Hi, guys, welcome to Entrepreneurial Strategic Management. I'm Doug Thomas from the University of New Mexico. And I'm very excited to be working with you again on this new MOOC. This is the sixth module or sixth week MOOC. And we will be talking all about one key question, which is trying to understand how you can create and maintain success in a small or medium or even a large size business. And that's why we call it entrepreneurial strategic management. I have been teaching a class related to these subjects for many years. And the way that I always approach it is to focus in on this one key questions, which is company success. What are the factors that lead to a company being more successful than another? I like to ask that question in several ways. One way to ask it is to say, why are some companies more successful than others? Why do some companies fail? I also like to focus sometimes on all organizations, not just for profit businesses. But all types of entities that exist, even in the nonprofit sector. But what we're trying to understand is success. And what we'd like to be able to do, is come up with a formula or a model that we could use, that we could teach to you. That would help you start, and then maintain success in your business. I think any of us who've ever started a business, and I've started several would love for someone to tell us if you do this, this, this, and this. If you have these factors in line, you will be able to start and run a successful business. The reality is, no such formula exists. Business in some ways is much more of an art than a science. We can't tell you with 100% predictive ability if you do this, this and this, follow these steps, follow this recipe, you will be guaranteed success. What we normally do, in fact, is look at back in history and look at other businesses and what they've done. And tried to come up with frameworks or models or explanations of this all important question, company success. There are a lot of people, by the way, who claim to give you answers that are 100% successful at predicting company success. You'll find sometimes, these models or answers being advertised on TV. They tell you to come pay money and come to a hotel conference room, and they'll explain to you for several thousand dollars this 100% guaranteed model for success. Or maybe you've seen it late at night, an infomercial where they offer the same type of service. Think about that for a minute, if there was one model or one answer that existed that you could just write down in a book. Would I be on this camera right now recording this class, giving you that answer? Probably not, right? If someone had such an answer they would not give it away so inexpensively. They probably would guard that formula very close, and would probably use it themselves to dominate the business world. So you might ask yourself right now, Professor Thomas has started this class, this MOOC, by giving us this simple focus question that we'll be using throughout the entire course. And he's already told us that there's no answer to that question. So what are we going to be doing for six weeks or during these six modules? That's a great question. We may not have an answer that is 100% successful at predicting the future. Because the future is uncertain and things change. But what we can do, is look back at history. And we do do that, although it's an imperfect way of trying to answer this question. And we also may not have a recipe or a formula, and we can't tell you exactly the amount of this or that you should put into your business bowl and mix it up. To produce success, we can't tell you two tablespoons of this or three cups of that, but we can tell you ingredients. We don't have a recipe, but we can tell you ingredients that seem to be very important, highly correlated, with successful businesses. And what we're going to focus on are two key frameworks. That try demonstrate or help entrepreneurs, managers, and others to increase the likelihood [COUGH], excuse me, of their success. It won't be 100% guaranteed success. If you're starting a small business tomorrow, a restaurant or a local service- oriented business. These ingredients that we'll give you won't guarantee success. Not only that, we can't tell you exactly how to do it. We can't tell you how to execute or implement it. But we will give you some factors that seem to be highly correlated with success. And before we do that, we need to measure success. How are we going to talk about success if we haven't figured out what our key metric, or the way that we understand it might be measured? And what we're going to focus on is a very simple measure, which is profit. Very simply put, revenues minus expenses, what's left over. Do you have a loss, are you losing money, or are you turning a profit? If you've studied accounting, or taken any class in business, you've probably seen that there are lots of measures of profit. For example, one word is often used, return on sales, return on equity. And return is just another word for profit and usually those are understood in ratio terms. You might put total profit divided by sales, total sales, and you get a percentage or a ratio. We're not going to focus on any one measure, but we are focusing in on profits. We're not focusing on other perhaps important measures, such as market share. Or the percent of the market that your particular company has in sales. We're not going to focus on broader measures that look at social responsibility, although those may be very important. We're going to focus on this simple measure, because we want to understand how businesses can survive. And you can't survive, and you can't hire people if you don't have profits. If you're not ending up with more money then you started with. And so, we'll use that simple measure of success. What we'll do in the next part is, we will simply try to understand what people have historically said seems to matter when we look at business success.