Entrepreneurship: SMEs, IDEs, and Intrapreneurship

• Entrepreneurship includes Small & Medium Enterprises (SMEs) and Innovation-Driven Enterprises (IDEs).
• The effects and objectives of entrepreneurship can vary, including profit motivation, social aims, or personal goals.
• Intrapreneurship involves creating new sources of value within an existing organization.

Forms of Entrepreneurship

• SMEs typically aim for stable sales, profits, and growth, focusing on addressing local markets.
• SMEs do not focus on innovation or competitive advantage.
• SMEs involve non-tradable jobs performed locally and include family businesses or those with less external capital, growing at a linear trend.
• IDEs focus on innovation, profitability, and sustainable growth, targeting global markets.
• IDEs capitalize on innovation and fostering a competitive advantage and involve tradable jobs.
• IDEs use diverse ownership and equity structures to attract external capital, often experiencing a hockey-stick growth curve with initial losses followed by rapid growth.

Entrepreneurial Opportunities

• Opportunities arise from identifying new products for existing markets, new markets for existing products, or creating new markets for new products (the highest form of innovation).

Individual Traits for Entrepreneurs

• Entrepreneurs make decisions under uncertain conditions.
• Effectuation involves making decisions particularly useful in uncertain situations.
• Causal reasoning thinks of a desired outcome and creates a plan to achieve it.
• Effectual reasoning considers the entrepreneur's resources and network to arrive at outcomes, improving chances of success.
• Iteration involves testing and learning to gather information about what works and what doesn't.
• It includes building a minimal product and experimenting, then incorporating learnings into future iterations.

Design Thinking

• Design Thinking is a creative problem-solving process that includes empathy, ideation, and experimentation.
• Human-centered design involves users in creating their own solutions, informing the business model.
• Key steps in design thinking:
• Empathize: Understand the problem and needs.
• Define: Define the core problems.
• Ideate
• Prototype
• Test
• Pitching, persuasion, and networking convince others to build and deploy a network around a vision.

Sources of Ideas

• Sources of ideas include societal, technological, economic, and governmental trends.
• Examples include demographic shifts, mobile tech, AI, e-commerce, and policy changes.
• Entrepreneurs analyze data to identify meaningful patterns.
• Perceptual changes in how people interpret concepts affect lifestyle.

Problem-Defining Process

• Establish the need for a solution
• Justify the need
• Contextualize the problem
• Write the problem statement

Effectuation

• Effectuation balances available resources with affordable losses for exploring opportunities.
• The effectuation process creates ideas using the entrepreneur's identity, knowledge, and network.

Causal Reasoning

• Causal reasoning involves setting a goal and assembling resources to achieve it.

Effectual Reasoning

• Effectual reasoning begins with available resources rather than a predetermined goal.
• Focus on co-creation with those who afford only what can be created without having to predict the future.

Entrepreneurial Principles

• Affordable loss principle sets an upper and lower bound on acceptable losses to enable creative strategies.
• Strategic partnerships focuses on building partnerships.
• Leveraging contingencies involves using social interaction and unexpected events to shape the venture.

The Lean Startup

• Developing a product via external customer validation methods until there is a product market.
• Favors experimentation over planning and customer feedback over intuition. Startups seek a working business model.
• A Business Model requires Value Identification, Value Delivery, and Value Captured from stakeholders.
• The Business Model Canvas turns assumptions into testable hypotheses.
• A Minimum Viable Product (MVP) tests business model hypotheses.

Scaling A Business

• Enhancing growth
• Expanding scope
• Exploring other options

Social Networks

• Sets of individuals are connected by some sort of relationship that allows trustworthy information to flow.
• It allows access to diverse skills, perspectives, and information
• It gives power and links to resources for both trustworthy and informative ties.
• Network Diversity helps in knowledge diversity and generating better ideas and innovation.
• Brokerage is related to shaping your network (closed or open networks) Strong ties are more prone to providing resources, and the people involved are more willing to take time to explore complex ideas.
• These are long-standing ties with less frequent interactions.
• Weak ties lead to more diverse exposure