduce our initial investment cost as we will be free to develop our business without the expense of premises.

  • Key Personnel :

There are several positions which we would need to fill with good level professionals. Firstly we would need a webmaster to manage the forum e.g. answer all queries, provide us with feedback. He would also play an essential role in building customer relations through engaging the forums and developing customer loyalty with the business.

There would also have to be personnel in place to develop and update the libraries. In order to achieve this successfully we would require competent musicians with technical experience with a range of instruments.

A network administrator is also required for the company to set up the server and maintain the libraries. He would also be required to provide adequate security for purchasing over the internet.

We would also feel it necessary to have an account on board. We feel that an account could provide several services to the business. These would include managing transactions, identifying assets and acting as a consultant towards the feasibility of expansion in monetary terms.

Finally a sales rep would need to be employed to forecast likely market expansion.

Personnel are the most essential factor in developing our idea. They account for all of our raw materials. This then minimums our initial costs down to just including wages and whatever software development equipment we may need.

  • Service Requirements :

– Who/What? : In order for our business to succeed our key personnel must be adequately trained and sufficient knowledgeable with regards the product field. In order to achieve this there must be sufficient level of training ascertained by employees to ensure a high quality end product. They must possess the necessary skills required to implement the desired end product and to work efficiently in a team environment. They must also possess a high level of organizational and inter-personal skills as well as the ability to work independently on their initiative.

- When? : We would aim to have our product ready for general release within two years. This time period will allow for testing, to ensure a high quality product, and also to allow for any unforeseen events. It is also essential to have clearly defined deadlines in order to release the product before it become redundant in the marketplace.

- Where? : As the product is web-based we have no need for a location because the product can be realized from home. As the product is on the web it gives us the broadest possible marketplace to sell to. Our target audience is also one which would frequent the internet.

- How? : Through the utilization of the skills of our personnel and also through the investment of our sponsors we would forecast that the goal of having a sellable product within two can be achieved.


Marketing:

We identified a niche in the gaming shops in Ireland, in that they did not stock any music editing suites, due to a lack of sales in the past. We discussed the existing music and sound software with the lecturer of sound production in New Media Technology College, Harcourt St, Dublin. He gave me us concise understanding of the current state of software and of upcoming ideas in this field.

What is unique about your product/service?

What is unique about the product and internet service?

The software package will allow the customer to learn how to play a guitar, drums or keyboard through the instruments connection to the computer. The program will recognize the notes and drum sound by their frequency. Rhythm will be recognized by the program also, through the comparing of the input notes to the expected beat.

This is unique in that there is only one reputable company in this field, and it only helps with the teaching of keyboard only. This product offers only a tutorial suite and is solely aimed at beginners; our program will include a wide variety of features such as the ability to record, edit and display you playing.

The product can be sold worldwide and we are sure that most of the sales will be online. The products will also be downloadable with a free trial version of the software, offering limited functionality, also available.

The product will gain income from the sale of online tutorial notes, tracks and tutorials for particular popular songs. However there are percentage royalties for us to pay on the songs that are modern and copyrighted.

How do we know there is a demand for our product/service?

We compiled a survey and emailed this to the students in our college, we felt that the students represented a good spectrum of our target market, in that most were familiar with the Internet and were interested in and felt comfortable with new technology. The feedback we received was very encouraging as most indicated that they would be interested and in some cases prefer to learn from a tutorial program allowing them to advance at their own desired pace without the pressure of scrutiny under a tutor.

We also spoke to sales managers of high street electronic and software stores about similar currently available applications, the general consensus was that few offered the variety of features that we intended for ours.

What competitive edge will we have over competing products/services?

Ours is instrument teaching software. There are no outstanding competitors, apart from the MIDI sequencers and music editors which are at the moment very popular with customers. Our market research has shown that customers are finding these computer music creators very impersonal, and believe it is more enjoyable to learn an instrument to create music in the real world. With the added advantage of being able to sell tutorial, tracks and notes across the internet.

Extra functionality, greater functionality, this is a music teacher AND editing suite.

At what price will we sell our product and how will this compare with our competitors?

€100 online by credit card, cheque, or postal order

€120 in computer software shops

The Prices of the existing products have created a niche opening, as they have priced themselves out of the mass market.

Ableton $499
Acid Music $299
Acid Wav Audio $99
BIAS Peak $599
Cakewalk $799
Cool Edit pro $299
Creamware $198
Cubase VST- STEINBERG  $1129
Digital Performer $499
Fruity Loops $99
GoldWave Digital Audio Editor
Magix £49
Logic Audio £19.95
Mixman Studio $109.95
Multitrack Studio $139
Orion $199 upgrades $99 $49
Quartz Audio Master $20- $30
Sample Wrench $149
Saw Studio $2,500
Sound Forge $299
Sound Probe $61
Sound Studio Pro $99
TrackTracker $40
TsunamiPro $30-$60

Where do we intend to sell product?

Software itself will be primarily sold online; this opens up a huge market both nationally and globally, allowing anyone with an internet connection access to the software, libraries and discussion forums. Upon our first roll-out we also intend to release our application on disc and sell this through software, electronics and musical instrument retailers, this will enable us to get our product into the public domain, increasing its profile before reverting to selling uniquely on-line.

What do we know about the market we propose to sell into?

As we know online music is slowly becoming a way of life, with millions of songs downloaded daily, it is forecasted that by 2010 online music industry will be worth over 80 billion euro. With our library service following similar lines as any online music provider we intend to use this familiarity and sense of ease to bring people to the school of thought that they can also learn how to play their music through the internet.

With broadband now being distributed nationally to most areas, and the Irish government intending that there will be almost 800,000 new broadband connections per year from 2005 onwards, more and more people will be turning to online resources fro their music needs.

The online market is an exponentially increasing market in terms of amount of customers and potential customers.

What

We wish to sell the services to big social organizations, such as exclusive usage rights to music teaching schools who pay for an overall campus membership to encourage their students to develop musical skills.

We have found through thorough market research that the most popular age group that would wish to use and buy our products is between 15 and 30 years of age, is generally very technically minded and would be very proficient at using computers and the internet, would have a strong interest in wanting to learn an instrument and would likely have some belief that getting instrument lessons may not be effective enough for them.

Realistically, only a small fraction of the population of any country would fit all the above, but Western countries such as USA, Canada, Britain, Ireland and other EU countries would have a relatively higher percentage. The EU as a whole is undertaking great steps towards providing a greater percentage of the public with computer and internet knowledge, and in all western countries the price of computers and internet connection is ever decreasing, thus the continuous growth potential for this product will be always great. The fact that our software is to be multi-lingual, would suit this environment, we have a great focus on the English speaking western countries at the moment as English is spoken with great proficiency in Germany, Holland, Belgium etc.

How are products to be distributed in the market?

Primarily, the products will be sold online, and this will become very obvious a few years from now. Initially there will be a great need to sell the software through CD format of the software in a box with instructions and information in booklets, Sold on shelf in Computer Software Stores like ‘Compustore’ throughout the world.

This will help us to develop the niche for the exiting and lucrative years to come.

We know the trend is such that this will in the future act as a good way of advertising the product, and letting the consumer know at this point that it is a software that is basically made for the internet, online customers and has an extensive online resources, and that the product itself can be purchased online and that it.

It is undeniable that for such a product to be visible in the public consciousness, it has to be seen in the real world, in the computer shops. We believe that perhaps this will change greatly in a few years time. As it is very obvious that peoples lives are revolving closely around the internet ( google, mail,  bebo, distance learning etc. .. ) and thus their spending habits are following the same pattern( skype, gambling sites, i-tunes etc. . .)

How do we propose to let people know about your product/service?

Online

-Google advertising is very cost efficient- only pay for when someone gets connected to your site

- Website, Free Trial, Small version given.

- Competitions to win the software to increase awareness.

- Innovative and effective marketing websites such as www.studentcents.ie

Real World

-Colleges

-Adverts in Magazines, Music /Youth /Tech magazines

- Sale of Software on shelf to sizeable extent until product becomes Reputable

- Promotions at large music 3rd level institutions,

Is there a market for Sponsorship??

Our research has shown us that there is evidence to support that we can get financial sponsorship off: a instrument making company provided that we make a contractual agreement that we often refer their instruments, to our customers

Create an agreement with a cabling company in which we will advise our customers to use their connecting cable for the instruments.


Profitability

Projections

Year 1                                                             Year2
€                                                                       €
Sales  :                                                1,430,000                                                 2,782,000
–If 30% is royalties  then     1,202,000                                                 2,344,000
Gross Profit  :                                       929,600                                                  1,831,100
(using royalties Figures)

FIRST YEAR OF BUSINESS:

Shop sales                                       € 100,000
SHOULD BE BIGGEST IN FIRST YEAR TO GET NAME OUT, NOT EVERYONE USES INTERNET, SHOULD BE A FOCUS ON SELLING IN SHOPS FOR A YEAR
Sponsorship                                     € 70,000   — from promoted digital port manufacturer
Program Downloaded Per Year       € 500,000
Yearly Subscriptions                        € 500,000          * Royalties affect this
Monthly Subscriptions                      € 60,000           * Royalties affect this
Single Track/tutorial                         € 200,000          * Royalties affect this

Expenditures year 1:

Royalties (30%) approx only when songs recorded
Wages X 10 people           –allowing for further team expansion.  € 250,000
CDs from SONOPRESS     € 2000 @ €1.25= 2500
Travel                                  € 1200
WEc (web) Rent                  € 120
Security                               €  795
Advertising                          € 1200

Post € 800

Additional expenses              € 16185

Total expenditure year1:     €  272,400

YEAR TWO OF BUSINESS:

Program Downloaded Per Year           €1,200,000
Yearly Subscriptions                            €1,200,000 (-360,000) equal to 840,000
Monthly Subscriptions                         € 60,000     (-18,000) equal to 42,000
Shop Sales                                          € 72,000
Single Track/tutorial                          € 200,000    (-60,000) equal to 140,000
VERY IMPORTANT ALSO THAT WE CAN SELL THEM SINGLY

COST OF SALES—YEAR 2

Royalties (30%) approx only when songs recorded
Wages X 20 People              € 500,000
CDs from SONOPRESS      € 4000 @ €1.25= 5000
Travel                                   € 1200
Wec (web) Rent                   € 500   perhaps the cost has increased
Security                                € 1000
Advertising                           € 1200
Post                                       € 400
Additional expenditures       € 3,600
Total expenditure yr2           € 512,900

Finance: Requirements & Funding

The following is our finance requirements and funding objectives.

Fixed Assets Requirements:

Our assets are for 2 years after which profits will greatly increase this.

  • 4000 DVD Box Sets

  • Website

Start – Up Costs:

This is based on a 2 year span. It will take us 1 year to have this running. If a company wished to undertake this project, the cost would greatly diminish in that the project would be brought online earlier. Profits after 3 months will service the entire debt.

Profits after Year 2 shall repay the entire debt.

Yr1 (20 employees)                        Yr2 (20 employees)                             total

Payroll:           250,000                                   500,000                                          750,000

4000, factory manufactured

DVD Box Set                                                 7,500

Delivery to Ireland nationwide

Postal Service                                                 800

Website

Rental                                                             620

Security                                                          1,795

Total                                                               2,415

Travel Expenses                                            2,400

Advertising                                                    2,400

Stationery, Food

Additional Costs                                            19,785

Royalties (2 year approximation)                 666,000

Total expenditure over initial 2 years:         1,451,300

Indicate how it is proposed to raise the necessary capital:

Capital can only be gained when the product is available online and in-stores. After year 1 this capital shall be generated, Year 2 ending.

A:        Amount to be invested by principals:

The guitar ports used are numerous. We aim to gain sponsorship with one company. For each program we sell, we aim for €5.

Total Units Sold @ €5                                   72000

B:        Amount to be provided by borrowings and grant:

€195130. This shall cover all costs for 2 years. If a company were to take over, this would be greatly reduced.

C:        Cash from profitable trading:

Trading shall only occur after Year 1. This is the expected income after Year 2.

  • €100 Program downloaded 1000 times per month for the year.

€1200000

  • €100 Yearly subscription; 10 songs per month; Bronze Membership

€200 Yearly subscription; 20 songs per month;  Silver Membership

€300 Yearly subscription; 30 songs per month; Gold Membership

€400 Yearly subscription; 40 songs per month; Platinum Membership

Assume that all members opt for Bronze Membership, €100, 500 members joining per month

€600000

  • €10 Month subscription; 10 songs per month; Bronze Month

€20 Month subscription; 20 songs per month;  Silver Month

€30 Month subscription; 30 songs per month; Gold Month

€40 Month subscription; 40 songs per month; Platinum Month

Assume customers choose a monthly package; 50 customers a month on each package

€60000

  • €120 program selling in shops; 50 per month

€72000

Total:              €1932000

€1.932 million

If a company were to take over this project, within 6 months preparations would be complete. Estimated profits after Year 1 would be:

€966000

After exhaustive research, we have estimated the royalties at 30%. We can only assume this figure as each different song would have to be negotiated separately with its producer. Some companies require a one off payment at the start, while others require a percentage of the income accrued per song.

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