Final dissertation

Submitted in part fulfilment of the requirement for the degree of Master of Science in Entrepreneurship China's Enterprise Education Development Business Plan – Venture World By Kang Ku

Submitted in part fulfilment of the requirement for the degree of Master of Science in Entrepreneurship

China's Enterprise Education Development

Business Plan – Venture World

By Kang KuoURN: 6507983

Faculty of Arts and Social Science

University of Surrey

September 2018Word count: 15,498

© Kang Kuo

Executive Summary

This dissertation paper will be constructed of two main part:

The first part is focus on research, in terms of market and industry analysis, research methodology, market research (follow the lean startup method), and business model canvas In the market and industry analysis section, PEST analysis and some useful competition analysis tools including ADL matrix, Porter's five forces, and competitors intelligence analysis will be used to build a comprehensive understanding of China's entrepreneurial environment and enterprise education ecosystem Then, the initial

assumptions of entrepreneurial marketplace in China will be embedded into questionnaireand tested by online survey The result of this survey shows that there is a huge gap in China's enterprise education industry, and the characteristics of the respondents also fit to Venture World's target customer segments Based on the research, the Minimum Viable Product (MVP) of Venture World is built and will be introduced into market to learn essential market needs, customer behavior and pivot the business strategy constantly TheMVP will be tested in Market Research part which will follows the process of The

Customer Development Model developed by Steve Blank At the end of research part, there are two business model canvases (BMC) will be displayed The initial BMC is based on the Market and Industry Analysis, and the whole business idea will be pivoted due to the findings in Survey and Market Research part

The second part is the most exciting section in this paper, that is the business plan of Venture World In this part, it will present the feasibility and sustainability of Venture World Venture World will adopt Holacratic organization structure, a revolutionary management system for a rapidly changing world, to operate the business in a more elastic and more open innovative way The milestones for next three years has been set to insure the company can fulfill the expectation of growth And the financial plan reveals

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the financial forecast of Venture World in the next five years It can be seen in the

financial plan that Venture World will start generating profit the third year after it start, and it will also be a turning point for Venture World as it achieves the economies of scale,and it will start growing exponentially In the end of the paper, the risks and opportunitiesarise from latest global affairs, and the future scaling plan of Venture World will concludethe research findings, practical strategies and business ideas of this Venture World

business plan

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Table of Contents

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1 Overview

Venture World combines sharing economic and platform business model to offer an open innovation environment to entrepreneurs and entrepreneurial related businesses in China Venture World also provides a more convenient way for UK's universities, enterprise education organizations, and SMEs (Small to Medium Enterprises) to move into China market via integrated online platform

Mission

Venture World is an O2O (Online to Offline) platform for China University students to learn entrepreneurial skills (Lean Startup Method, Financial Management, Business Model Canvas, ), obtain resources they need (e.g seed funding resources, business partners networks, market and industry information, etc.), and explore opportunities they can get involve (e.g international trading trends, latest technology trends, etc.)

Problems and Solution

Nowadays, China not only have the most incubators in the world (more than 7,500 incubators), China government also encourage university students to start up their

businesses by providing sufficient financial support However, it is difficult to build up stable and effective entrepreneurial environment because that there is lack of robust enterprise education system, and the link between university students, entrepreneurial bases, venture capitals, and enterprise educators is not strong enough

The most effective and efficient way to raise the quality of enterprise education in China

is introduce British style enterprise education system into China Venture World will be the bridge linking UK and China entrepreneurs and related organizations Chinese

university students can learn entrepreneurial skills and knowledge through Venture Worldonline courses platform UK enterprise educators will also be invited to China to hold

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lecturers and seminars Furthermore, British and Chinese entrepreneurs, investors,

universities, and enterprise education organizations can all connect together through Venture World online community They can share their ideas to others, find possibilities

to become business partners, and utilizing the resources they have to support each other

Opportunity

China's reform and opening-up policy, OBOR (one belt one road), Made in China 2025, and US-China trade war are stimulating the transformation of China's economy It causes China's transition from manufacturing-based economy to service-oriented and personal consumption-based economy (U.S Energy Information Administration, 2018) Although this transformation has led to bankruptcy of many Chinese companies, it also creates a new era of entrepreneurship in China, as the main trade partner of China is going to change from America to England and other European countries, and it will bring in extensive opportunities for new startups who are prepared to build their businesses in thisblue ocean market without competing with large Chinese companies which has occupied US-China market for decades

With the development of OBOR, the cargo rail transport between Europe and China has grown form 20 runs in 2011 to 3673 runs in 2017 (Hui, 2018) Rail freight provides fastertransit times than ocean freight shipping, and lower cost than air freight, which can promote the relationship between Europe and China's businesses, and make it more favorable for new startup businesses to import materials and products from Europe to ease the impact of US-China trade war

The Target Market and Market Size

The target customer segment of Venture World will be university students in China who are going to start up their business in the next three to five years, as the research survey shows that the people who are going to start up their business in next the three years have

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stronger motivation to learn entrepreneurial skills According to Ministry of Education and National Bureau of Statistics' data, there were 26.958 million university students in

2017, and the number is still climbing (Data.stats.gov.cn, 2018) One third of them (8.986million students) have strong willing to start up their business (Ru, 2018)

Objectives

Based on the industry analysis and market research, Venture World has set up some feasible objectives for the next five years:

1 Acquire 16,500 members by the third year, and 34,000 members by the fifth year

2 Sell £ 40,000 of online courses, in-person seminars, and unofficial business activities

by 2021 and start making profit

3 Raising gross margin above 80% by 2021 to cover increasing fixed cost

4 Cooperate with 50 venture capitals, 100 universities, 1,000 incubators and co-working spaces by 2022

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2 Market and Industry Analysis

In this section, PEST analysis will be used to discover potential opportunities and risks in China's entrepreneurial environment by having an initial research on China's

entrepreneurship market In addition, ADL matrix, Porter’s Five Forces, Competitors intelligences analysis will be applied to analyze the competition in China's enterprise education industry ADL matrix will help Venture World have a better understanding of company's position and adopt suitable strategy to get into the market Then Porter's Five Forces will be used to analyze the industry's attractiveness, threats and profitability

Finally, Competitors intelligences analysis will select two influential competitors in the industry to figure out Venture World's competitive advantages

2.1 PEST Analysis on China Entrepreneurial Environment

2.1.1 Political

A After the Report on the Work of Government addressed by Li Keqiang, Premier of the

State Council, on 5 March 2015, China step into the era of entrepreneurship, as Li

Keqiang clarify the orientation to develop Popular Entrepreneurship and Mass

Innovation scheme (Zhongbing, 2015) On May 2015, the State Council of China issued

an opinion on Further Efforts Relating to Employment and Business Startup under the New Conditions (Lawinfochina.com, 2015) In this paper, the new policies include:

Firstly, create enterprise platform, incubators and entrepreneurs space Secondly,

simplify the permission rules and processes of new businesses Thirdly, provide

financial support, including but not limited to encouraging the development of venture capital, providing lower interest rate for entrepreneurs, reduction of tax rate Finally, construct energetic entrepreneurial environment through strengthen enterprise

education system and related services

B China 135 Plan: It stands for the 13th Five-Year Plan of China central social and

economic policies China 135 Plan is drafted by National Development and Reform Commission (NDRC), outlines economic targets which aimed to be achieved during

2016 to 2020 (Haacke, 2015) One of the policies is promoting “universal two-child” policy, ending the “One-child policy” which has been conducted for 30 years By this way, China can retard the impact of aging population However, this might lead to the increase of unemployment rate in the future, therefore another policy in China 135 Plan

is building a moderately prosperous society in all respects by absorbing excellent people with overseas education background, and strengthen personnel training

environment to build up a robust innovative and entrepreneurial environment (NARI

&STPI, 2016)

2.1.2 Economic

A China economic growth slow down: After 2010 when China economic growth rate peaked at 10.6%, the pace of economy growth in China has slowed down In 2016, the growth rate declined to 6.7% (Kang, 2018) With the higher demand on wages and working condition, China was no longer the world manufacturing centre Chinese realised that it was time to transfer China from cheap labour provider to innovative technology creator, the state, therefore proposed “Made in China 2025” programme,

which focus on the research and development in new information technology (5G), modern railway equipment, new energy vehicles (electronic vehicles), renewable energy, robotics, new materials, ocean engineering equipment, aerospace and

aeronautical equipment, medical devices, agricultural machinery there ten sectors Made in China 2025 programme provides Chinese entrepreneurs a clear direction and great opportunity to start their businesses

B Venture Capital: China government support venture capital to raise funds, the total amount of available funds increased to 1.5 trillion China Yuan (around £176 billion) by

2015, it is five times greater than the average number of other ventures capitals in the world (XU, 2016) The extension of China venture capital market is keep growing, as the government issued new policies to attract foreign investments, in terms of

preferential tax policy, and extend limitation on investment fields to improve the investment environment (China.org.cn, 2018) According to the VC report collected by China Money Network, the total VC deal in China in April 2018 worth £11.77 billion compare to U.S £7.1 billion (Xiang, 2018)

2.1.3 Social

A Statistic released by Ministry of Education and National Bureau of Statistics, there were 26.958 million China university students in 2017, including 7.95 million fresh graduates According to the report of China University students’ startup published by Renmin University of China, around one third of university students are willing to start

up their business, and 70 percent of them launched their businesses when they are still studying in university (Ru, 2018) Therefore, the market of China university enterprise education is around 8.986 million students with strong will of becoming entrepreneurs,

and 6.29 million students of them will take action to build their companies while at university Lack of entrepreneurial resources, qualified enterprise education and

mentors was ranked as the second obstacle which hold back students from startup, while the main obstacle is insufficient funds In regard to insufficient funds, China government has started to establish related rules under the guidance of new policy

B Base on China Ministry of Education data, there were 2,914 universities registered officially Besides, China has become the country possesses most incubators,

accelerators, and co-working spaces in the world, the number had broken through 7,500 by 2017 (Xin, 2017) This number will keep increasing to 10,000 by 2020, with the support of “China 135 Plan” which made a detailed plan for the five years period from 2016 to 2020

2.1.4 Technology

A Automatic translate system: Microsoft has used machine - learning technology to build

up Microsoft translator since 2007 However, Statistical Machine Translation (SMT) technology has its limitations to provide higher quality of performance In 2016, with the support of Microsoft’s supercomputer, Microsoft is able to deploy Deep Neural Network (DNN) to significantly improve the quality of transaction (Microsoft.com, 2018) Deep Neural Network makes Microsoft have capability to launch its Speech API

in 2014 It has become easier than ever before for people from different countries to communicate with each other online either over text or live meeting

B Mobile payment system: According to the data released by China’s Payment and Clearing Association, the transactions made through mobile payment service has

reached £ 24.09 trillion pounds (Li, 2017), shared by commercial banks and banking payment institutions, £ 18.2 trillion pounds and £ 5.89 trillion pounds

non-respectively QR Code payment alone is estimated to increase to £ 19.13 trillion pounds (Knowledge at Wharton, 2018) Compare to United States, the total mobile payment in 2015 is £ 414 billion pounds, and it was forecasted to get £ 2.1 trillion pounds by 2020 (Anderson, 2018)

C Online course platform: China’s online courses market start thriving since 2016, the size of this market has expanded to 144 million active users To fulfill this rapidly growing market demand, many IT companies like Tencent, Alibaba, Baidu started to design more powerful Learning Management System and develop higher quality onlinecourses platform, more than 460 higher education institutions create around 3,200 MOOCS (Massive Open Online Courses), even China Central Television (CCTV) has created their own online education platform to deliver valuable knowledge

2.2 Competitive Analysis

2.2.1 ADL Matrix

ADL Matrix is developed by Arthur D Little, a well-known consulting company, in late 1970s This strategy is used to help company find out suitable marketing strategy based on two dimensions: competitive position of company and industry maturity (Product Life Cycle, PLC)

Figure 1 ADL Matrix

(Source: MBA Knowledge Base)

A The Competitive Position: Embryonic

．The features of "Embryonic" is rapid market growth, low competition, and high selling price (Thakur, 2011)

．Enterprise education industry could be classified to this initial introductory stage, as the customer need is growing rapidly, while there are only few companies provide related solution, and the price of enterprise education service is significantly high

B Industry Life Cycle: Tenable

．The features of " Tenable" is that company only have a small market share, and the

competitors in the market are becoming stronger (Thakur, 2011)

．As Venture World is just a new start up business, it will focus on a niche market firstly to build and strengthen its brand to attract specific customer segment (China university students)

C Strategic Choices for Venture World: Strategy 13

．There are 20 strategy options which are suggested by ADL matrix to apply to different interactions of industry maturity and competitive position

．Take Venture World's position in Industry maturity and competition into consideration, theeffective strategy correspond to Venture World is strategy 13: all efforts should be put into improving market position (Thakur, 2011) Therefore, Venture World will

concentrate on China university students to snatch huge market share within the shortest possible time

2.2.2 Porter’s Five Forces

Figure 2 Porter’s Five Forces Analysis

A Threat of New Entrants – High Pressure

Threat: New entrants can find out the ways to obtain enterprise education resources from

UK and contact with British entrepreneurial education organization for further cooperation Additionally, with the support of SaaS, PaaS, IaaS companies, the barriers to online education is much lower than before

Solution: To maintain competitive advantages, Venture World will integrate online

platform and offline community, create its own workshop and seminar to set up anti imitation strategy

B Threat of Substitute Products/Service – Medium to High Pressure

Threat: Online course platforms like Tencent online courses, NetEase online courses

provide massive courses with very low price Moreover, most of these platforms hire professional IT technical talents to improve their website performance and gain more traffic

Solution: Cooperate with these platforms by putting Venture World online courses on the

platforms to increase customer awareness, sharing their courses on Venture World websites via affiliate marketing scheme to obtain new customer

acquisition

C Bargaining power of Suppliers – Low Pressure

Venture World will need the powerful service provided by WordPress, Microsoft automatictranslate system, China third party mobile payment systems, Learning Management System (LMS) to develop an integrated online to offline (O2O) entrepreneurial

environment Although the companies which provide these services are all large

corporations, and Venture World could not have power to negotiate with them, most of their products' price are constant For that reason, the pressure from Suppliers is low

D Bargaining power of Buyers – Medium to High Pressure

Threat: Potential buyers will be China university students, as they are all individual buyers,

their bargaining power will not be high While with the impact of social media, their opinion could have great influence on others

Solution: Therefore, decent customer service will be one of the main jobs for Venture

World to encourage customer engagement and improve user experience

E Rivalry among existing competitors – Medium to High Pressure

Threat: Current rivals include private enterprise education organizations, entrepreneurship

programme produced by China universities, college entrepreneurship clubs, and incubators which provide workshops, lectures, seminars for people to learn entrepreneurial skills It seems that the competition is fierce, while, these

competitors can be classified into two types:

a The first type is high quality with high price (private enterprise education organization): Doer's education group, for instance, it cooperates with Excellerated Business School which started teaching Money & You course since 1978, while an 8-days Business School for Entrepreneurs (BSE) courses charges £ 10196, this price is too high for most of university students

b The second type is low quality with low price (services provided by China universities and incubators): In consonance with the report released by Center for China & Globalization(CCG), more than two third (64.54%) of China university students think that the entrepreneurial resources provided

by universities are not abundant enough (Ccg.org.cn, 2017) In addition, most of the incubators in China are short of entrepreneurial education resources, some of them even do not have mentors at their centre to guide entrepreneurs

Solution: Align with China universities, college entrepreneurship clubs, and incubators to

utilise entrepreneurial resources in a more effective way It will be difficult to cooperate with private enterprise education organizations, however their

customer segment is different to Venture World at this moment, so the lowest riskstrategy is avoiding competing with them at this stage.

2.2.3 Competitors intelligences analysis

Doers Education Group NetEase Cloud Venture WorldValue

Proposition

Help people to start up their business in shortest time, with lowest risk

Focus on enhancing people's skills and capabilities on work via internet

Venture World is an online platformand community that provide high quality entrepreneurial resources for China university students to start up business

Integrate online courses and offline activities to help entrepreneurs learn the business skills and knowledge more effectively and more affordably

Product

Features

DBS entrepreneurship programme, it is an 8 days course let entrepreneurs haveopportunity to learn from successful business founders directly

The contents of this

Massive online courses coverfinancial management, professional certification programme, IT, and so on

．Well-structured enterprise education system introduced from UK

．In-person seminars and workshopscan let entrepreneurs learn by doing

programme includes corporate social responsibility, self-discipline,business plan, and

．Social media: Weibo, Sina blog

．In-person product presentation

3 Research Methodology

The information in Market and Industry Analysis reveals that the market of enterprise education industry is still at the beginning stage, and the growth potential in the near future is significant The assumptions based on Market and Industry Analysis will be tested by an online survey to confirm market needs and gain insight into customer behavior And a Minimum Viable Product of Venture World will be designed and delivered to target market to start the learning process and pivot the business in Market Research section

C The biggest challenges that people think stopping them from startup is lack of sufficient funds and finding ideal workplace While they might not discover the importance of enterprise education

D University students should have higher interest in startup than other people Therefore, Venture World should firstly focus on this customer segmentation

3.2 Research Access and Ethics

The purpose of this research project is to have a research on enterprise education

environment in China This is a research project being conducted by Kang Kuo at the University of Surrey The participation in this research study is voluntary and may choose not to participate If participants decide to participate in this research survey, they may withdraw at any time The procedure involves filling out this online survey that will take approximately 5 minutes All information collected from this research will be keep

confidential All data is stored in a password protected electronic format The results of thisstudy will be used for scholarly purposes only

3.3 Data Collection and Sample Selection

A Sample

a Sample Strategy:

Homogeneous sampling strategy of Purposive (Judgmental) Sampling will be adopted

to select the samples who are particularly informative (Saunders et al., 2009), and focus on one particular sub-group to have a deeper study on, the criteria of the

samples are as follow:

b Sample Criteria:

Sample Size: Primary quantitative data collection method was utilized to collect 317

questionnaires through online survey to gain a deeper insight into China

entrepreneurial environment In this research, 300 questionnaires will be selected and

analyzed by SPSS.

Geographical Areas: People live in China tier 1 cities (The most affluent cities China

such as Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin), and some of the tier 2 cities (Hangzhou, Nanjing, Chongqing, Chengdu, Wuhan, Fuzhou, Suzhou, and Xi’an) are the target sample of this survey, for the main entrepreneurs population and entrepreneurial infrastructures are keep gathering in these cities, hence, the demand ofenterprise education is expected to increase continually

Career Position: Although the initial concept of Venture World is to build up an

enterprise education platform and online community for China university students, thesample will not be limited to China university students People who work as an employee, retirees, the unemployed, high school students will also be included, as thisresearch want to find out which segment of population has higher potential to start up

B Questionnaire

The main goal of this questionnaire is to have a great understanding of the

entrepreneurship environment in China, including the types of people who are more likely

to start up, the problems that hold back China's entrepreneurs from startup, and the

resources they currently utilize There are 14 questions in this questionnaire, question 1 to

4 are aimed to find out potential customer segments and determine actionable customer prototype, question 5 to 10 are designed to identify the factors influence people to start

up, and question 11 to 14 are trying to get more complete information about current solutions that target customers are using The full questionnaire of survey can be seen in Appendix 1.

3.3 Analysis Method – SPSS Statistical Analysis

SPSS (Statistical Package for Social Science) is generally used in social science fields for complex statistical data analysis As SPSS has been widely used by market researchers to perform quantitative analysis since it was developed in 1960s (Statistics Solutions, 2018)

In this research, SPSS will be used to analyze around 300 questionnaires collected through China's survey platform to study the enterprise education environment in China, including customers' geography, demography, influential factors and industry rivalry

A Aspiration of people to become entrepreneurs

Due to the respond rate, it can be seen that the people who are going to start up in next 5 years are more willing to get involve in entrepreneurship related information, around 60%

of respondents are going to start their business in next 5 years While the number of peoplewho are not planning to start up in recent years but still want to become entrepreneurs is beyond expectation which take 36% of all respondents

B Current Career of Pre-entrepreneurs

The number of this figure is similar to China small to medium businesses statistic (53 percent of China small to medium business founders are senior employees) Employees occupy the largest part of pre-entrepreneurs (57% of respondents), which are followed by university students (30% of respondents) The reason why there is no retiree could because this survey is delivered through online platform which the elderly might not even know this platform

C Main funding resources for entrepreneurs in China

The main funding resources for new business founders in China is still self-funded, though the government has released several pro-

entrepreneurial policies and sufficient financial subvention, only few entrepreneurs notice that

In truth, the question 14 "Before startup or whenyou start up, what kind of skills or information you would like to know", 104 out of 317 respondents are looking for the information of government Entrepreneur subvention scheme

D Main Difficulties for China entrepreneurs

It is generally accepted that "lack of funding" is the biggest obstacle stops them from launching their company (48% of respondents state that lack of funding is the major problem when they want to start up) and overlook the value of enterprise education can bring to them (4%), while the truth is there are many resources provided

by China government and other entrepreneurial organizations which the entrepreneurs in

China did not discover and make good use of them.

E Relation between entrepreneurial resources and generating business idea

Unstandardized Coefficients

Standardized Coefficients

11 For you, finding

entrepreneurial resources is:

0.012 0.003 0.333 3.498 0.001** 1

Dependent variable：5 Do you already have a business idea?

* p<0.05 ** p<0.01

The figure shows that accessibility of entrepreneurial resources has great impact on

generating business ideas People will be more possible to have a business idea if it is easier for them to gain entrepreneurial resources they need

This model passes the F-test (F=12.233，P<0.05) which means that "Question 11 For you, finding entrepreneurial resources is (easy or difficult)" has impact on "Question 5 Do you already have a business idea?" Besides, there is no problem of Multi-Collinearity as number of VIF is lower than 5 (VIF=1) The figure reveals that: "Question 11 For you, finding entrepreneurial resources is easy or difficult" has significant positive influence on

"Question 5 Do you already have a business idea", for the number of Unstandardized Coefficients is 0.012, and P-value is smaller than 0.05 (0.001)

F Relation between having business idea and the possibility of startup

Whether people have their business ideas has positive influence on feeling that startup is

more authentic and less difficult.

This model passes the F-test (F=13.762，P<0.05), and there is no problem of

Multi-Collinearity as number of VIF is lower than 5 (VIF=1) The figure reveals that: " Question

5 Do you already have a business idea?" has significant positive influence on "Question 6 For you, startup is (easy or difficult)", for the number of Unstandardized Coefficients is 0.795, and P-value is smaller than 0.05

G Relation between having business idea and the mindset of startup

The table indicates that people are more willing to become entrepreneurs when they have feasible business ideas which can be put into practice

This model passes the F-test (F=38.695，P<0.05), and there is no problem of

Multi-Collinearity as number of VIF is lower than 5 (VIF=1) The figure reveals that: " Question

5 Do you already have a business idea?" has significant positive influence on "Question 1 Your aspiration to become an entrepreneur ", for the number of Unstandardized

Coefficients is 0.102, and P-value is smaller than 0.05

The research also reveals that the value of enterprise education is under estimated Due

to the obsolescence of entrepreneurial knowledge and skills, there are many resources and opportunities missed by China's entrepreneurs Therefore, Venture World will emphasize the problems that enterprise education can help entrepreneurs overcome, in terms of finding business startup funding, business social networks development, nourishing great startup ideas

system, online courses management system, therefore the expected time of completing build-manufacture-learn loop can be compressed into one week.

The objective of this MVP is to test the assumption of "people will pay for learning entrepreneurial skills" as this is crucial for Venture World to map out pricing strategy It will also inspect the customer segment Venture World chooses

The contents of this website include basic concepts of entrepreneurial knowledge and skills written in Mandarin, in terms of Business Model Canvas, Lean Startup, Minimum Valuable Product, and so on Innovative new ways of starting a business, include but not limited to proven steps to earn money through affiliate marketing platform; essential skills to become a successful freelancer; well organized strategy to start an e-commerce business, will also be updated to website

Besides the written contents, online courses related to enterprise education will be shared on the website through Udemy or other online course platform’s affiliate

marketing programme Consider the cost of creating Venture World own online courses will be a heavy burden at this stage, the effective way is utilizing external resources Sharing other platforms’ courses by affiliate marketing programme not only can save significant amount of time and money on producing online courses, it can also bring in revenue from the commission of each sale Furthermore, brief introduction and link of local incubators, accelerators, co-working spaces, and venture capital will also be displayed on the website to help pre-entrepreneurs get the resources they need

A simple questioner will be presented to audiences when they are leaving the website to query about the most useful and interesting part, confusing part they think during the whole process of website surfing; is there any information they cannot find on this website This exit pop-up can evaluate this minimum variable product in a specific way

to support valuated learning, identify customer needs, test the business plan through shortest Build-Measure-Learn loop and decide whether to pivot it or persevere with original plan (Ries, 2011)

4 Market Research

The four steps customer development model will be adopted in this paper to conductmarket research and design scaling plan in the future Customer development model iscreated by Steve Blank The tools and processes established in his book "The Four Steps

To The Epiphany", were subsequently become the core ideas of "The Lean Startup" written

by his student, Eric Ries

4.1 Lean Startup Method Customer Development Model

Figure 3 Customer Development Process

Most of new business founders do not have a will-structured process to go through market discovering, first customer locating, assumptions validating, and business scaling as they

use Product Develop model to set up milestones and measure their progress (Blank, 2013) Although entrepreneurs can easily follow the unambiguous structure and measurable execution activities provided by Product Development model, there are some vital and inevitable risks lurk in this model which might let entrepreneurs ignore the importance of the development of customer and market.

Entrepreneurs and their investors who adopt Product Development model might become too focused on the "first customer ship date" and disregard whether their products can solve customers' problem, there are enough, whether their businesses can cross the chasm and move into the mainstream market, they might even do not know if there are customer need in the marketplace before they launch their product on the first customer ship date, as they follow the "Fire, Ready, Aim" strategy (Blank, 2013) They could also go into death spiral caused by premature scaling which accelerate the burn rate because of higher cost onadvertising, manufacturing, inventory, and salaries

Therefore, Customer Development model might be a more appropriate roadmap for

entrepreneurs to design their business ideas, test their products, pivot the business plan, then scale their business by crossing the chasm steadily and successfully The core of Customer Development model is learning and discovering who are initial customer, where they are, and how much money they are willing to pay to solve their problems (Blank, 2013)

Customer Development model is constituted by four steps: Customer Discovery, Customer Validation, Customer Creation, and Company Building In market research section,

Customer Research and Customer Validation will be used to discover customer need and test Venture World's business model Customer Creation and Company Building will be discussed in Future Scope and Realisation section to draw up reliable scaling plan.

4.1.1 Customer Discovery

4.1.1.1 State the hypotheses

A Product Hypothesis

a Product features: online entrepreneurial courses provided by British enterprise

educators Besides, articles about entrepreneurial skills and new technology applications will be updated to website Furthermore, entrepreneurs can connect to venture capitals and potential investor

by uploading their business ideas to online community

b Product benefit: Pre-entrepreneurs and entrepreneurs can acquire business

knowledge and entrepreneurial skills before they startup Apart fromthis, it becomes easier for new business founders to raise funds on online community, as they can deliver their business ideas

effectively

c Dependency analysis: For Venture World to be successful, that is, become a

well-known platform for China's entrepreneurs, investors, and UK's enterprise educators, the number of youth entrepreneurship rate has

to grow to 5% by 2020, if it does not happen, Venture World should take other customer segments into consideration

d Product delivery schedule: The minimum viable product (only have pop-up landing

page, 10 articles about entrepreneurship, one affiliate online course, and 10 useful links of entrepreneurial resources) will be released by the end of July 2018 The first version of Venture World will be launched by March 2019, it will be combined with WeChat, Weibo, Alipay, WeChat Pay to increase customer base.

e Total Cost of Ownership/Adoption: There is no extra cost for customer to adopt

Venture World, because all the products and services can be acquiredonline With Alipay and WeChat Pay, customers also do not need to change their purchase behavior, as 92.82% of China mobile paymentmarket is occupied by these two China's mobile payment giants which has 800 million and 600 million users respectively (Soo, 2017)

B Customer and Problem Hypothesis:

a Types of customers:

on MakerEconomic BuyerRecommendersInfluencersEnd Users

b Customer problems: Increasing

number ofChina

Potential users themselves

China universities' directors

Parents of potential users

China university students and new business foundersFriends or classmates of potential users