SESSION 1: INTRODUCTION TO

ENTREPRENEURSHIP.

THE PROFILE OF THE

ENTREPRENEUR

Raquel Antolín López

WHAT IS

ENTREPRENEURSHIP?

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

Myth or reality:

The terms entrepreneurial

venture and small

companies can be used

interchangeably

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?

WHY BEING AN

ENTREPRENEUR?

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?

KNOWING

ENTREPRENEURS:

THEIR PROFILE

ATTITUDES SKILLS

ENTREPRENEURIAL

ATTITUDES

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/CAPABILITIES

Myth or reality:

Entrepreneurs do not

become successfull on their

first venture

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

THE ENTREPRENEURIAL

PROCESS

Myth or reality:

It is necessary to have

access to money to become

an entrepreneur

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

THE BENEFITS OF

ENTREPRENEURSHIP IN

SOCIETY

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.