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15 years with more than ventures

Written by - 31.01.2018 - kl. 15.05

Although NTNU School of Entrepreneurship (NSE) has bred forth numerous new ventures, tech development in world class, and graduates with extensive knowledge and experience in entrepreneurship, its students are also presenting academic work with high standards. Through NSE’s years of existence, a number of Master’s theses have been written; investigating interesting topics, answering important questions, and providing the students with an insight into the world of academic writing. Some of these theses had, and still have, a potential of being important for researchers, scholars and practitioners. Thus, these theses should neither be forgotten, nor defined as just an academic task, because, as you will see below, NSE fosters more than new ventures.

In 2018, NSE celebrates its fifteenth anniversary and as a part of the celebration, the faculty has gathered fifteen theses from prior NSE students, and intend to present three of these theses each month onward. The theses presented will be a variety of academic prodigies, timely written investigations and theses not necessarily meaningful to the majority of the world, but with topics of profound importance to NSE’s students. Some will carry limited empirical foundation, nevertheless with impressive results. Others have a data collection that would cause professors to become envy, but where the students still handled the data in an impressive manner. Moreover, all of the above show the impressive span in the students’ theses.

In this series of presentations, we intend to provide you with an overview of what NSE students focus on, what outcomes the Master’s theses could give, and what the students themselves think of their theses – some of which written more than a decade ago! You will therefore find abstracts and interviews with the authors of the presented theses. If some of the works are of interest to you, the majority of the theses are available at the Norwegian University of Science and Technology’s library. If they are not available, we assume the authors would be happy to share some of their knowledge.

We hope you will enjoy reading!

– The faculty of NSE

Innovation and Innovation Processes in a Decentralized Multinational Corporation

By Halvor A. Gregusson and Konrad R. Fagertun

The first thesis presented is from the class of 2008, but it could easily be written by the current graduation class. As illustrated in yesterday’s Dagens Næringsliv (January 30th, 2018), a Norwegian economics newspaper, the case company is still focusing on the issues investigated in the thesis. Thus, the authors’ work is not only timely in 2008, but also an important topic today. The rumour also has that the authors were offered jobs in the case company as a result of their excellent work, but they pursued an entrepreneurial career instead.

When asked why they chose the topic and the research question, the authors explain that a new initiative, Centre for studies of Radical Organisational Change (CROC), a collaboration between NTNU and Hydro, gave them the opportunity to write about a topic in which they both had a great interest. As Hydro is a global organisation and world leading in aluminium production, their innovation processes are of special interest as the organisation is quite distributed. Since the authors had a special interest in innovation, an opportunity to work with such a huge organisation was not something they passed.

With Hydro being a large and global organisation, one could expect the data gathering and process to be a bit challenging. The authors confirmed this. As Konrad stated,‘I would like to say that our work was strictly structured’, but that is seldom the case for good research and their work had rather innovative features, as they had to work in a repeatedly manner to improve their writing and reach the final product. Moreover, as some of the important divisions of Hydro are located in different locations in the world, their work involved a lot of travel and in addition to Norway, the authors visited Denmark, Austria and Italy.

Regarding the learning from both the process and the topic in the thesis, the two authors agree that the insights they obtained in the organisation were as predicted, but that they also experienced the wheel being reinvented in the organisation’s different departments at some occasions. Being able to investigate Hydro from the inside as young students was also a great experience, Halvor states, and follows up with an example where the organisation destructively competed with itself inside departments. All in all a great experience, and in the end a paper valued by Hydro!

When asked about what they would focus on if they were to write another Master’s thesis, it would be the same topic, innovation, but with a lean focus.

Executive Summary

Based on previous research, we have written definitions and framework on innovation and the innovation process, formal and informal organization and communication. With this as a foundation, four case studies were carried out in Hydro Aluminium Products. Through interviews and meetings, observations of innovations and communication activities are described and explained. Three different plants in hydro Extrusion Eurasia, and one in Hydro Automotive Components were chosen, to cover a diversified part of Europe. The different philosophies for innovating in a decentralized company are compared, and the discussion of how organization structure, culture and KPI affect innovation lead to interesting findings. Addressing the vulture and climate for creativity, there is a strong culture for safety within Hydro and the climate for creativity is good at the decentralized plants. The culture for safety has brought with it several key aspects required to build a creative environment, and this is a good starting point for implementing an innovative culture. The key to establish a creative climate is to ensure frequent communication through “rich” channels such as personal contact. This has resulted in numerous creative achievements at the different plants. However, sharing innovations is not done effectively, and there are several issues regarding corporate communication.

Hydro Extrusion Eurasia is a group of decentralized plants, operating in their own geographical “kingdoms”. Managed from Lausanne in Switzerland, Hydro has used a clear and effective approach to benchmark performance with Key Performance-Indicators (KPIs). Production and sales –data is well documented, and by sharing improvements regarding safety, accidents have been drastically reduced. However, this model is not implemented for innovation, which remain decentralized. The result is sub optimal sharing of innovations, and customers, on an ad hoc basis. Some innovations are shared instantly, and some coincidentally, on meetings among managers. The lack of communication

structure regarding new ideas, lead to “reinventing of the wheel” at different sites, and also that plants are turning down customers that could have been served by other plants in the system.

We recommend a more centralized control of innovations managed by R&D, to benefit from the well functioning idea generation, while remaining decentralized. To monitor these activities, they should be incorporated in the already successful KPI. Such an implementation could be the first step in increasing communication between the plants that operates in own geographical kingdoms. One suggestion in how to manage the ideas and problems on each plant is by assigning an innovation manager that will communicate with other equals, and an innovation coordinator in Lausanne. This will ease communication, and clarify areas of expertise among the sites. Another finding we have done is the small focus put on AVA-Added Value Activities. Processes done on the profiles for customers are actually a market innovation that can prove significant in increasing earnings and staying competitive. 95% of customers need some form of AVA done on their profiles. With this in mind, Eurasia seem dynamically conservative in keeping  only aluminium extrusion as a core competence, while increased competition continue to make margins on pure aluminium profiles smaller. AVA seems more and more important, and should be included in the KPIs for easy comparing and improving.

Key Factors in the Process of Customer Acquisition for Startups Launching a Platform in a Two-Sided Market

By Agnes Dyvik and André Sebastian Wærness-Vold

The second thesis presented is from 2015 where the authors wanted to use findings from their work in their own start-up. Moreover, to learn about the thesis’ topic, the authors used a former NSE start-up as their case, as this would provide interesting insights that helped them understand customer acquisition in their own context. The topic was formed by their start-up’s situation, and as they state, ‘we wanted to reflect theoretically and practically about what we had coming for us’. You will therefore find both the paper’s preface and its abstract below, as both provide the reader with an understanding of why the topic is investigated, and why it is important for the authors.

In the process of writing the thesis, the two authors state that the data collection and project thesis (written in the former semester) shaped their work and effort, and that the writing was conducted in a quite short time. However, as they also stress, the thesis was of profound interest for them and the topic was something they had in their mind while working in their start-up. In that regard, the thesis was probably moulded in their subconscious while being entrepreneurial.

Their main finding was that there does not exist a strategy to develop a two-sided platform, but that there exists good strategies for growth hacking that others have copied and succeeded with. This, together with community and fan building is something they would focus on if they once in the future should sit down and write another thesis. Which we guess they might not. However, there is no need, as their first attempt made it to NSE’s top 15.

Preface

This paper is written by two students at the NTNU School of Entrepreneurship and is a master thesis that builds on a literature review, with the same title, delivered in December 2014 at the Norwegian University of Science and Technology.

The authors of this paper are currently working to launch an online service for long-form journalism called Vio. By purchasing a monthly subscription, Vio will allow users to read unbundled (article by article) journalism from a variety of sources. This is done by extracting content directly from printed magazines and newspapers, and presenting these articles online to paying users.

In short, Vio is a “Netflix for journalism” and operates in a two-sided market with a business-to-business (B2B) side comprised of several large media corporations as well as a business-to-consumer (B2C) side with users eager to read journalism.

Compared to larger competing corporations such as Norway´s leading publisher Schibsted Media Group with their large user base and budget, it is challenging to acquire both customer groups effectively, especially when bootstrapping with minimum resources. However, a competing startup in the Netherlands by the name of Blendle has shown that this is possible. Having undergone rapid growth since launching in April 2014, by September the same year Blendle had more than 100,000 users that joined the service in under 6 months (Edge, 2014). Despite bootstrapping in the early stages, this service recently received $3.9 million in funding due to their growing user base and are now looking to expand internationally (Gani, 2014). The authors rationale for writing this thesis is based on these exact challenges, that their startup Vio is also currently facing.

Abstract

This thesis will present research in the form of a single case study of the bootstrapping startup Dirtybit. When launching their second game, Fun Run, it grew from zero users to acquiring 1 million new users per day within 2 months. A prime example of resource efficient rapid customer acquisition.

Startups with limited resources find it difficult to launch platforms acquiring a critical mass of users. The value of the platform to each of the customer groups is heavily contingent on this critical mass, and must be rapidly driven in the early stages of the platform’s launch.

The research in this thesis is based on a theoretical framework found through a preliminary literature review. Empirical data was collected from Dirtybit employees, as well as both customer groups. Interviews, questionnaires and different data archives have been used as sources.

By answering the stated research questions in terms of what are the most resource efficient ways of acquiring customers to a two-sided platform in order to achieve the result of rapidly acquiring a large user base, key factors have been outlined. Platforms are heavily dependent on network effects, and this thesis focuses on this.

Different mechanisms can be used to achieve network effects in the different groups, as well as between them. Key factors leveraging these effects are explained through a model, for a startup launching a platform in a two sided market, and vary from word-of-mouth and the bandwagon effect, to implementing subsidization and trialability.

The model contributes to the field of platform entrepreneurship with key factors that hopefully will equip entrepreneurs with a model that they can use in order to maximise their odds of success when launching a platform in a two-sided market.

Opportunity Formation of Digital Services in a Well-Established Firm

By Karoline Kaspersen and Valentina Luzmira Fernandez Sørlie

The third thesis presented is from 2017, and is in many ways unique. The theoretical approach in this work can be seen as extreme, and this holds for the authors’ project thesis as well. As a professor in the faculty said, ‘I have never seen master students discuss epistemology in their thesis,’ and it might take some years until it occurs again. Thus, the theoretical work is thorough and well-argued which is illustrated and supported throughout their empirical evidence.

The two authors tell us that the thesis was selected late. Their interest in the case business and its issues triggered them to leave their initial plan and set out toward investigating this well-established firm. They found the innovation process in this firm interesting to compare with their own experiences from their start-up activities, and if they were to write a new thesis, the topic would have been similar but the context might have shifted to new ventures instead.

With work that holds this level of quality, the process demands a lot from the authors, and they describe it as ‘challenging’ and ‘frustrating.’ It starts with an over-complex view of their work, and then the focus is honed until the progress leads to a clear outcome. Especially the amount of data collected made the process challenging, and their learning from the work is to set a clear plan for how to conduct the work. As Karoline states, ‘it would be valuable to use some extra time to understand the way to write academic papers.’

Their main learning from their work is that big organisations have a deep will to be innovative, but to actually migrate toward becoming an innovative firm is often difficult for these giants.

Abstract

In order to gain markets and stay competitive, it has never been as important as of today to form new digital opportunities. Despite this, previous research has not offered in-depth empirical studies within the opportunity theory, as most of the research have failed to include different factors such as the resources that affects the opportunity formation process (Hajizadeh & Zali, 2016).

The purpose of this master thesis is to investigate how well-established firms can form new digital opportunities within an innovation project by utilizing their prior knowledge and social network in the process. To fulfill this purpose, the authors have investigated how different activities conducted in an innovation project enables well-established firms to form new digital opportunities (Research Question 1). Moreover, how a well-established firm can utilize its employees’ essential resources, prior knowledge and social network in the opportunity formation process (Research Question 2).

The authors conducted a single-case embedded study where they researched how individuals within two innovation projects, within the same innovation program, conducted different activities to form an opportunity. The empirical data was acquired through two interview rounds with a total of 16 individual, semi-structured interviews. The empirical findings are compiled into events in time, to enable a comparative analysis where the given events were put in light of a theoretical framework developed through a literature review.

The conclusion of the thesis is that there exists a deeper level of activities within the different phases of the opportunity formation process. Each phase can be divided into single events, which again can be divided into one or more activities. This contributes to the existing literature of opportunity formation presented by Ardichvili et al. (2013) who solely looked at the overall phases of the formation process. Further, the thesis concludes that the combination of opportunity recognition and opportunity creation is not performed as an initial process in the opportunity formation process, and that it rather occurs in the next phase of iteration. This is contrary to previous researchers’ statements, and contributes to the theory by exploiting another possible formation process. More detailed, the thesis concludes that prior knowledge and social network affects the formation process at different stages of the opportunity formation process, and further reveal that the resources are interlinked.

Consequently, the thesis has incorporated both the activities and the resources in a proposed model, illustrated in Figure 5.5. This model illustrates the activity based process and how the resources coher with the recognized activities. This is an issue which has not previously been studied. The authors’ thesis provides insight to the gap identified by, amongst others, Hajizadeh and Zali (2016), where there exist few empirical studies within the opportunity theory where the resources have been incorporated in the opportunity formation process.