Entrepreneurs must dive into the Blue Ocean

I HAVE just got back from the Forest of Fontainebleau, where I celebrated the 50th Anniversary of Insead, the institution that awarded my MBA in 1997.

I am still marvelling at the Insead co-founders, four French men who hit a bullseye 50 years ago.

The idea of Insead was that Europe needed its own business school, built by Europeans.

It would offer a one year MBA course instead of two, focusing on diversity, with broad international representation, helping executives work effectively cross-culturally.

All of this sounds obvious today, but this area was a Blue Ocean 50 years ago.

Blue Ocean strategy refers to how organisations can achieve high growth and profits by creating new demand in an uncontested market space, or a Blue Ocean, rather than competing head-to-head with other suppliers for known customers in an existing industry.

Blue Oceans are the wide-open market spaces which Insead strategy professors, Chan Kim and Renee Mauborgne have written about for the last 15 years.

In interviewing leading chief executives around the world, they saw much focus on Red Oceans, where improvement comes from cost cutting.

Ten years ago, Insead opened a Singapore campus. I thought they were wrong at the time; too much to do to improve Fontainebleau I lamented.

But they were sailing once again into a blue ocean, becoming the business school for the world.

Building on its eastern success, it recently launched a campus in Abu Dhabi.

As I enjoyed three days with alumni in Fontainebleau, I heard various former students speak about their success.

Mika Salmi, the founder of Atom Films (sold to Viacom); Kevin Ryan, former chief executive of Doubleclick, now runs the Gilt Groupe (a successful online women’s clothing site); Damian Bown, founder of UK-based start-up Kizoom (sold to in May 2008 in an all-cash deal to CitySpace), and the Stanford Professor Kathleen Eisenhardt.

Many of the lessons Eisenhardt shared from her experiences working with leading Silicon Valley entrepreneurs included:

• Stay close to real-time information; you develop an intuition about your business

• Carry out experiments; you learn best from small losses

• Use familiar templates in new ways

• Build your industry’s architecture

• Rely on simple rules about time and priorities for building your team.

What will be your company’s blue ocean strategy?

Julie Meyer is founder and chief executive of Ariadne Capital, runs Entrepreneur Country and appears on the BBC’s Online Dragons’ Den.