Chapter 1: The Entrepreneurial Mindset (PDF)

CHAPTER 1 THE ENTREPRENEURIAL MINDSET WHAT IS ENTREPRENEURSHIP? From environmental sustainability to security, from information management to health care, from transportation to communication, the opportunities fo...

CHAPTER 1 THE ENTREPRENEURIAL MINDSET WHAT IS ENTREPRENEURSHIP? From environmental sustainability to security, from information management to health care, from transportation to communication, the opportunities for people to create a significant positive impact in today’s world are enormous. Entrepreneurs are people who identify and pursue solutions among problems, possibilities among needs, and opportunities among challenges. Entrepreneurship is defined as the process by which individuals pursue opportunities without regard to resources they currently control. Others such as venture capitalist Fred Wilson define it more simply, seeing entrepreneurship as the art of turning an idea into a business. In essence, an entrepreneur’s behavior finds him or her trying to identify opportunities and putting useful ideas into practice. The tasks called for by this behavior can be accomplished by either an individual or a group and typically require creativity, drive, and a willingness to take risks. Entrepreneurship is more than the creation of a business and the wealth associated with it. It is focused on the creation of a new enterprise that serves society and makes a positive change. Entrepreneurs can create great and reputable firms that exhibit performance, leadership, and longevity. ALL ENTREPRENEURS can be a businessman, but not all businessman can be entrepreneurs. DEFINITIONS OF TECHNOPRENEURSHIP Technopreneurship in a nutshell is “Creating the NEW and destroying the OLD” with new knowledge, new products, new processes, new services, new markets and new business. Technopreneurship is, by a large part, still entrepreneurship. The difference is that technopreneurship is either involved in delivering an innovative hi-tech product, for example Intel or makes use of hi-tech in an innovative way to deliver its product to the consumer such as eBay, or both. Technopreneurship requires tertiary level and professional development programs and training to produce strategic thinkers who should have the skills to succeed in a dynamically changing global environment. Logically, the term technopreneurship was coined from the words “technology” and “entrepreneurship”. It was first used in the year 1987 but gained popularity due to the wide use of the internet during the second millennium. There are various definitions of that word, depending on the individual giving meaning to it. Technopreneurship is a simple entrepreneurship in a technology intensive context. It is a process of merging technology prowess and entrepreneurial talent and skills. Technopreneurship is not a product but a process of synthesis in engineering the future of a person, an organization, a nation and the world in a digital, knowledge-based society. Technopreneurship is integration of technology, innovation, and entrepreneurship. Technopreneurship is act of turning “something” into a resource of high value by converting good ideas into business ventures that rely heavily on the application of human knowledge for practical purposes.  Technopreneurship is entrepreneurship in the field of technology. Firms in which technology plays a critical role in their operations is technopreneurship. Technopreneurship is the process of engineering the future of an individual, an organization or a nation. Application of the newest inventions and advancements in coming out with new and innovative products through the process of dissemination is technopreneurship. Manufacturing of hi-tech products or making use of hi-technology to deliver products to consumers is technopreneurship. Technopreneurship is exhaustive use of technology in making profit. TALES OF TECHNOPRENEURSHIP THAT CHANGED THE WORLD The technology entrepreneurs of the past were Nikola Tesla, Thomas Edison, Marie Curie, Alan Turing, and others. With the rise of the Internet and the age of computers since the 1980s, we have seen some great technopreneurs like Bill Gates, Mark Zuckerberg, and Steve Jobs. These techpreneurs managed to combine their technical abundances with teams of great management executives to build a legacy from the ground up. 1. Jeff Bezos. The man behind the online empire of Amazon. The visionary genius who sits atop the online e-commerce giant. Worth a whopping US$182 billion as of April 2022, Jeff Bezos is definitely the man to look up to as an ideal technology entrepreneur. 2. Elon Musk. Heralded as the ‘Real-Life Iron Man’, thanks to his antics and innovations, Elon Musk is a true technology entrepreneur and a genius visionary. He has a range of tech businesses under his belt such as Paypal, SpaceX, Tesla, Nerualink, The Boring Company and Open AI. He made big waves after agreeing to buy Twitter for a staggering $44 billion dollars! 3. Mark Zuckerberg. From writing software codes in school to co-founding the mammoth social media platform – Facebook, now called Meta, Mark Zuck became the world’s youngest self-made billionaire at age 23. Zuckerberg’s net worth is $74.5 billion according to the Forbes’ Real-Time Billionaires, and he’s now making waves in the Metaverse. 4. Bill Gates. Computer programmer and tech-entrepreneur who co-founded Microsoft Corporation, the world’s largest personal computer software company. Microsoft, in addition to developing software solutions for the Internet, also moved into the computer hardware and gaming markets with the Xbox video machine. 5. Steve Jobs. Jobs co-founded Apple & built it into the world’s most valuable company. He also helped transform other industries: personal computing, animated movies, music, phones, tablet computing, retail stores, and digital publishing. Touted as a great innovator, he applied imagination to technology and business. 2 DIFFERENCE BETWEEN AN ENTREPRENEUR AND A TECHNOPRENEUR Entrepreneur: Technopreneur: 1. An entrepreneur likes to compete. 1. A technopreneur likes to innovate. 2. An entrepreneur is a pioneer. 2. A technopreneur is part of a team. 3. An entrepreneur is creative and has 3. A technopreneur is innovative and a dreams and goals. visionary. 4. An entrepreneur is able to do many 4. A technopreneur chooses to delegate things at once. his work. 5. An entrepreneur is motivated by a 5. A technopreneur is motivated by a strong desire to achieve and attain strong vision and the passion to financial success. innovate. 6. An entrepreneur likes to work for him 6. A technopreneur likes to be the one to and be in control. control innovation and be part of an 7. An entrepreneur focuses attention on evolution. the chances of success rather than the 7. A technopreneur takes failure as a possibility of failure. learning experience and strides for the next challenge. IMPORTANCE OF TECHNOPRENEURSHIP Because nothing in this world is permanent, even the innovations we imagine or produce, we must modify what we already have in order to generate something new for the people or anything new that aids in the development or improvement of our society. In line with this, technopreneurship will be essential for any entrepreneur seeking improvisation and a variety of other crucial features for their firm to be engaging. Here are some important things for entrepreneurs to consider when it comes to technopreneurship: 1. Technology has enabled everything to be effectively managed, time-efficient, and cost-effective in a company. 2. Entrepreneurs may come up with both odd and sensible ideas for their company; thereby helping it expand in terms of profit, revenue, and other important business metrics. 3. For many years to come, technopreneurship will continue to assist in finding work by developing or inventing a new product. WHY BECOME AN ENTREPRENEUR? The three primary reasons that people become entrepreneurs and start their own firms are to be their own boss, pursue their own ideas, and realize financial rewards. Be Their Own Boss. This does not mean, however, that entrepreneurs are difficult to work with or that they have trouble accepting authority. Instead, many entrepreneurs want to be their own boss because either they have had a long-time ambition to own their own firm or because they have become frustrated working in traditional jobs. 3 Pursue Their Own Ideas. Some people are naturally alert, and when they recognize ideas for new products or services, they have a desire to see those ideas realized. Established firms often resist innovation. When this happens, employees are left with good ideas that go unfulfilled. Because of their passion and commitment, some employees choose to leave the firm employing them in order to start their own business as the means to develop their own ideas. Pursue Financial Rewards. Finally, people start their own firms to pursue financial rewards. This motivation, however, is typically secondary to the first two and often fails to live up to its hype. CHARACTERISTICS OF SUCCESSFUL ENTREPRENEURS Although many behaviors have been ascribed to entrepreneurs, several are common to those who are successful. Passion for the Business. This passion typically stems from the entrepreneur’s belief that the business will positively influence people’s lives. A note of caution is in order here: While entrepreneurs should have passion, they should not wear rose-colored glasses. It is important to be enthusiastic about a business idea, but it is also important to understand its potential flaws and risks. In addition, entrepreneurs should understand that the most effective business ideas take hold when their passion is consistent with their skills and is in an area that represents a legitimate business opportunity. Table 1.2 Five Primary Reasons Passion is Important for the Launch of a Successful Entrepreneurial Organization Reason Passion is Important Explanation 1. The ability to learn Founders do not have all the answers. It takes passion and drive to and iterate solicit feedback, make necessary changes, and move forward. The changes will not always be obvious. Passion makes the search for the right answers invigorating and fun. 2. A willingness to work Commonly, entrepreneurs work longer hours than people with hard for an extended traditional jobs. You can only do that, on a sustained basis, if you’re period of time passionate about what you’re doing. 3. Ability to overcome It’s rare that an entrepreneur doesn’t experience setbacks and hear setbacks and “no’s” many “no’s” from potential customers, investors, and others while building an entrepreneurial business or social enterprise. The energy to continue comes from passion for an idea. 4. The ability to listen to You will meet plenty of people along the way—some with good feedback on the intentions and some without—who will tell you how to improve your limitations of your organization and how to improve yourself. You must be willing to listen organization and to the people with good intentions and make changes if it helps. You yourself must be able to brush aside feedback from people with bad intentions without letting them get you down. 5. Perseverance and Perseverance and persistence come from passion. As an entrepreneur, persistence when the you will have down days. Building an entrepreneurial organization is going gets tough 4  fraught with challenges. Passion is what provides an entrepreneur the motivation to get through tough times. Source: Adapted from A. Sack, “Why Is Passion so Important to a Startup,” A Sack of Seattle blog, http://asack.typepad.com/a_sack_of_seattle/2010/03/why-is-passion-so-important-to-a-startup.html (accessed May 22, 2011, originally posted on March 16, 2010). Product/Customer Focus. This quality is exemplified by Steven Jobs, the cofounder of Apple Inc., who wrote, “The computer is the most remarkable tool we’ve ever built... but the most important thing is to get them in the hands of as many people as possible.” This sentiment underscores an understanding of the two most important elements in any business—products and customers. While it’s important to think about management, marketing, finance, and the like, none of those functions makes any difference if a firm does not have good products with the capability to satisfy customers. It is also important to focus on the right things. A product/customer focus also involves the diligence to spot product opportunities and to see them through to completion. Tenacity Despite Failure. Because entrepreneurs are typically trying something new, the failure rate associated with their efforts is naturally high. In addition, the process of developing a new business is somewhat similar to what a scientist experiences in the laboratory. Developing a new business idea may require a certain degree of experimentation before a success is attained. Setbacks and failures inevitably occur during this process. The litmus test for entrepreneurs is their ability to persevere through setbacks and failures. Execution Intelligence. The ability to fashion a solid idea into a viable business is a key characteristic of successful entrepreneurs. Commonly, this ability is thought of as execution intelligence. In many cases, execution intelligence is the factor that determines whether a start-up is successful or fails. An ancient Chinese saying warns, “To open a business is very easy; to keep it open is very difficult.” The ability to effectively execute a business idea means developing a business model, putting together a new venture team, raising money, establishing partnerships, managing finances, leading and motivating employees, and so on. It also demands the ability to translate thought, creativity, and imagination into action and measurable results. COMMON MYTHS ABOUT ENTREPRENEURS There are many misconceptions about who entrepreneurs are and what motivates them to launch firms to develop their ideas. Let’s look at the most common myths and the realities about entrepreneurs. Myth 1: Entrepreneurs are born, not made. This myth is based on the mistaken belief that some people are genetically predisposed to be entrepreneurs. The consensus of many hundreds of studies on the psychological and sociological makeup of entrepreneurs is that entrepreneurs are not genetically different from other people. This evidence can be interpreted as meaning that no one is “born” to be an entrepreneur and that everyone has the potential to become one. Whether someone does or does not is a function of environment, life experiences, and personal choices. Myth 2: Entrepreneurs are gamblers. A second myth about entrepreneurs is that they are gamblers and take big risks. The truth is, entrepreneurs are usually moderate risk takers, as are most people. The idea that entrepreneurs are gamblers originates from two sources. First, entrepreneurs typically have jobs that 5 are less structured, and so they face a more uncertain set of possibilities than managers or rank-and-file employees. For example, an entrepreneur who starts a social network consulting service has a less stable job than one working for a state governmental agency. Second, many entrepreneurs have a strong need to achieve and often set challenging goals, a behavior that is sometimes equated with risk taking. Myth 3: Entrepreneurs are motivated primarily by money. It is naive to think that entrepreneurs do not seek financial rewards. However, money is rarely the primary reason entrepreneurs start new firms and persevere. Some entrepreneurs warn that the pursuit of money can be distracting. Media mogul Ted Turner said, “If you think money is a real big deal... you’ll be too scared of losing it to get it.” Myth 4: Entrepreneurs should be young and energetic. Although it is important to be energetic, investors often cite the strength of the entrepreneur (or team of entrepreneurs) as their most important criterion in the decision to fund new ventures. In fact, a sentiment that venture capitalists often express is that they would rather fund a strong entrepreneur with a mediocre business idea than fund a strong business idea and a mediocre entrepreneur. What makes an entrepreneur “strong” in the eyes of an investor is experience in the area of the proposed business, skills and abilities that will help the business, a solid reputation, a track record of success, and passion about the business idea. The first four of these five qualities favor older rather than younger entrepreneurs. Myth 5: Entrepreneurs love the spotlight. Few of us could name the founders of Netflix, Twitter, or GAP even though we frequently use these firms’ products and services. These entrepreneurs, like most, have either avoided attention or been passed over by the popular press. They defy the myth that entrepreneurs, more so than other groups in our society, love the spotlight. THE TECHNOPRENEURIAL PROCESS 1. Idea Generation: At this stage, the individual toys with various thoughts coming across his/her mind. These ideas may be generated by analysis of problems, while understanding technology and its uses or as a subset of other projects. The subconscious mind is usually working on such ideas. 2. Idea Screening: As there are many ideas that are encountered at the first stage, the next natural progression is to check their feasibility and drop infeasible ideas. 3. Concept Testing: Concept testing is the process of using surveys and other qualitative methods to evaluate consumer acceptance of a new product idea prior to the introduction of a product to the market. It saves the entrepreneur’s cost and also tests the probability of success and customer acceptance level. 4. Business Analysis: Post successful completion of concept testing there is a need to develop a holistic view of business problems and evaluate business operations to improve core processes. It involves documentation of business requirements that can serve as a yardstick going forward. 5. Prototyping: A prototype is a sample of a product built to test a concept or process. A prototype is used to evaluate new designs and to enhance precision based on feedback. It is cost effective and properties of the prototype are very closely simulated to real product s. 6  Prototyping enables the technopreneur to capture customer expectations with precision and improve upon the actual product. 6. Test Marketing: Test marketing is an experiment conducted in the test market consisting of actual markets and real-life buying, without the buyers being aware of evaluation exercises. It imitates the ultimate market-mix to gather customer response. Test marketing may last from a few weeks to several months Depending on the quality and quantity of sales data needed to make the final decision. 7. Commercialization: At this stage, the idea finally takes the shape of a full-grown product and is launched in the market for financial gains. It involves various activities including marketing, advertising, supply chain management etc. 8. Monitoring and Evaluation: At this stage the idea has transformed into a product and is currently circulated in actual markets to end consumers. It is very important for the organization to keenly observe every stage of product evolution so as to improve upon the idea. This will eventually lead to financial gains and societal benefits. EMPLOYEE OR ENTREPRENEUR by Joey Concepcion Typical advice from Filipino parents: 'Study hard so you can get good grades, then you can get a good job!' Typical advice from Chinese parents: ''Bilis mo r'yan aral, bantay ka pa tinndahan!'' I had two former classmates: one of Chinese descent and the other a Filipino. After college, they both applied in the same company. The Filipino was successful and the Chinese classmate was not. Years later, the two met and the Chinese classmate declared, “Buti na lang di ako natanggap.. sana bise-presidente lang ako ngayon, hindi milyonaryo!’’ Though jokingly delivered the statement is quite profound. Most captain s of the industry started out as entrepreneurs and not as corporate people. There is a danger, however, of swinging to the other side of the pendulum and saying, “I don’t have to be good in school. I will just become a businessman.” This is a predicament I’d say that falls into the category of the “Tyranny of the OR’,” in contrast to embracing the “Genius of the ‘AND’” (Built to Last, James Collins and Jerry Porras). Yes, the genius of being an employee and entrepreneur at the same time. They are not mutually exclusive, neither are they sequential. Excluding those who have been born into entrepreneurial families, Filipinos go through the natural cycle of school, work, then retirement. After retiring, they usually go into business using retirement pay as capital (very risky!). Going to business straight from school is still an uncommon phenomenon, and has its own advantages and disadvantages. When I was handling recruitment in a multinational firm, I encountered an interesting applicant. He was already a successful businessman (a millionaire!) and yet was applying for a job. When asked why, he replied that, yes, he’s a millionaire alright. However, a thought continued to bother him: Could he have made it to managerial level in a multinational company? Way Forward, Our Advice Study hard and get good grades, and build our business idea. Ideally, pursue opportunities in a discipline aligned with your passion and ambition. There’s nothing wrong with joining the bandwagon for practical purposes. In the 7 ‘70s, it was computer programing; in the ‘80s, physical therapy; ‘90s, nursing; and now, call centers. Just find something that aligns with your genuine interests. If, and when possible, go corporate. Choose one that will serve as a vehicle to express your in-born and acquired talents. Inside the organization, continue to hone and polish those talents at your company’s expense. Learn other skills. (Most especially, in the financial department, you will need that when you set up your business later). Do not rely solely on company-sponsored training programs. Network with friends, find out what they are doing, and examine whether you would enjoy any of those endeavors. Save. Pay yourself first. Use the formula: INCOME – SAVINGS = EXPENSES. Delay gratification. Use your savings to start up a business. Partner with someone who shares the same passion, in order to spread the risk. Do not mind initial losses and so called “failures”. Those are just lessons, another way of how ‘not to invent a light bulb” as Thomas Edison would put it. Just remember, what you lost is not yet your retirement pay. At whatever stage you’re in, do it NOW! EMPLOYEE OR ENTREPRENEUR? Maximize your learning by becoming both! 8