What is Entrepreneurship?What is Entrepreneurship?
Mark T. Schenkel, Ph.D.Mark T. Schenkel, Ph.D.
AgendaAgenda
What is Entrepreneurship?What is Entrepreneurship?– Historical developmentHistorical development– DefinitionDefinition– MythsMyths– ProcessProcess– Career PathsCareer Paths
The Entrepreneurial The Entrepreneurial RevolutionRevolution
“We are in the midst of a silent revolution – a triumph of the creative and entrepreneurial spirit of humankind throughout the world.”
“I believe its impact on the 21st century will equal or exceed that of the Industrial Revolution on the 19th and 20th.”
“The death knell for brontosaurus capitalism of yesteryear.”
-- Jeffry A. Timmons (The Entrepreneurial Mind, 1989)
Development of EntrepreneurshipDevelopment of EntrepreneurshipEarliest Period- Marco PoloEarliest Period- Marco PoloMiddle Ages- Theater, Middle Ages- Theater, Architectural WorksArchitectural Works1717thth Century- Mississippi Century- Mississippi CompanyCompany1818thth Century- Edison & Century- Edison & WhitneyWhitney1919thth & 20 & 20thth Centuries Centuries– Organize/OperateOrganize/Operate– InnovationInnovation
The OpportunityThe OpportunityStatisticsStatistics– A random national sample (Gallup poll survey, 1994) of high A random national sample (Gallup poll survey, 1994) of high
school students reveals that 70% of these students say they school students reveals that 70% of these students say they want to own their own business some day (Timmons, 2004: 7) want to own their own business some day (Timmons, 2004: 7)
– Annual Annual ChronicleChronicle survey: 40% of incoming students have survey: 40% of incoming students have entrepreneurship as major goal for why they are going to entrepreneurship as major goal for why they are going to collegecollege
– Fortune 500 employment decline: 1970 (20%) – 1996 (8.5%)Fortune 500 employment decline: 1970 (20%) – 1996 (8.5%)– Small firms constitute more than 90 percent of the entire Small firms constitute more than 90 percent of the entire
business population business population
Virtually of USA’s economic growth is coming Virtually of USA’s economic growth is coming from entrepreneurial ventures of all sizes and from entrepreneurial ventures of all sizes and typestypesNot yet tainted by corporate way of lifeNot yet tainted by corporate way of lifeGood time to take risk!!!Good time to take risk!!!
EntrepreneurshipEntrepreneurshipA process, not a type of personA process, not a type of personCreating and/or building something of valueCreating and/or building something of valueIdentifying an opportunityIdentifying an opportunityPulling together the needed resources to Pulling together the needed resources to pursue the opportunitypursue the opportunityDeveloping and implementing a Business Developing and implementing a Business PlanPlanInvolves uncertainty and the acceptance of Involves uncertainty and the acceptance of riskrisk
The Nature of The Nature of Entrepreneurial RiskEntrepreneurial Risk
Failure – Failure –
““Sinking the Boat Risk”Sinking the Boat Risk”
Opportunity Cost – Opportunity Cost –
““Missing the Boat Risk”Missing the Boat Risk”
Myths aboutMyths aboutEntrepreneurshipEntrepreneurship
The Lone Cowboy Myth.The Lone Cowboy Myth.
The Experience Myth.The Experience Myth.
The I’m Only in it for the Money The I’m Only in it for the Money Myth. Myth.
The Entrepreneurs are Gamblers The Entrepreneurs are Gamblers Myth.Myth.
Myths aboutMyths aboutEntrepreneurshipEntrepreneurship
The Entrepreneurs Don’t Have to The Entrepreneurs Don’t Have to Worry about Numbers Myth.Worry about Numbers Myth.
The All You Need is Money Myth.The All You Need is Money Myth.
The I’ve Got a Secret Myth.The I’ve Got a Secret Myth.
The IPO Myth.The IPO Myth.
Other Opportunities for Learning Other Opportunities for Learning
Curb event center retail spaceCurb event center retail space
HatcheryHatchery
Practicing entrepreneurs activitiesPracticing entrepreneurs activities
Entrepreneurship clubEntrepreneurship club
InternshipsInternships
MentorsMentors
Networking!!!Networking!!!
The Entrepreneurial ProcessThe Entrepreneurial Process
Working Definition of Working Definition of EntrepreneurshipEntrepreneurship
““Entrepreneurship is a way of Entrepreneurship is a way of thinking, reasoning and acting that thinking, reasoning and acting that is opportunity obsessed, is opportunity obsessed, holistic in holistic in approachapproach [[emphasis addedemphasis added]], and , and leadership balanced” (Timmons, leadership balanced” (Timmons, 1999: 27).1999: 27).
The Entrepreneurial Process The Entrepreneurial Process (Timmons, 2000)(Timmons, 2000)
Opportunity Resources
Team
Communication
Business PlanFits and Gaps
Creativity Leadership
Capital Market ForcesUncertainty
Ambiguity Exogenous Forces
Founder
Analysis
StrategyFormulation
Eval., Review,& Feedback
Implementation
The Entrepreneurial ProcessThe Entrepreneurial Process
The Entrepreneurial ProcessThe Entrepreneurial Process
StrategyLuck
Planning
Three Part Process
Life Cycle of a Business Venture
Pre-Launch Process: Pre-Launch Process: Idea GenerationIdea Generation
Understanding the Genesis of New Understanding the Genesis of New Businesses in the EconomyBusinesses in the Economy
Sources of Ideas: Where to LookSources of Ideas: Where to Look
The Entrepreneurial ProcessThe Entrepreneurial Process
Challenge Traditional Definitions of ValueChallenge Traditional Definitions of Value
Entrepreneurship thrives on market Entrepreneurship thrives on market inefficienciesinefficiencies
Customers seek improvement in the Customers seek improvement in the following:following:– SpeedSpeed
– ConvenienceConvenience
– PersonalizationPersonalization
– PricePrice
Pre-Launch Process: Pre-Launch Process: Evaluating Ideas GenerationEvaluating Ideas Generation
Does Does the Ideathe Idea = = an Opportunityan Opportunity??– MarketMarket– MarginMargin– MissionMission
The Right Team?The Right Team?
The Necessary Resources?The Necessary Resources?
The Start-up ProcessThe Start-up Process
Filling the GapsFilling the Gaps
The Business PlanThe Business Plan– Executive SummaryExecutive Summary– Market Analysis and Marketing PlanMarket Analysis and Marketing Plan– Operating Plan and TeamOperating Plan and Team– Financial PlanFinancial Plan
Growing the BusinessGrowing the Business
CASH FLOW MANAGEMENTCASH FLOW MANAGEMENT
Building a CultureBuilding a Culture
MarketingMarketing
StaffingStaffing
Building Management & Administrative Building Management & Administrative SystemsSystems
Exit or SuccessionExit or Succession
Entrepreneurial CareersEntrepreneurial Careers
Do it now!Do it now!
Not necessarily a one shot dealNot necessarily a one shot deal
Sentry Position (in consulting firm or in Sentry Position (in consulting firm or in industry)industry)
Family or existing Small BusinessFamily or existing Small Business
Corporate TrackCorporate Track
Key Takeaway Points . . . Key Takeaway Points . . . No fully satisfactory definition of No fully satisfactory definition of entrepreneurship has been developed to date entrepreneurship has been developed to date (i.e., one that garners collective agreement (i.e., one that garners collective agreement among scholars & practitioners alike).among scholars & practitioners alike).
““Entrepreneurship” reflects creative, Entrepreneurship” reflects creative, innovative, and arbitrage oriented innovative, and arbitrage oriented behaviors.behaviors.
Is a Is a processprocess; involves planning, strategizing, ; involves planning, strategizing, and a little bit of luckand a little bit of luck..
Interconnectedness of resources and Interconnectedness of resources and opportunitiesopportunities
Key Takeaway Points . . . Key Takeaway Points . . .
Entrepreneurship can occur – and fail to occur Entrepreneurship can occur – and fail to occur – in firms that are old and new; small and – in firms that are old and new; small and large, fast and slow growing; in the private, large, fast and slow growing; in the private, not-for-profit, and public sectors; in all not-for-profit, and public sectors; in all geographic points; and in all stages of a geographic points; and in all stages of a nation’s development.nation’s development.