Course 1 - Intro to entrepreneurship

De-Pe

Intro to Entrepreneurship

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Introduction to Entrepreneurship

• Peter F. Drucker entrepreneurship is not:-– Magic– Mysterious– But It is a DISCIPLINE and it can be

LEARNED.

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Types of Companies

Lifestyle– Provide a family income/support desired lifestyle– Fulfill personal goals– Generally $1M or less in annual sales– Limited upside– Sole proprietorship, LLC, S-Corp

High Growth– Fewer than 1 in 20 businesses– Possibly very large returns– Generally require more funds– Fiduciary responsibilities

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Manager vs Entrepreneur

Entrepreneur Growth FirmPursuit of growth and personal wealth important

Owner Manager Lifestyle FirmOften trade or craft based. Will not grow to any size

Manager Manages a business belonging to someone elseWill build an organisation putting in appropriate controlssimilar to a large firm

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Classical Viewpoint of the Entrepreneur

Entrepreneur

Risk-taker New Product Combinations

Manager

Uncertainty

Market Opportunities

Capitalist Organises Production

Decision-maker

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Identifying entrepreneurial characteristics

• INTRODUCTION– Entrepreneurs are individuals who

recognize opportunities where others see chaos or confusion

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Entrepreneurial Culture

• Always seeking something new• Restless, constantly on the move• Strong preference for freedom of choice

for the individual• Rebellious non-conformist youth is the

accepted norm

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Entrepreneurial Culture

• Ability think big• Try to do the impossible• They prefer the new or at least the

improved• They worship innovation• They are tolerant of those who make

mistakes• Things need to get done quickly rather

than always get done perfectly

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Hofstede’s Dimensions of Culture

Individualism

Power Distance

Uncertainty Avoidance

Masculinity

High(upper quartile countries)

Low(Lower quartile countries)

USA, Australia,New Zealand, UK,Canada, France, Germany

South America,Pakistan

Malaysia, Philippines,France, South America

UK, USA, Scandinavia,Germany

Greece, Portugal,Uruguay, Guatemala,France

Hong Kong, Singapore,UK, USA

Japan, Austria, Italy, UK, USA,Germany

North Europe

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Hofstede’s Dimensions of Culture• Individualism vs Collectivism

– The degree to which people prefer to act as individuals rather than groups

• Power Distance– The degree of inequality among people that a community is willing

to accept

• Uncertainty Avoidance– The degree to which people prefer to avoid ambiguity, resolve

uncertainty and prefer structured rather than unstructured situations

• Masculinity vs Femininity– This defines quality of life issues. Masculine virtues are those of

assertiveness, competition and success. Feminine virtues are those such as modesty, compromise and cooperation

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Benefits of Being an Entrepreneur

• Do what you enjoy• Control your own destiny• Contribute to society• Potentially huge financial rewards

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Entrepreneurship is easier than a job?

• The average working week for a self employed person is 64 hours

• Most people do not increase their income by becoming self employed

• 1 in 5 Entrepreneurs do not earn anything within the first 12 months

• Support of the spouse or partner is critical

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“ The only place success comes before work is in a dictionary” ANON

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Entrepreneurship is risky because…..?

• Few entrepreneurs actually know what they are doing

• They lack the methodology• Management incompetence• Poor financial control• Failure to develop a plan• Uncontrolled growth• Improper inventory control

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Entrepreneurship is risky because…..?

• “ Entrepreneurs who start out with the idea that they will make it big - and in a hurry - can be guaranteed failure “

Drucker pg31

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Entrepreneurship

• Entrepreneurship is behavior rather than personality trait (Drucker pg23)

• Entrepreneurs see change as the norm and as healthy

• The entrepreneur always searches for change and responds to it

• Entrepreneurship does not have to be high risk!!

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Things To Do

• Commit to your business, raising funds often forces this

• Have skin in the game• Fail fast, fail small, try again, find a model• Get excited, be confident and think big• Focus on revenues, margins – this will make raising

money easier and valuations better• Don’t try to be a big business too soon• Focus on the size of the pie and not the size of your

piece• Look for similar business models

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Question?

• What is your understanding of entrepreneurship?

Please answer this question at de-pe.com/faq/

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1.4 The myths of entrepreneurship

• Myth 1: Entrepreneurs are doers, not thinkers

• Myth 2: Entrepreneurs are born, not made

• Myth 3: Entrepreneurs are always inventors

• Myth 4: Entrepreneurs must fit the “Profile”

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1.4 The myths of entrepreneurship (cont)

• Myth 5: All entrepreneurs need is money or luck

• Myth 6: Your ideas is the most important thing and must be protected

• Myth 7: Entrepreneurs seek success but experience high failure rates

• Myth 8: Entrepreneurs are extreme risk taker (gamblers)

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Question?

• What is are some of your own myths about entrepreneurship?

Please answer this question at de-pe.com/faq/

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What is creativity?

• “…involves the development of UNIQUE and NOVEL responses to problems and opportunities” (Online Ticketing, E-Banking)

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Barriers to creativity

• Personal Beliefs• Institutional Inertia• Fear of Criticism• Over-Management

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What is innovation?

• “…finding ways to deliver new or better goods or services.” (Kinicki and Williams, 2003)

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3.7 Types of innovation

• Invention – creation of a new process or method

• Extension – iterating on existing ideas to make them more useful

• Duplication – apply an existing idea to a different audience or field

• Synthesis – combining two existing ideas to create something novel

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3.8 Sources of innovation

• Process needs• Unexpected events• New knowledge• Changes of demographics

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Questions?

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Thank You

Business

Course 1 - Intro to entrepreneurship