Entrepreneurial Behaviour & Strategy: Week 1

Week 1: Introduction to Entrepreneurial Behaviour & Strategy

• Research interests can be categorized as visceral factors, risk preference, and extraneous factors.
• Visceral factors include elements like anxiety, anger, sadness, energy level, tiredness, hunger, stress, and sensitivity to temperature (hot or cold).
• Risk preference involves decision weight parameters, utility parameters, and loss aversion.
• Extraneous factors are personality traits and demographic variables.

Consolidated Risk Categories for Small Business Failure

• Risks are categorized as Internal (Controllable) or External (Uncontrollable).

• Internal factors are further divided into Firm-level and Individual-level risks.

• External factors include Industry-specific and Economy-wide risks.

• Individual-level risks include Management (Financial), Management (General), Person, and Team Risks.

• Firm-level risks are Business Model, Strategic, Execution, and Product Risks.

• Industry-specific risks are Competitive, Credit, Customer/user, and Labor Risks.

• Economy-wide risks are Political/Legal and Technology.

Indigenous Works

• Indigenous Works explores the barriers and enablers to research-based career paths for Indigenous students

Myths About Entrepreneurship

• Common misconceptions about entrepreneurship include:
• It means having no boss.
• It equates to being a big risk-taker or gambler.
• It is more about the opportunity than the founder.
• VC money is the key to success.
• It is only for the young.
• Entrepreneurs are introverted genius inventors.
• Disruptive products are essential.
• It is easier than employment.

Business In Canada

• Canada has over 1.1 million businesses in 2016.
• Small businesses made up 67.7% of all businesses in Canada.
• Medium sized businesses represented 20.6% of all businesses in Canada.
• Large businesses accounted for the remaining 11.7%.

Celebrate Your Failures

• Dare to think without limitations.
• Step outside of comfort zone.
• Failures help connect others.
• Learn from it, by examining what went wrong, assessing personal role and external factors, figuring out how to act differently, recognizing missed warning signs, and finding applicable future lessons

What is an Entrepreneur?

• An entrepreneur is someone who organizes and operates businesses, taking on higher than normal financial risks.

Traits of Great Entrepreneurs

• Great Entrepreneurs have:
• An internal locus of control.
• Success in adversity (high adversity quotients).
• Actions that lead to creative destruction.
• The ability to find 10x solutions.
• Had huge $$$$ exit.

The 10 D's of Entrepreneurship

• Dream: Visionaries who can also implement their dreams
• Decisiveness: Avoid procrastination and make swift decisions.
• Swiftness is key to success.
• Doers: Quickly implement actions once a course is decided.
• Determination: Implement ventures with total commitment.
• Seldom give up.
• Dedication: Give it your all, even if friendships or relationships suffer.
• Love business.
• Work tirelessly.
• Long hours.
• Devotion: Love what you do, as it sustains one through tough issues.
• Details: Pay attention to the details.
• Destiny: Want to control own destiny rather than depending on others.
• Dollars: Not the primary motivator.
• Distribute: Share ownership with key employees.

Definitions of Entrepreneurship

• Joseph Schumpeter described an entrepreneur is someone who destroys the existing economic order through new products, services, production methods, forms of organization, or exploitation of raw materials - also known as creative destruction.
• Niccolò Machiavelli: Entrepreneurs understand there's little difference between obstacle and opportunity.
• An entrepreneur is the person who sees an opportunity and creates an organization to pursue it.

Startups Defined

• Start up is an organization formed to search for a sustainable, repeatable and scalable business model.
• A startup stops being a startup when it finds product or market fit before trying to scale.

Entrepreneurship in Canada

• Globally, there are differences between male and female entrepreneurs.
• Most Canadian small and medium business owners report that passion is more of a motivator than financial gain.
• Canada has a significant Total Entrepreneurial Activity (TEA) rate among other countries.
• The survival rates for businesses had comparable trends between goods and and services producing sectors for the first 3 years.
• After the fourth year, goods-producing sectors had a higher business survival rate compared to services.

Week 2: Finding and Evaluating Opportunities

• Large Language Models (LLM) are a type of generative AI.
• LLMs use training data from websites, Reddit, Wikipedia, journal articles, and books.
• Generative AI creates new content based on patterns in training data of text, images, audio and video.
• The benefits of Generative AI are enhanced creativity, faster feedback, better writing, wider knowledge, faster learning, accessibility.

Generative AI in Action

• Generative AI can be used to create content for Chatbots, improve accessibility, write product descriptions, marketing campaigns and personalized ads, generate voice content and develop new products .

Limitations of Generative AI

• Ethical considerations in Generative AI needs ethical boundaries.
• Copyright issues, such as mimicking individuals.
• The computational and environmental costs implications.
• Dependency and deskilling.
• Human-machine credibility.
• The generation of Misinformation, biased narratives, fake citations.

Growing Concerns of Generative AI

• Deepfakes & Social Manipulation of news.
• Privacy & Surveillance.
• Policing using facial recognition.
• Bias & Discrimination.
• Lack of Transparency and Accountability.
• Job Displacement.
• Frictional unemployment.

Laws and Policies Regarding Generative AI

• Know the Intellectual Property Rights and Generative AIs impact on them.
• Ensure that any personal data is used and it complies with privacy .
• Students cannot use generative AI unless the teacher provides permission.
• Comply with the terms of service

Generative AI Use Safely

• Ensure compliance of the terms of service when using programs. which require uploading of the data.

Applications in New Venture Creation

• ChatGPT can suggest Generative AI tools helpful at various entrepreneurial stages, for example GTP-3, DALL-E, AI Music Generators, Data Analysis Tools, and AI project management.

ChatGPT Settings

• Temperature controls how random the answer is.
• A lower temperature equals more predictable responses.
• A higher the temperature allows for more random content generation and creativity.
• Frequency penalty penalizes words that appear too frequently in a response, encouraging more diverse vocabulary.
• Presence penalty discourages repeating concepts, encouraging new ideas.

Using Generative AI - The Do's

• Cite sources.
• Fact check everything.
• Enhance learning.
• Spell/grammar check.
• Create drafts/outlines.
• Respect privacy/ethical guidelines.

Using Generative AI - The Don'ts

• Submit AI generated content as one's own work.
• Neglect data protections laws.
• Let the system think for you."

Starting a Business Today

• It has never been cheaper to launch a start up with costs reducing over recent years.
• 99% reduction since 1995 with emerging tech for $5 million to $50 in 2023.
• This has occurred due to open source software + cloud based solutions + developers can quickly make applications + ecommerce platforms.
• Technology has leveled the playing field.
• Startups have more funding opportunities.
• Barriers to entry are lower.
• Consumers are more open to new products and services.
• There is a growing demand for entrepreneurs.

Entrepreneurship Defined

• An entrepreneur perceives opportunity and creates an organization.
• Activities: including perceiving opportunities and creating organizations.
• This includes market and customer research, product innovation, team building, managing resources and leadership.

Crucial Components of Success

• The Timmons Model states there are three elements: Opportunity, Team, and Resources.
• These each have an Uncertainty aspect to them.
• Each requires Fits and Gaps analysis to implement business plan.

Tenets of the Timmons Model

• Is there a clear customer need and will the business address it?
• Is market and team ready?
• Combine these features with the business plan.
• Does the leader of the business have proven experience for the industry?
• Investors want to drive growth and profits.
• 'A' team with B idea is better.
• Must have capital, tech, equipment, and people available.
• Lower overhead while maximizing productivity as much as possible to get more resources.
• Find quicker, cheaper ways to get your resources
• Focus on entrepreneurs with management and market skills

Finding Success

• Luck is where preparation and opportunity meet.
• Crucial elements: superb entrepreneur, management team, and an excellent market.
• Most successful ideas are driven by the entrepreneur's personal experience.
• Start by determining your enjoyment levels for inner work.
• The best ideas have three things in common:
• The founders want same thing.
• They can build.
• Others have done same.

Opportunity vs Idea

• An idea is just a concept.
• An opportunity is a chance to make potential success.

Key Characteristics of an Opportunity

• It must be timely, Durable, Attractive and Customer Centric.
• Customer Centric relates to solving a real issue.

Business To-Dos

• ARPU should be greater than COCA.
• Know 1ox rule.
• Determine Unique Value Proposition.
• Look for Defensible Competitive Advantage.
• Ensure Growing Market (CAGR).
• Know your Customer & Access to Needed Resources.
• Your passion + access + insight + credibility is key for being a good business owner.
• Determine value.
• Access early adopters.
• Successful founders have good insight.

Market Size

• Know how big market will be the future.
• If capturing trends, the market will likely grow.
• Try to guess what it will look like.
• All else fails, see what things previously looks like to see future.

What About Timing

• According to Rogers Bell curve, only unmet needs will create growth.

Where To Find Opportunities

• Unmet market needs of large and growing customer segments addressed with new tech, innovations, models; or CHANGE.
• Activity creates innovation.

Finding Opportunities

• Search for internal, external forces.
• Internally, assess unexpected successes/failures; look at inconsistencies; process needs taken for granted; or industry structure changes.
• Externally, look for demographics changes, perception changes, new knowledge.
• Look for Technological/Demographic Change, market demand, or changes in policy.
• Adapt from successful Innovations.
• Build, sell and monetize opportunities.
• Opportunities start from ideas that create wealth from execution.
• Use an established market.
• Be passionate about the company to know the customer & reach them better.
• Maintain customer, competitor, supplier and government relationships.
• Remember to BUILD - MEASURE – LEARN.

Week 3: Understanding the Business Model

• Customer Development & Lean Startup methods help people quickly get and respond to feedback.
• These include building ideas that create waste.
• It helps fix your cause.
• Customers can give feedback that help to show inspiration and spread the word

Customer Development

• It helps validate what you are doing.

Four Phases of Customer Development

• Customer Discovery: Achieves a solution fit.
• Does the problem exist and can you fix it?
• Customer Validation

Achieving Product/Market Fit

• Be in great market with a product to make it satisfy.
• 40% said to be disappointed with the product.
• Drive Demand.
• Scale Company.

What is a Start-Up

• Start up is an novel business to search for a good revenue model before company goes broke.
• The process is done through scalable start-up.

Business Plans

• Roadmap to show your company's business goals.
• It outlinines detailed financial information and what goals you want to complete.
• It Includes Summary, Description.

Model & Value

• Model: creates value in contexts.
• Value = revenue - cost model
• Revenue model displays revenue generated.
• Cost model shows spent resources.
• All have components.

Business Generation

• Key Partners include supplier and buyer relationships.
• Key activities are needed for the value proposition.
• This is a building block for all of the business.
• You can determine for which parts to compete.
• Customer and revenue streams have better results.

Validating Model

• Do oppurtunity, customers, channels, products and revenue.
• Customer is number one priority.
• A Business Model, that changes depending on the success.
• Founders make a change to make better.
• This is a called a pivot and helps to sell products depending.

Proactive Pivots - 8 areas

• Customer, Market, Product
• Channel has a large process from revenue formula.
• Pivots focus on customers.
• Customer discovery shows founders are missing value.
• They are more likely to show a revenue/cost of business model

Problems With Pivots

• Many people often fail despite success.
• They occur with customers over time.
• It means the companies can get less sucessfully with more input.
• The best option to take time and hypothesis test and try to find what may preserve the company.

Lean Canvas Model

• Solution/Problems, Value metrics, Alternatives; Channels will effect the cost/revenue.

Week 4: 21St Century Entrepreneurship, Lean Startup

• Process includes building customer early on for share.
• In addition to the secret models, show customers the ideas and adapt.
• Check to see if google exist to see if it will work.
• You cant steal passion or insight.
• The reality to build is if you make goals or more people do it
• Get feedback .
• Share, Measure, Learn.

Week 5: Elevator Pitches, Executive Summaries, Business Plans & Investor Decks

• Investors want to see what product milestone reached.
• Business Plan: a roadmap, details how you want to follow goals or plan to get where company wants to get.
• Includes description and review statements.

Business Planning

• It can align stakeholders to force critically think of business, and monitor progress to take notes.
• Value and value proposition statement shows values of benefit to customers.

Value Proposition

• Value Design helps you to create value for your users based on the business' model, shows how you provide products and gain customers
• All should be simple and easy to understand to greedily create money as an investor.
• Show customers the opportunity.
• Know powerpoint.
• What proves someone wants what you are selling, or what you will sell?
• Traction - the momentum in market Adoption
• Forms of Tration: Profitablity, user, reveneue. partners and traffic sales.
• This occurs in the 21st cent

Metrics

• KPI's - vitals for venture.
• The numbers are simple and show whats going on along marketing of company.
• Costs will cause retention
• Calculate users costs. Calculate Retention.
• Revenue should show the new visitor to be able to buy.
• Ask for 500k from 25 value.
• This is is the ask to get more money and revenue for the plan.

Explore entrepreneurial behavior and strategy, focusing on research interests categorized as visceral, risk preference, and extraneous factors. Learn about consolidated risk categories for small business failure, distinguishing between internal (controllable) and external (uncontrollable) risks.