lecture 2-entrepreneurial process

8/4/2019 Lecture 2-Entrepreneurial Process

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Select a high-potential opportunity that interests the group and then use it forthe one page business proposal description of the opportunity. For example, youmight consider one of these current trends in science and technology: mobiledata applications, internet telephony, video podcasting, web services, nano-technology, clean technologies (including fuel cell, battery and solar), pandemicflu and biodefense treatments.

1) Describe the opportunity that attracts you and why you think it is a newventure opportunity.

2) Describe the competencies and skills you and your team members possess.

3) What important stakeholders will you need to be successful?

4) Describe the passion and commitment you have for the opportunity.

5) Is this a good opportunity for you?

VENTURE CHALLENGE



Looking back …

This is the entrepreneurial age

- Initiating change in the structure of

business and society

Entrepreneurs are driving a revolution that is

transforming and renewing economies worldwide

Entrepreneurship is the essence of free enterprise

- steady stream of brilliant entrepreneurs

and innovators

- job creation

- new venture formation- Venture and growth capital

- building entrepreneurial society

- economic weapon



Looking back …

What is entrepreneurship?

- economic function approach

- psychological and sociological profile

- entrepreneurial behavior approach

The pursuit of opportunity without regard to resources currently controlled

- strategic orientation

- the commitment to opportunity- resource commitment process

- concept of control over resources

- concept of management, and reward policy



Successful entrepreneur

Passion forthe business

Product/customerfocus

Tenacity despitefailure

ExecutionIntelligence

Characteristics of Successful Entrepreneurs



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 Are Academic and

Social MisfitsMyth 5: Entrepreneurs Must Fit the “Profile”

Myth 6: All Entrepreneurs Need Is Money



The Myths of Entrepreneurship

Myth 7: All Entrepreneurs Need Is Luck

Myth 8: Ignorance Is Bliss For Entrepreneurs

Myth 9: Entrepreneurs Seek Success ButExperience High Failure Rates

Myth 10: Entrepreneurs Are Extreme Risk

Takers (Gamblers)



Entrepreneurship — a way of

thinking, reasoning, and acting that is

opportunity obsessed, holistic in

approach, and leadership balanced

The entrepreneurial process involves

all the functions, activities, and

actions associated with perceiving

opportunities and creating

organizations to pursue them



Entrepreneurial Management

(A Framework for Entrepreneurship)

EntrepreneurialProcess

Entrepreneurial Mind

EntrepreneurialPerspective

Entrepreneurial

Manager

OpportunityRecognition

Resources andBusiness Plan

Launching theVenture

Managing theEntrepreneurial

Venture

Flow of Topics



Critical Factors for starting a newventure

Personal

AttributesSociological Environment

• Achievement

• Locus of Control

• Ambiguity

•Tolerance

Risk taking

• Education

• Experience

• Networks

• Teams

• Parents

• Family

• Role Models

• Culture

• Opportunities

• Role Models

• Creativity

• Competition

• Incubator• Govt. Policy

Innovation Triggering event Implementation Growth



The Entrepreneurial Process

It is opportunity driven

It is driven by a lead entrepreneur

and an entrepreneurial teamIt is resource parsimonious and

creative

It depends on the fit and balance among these

It is integrated and holistic



AcquiringResources

Harvesting

Conducting

OpportunityAnalysis

Developingthe Plan and setting up

the company

Managing theEntrepreneurial

Venture

•State the vision

•Market analysis

•Evaluate competition

•Research pricing strategies

ENTREPRENEURIAL PROCESS

• Writing business plan

• Set up the company

•Financial

•Human

•Materials

• Marketing issues• challenges of growth

• strategies for growth

• Exit Strategy



Issues AffectingEntrepreneurship in Action

Characteristics of today’s economy

Legal factors

The changing world of work

Social responsibility and ethics

Entrepreneurial Context




Important Characteristics ofToday’s Economy

What forces are “driving” today’seconomy?

What are the implications?

What will it take to be successfulin this context?




Driving Forces of Today’s

Economy

The Role of Information

Technological Trends

Globalization

Changing Demographics




Implications of the Driving Forcesof Today’s Economy

Continual turbulence and change

Reduced need for physical assets

Vanishing distance

Compressed time



Critical Success Factors

Four critical success factors forsucceeding in today’s economy

1. The ability to embrace change

2. The ability to be creative andinnovative

3. Vision and leadership

4. Total quality culture



The Timmons Model of the

Entrepreneurial Process

Opportunity Resources

Entrepreneur/

team

Creativity Leadership

Communication

Business Plan

Fits and gaps Ambiguity Exogenous forces

Capital market contextUncertainty

Founder (1)



Opportunity

Market demandto measure opportunity

Market structure and size

to define an opportunity

Margin analysisDifferentiate an

Opportunity from idea

• emerging/fragmented • barrier to entry

• low cost provider/

High margin

• low capital requirement

• early break even•Value added

• customer payback

less than one year

• market share and growth

potential

• is customer reachable?



Resources

Unleashing Creativity

Determining resourcesNeeds and acquiring

resources

• Profit Potential

• Financial

• People

• Assets

entrepreneurial frugality:

• low overhead

• high productivity• minimal ownership of

capital assets

Minimize and control vs

maximize ownership



The Entrepreneurial TeamQuality of the Team

– Relevant experience and track record

– Motivation to excel

– Commitment, determination, and

persistence

– Tolerance of risk, ambiguity, and

uncertainty

– Creativity



The Entrepreneurial TeamQuality of the Team

– Team focus of control

– Adaptability

– Opportunity obsession

– Leadership

– Communication

lecture 2-entrepreneurial process

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