Introduction to Entrepreneurship

Introduction to Entrepreneurship

• Entrepreneurship originates form the french word "entreprendre", which mean "to undertake"
• It is the innovation and creation of new ventures across four diemensions that include individual, organizational, environmental, and process
• Collaboration between government, educational institutions and other institution aids entrepreneurship

Entrepreneur Defined

• A entrepreneur organizes, manages, and handles the risks of a business
• They are also catalysts for economic change by using purposeful searching, careful planning and sound judgement
• Competitive drive and viewing failure as a learning opportunity are defining traits of entrepreneurs

Characteristics of an Entrepreneur

• Entrepreneurs display personal initiative and goal-oriented behavior
• They possess the following:
  • Capacity to consolidate resources
  • Confidence
  • Management Skills
  • Opportunistic Behavior
  • Desire for autonomy
  • Intuitiveness
  • Risk-taking
  • Ability to act practically
  • Aggressiveness
  • Receptiveness to learning from mistakes
  • Competitiveness
• Human relations skills

Busting Common Myths

• 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 Misfits
• Myth 5: Entrepreneurs Must Fit the Profile
• Myth 6: All Entrepreneurs Need Is Money
• Myth 7: All Entrepreneurs Need Is Luck
• Myth 8: Entrepreneurship Is Unstructured and Chaotic
• Myth 9: Most Entrepreneurial Initiatives Fail
• Myth 10: Entrepreneurs Are Extreme Risk Takers

The Entrepreneurial Mindset

• Encompasses characteristics needed for successful entrepreneurship, and elements that are also associated with the darker side of entrepreneurship

Essential Traits

• Determination and perseverance
• Drive to Achieve
• Opportunity orientation
• Initiative and responsibility
• Persistence
• Problem-solving skills
• Seeks feedback
• Internal focus of control
• Tolerance for Ambiguity
• Calculated Risk-Taking
• High Energy Level
• Creativity and Innovativeness
• Vision
• Independence
• Passion
• Team building

Failure and the Grief Recovery Process: Two Orientations

• Loss Orientation: Concentrates on the loss and explaining its occurrence
• Restoration Orientation: Involves distancing from the event and proactively addressing stressors arising as a result

The Dark Side of Entrepreneurship

• Entrepreneurs can encounter financial, career, family, social and psychic risks
• Financial risk relates to the desire for wealth
• Career risk relates to the potential loss of employment security
• Family and social risks can arise from the need to compete for work and family commitments
• Psychic risk is the psychological impact of failure

Entrepreneurial Stress: An Overview

• Defined as the extent to which entrepreneurs believe that demands outstrip their abilities to perform effectively as venture initiators

Sources of Stress

• Loneliness, Immersion in business, Interpersonal issues, A strong need to achieve.

Strategies for Managing Stress

• Networking
• Delegating
• Communication with employees
• Exercising regularly
• Finding satisfaction outside the business
• Getting away from it all.

Innovation

• Entrepreneurs use this process to convert opportunities into marketable ideas
• Innovation combines the vision to create a solid concept with the perseverance and dedication to implement it

Key Aspect

• It is a critical, as well as a specialized function of entrepreneurship

Innovation Types

• Invention: Creating an entirely new product
• Extension: Enhancing an existing product
• Duplication: Replicating something that exists
• Synthesis: Combining existing ideas to create something new

Sources of Innovation

• Unexpected occurrences
• Incongruities
• Process needs
• Industry and market change
• Demographic change
• Perceptual change
• Knowledge-based concepts

New Venture Creation: Pathways for Entrepreneurs

• New ventures can be created through three major avenues:
  • De Novo (Creating a New Venture)
  • Acquisition (Acquiring an Existing Venture)
  • Franchising (Obtaining a Franchise)
• Creating a new venture involves starting a business from the ground up based on a unique vision
• Acquiring an existing venture involves purchasing and taking over an already established business
• Obtaining a franchise means acquiring the right to operate under an established brand's name and system

Approaches to Creating a New Venture

• New-New Approach: Involves creating something entirely new such as the creation of a business that has never existed
• New-Old Approach: improving upon an already existing entity or system

Trends in Opportunities

• Green products, alternative energy, healthy care, niche consumables and automation of media storage are some of the emerging opportunities
• Virtual economies, mobile advertising, educational tutoring, concierge service and human resource services are some emerging internet opportunities

Sustainable Entrepreneurship

• Sustainable entrepreneurship focuses on:
  • Preserving nature
  • Maintaining life support systems
  • Supporting communities through products, processes, and services that generate both economic and noneconomic benefits
• Nike has for example refocused the strategy of their sportswear brand to be more energy efficient in recent times

Shared Value

• Approach to generating both economic and societal benefit by tackling issues through innovative business practices
• The triple bottom line (TBL) is an accounting framework that expands beyond traditional metrics to include environmental and social dimensions.

Triple Bottom Line Measures

• Economic performance
• Personal income
• Cost of underemployment
• Establishment sizes and job growth
• Environmental performance
• Concentrations that include hazardous chemicals
• Prioritizing to select Pollutants and monitor electricity consumption
• Social performance by providing access to Unemployment rate and median household income

Essential Points

• A Benefit Corporation operates with the purpose to make a positive impact on society and the environment
• Social entrepreneurs are people who create or lead a company that seeks to create change using pattern-breaking ideas

The three business types that allow environmental/social change

• Ecopreneurship: Actions that aid in preserving the environment
• Social Entrepreneurship: Activities designed to improve social wealth
• Corporate Social Responsibility: Engagement in activities that improve society
• Corporate Social Responsibility (CSR) generally falls into for categories including environmental, ethical/human rights, philanthropic and economic responsibility