Entrepreneurship: Opportunity and Individuals

Entrepreneurial Opportunity

• Situations where new products, services, raw materials, and methods are introduced and sold above production cost.
• Includes new system software applied to an existing market like AI in mining or agriculture.
• Includes existing software applied to the new market, such as subscription applied to 3D printing.

Enterprising Individuals

• Enterprising individuals are groups or organizations that recognize, evaluate, explore, and exploit opportunities.
• Entrepreneurs recognize opportunities and mobilize resources to offer new products, services, or ventures.

Nature of Entrepreneurship

• Entrepreneurs take action by developing new products, services, or processes in new or existing markets or ventures.

Defining Entrepreneurship

• It involves thinking and acting in a way that is opportunity-obsessed, holistic, and leadership-balanced
• Entrepreneurship can be defined as the ability to create and build from a vision as a creative act

Nature of Entrepreneurship Attributes

• These attributes include being able to assess the level of uncertainty and being willing to bear the risk to act on opportunity.
• Increased knowledge is correlated to a reduced level of uncertainty.
• Willingness to bear uncertainty is associated with increased motivation.

Key Ideas when Starting A Venture

• Believe in your ability to achieve a goal and have self-efficacy
• Have the right plan to achieve the right action that leads to success
• Learn from experts and mentors
• Depend on your stakeholders and incorporate social responsibility

Timmons Model: Entrepreneurial Process

• The model includes Opportunity, Resources, and Entrepreneur/Team
• It incorporates communication, business plan, fits and gaps, ambiguity, exogenous forces, creativity, uncertainty, leadership, and capital market context
• Sustainability is vital for the environment, community, and society.

Entrepreneurial Process: Opportunity

• The creation and recognition of opportunities is essential.
• Consider market readiness, consumer trends, and behaviors for new products or services.

Entrepreneurial Process: Resources

• Level and extent of resources needed are based on the opportunity.
• Minimize and control, rather than maximize and own resources, reduce cash flow problems.
• A solid resource base is key to facilitating the start-up process.

Entrepreneurial Process: Entrepreneur/Team

• An entrepreneur identifies an opportunity by putting together a team and resources.
• The nature of the opportunity determines the team's size and shape.
• A good team is indispensable for success and can unlock higher potential from any opportunity while managing growth pressures.

Entrepreneurial Process: Creativity, Communication and Leadership

• The success of business is determined by the ability of the entrepreneur to balance creativity, leadership, and communication
• Key throughout the value chain.

Entrepreneurial Process: Business Plan

• The business plan integrates the three basic components into a comprehensive strategic plan.
• Plan serves purposes beyond financing.
• The plan provides the communication for the quality of the model's three driving forces: opportunity, resources, and the team.

Entrepreneurial Process: Risk vs. Capital Market Capture

• This involves balancing risk management and capturing market share.
• The risk of failure can be minimized with a sound opportunity, enough resources, and a great team.

BRIE Model Elements

• Boundary: Creating a space for businesses in location and in people’s minds
• Resources: The money, product, knowledge, that make up the business
• Intention: Having the desire to start a business
• Exchange: Moving resources/products/services in exchange for money

Small Businesses and the Economy

• Small businesses creates new jobs and supports existing ones
• Small businesses are key employers as they are more likely to offer employment opportunities to people with work needs and atypical work histories.
• Provide a breeding ground for innovation
• Small businesses provide opportunities for entrepreneurs and the communities they serve.
• Small businesses provide necessary goods and services as convenience.

Factor-Driven Economies

• Examples include Pakistan, Jamaica, and Venezuela.
• These economies rely on farming and extracting raw materials with little manufacturing.
• Entrepreneurship is key to building personal wealth and breaking the cycle of low-wage jobs.
• Characterized with normally very high entrepreneurial activity.

Efficiency-Driven Economies

• Russia, Brazil, and China are examples.
• As economies develop and industrialize, entrepreneurship is key to building the middle-class.
• It has high presence of retail, wholesale and large industries. Entrepreneurial activity is typically in the middle range of economic activity.

Innovation-Driven Economies

• Examples include Germany, Korea, and the USA.
• The focus is on high-value-added manufacturing, a large service sector, and providing high-end products and services for local and export markets.
• The entrepreneurial activity is the lowest of the economies.

Opportunity-Driven Entrepreneurship

• Entrepreneurs improve themselves financially.
• This is done by launching a new or improved product or service.

Need-Driven Entrepreneurship

• Arises in the absence of job prospects, which forces individuals to create employment for themselves.

Sustainable Development Goals (SDGs)

• A plan agreed to by all world leaders to build a greener, fairer, better world by 2030

Five Ps of Entrepreneurial Behavior

• Passion
• Perseverance
• Promotion-prevention focus
• Planning Style
• Professionalization

Five Ps: Passion

• Entrepreneurs display intense positive feelings toward their business or opportunity.
• The benefit of passions increases commitment and inspire stakeholders.
• Displayed by overcoming challenges with creative approaches.
• Achieved with high focus on the business.
• Passion is attained by being absorbed tasks with the tasks and activities of the business.

Five Ps: Perseverance

• This is a learned optimism that allows one to remain committed to an activity even if the timeline is extended.
• It is defined by the ability to stick with the activity even if the outcome is unsure.

Five Ps: Promotion-Prevention Focus

• The two internal focuses human beings have regarding internal thought processes include:
• Promotion Focus: Intention to maximize gains, which lead to the pursuit of opportunities that result with profit
• Prevention Focus: Intention to minimize losses, which leads to either inaction or protective measures

Five Ps: Planning Style

• The different type of planning includes:
  • Comprehensive
  • Critical-point
  • Opportunistic
  • Reactive
  • Habit based planning

Five Ps: Professionalization

• Successful entrepreneurs stand out by doing at least one thing better than the average.
• Standard business practice refers to a business action that is widely adopted in industry.
• Expert business professionalism is achieved when most aspects of the business meets or exceeds the normal industry standards for business.

Entrepreneurial Lifecycle

• The major parts of the enterprise lifecycle:
  • (1) emergence,
  • (2) existence,
  • (3) success,
  • (4) Resource Maturity or Takeoff.

Stage in the Lifecycle: Emergence

• This stage is defined of considering the idea of starting a new venture and taking actions towards it

Stage in the Lifecycle: Existence

• Marks active operation of the business but lacks stability in markets, processes and finance.
• In South Africa SA, this stage faces SA – cashflow problems; takes 2 years on average to reach break-even point etc.

Stage in the Lifecycle: Success

• This stage is when the venture is established in the market.
• The period is characterized by ongoing consistent financial performance and an increase in sales.

Stage in the Lifecycle: Resource Maturity

• A business has reached a point characterized by stable sales and stable profit levels and consistency.
• The businesses have increased overall efficiency.

Stage in the Lifecycle: Takeoff

• This stage serves as an alternative to resource maturity.
• Characterized with a period of exceptional growth
• Has a key risk which is balance resources

Sources of Ideas and Opportunities

• Opportunity Recognition: Searching and capturing entrepreneurial ideas that lead to business opportunities which involves creative thinking.
• Entrepreneurial Alertness: Possessing observational and thinking skills that assist entrepreneurs in identifying good opportunities.

Opportunity Recognition: SCAMPER Acronym

• Substitute
• Combine
• Adapt
• Magnify or Modify
• Put to other uses
• Eliminate
• Rearrange

Business Model Canvas

• A business model canvas provides a means to identify and organize key information on an organization and show how they achieve their desired goals.

Value Proposition Questions to Ask

• What do you sell?
• What problem do you solve?
• What value do you create?

Value Proposition

• Value proposition is important because it shows customers why are you different, better and worth buying from
• It describes a bundle of products and services that create value for a specific customer segment
• Includes elements like:
  • Newness
  • Performance
  • Customization
  • "Getting the job done”
  • Design
  • Brand/status
  • Price
  • Cost reduction
  • Risk reduction
  • Accessibility
  • Convenience/usability