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Introduction to the Entrepreneurship: The Profile of the Entrepreneur
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WHAT IS ENTREPRENEURSHIP?
The process of discovering, creating, evaluating, and
exploiting economic opportunities by innovative actors
that engage in business activities to earn a profit or be
succesful.
Shane & Venkataraman (2002)
OPPORTUNITY INNOVATION ACTORS
CORE ELEMENTS OF THE DEFINITION
The process through which entrepreneurs
(person) establish a new organization
AGENTS OF CHANGE
A–4
ENTREPRENEURSHIP
NEW VENTURE
CREATION
INTRAPRENEURSHIP
CORPORATE
ENTREPRENEURSHIP
ESTABLISHED COMPANIES
Business units
Departments
Ent orientation
New Ventures
Organizations that pursue opportunities, are characterized by innovative practices, and have growth and profitability as their main goals. (Entrepreneurial ventures)
Most of new ventures are small or micro-companies, but not always
Small Business
A firm that:
is independently owned, operated, and financed;
has fewer than 100 (250) employees; <1M - 2,5M sales
doesn’t necessarily engage in new or innovative practices,
and has relatively little impact on its industry
WHAT IS ENTREPRENEURSHIP?
WHAT IS ENTREPRENEURSHIP?
New venture creation
Independent company
wether big, small or micro
Start-up
Franchise
Spin-off
Franchise: A business that markets a product or service developed
by a franchisor, typically in the manner specified by that franchisor.
Microenterprise: A firm with 10 or
fewer employees, with initial
capitalization requirements of under
$35,000 and high operational
involvement of the owner
(Frequently a family business)
Spin-off: A firm created from
an existing company/division
of a parent company
(incubator). The company has
commercial, technical and
legal independence.
Start-up: An innovative
and technology-based
company that develops a
new technology or
innovation.
Business incubator: A company
that helps new and startup
companies to develop by
providing services such as
management training or office
space.
COLLECTIVE ENTREPRENEURSHIP: is the association of
entrepreneurs that results from the combination of skills of a
group of individuals who come together to create and
innovate.
Cooperative
Limited Company
WHAT IS ENTREPRENEURSHIP?
MOTIVATIONS TO CREATE YOUR OWN
COMPANY
What are common motivators for entrepreneurs to star t a new
venture?
Money
Control over your compensation /making profits
Freedom
Control over your time
Create
Changing the world? A new technology, innovation,
service
Independence
Control over your working conditions
Help
Social and environmental entrepreneurship
(improve society)
Self-fulfillment
Benefits Independence
Satisfaction
Financial reward
Self-esteem
Contribution to society
Costs Business failure
Obstacles
Loneliness
Financial insecurity
Long hours/hard work
Strain on personal
relationships
Compete responsability
COSTS / BENEFITS
WHY NOT ENTREPRENEURSHIP?
RISK (risk of time, risk of
money): you are likely to fail.
Uncertainty: will you be
successful or unsuccessful?
Entrepreneurship
Employee
Peer pressure: popular
among your friends?
Family pressure: the risk is
worth taking?
Opportunity cost: a job
somewhere else?
Myth or reality:
Entrepreneurs have a
natural desire to take risks
at a higher level than non-
entrepreneurs
ENTREPRENEURIAL ATTITUDES:
RISK TOLERANCE
• Research studies show that entrepreneurs and traditional managers do
not show differences in natural tendencies or desire to take risks.
• However, entrepreneurs do perceive risk differently: the risk is in the eye
of the beholder)
• Risk is conceptualized based on the individual entrepreneur’s assessment
of risk and uncertainty in a decision.
• The risk tolerance of entrepreneurs may be higher based on their
perception of the risk-reward scenarios that they face.
• Entrepreneurs see greater potential in the rewards of their decisions than
do non-entrepreneurs.
Why do entrepreneurs accept risks that traditional
managers may avoid?
ENTREPRENEURIAL ATTITUDES:
SELF-ACHIEVEMENT
• Achievement orientation: satisfying objectives – addressing challenges
•Pursuing changes Challenging but
attainable goals/targets
ENTREPRENEURIAL ATTITUDES:
SELF-EFFICACY
• Self-confidence
• Self-esteem
• Proactivity
Beware of overconfidence. Overconfidence refers to an
individual’s tendency to overestimate their own
capabilities, knowledge and skills. This results in being
overly optimistic of the future. While confidence helps
entrepreneurs to successfully face the multiple
hurdles of starting and managing a venture,
overconfidence explains why most new ventures fail.
Overconfidence?
ENTREPRENEURIAL ATTITUDES:
PERSEVERANCE
Medium – Long term
orientation
ENTREPRENEURIAL SKILLS:
FAILURE TOLERANCE
Failure: Part of the
Creative Process!
For every 3,000 new product
ideas:
►Four make it to the
development stage
►Two are actually
launched
►One becomes a success
in the market
ENTREPRENEURIAL SKILLS:
CREATIVITY
CURIOSITY
PASSION
INNOVATION
FLEXIBILITY
OPPORTUNITY
RECOGNITION
INNOVATIVE
MANGEMENT
ENTREPRENEURIAL SKILLS:
LEADERSHIP AND MOTIVATION
• Being able to make decisions and to involve your employees and
other members of the team
• Leadership position in your sector
ENTREPRENEURIAL SKILLS:
COMMUNICATION AND NEGOTIATION
•Skills to relate to un-known people
•Skills to listen to other people
•Skills to talk and transmit to other people
•Persuative skills
FIND INVESTORS NEGOTIATE
WITH BANKS
SELL YOUR
PRODUCT/SERVICE
ASSOCIATION WITH OTHER ENTREPRENEURS
ENTREPRENEURIAL SKILLS:
COOPERATION & NETWORKING
Social capital
Which is the more valuable measure of your social capital?
The diversity of the people that you know.
The number of people that you know
.
While the number of people that you know is valuable, it is more
valuable for entrepreneurs to have (a) a diverse network than (b) a large
network of similar people. The richness of your social capital depends
on the size, quality, and diversity of your networks. In terms of diversity,
it is very valuable to know people of different skill sets, with different
company experiences, in different cities and regions, and with
diversified types of people that they know.
ENTREPRENEURIAL SKILLS:
COOPERATION & NETWORKING
Social capital
Team work
.
Why build social capital?
To be a more valuable collaborator
To be a more efficient problem solver
To be more creative
To be better informed
Google Yes, the world's most famous search engine was
actually started in a garage. Larry Page and Sergey
Brin, graduates of Stanford University, rented a garage
from a friend, Susan Wojcicki, in September of 1998.
They worked day and night for a number of months and
developed what would be known as Google. Their main
goal while creating the website was to organize and
maintain all kinds of information on a single platform
accessible to common people all over the world. Today,
Google is the most commonly used search engine in
the world and has also launched other useful websites
and applications like Gmail, Google+, and Google Drive.
Microsoft Every computer user knows the Microsoft brand. It's the
remarkable and famous software that was once
created in a small Albuquerque garage by Bill Gates
and his friend Paul Allen. Both of them gave more
importance to programming language and software
operations and worked in collaboration with IBM. They
got their first operating system licensed for $80,000.
They kept working hard and some years later they
developed their most impressive and exceptional
operating system, called Windows. Today, Windows is
the most widely used software on the globe. About 80%
of computers worldwide are running this operating
system.
Amazon Amazon.com is a well-known online shopping
website that was created in 1994 as an online
bookstore by Jeff Bezos. He created the website
in his garage in Washington, originally investing
nearly $40,000 to enable him to order, sell, and
deliver books to 48 different countries. He
succeeded in selling his first book in July 1995,
and since then has built Amazon into the largest
online shopping store in world.
Apple Apple is another insanely popular international
brand, but few people realize that it was
started in a California garage by three young
men. Steve Jobs, Steve Wozniak, and Ronald
Wayne developed the first Apple computer in
1976 in the garage of Steve Jobs' parents' house.
The Apple I was sold as a motherboard to a local
store for $500 and shortly thereafter, the team
continued on to create the Apple II computer. The
founders' products and company became famous
when they got a break from their Macintosh line
of products, from which they earned millions of
dollars. Now, Apple is leading a technological
revolution with its various devices, including Mac
computers, iPhones, iPods, and iPads.
Disney Walt and Roy Disney created their first films in their uncle's
garage in 1923. They started their career by creating "Alice
Comedies," which were actually a part of the original Alice in
Wonderland animation series. Disney faced a lot of
hardships in the journey toward success and was only
accepted by investors after enduring plenty of struggle and
strife. Now, Disney is one of the most popular and highest-
earning media houses and franchises in the world, and is
the leading name in producing cartoons, children's movies,
and animated films.
Hewlett-Packard (HP) Two friends, Bill Hewlett and Dave Packard, founded HP in Packard's
garage in 1939 with an initial investment of only $538. The product that
eventually boosted their career was an audio oscillator (HP200A), which
was sold to Walt Disney to improve its sound system for the
movie Fantasia. Walt Disney bought eight oscillators and gave HP the
biggest break of its life. Today, the Packard's garage in Palo Alto is
famous as the birthplace of HP and Silicon Valley. Since its inception,
HP has developed into a powerful and active company, developing
various computers, laptops, and other computer-centric accessories with
advanced technologies.
All of these companies started with little investment capital and small
physical space, but hard work and unwavering dedication led them to
huge success. With the same type of passion and determination you,
too, could be the founder of the next $25B+ enterprise.
IDEA
IDEA
ATTRACTIVENESS
ASSESSMENT
BUSINESS MODEL
(CANVAS
METHOD)
The entrepreneurial
cycle
Yes
No
OPPORTUNITY
FINANCIAL
VIABILITY
Be curious first and
critical later
GROUP
BUSINESS
PROJECT
Identification o a business idea
Validation of the idea as a business opportunity (viable and feasible)
CANVAS Method or Business plan
Founding your company
OPPORTUNITY
RECOGNITION
OPPORTUNITY
ANALYSIS
OPPORTUNITY
EXPLORATION
OPPORTUNITY
EXPLOTATION
Innovation
Engage in the creative destruction process
Act as agents of change: Industry standards, business models, business
power, economic power, Push for new laws
Provide new solutions to “old” problems
Push for equality of opportunities, democracy, etc.
Opportunities for diverse people
Ex. For minorities and Women: A way to break the glass-ceiling
Balance work and family responsibilities
Avoid unpleasant firm politics
Obtain more challenge and autonomy (and wealth)
Rural areas
Job Creation and country growth
New ventures create 60-80% of net new jobs
WHY IS ENTREPRENEURSHIP IMPORTANT
FOR SOCIETY?
Business and social needs are key sources of
entrepreneurial opportunities
Venture philanthropy: funding models designed to yield social
impact as well as a financial return on their investments.
THE ROLE OF ENT’SHIP IN SOCIETY
Social entrepreneurship. Social entrepreneurs are individuals
with innovative solutions to society’s most pressing social
problems.
Green entrepreneurship. Environmental entrepreneurs are
individuals who create new, for-profit, ventures that help
address environmental challenges – climate change, loss of
biodiversity, pollution, etc.
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