Business Leadership ProgramAug 10

IQC 2015

Day 4:Entrepreneurship 101

DefinitionEntrepreneurship is frequently defined in terms of new venture creation, with an understanding of the formation process, from conception, gestation, and infancy to adolescences. The process of a ventures’ success can be paralleled with raising a child as expressed in the question of nurture versus nature in determining which aspect plays a stronger role in the development of an individual or a venture.

•The process of starting a business or other organization (wikipedia)

•Study of entrepreneurship stated in late 17th

and early 18th century with Adam Smith

Entrepreneurship: History – Richard Cantillon (1734)•Considered the entrepreneur to be a risk taker, who deliberately

allocates resources to exploit opportunities to maximize the financial return (R. Cantillon)

–Entrepreneurs - Willingness to take risk and to deal with uncertainty (uncertain incomes)

–Defined entrepreneurship first

Entrepreneurship: History – Jean – Baptiste Say (1803)

•Product pays costs (rent, wages interest and the rest is profit) and shifts resources to an area of low to high productivity

Entrepreneurship: History – Joseph Schumpeter (1934)

1̈ Focuses on “driving economic progress” absent which economies would become static, structurally immobilized, and subject to decay

Chain reaction – creative disruption – a state at which the new venture and all of its related ventures effectively render existing products, services, and business models obsolete

•Innovators who change the status quo to set up new products and new services

•Create new industries and inputs

•Entrepreneur does no bear the risk; capitalist does

Horseles Carriage: Combination of a Steam Engine & Waggon

Peter Drucker

“Entrepreneurs are exploiters of change”Not every new business is entrepreneurial nor is every Not-For-Profit but some are incredibly

entrepreneurial and innovative

Risk & Uncertainty

Drucker uses the “modern university” as an example of major innovation (as are libraries)

What is an Entrepreneur?

Entrepreneur

•Entre – Prendre

–Entre – To be in

–Prendre - To take

An Entrepreneur is ….

•A problem solver

•Takes direct action

•Courage

•Can deal with High Uncertainty

•Unique Capabilities

•Consensual Relations

•Problems Understood ex post

Characteristics of an Entrepreneur

Entrepreneur Magazine says Entrepreneurs need

to have:

–Tenacity

–Passion

–Tolerance of ambiguity

–Vision

–Self Belief

–Flexibility

–Rule Breaking

Answer: Yes or No•I don’t like being told what to do by people who are less capable than I am.

•I like challenging myself.

•I like to win.

•I like being my own boss.

•I always look for new and better ways to do things.

•I like to question conventional wisdom.

•I like to get people together in order to get things done.

•People get excited by my ideas

•I am rarely satisfied or complacent.

•I can’t sit still

•I can usually work my way out of a difficult situation.

•I would rather fail at my own thing than succeed at someone else’s. Whenever there is a problem, I am ready to jump right in.

•I think old dogs can learn — even invent — new tricks.

•Members of my family run their own businesses.

•I have friends who run their own businesses.

•I worked after school and during vacations when I was growing up.

•I get an adrenaline rush from selling things.

•I am exhilarated by achieving results.

•I could have written a better test than Isenberg (and here is what I would change ….)

Answer Yes to 17+ of these questions?

You have the traits of an entrepreneur! (according to the Harvard Business

Review Blog)

Examples of Great Entrepreneurs

Listerine

–1879 – surgical anticipative

–Late 19th century – floor cleaner and cure for gonorrhea

–1895 – given to dentists for oral care

–1914 – 1st sold as over-the counter mouthwash

–1920 – solution for chronic halitosis $8 mill rev

McDonald’s

•Started in 1940’s in California

•Speedee Service System

–Established as a drive-in restaurant service

–Established the processes to speed up food preparation and delivery

–The fast food industry today

•Today in over 118 countries

–+ 28.Billion US$ in Revenue (2013)

iPad Commercials

Thank You!