SSP04 (Finals) Entrepreneurial Mind PDF

THE ENTREPRENEURIAL MIND  Table of Contents Module 8: Entrepreneurial Process: Ideation, Innovation, And Creativity: The Beginning of Business Endeavor 101 Introduction 101 Learning Outcomes...

THE ENTREPRENEURIAL MIND  Table of Contents Module 8: Entrepreneurial Process: Ideation, Innovation, And Creativity: The Beginning of Business Endeavor 101 Introduction 101 Learning Outcomes 101 Lesson 1. Identifying Sound Business Ideas 102 Lesson 2. Idea Generation 107 Lesson 3. Entrepreneurial Creativity and Innovation 109 Assessment Task 8 114 Summary 114 References 116 Module 2: Choice of Business: Entrepreneurial Behavior in a Changing World 118 Introduction 118 Learning Outcomes 118 Lesson 1. The Internet Technology 119 Lesson 2. Digital Entrepreneurship 120 Lesson 3. The Cyber Entrepreneur 127 Assessment Task 9 132 Summary 132 References 134 Module 10: The Winning Hand of Entrepreneurship: Goal Setting and Building a Legacy 137 Introduction 137 Learning Outcomes 137 Lesson 1. The Importance, Benefits, and Value of Goa Setting 138 Lesson 2. Crafting a Worthy Legacy 148 Assessment Task 10 152 Summary 152 References 152  MODULE 8 ENTREPRENEURIAL PROCESS: IDEATION, INNOVATION, AND CREATIVITY: THE BEGINNING OF BUSINESS ENDEAVOR Introduction This module particularly discussed the basics of entrepreneurial process; ideation, creativity and innovation. Particularly this will help the students to appreciate the its significance in today’s economy and society. In this context, they will have the capability to vigorously assed the best idea and which particular business they would want to venture. Learning Outcomes At the end of this module, students should be able to: 1. outline the things to consider in searching the business idea, the context of entrepreneurship and innovation and their significance in today’s economy and society 2. develop an attitude gear towards creativity and innovation. 3. Apply the concept of creativity and innovation in assessing the best entrepreneurial opportunities. 4. conduct a vigorous opportunity-evaluation process by utilizing all the best available idea in selecting what type of business to venture. 101 Lesson 1. Identifying Sound Business Ideas Nature of Entrepreneurial Process (Orcullo, 2004) Effective entrepreneurship allows a new way of addressing needs and a business demand are brought together by innovative individuals. This is achieved through a patterned process, one that mobilizes and utilizes capital to provide consumers with a particular product or service using a market entry strategy that gives investors financial promise to create lasting streams of revenue and profitability. The Opportunity The opportunity is an attempt to interact with clients in trades that meet their needs while producing returns that allow you to continue to operate and develop your company over time. Opportunities for new goods and services may be created by several different conditions in society. As a prospective entrepreneur, the following are the main questions: What are the conditions that have created a marketplace opportunity for my idea? Why do people want and need something new at this point in time? What are the factors that have opened up the opportunity? Will the opportunity be enduring, or is it a window that is open today but likely to close tomorrow? If you perceive an unmet need, can you deliver what the customer wants while generating durable margins and profits? The Entrepreneur In a way that optimizes the likelihood of success, the potential and the entrepreneur must be interconnected. People also, when they see an opportunity, become entrepreneurs. They are forced to start a venture to find out if they can turn the chance into an ongoing business. This implies that, ideally, the life experience, schooling, talents, job visibility, and network of contacts of the entrepreneur match well with the opportunity. Analysis of the entrepreneur also indicates the appropriateness of the individual’s capacities to execute on a given business plan. The components are as follows: 102  Values. What motivates the individual? What does he or she care enough about to devote the time required to create a new venture? Education. What training has the individual received, what level of formal education, and how relevant is it to the tasks the venture requires to successfully launch? Work experience. Formal education may be less relevant than work experience. What prior jobs has the individual held, and what responsibilities did he have? How did he perform in those positions? What has he learned? Life experience. What exposure to life’s diversity has the individual had that might strengthen (or weaken) her competencies for building a viable business? Networks. What relationships does the individual bring to the venture? Have her prior experiences enabled her to be familiar and comfortable with a diverse mix of people and institutions so that she is able to call upon relevant outside resources that might assist with the venture’s execution? Resources Effective entrepreneurial processes enable entrepreneurs and teams to rapidly and efficiently assemble a broad range of resources. Unique resources such as money, talent and know-how (e.g., accountants, lawyers), machinery, and manufacturing facilities are combined into all creative and entrepreneurial projects. Breaking down the necessary resources of a venture into components will explain what is needed and when it is required. While resource needs change during an enterprise's early growth periods, the entrepreneur should be clear about the priority resources at each point that allow or inhibit moving to the next growth phase. What resource types are needed? Guidance is given by the following list: Capital. What financial resources, in what form (e.g., equity, debt, family loans, angel capital, venture capital), are needed at the first stage? This requires an understanding of cash flow needs, break-even time frames, and other details. Back-of-the-envelope estimates must be converted to pro forma income statements to understand financial needs. Know-how. Record keeping and accounting and legal process and advice are essential resources that must be considered at the start of every venture. New ventures require legal incorporation, financial record keeping, and rudimentary systems. Resources to provide for these expenses must be built into the budget. 103  Facilities, equipment, and transport. Does the venture need office space, production facilities, special equipment, or transportation? At the early stage of analysis, ownership of these resources does not need to be determined. The resource requirement, however, must be identified. Arrangements for leasing or owning, vendor negotiations, truck or rail transport, or temporary rental solutions are all decision options depending on the product or service provided. However, to start and launch the venture, the resources must be articulated and preliminary costs attached to them. The Product/Service Concept What are you selling? New ventures offer solutions to people’s problems. This concept requires you to not only examine the item or service description but understand what your initial customers see themselves buying. A customer has a need to be met. He or she is hungry and needs food. Food solves the problem. Another customer faces the problem of transferring money electronically and needs an efficient solution, a service that satisfies the need. Automatic teller machines are developed and services are offered. Other buyers want electricity from a renewable energy source; their problem is that they want their monthly payments to encourage clean energy development, not fossil fuel–based electricity. In any of these situations, in any entrepreneurial innovation circumstance in fact, as the entrepreneur you must ask the following questions: What is the solution for which you want someone to pay? Is it a service or product, or some combination? To whom are you selling it? Is the buyer the actual user? Who makes the purchase decision? What is the customer’s problem and how does your service or product address it? Entry Strategy Another category to examine carefully at the outset of a venture is market entry strategy. Your goal is to create something where nothing previously existed. Mobilizing resources, analyzing your opportunity, producing your first products for sale—none of these proves the viability of your business. Only by selling to customers and collecting the payments, expanding from those earliest buyers to a broader customer base, and scaling up to sufficient revenue streams to break even and then profit do you prove the enduring viability of the enterprise. Even then, a one-product operation is not a successful business; it is too vulnerable. A successful 104 entrepreneur should consider additional products or services. Living through the early stages of a venture educates you about the customer and market and can point you to new opportunities you were unable to see previously. Your product concept at the end of year two may be, and often is, different from your original vision and intent. Ideation "Ideation" is a course to create, grow and test concepts for the launch of creative and successful new projects. Ideation includes a process of experimentation designed to contribute to the development, whether business or social projects, of diverse and impactful companies. The course covers many business topics but does not presume or involve prior knowledge or experience in business. A significant and exciting method, but only the beginning for entrepreneurs, is to generate an idea. Via creative thinking, market research, competitive analysis, and complex business modeling, they must turn a concept into a promising opportunity. What is a good idea? “A brilliant business idea comes out of nowhere and forcefully latches itself onto your brain.” — Dale Partridge. That’s what happened with Apple’s Steve Jobs or Facebook’s Mark Zuckerberg. Good ideas are common but great ideas require the discipline of the creator. How do you come up with good ideas? Let’s think about how Google came into existence. Internet had already come live by then but still, Larry Page and Sergey Brin faced ample amount of difficulty to find things on the Internet. This problem discovery was followed by rigorous brainstorming to come up with the concept of page ranking based on inbound link analysis. And there — Google was born! Good ideas come from the discovery of customer pain points that has the potential to be solved by bringing a product into existence. Early on, Larry Page and Sergey Brin discovered the 105 customer pain point which led them to create a disruptive innovative technology that had the potential to solve the problem. Does passion matter with ideas? As the famous quote goes “Do it with passion or not at all.” Passion matters — if you are not passionate about your idea, it is impossible for you to turn it into a reality. Take the iconoclastic thinker, Steve Jobs, instance. The motto of his life was to ‘Think Different’ — he believed in it with all his passion and worked towards it. That’s how Apple came into existence. If you won’t believe in your product, why should someone else? How can you tell what you are passionate about? It is difficult to put a finger on something like this. But, the most basic thing to know you are passionate about something is if you are excited about it. If your answer is in affirmative, you are one step closer to really finding out your passion. Now, you can be excited about a lot of things — Does that mean you are passionate about each and everything? — Definitely not. Can you see an opportunity to pursue your passion? — If there is a lack of opportunity aligning with your passion, can you create one to sustain yourself? Can you do it each and every day of your life without getting bored? If answers to such questions are in affirmative, you have truly found your passion. How do you translate your passion into one or more business ideas? When you are passionate about something, you will try to find more than one way of bringing value to customers through your product or service. Sandipan Mitra just did that. Extensively passionate about food, he founded HungryZone way back in 2009 which turned out to be one of the largest online food ordering portal — which was later acquired by JustEat. He then went on to start 3plates — a tech-driven F&B company only to merge it with HungerBox, again founded by him which is now one of the largest full stack corporate F&B company in the country. 106  It is a necessary and exciting process to create an idea, but just the beginning for entrepreneurs. Via creative thinking, market research, competitive analysis, and complex business modeling, they must turn a concept into a promising opportunity. Lesson 2. Idea Generation Ideation should be the first investment of anybody who seeks to be an entrepreneur. A good idea- one that is worth exploring or converting into business option (Orcullo, 2004). Good Entrepreneurial Business ideas (Cottrell, 2009) MARKET DRIVEN Solve a problem Find a market need Customer focused not product driven Target an identified, sizeable market segment FEASIBLE Attractive – there is a demand Achievable – it can be done Durable – it lasts Value creating – it is worth something Safe Affordable for target market UNIQUE Differentiated (vs. commodity) Faster Better Cheaper 107 FUNDABLE Revenue stream Manageable risk Sustainable - Market exists with frequency of purchase Scalable or Replicable Barriers to entry Growth potential Product pipeline Exit plan Innovative INNOVATIVE Radical vs. Incremental Innovation framework1 Invention Extension Duplication Synthesis INTELLECTUAL PROPERTY Copyrights: protects the creative work of composers, authors/writers, artist, film makers, and others. It endures during the lifetime of the creator and for 50 years after his or her death. Trademarks: is a word, name, symbol, or device (or any combination of these) used by the manufacturers or merchants to identify their goods and distinguish them from those made or sold by others (Orcullo, 2004). Patents: Gives an inventor exclusive legal right to exclude anyone else from manufacturing, selling, marketing, importing, or using an invention during the life of the patent- which is 17 years under the Philippine laws (Orcullo, 2004). Trade Secrets: Trade secrets are intellectual property (IP) rights on confidential information which may be sold or licensed. (WIPO, 2000) 108 Sources of good entrepreneurial business ideas Talk to friends, family and other contacts Read Examine surroundings - consider your – Hobbies/activities – Education – Work Experience – Personal Life Network Recognized needs not effectively met Geographic or business niches not currently served or under served Changes in Market (PEST- Politico-legal, Economic, Socio-cultural and Technological Analysis) Ideas to Avoid Unfavorable industries Unfavorable markets Crusades An N of one One Hit Wonders Unsafe or illegal products/services Lesson 3. Entrepreneurial Creativity and Innovation Creativity, innovation and entrepreneurism are inseparable. Creativity is an essential part of innovativeness (Orcullo, 2004). No entrepreneur or enterprise, however successful and big, can continue to hold a place of leadership unless it recognizes that modern business operates in a world of galloping change which creates new problems, risk and opportunities and for which they have to mobilize the enterprise’s resources before changes make their impact felt. To do successfully, the entrepreneur and enterprise should know where this firm is going and how the firm will get there. This is turn requires a clear definition of the company’s business which will enable it to continually adopt operations to the realities of the market place, ‘the very corner stone of survival and growth” 109 What is creativity? (Ayden, 2015) The process of becoming sensitive to problems, deficiencies, gaps in knowledge, missing elements, disharmonies, and so on; identifying the difficult; searching for solutions, making guesses, or formulating hypotheses and possibly modifying them and retesting them; and finally communicating the results. Creativity is marked by the ability to create, bring into existence, to invent into a new form, to produce through imaginative skill, to make to bring into existence something new. Creativity is not ability to create out of nothing (only God can do that), but the ability to generate new ideas by combining, changing, or reapplying existing ideas. Some creative ideas are astonishing and brilliant, while others are just simple, good practical ideas that no one seems to have thought, of yet. Creativity is also an attitude, the ability to accept change and newness, a willingness to play with ideas and possibilities, a flexibility of outlook, the habit of enjoying the good, while looking for ways to improve it, we are socialized into accepting only a small number of permissible or normal things, like chocolate-covered strawberries, for example. The creative person realizes that there are other possibilities like peanut butter and banana sandwiches, or chocolate-covered prunes. (Harris, 1998). Creativity is also a process. Creative person works hard and continually to improve ideas and solutions, by making gradual alterations and refinements to their works. Contrary to the mythology surrounding creativity, very few of creative excellence are produced with a single stroke of brilliance or in a frenzy of rapid activity. Much closer to the real truth are the stories of companies which had to take the invention away from the inventor in order to market it because the inventor would have kept on tweaking it and fiddling with it, always trying to make it a little better, (Harris, 1998). A product is creative when it is “novel” and “appropriate”. A novel product is original, not predicable. The bigger the concept, and the more the product stimulates further work ideals, the more the product is creative (Stermbering and Lubart). Creativity requires passion and commitment. Out of the creative is born symbols and myths. It brings to our awareness what was 110 previously hidden and points to new life. The experience is one of heightened consciousness- ecstasy”- Rollow May. Creative Thinking Creative thinking has various definitions (Okpara, 2000). However, it is the art of generating solution to problems by the force of imagination and reasoning. It is an activity of the mind seeking to find answer to some of life’s questions. In a dynamic and changing world, the challenges of man are also not static. They take on new forms and require a deep creative thinking approach. The celebrated discoveries of man are not accidents. The minds of men/women were engaged in creative thinking to deliver the visible products we enjoy today. Name them: Bill Gate and the computer, Graham Bell and the telephone, Michael Faraday and electricity, Isaac Newton and physical law of science, the Wight brothers and Aeroplane, Adenuga and Consolidated oil, Atedo peterside and Investment Banking and Thrust Company, Raymond Depokesi and Dear Communications. The list is endless. You too can join them as you begin to “ponder the path of your feet, that all your ways may be established.” Thinking begins with engaging yourself in a conversation with yourself by yourself, in yourself. That is to reach a conviction and conclusion as to what steps to take and what strategies to employ. It is advisable to always have a pen and paper at hand to document your thoughts. It unveils every illusion around you. Innovation Innovation is the process of bringing the best ideas into reality, which triggers a creative idea, which generates a series of innovative events. Innovation is the creation of new value. Innovation is the process that transforms new ideas into new value- turning an idea into value. You cannot innovate without creativity. Innovation is the process that combines ideas and knowledge into new value. Without innovation an enterprise and what it provides quickly become obsolete. The dictionary defines innovation as the introduction of something new or different. Innovation is the implementation of creative inspiration. The National Innovation Initiative (NII) 111 defines innovation as “the inter-section of invention and insight, leading to the creative of social and economic value” Innovation is “value” – the creation of value adding value to customer’s satisfaction- “delighting the customers”. Innovation is the basis of all competition advantages, the means of anticipating and meeting customer’s needs and the method of utilization of technology. Innovation is fostered by information gathered from new connections; from insights gained by journeys into other disciplines or places; from active, collegial networks and fluid open boundaries. Innovation arises from organizing circles of exchange, where information is not just accumulated or stored, but created. Knowledge is generated a new from connections that were not there before (Wheatley, 1994). Innovation requires a fresh way of looking at things, an understanding of people, and an entrepreneurial willingness to take risks and to work hard. An idea doesn’t become an innovation until it is widely adopted and incorporated into people’s daily lives. Most people resist change, so a key part of innovating is convincing other people that your idea is a good one – by enlisting their help, and, in doing so, by helping them see the usefulness of the idea- Art Fry The Elements of Innovation Innovation is the successful development of competitive advantage and as such, it is the key to entrepreneurship. The entrepreneurs are the “dreamers”, who take hands on responsibility for creating innovation. It is the presence of innovation that distinguishes the entrepreneur from others. Innovation, must therefore, increase competitiveness through efforts aimed at the rejuvenation, renewal, and redefinition of organizations, their markets or industries, if business are to be deemed entrepreneurial. Fiona Fitzpatrick identified the following elements of innovation: 1. Challenge: What we are trying to change or accomplish-the “pull” 2. Customer focus: Creating value for your customers – the “Push” 3. Creativity: Generating and sharing the idea(s)- the “brain” 4. Communication: The flow of information and ideas –the “life blood” 5. Collaboration: People coming together to work together on the idea(s) - the “heart.” 6. Completion: Implementing the new idea-the “muscle”. 7. Contemplation; Learning and sharing lessons lead to higher competency-the “ladder” 112  8. Culture: The playing field of innovation includes: Leadership (sees the possibilities and positions the team for action-the role model) People (diverse groups of radically empowered people innovate –the source of innovation Basic values (trust and respect define and distinguish an innovative organization- the backbone). Innovation values (certain values stoke the fires that make the “impossible” possible-the Spark) 9. Context: Innovation is shaped by interactions with the world. What is the difference between creativity and innovation? (Ayden, 2015) Creativity is related to finding a new idea; but innovation can be defined as the development of new or useful ideas by individuals, teams and organizations (Cropley et al., 2011: 13- 15). Figure 1. Creativity and Innovation in Entrepreneurship 113 Creativity and Innovation in an Entrepreneurial Organization Growth and development cannot be sustained without additional innovations (usually in the product or services or in its marketing) with additional innovations, firms become “glamorous” Introducing new products is usually seen as part of the process of The “winning performance” of the entrepreneur and the organization focuses on. Competing on quality not prices: Domination of a market niche; Competing in an area of strength Having tight financial, and operating controls: Frequent product or service innovation (particularly important in manufacturing) Assessment Task 8 Using the internet, identify a successful entrepreneurial venture who have thrive even if there is a pandemic in Philippines or in your community and if possible interview the entrepreneur or members of the management team. Define and describe the key elements of the entrepreneurial process for this enterprise. Analyze the fit between the entrepreneurial founder and the product or service, the fit between the product and the opportunity, and the fit between the resources and the entry strategy. Summary Entrepreneurship is the creation of new ways of meeting needs through novel products, processes, services, technologies, markets, and forms of organizing. Entrepreneurial ventures can be start-ups or occur within large companies. 114  Entrepreneurship is an innovation process that mobilizes people and resources. Key to entrepreneurial success is the fit among the entrepreneur/team, the product concept, the opportunity, the resources, and the entry strategy. Successful entrepreneurs require an edge derived from some combination of a creative idea and a superior capacity for execution. The entrepreneur’s creativity may involve an innovation product or a process that changes the existing order. Or entrepreneur may have a unique insight about the course or consequence of an external change. Entrepreneurship is the vehicle that drives creativity and innovation. Innovation creates new demand and entrepreneurship brings the innovation to the market. Innovation is the successful development of competitive edge and as such, is the key to entrepreneurship. Creativity and Innovation are at the heart of the spirit of enterprise. It means striving to perform activities differently or to perform different activities to enable the entrepreneur deliver a unique mix of value. Thus the value of creativity and innovation is to provide a gateway for astute entrepreneurship—actively searching for opportunities to do new things, to do existing things in extraordinary ways. Creativity and Innovation therefore, trigger and propel first-rate entrepreneurship in steering organization activities in whatever new directions are dictated by market conditions and customer preferences, thereby delighting the customers to the benefit of the stakeholders. Innovation also means anticipating the needs of the market, offering additional quality or services, organization efficiently, mastering details, and keeping cost under control. No doubt, the current economic environment is a volatile and violent one. The new environment demands renewed dynamism of approach. Creativity and innovation is the new name of the game. Only the discerning organizations can manage the changes inherent in the new environment. It is the duty of the entrepreneur to keep his/her organization lean, young, flexible, and eager for new things to continuously delight the customers, which is the purpose of every business. Visit for more business ideas https://www.gonegosyo.net/?fbclid=IwAR2anQvfFBaILzBU8vmOtDVSChbImIXY2soZfIyj3DNd7 hhV5mqUjiXPBtM 115  References Orcullo N.A. (2004) Contemporary Entrepreneurship, Academic Publishing Corporation Cottrell E. (2009) Entrepreneurship 101: Keys to Starting a Business- Entrepreneurial Leadership Center Fall 2009 - Speaker Series Amabile T.M. (1998) “How to kill Creativity” Harvard Business Review, September, - October. Bhide A. (1994) “How Entrepreneurs Craft Strategies that Work” Harvard Business Review, March – April. Bridges S. O’Neill K. and Cromie, S. (2003) Understanding Enterprises: Entrepreneurship and Small Business. New York: Palgrava MacMillan. Chakravorti B. (2004) ‘The New Rules for Bringing Innovations to Markets”. Harvard Business Review, March. Creativity at Work; Articles and Tips. http:[email protected]/articlescontent/whatis.htn. Drucker P.F. (1985) Innovation and Entrepreneurship, London: Pan Books Ltd. Drucker P.F. (2002) Management Challenges for the 21st Century. London: Butter Worth Heinemann. Harris R. (1998) Introduction To Creative Thinking. www.vittualsalt.com. Innovation and Goal – free Living –Stephen Shapiro. http”//www-24-27 innovation.com/innovationorcle.htn. (Sikszent Mihalyi, C. (1997) Creativity: Flow and the Psychology of Discovery and Invention, New York: Harper Will Collins Publishers, Inc. Okpara F.O. (2000) Entrepreneurship: Text and Cases. Enugu: Precision Printers and publishers. Drucker P. F. (1995) Management in a Time of Great Change. Oxford: ButterworthHeinemann. 116 Meredith G. G; Nelson, R. E. and Neck, R. A.(1991) The Practice of Entrepreneurship. Lagos: University Press. Okpara F. O. (2006) The Practice of Entrepreneurship. Enugu: precision Publishers Ltd. Thompson J. L. (2001) Strategic Management. Canada: Thomson Learning Schumpeter, J. A. (1934) The Theory of Economic Development. Cambridge, USA: Harvard University Press. Porter, M. E. (1985) Competitive Advantage: Creating and Sustaining Superior Performance. USA: Free Press. Stevenson H. H. and Gumpert D. E. (1985) The Heart of Entrepreneurship. Harvard Business Review, March-April. 117  MODULE 9 CHOICE OF BUSINESS: ENTREPRENEURIAL BEHAVIOR IN A CHANGING WORLD Introduction With the rapid penetration of e-commerce into various fields, the role of e-commerce in economic development has attracted much attention and debate among academics and policy makers. Supporters of e-commerce recognize its important role in upgrading traditional industries and regard it as a new engine for economic development. Despite various new studies on the new technologies in several fields, as consumer behavior and innovation (Dominici, et al., 2016), there is still only a few studies specifically exploring the detail of how they are used by entrepreneurs in developing new business. In entrepreneurship studies, there are still various significant gaps on how these technologies will impact the future of entrepreneurship. There is an ongoing call for more research contributing to shed some light on various issues such as understanding the entrepreneurs “new behaviors”, with a particular focus on their motivations, the cognitive and emotional aspects, the new decision- making processes, and so on. In this special issue we aim to explore the new entrepreneurial behaviors developed in the digital transformation era. These technologies influence entrepreneurial behaviors and have a significant impact on entrepreneurial decision-making processes. The special issue focused on the identification and analysis of the main behaviors of entrepreneurs in different fields. Learning Outcomes At the end of this module, students should be able to: 118  1. evaluate entrepreneurship opportunities and challenges through digitization, e- commerce and global change. 2. employ the necessary ethics and actions in conducting a business. 3. utilize all the best available idea in selecting what type of business to venture. Lesson 1. The internet technology Digital transformation offers both intriguing challenges and new opportunities for these days’ entrepreneurs (Cohen et al, 2017; Li et al., 2018). New technologies are spreading all over the world, and new industries are rapidly changing and developing (Aydalot & Keeble, 2018). These new technologies include a wide range of new players that entered into the global arena. Among these enabling technologies there are the artificial intelligence and machine learning, the IoT and the big data, the digital platforms, the mobile applications (i.e. apps), cloud computing, blockchain, and more (as the Fintech ones, such as ICOs and crowdfunding). Their adoption and use are expected to be more and more pervasive in the next years. The digital transformation has had consequences on several contexts, and it cannot be ignored by individuals (Andriole, 2017). New technological developments favor the creation and the diffusion of several new types of entrepreneurship (Oukil, 2011). For example, the recent advances in digital technologies have played a key role in growing a new, digital-based, entrepreneurship and for the development of related business models (Kraus et al., 2019; Nambisan, 2017). New technologies are having a disruptive impact on entrepreneurship, they change the traditional patterns, and they help to disclose new frontiers for entrepreneurs to explore in order to understand how they want to become self-employed (Broomé & Ohlsson, 2018). A growing number of entrepreneur’s leverage online social networking in order to create relations and to exchange knowledge (Scarmozzino et al., 2017). Some other studies investigated the impact of social media technologies on company performance (Ahmad et al., 2019) or the importance of the entrepreneurial teams (Ben-Hafaïedh et al., 2018; Santos et al., 2019). Digital Platforms are among the new technologies entrepreneurs can exploit (Srinivasan & Venkatraman, 2018; Troise, 2019; Yablonsky, 2018). These new technologies have helped developing new business idea as new entrepreneurs, in fact, have focused their business models on exploiting these platforms’ characteristics. 119 Lesson 2. Digital Entrepreneurship The concept of digital entrepreneurship (Allen, 2019) Digital entrepreneurship is a term that describes how entrepreneurship will change, as business and society continue to be transformed by digital technology. Digital entrepreneurship highlights changes in entrepreneurial practice, theory, and education. Digital entrepreneurship includes everything that is new and different about entrepreneurship in a digital world, including: New ways of finding customers for entrepreneurial ventures. New ways of designing and offering products, and services. New ways of generating revenue, and reducing cost. New opportunities to collaborate with platforms and partners. New sources of opportunity, risk, and competitive advantage. On a practical level, digital entrepreneurship opens up new possibilities for anyone thinking. Some opportunities are more technical, but many others are within reach for anyone who learns the basic skills of digital entrepreneurship. These basic skills include finding new customers online, prototyping new business ideas, and improving business ideas based on data. Beyond learning new practical skills, digital entrepreneurship is also about new ways of thinking about entrepreneurship itself—which is another way of saying it offers new theories of entrepreneurship. Digital entrepreneurship opens up new questions about strategy, opportunity, and risk. Does the best data win? How can I craft a business idea that can be prototyped digitally? How can I improve my business idea faster than anyone else? How can I easily switch between different business ideas, and revenue sources? What does it mean to be a global business from the first day? And why do people from around the world keep trying to break into my business? The best way to learn entrepreneurship is to ‘do it’, and reflect on that experience. Starting a new business, or launching a new product, in the normal world is costly and risky for beginners. The digital world not just lowers the barriers for starting something new, but offers a variety of 120 pathways to success. It’s just a different world educationally from case studies, simulations, and business plans. As digital technology evolves, what is new about digital entrepreneurship will change over time. Perhaps one day, most or all entrepreneurial ventures will be ‘born digital’, and digital entrepreneurship as a separate topic will cease to exist. Today, however, there’s a real need to better prepare entrepreneurs for the digital world, and to give more people a new path to entrepreneurship. Five Simple Types of Digital Business Ideas At the very beginning, digital entrepreneurs don’t have a good feel for what is possible. To help beginners think of new digital business ideas, we suggest they start with one of five simple types: A content business, providing information about any specialized topic. Revenue can be generated through advertising, referrals, sponsorship, or merchandise. A community business, hosting a lively and useful conversation about any specialized topic. The revenue possibilities are similar to content businesses. An online store, which sells products or services. The products might be physical, or digital. A matchmaker business, which brings together two groups of people. Often one group is a product or service provider (for example, potential babysitters) and another group that would use their services (parents looking for a babysitter). Advertising revenue is a possibility, but a transaction fee could also be collected for successful matches. A promotion business, which attracts online customers for a business that already exists. Payments per customer referral is a likely revenue source here, or sponsorship. It may be difficult to come up with a perfect new business idea right from the start, but among these five possibilities just about anyone can come up with a reasonable idea quickly. As long as they can think of a topic (any topic!) that at least a few hundred other people might be interested in, a product or service they want to sell, groups of people who could help each other, or any local business which could use some promotion help, beginning digital entrepreneurs can start their journey. 121  These five simple types also make it easier to communicate a digital business idea. A new business idea is either: A content business about [your topic]. A community business about [your topic]. An online store selling [your product or service]. A matchmaking business connecting [service providers/group A] with [service users/group B]. An online business promoting [a local business]. The ABCs of Digital Business Design: Acquisition, Behavior, and Conversion At the heart of digital business design is a process that attracts people, satisfies them, and gets them to do something that has value for our business. They call this the ABCs of digital business design: acquisition, behavior, and conversion. The first step is acquisition, or attracting visitors online. The good news for digital entrepreneurs is there are over four billion people connected to the Internet worldwide. That’s a lot of potential customers and partners. The bad news is there’s lots of competition: somewhere between one and two billion web sites, around 5 million apps on the two major app stores, and the giant tech platforms that capture so much attention. A digital business needs to make careful choices about the sources of customer acquisition, such as search results, advertising, and social media, and how to focus on the right targets. The second step is behavior, or how a visitor will be satisfied at a digital business. Visitors arrive with some intent or goal for their visit, and their actions at a digital presence will hopefully satisfy that goal. A digital business design describes the most important thing a visitor must be able to do on a digital prototype. The final step is conversion. A conversion is a specific action that defines a successful visit to a digital business. For a store, a successful conversion might be a final click to confirm purchase. For an advertising-based business, an ad clicks might be the conversion. A conversion is any action that can be tracked digitally, and creates some value for our digital business. 122  Every step of the ABC process is easily tracked by web analytics. Analytics can tell the digital entrepreneur exactly where potential customers are coming from, what they do on a site or app, and most importantly which customers sources and behaviors lead to successful conversions. By speeding up the learning process, digital entrepreneurs can not only try out their ideas, but actually make them better. Digital Entrepreneurship and the Pandemic: New Business Ideas, and New Skills, For a More Digital Future (Allen, 2020) The recent pandemic has hit small businesses and entrepreneurs harder than any other segment of the economy. Small businesses typically have fewer resources to survive a crisis. Small businesses also typically have less experience with being entrepreneurial in the digital world, which is now one of their best options for weathering the storm. Small business should be considering a number of digital activities in this time of crisis. The standard advice includes applying for government assistance, keeping in touch with customers online, and starting e-commerce sales for existing products. These are all good moves, but the research on digital entrepreneurship suggests some additional options. Here are three additional areas of digital opportunity for small businesses and entrepreneurs. 1) New models for doing business Exploring how to sell your existing products online is a great idea, but consider selling your expertise as a new online service. Many households have at least one person with extra time to learn new skills, or with a pressing need to find new, more personalized ways to entertain themselves. Another possibility is to sell digital products based on your skills, such as online courses or digital how-to guides. Beyond selling related new products and services, however, digital entrepreneurship allows you to explore entirely new lines of business. A big advantage of digital entrepreneurship is the ability to try new business ideas at no or low cost. 123  For example, your new digital business could provide valued information that helps consumers make other purchasing decisions. Online traffic and spending are up during this crisis. Advertisers and marketers are interested in capturing the attention of these new online traffic streams, and will pay for quality customer leads. New revenue possibilities include display advertising, performance advertising, sponsorships, and commission payments through affiliate marketing sales. Another new digital business opportunity is to become a matchmaker, connecting people who need an online product or service with those who could best provide it, and charging a transaction fee or percentage. What groups of people do you already know best? What are their unique needs during this crisis? And where can you refer them to for help? Many of the large digital matchmakers—the Airbnbs and Ubers of the world—will need to be temporarily replaced by more local solutions fitting local circumstances, and able to navigate local restrictions as they evolve. 2) Perfecting your digital business process A simple way of thinking about digital business is to view it as a three-step ABC process: Acquisition, Behavior, and Conversion. Acquisition brings potential customers to your digital business, through search results, social media campaigns, email, search or social advertising, and many other channels. Behavior is what visitors do on your digital presence that satisfies their needs, and helps them achieve their goals. Conversion is the action you would like each of your visitors to perform, whether it’s completing a purchase, clicking on advertisement, asking for an appointment, or downloading a menu. This crisis is an opportunity for your business to improve its capabilities in any of these three essential areas. For customer acquisition, now is a great time to be building out your digital marketing campaigns. This will get customers and prospects prepared for when they are ready to spend again. Behavior can be enhanced by improving your digital customer experience. Try new features, new content, and new ways of organizing and navigating your online presence, to see which ones are more popular, and increase engagement. The analytics data provided by your digital business is your friend here. 124  Converting visitors into potential or actual customers is an essential digital business skill. Use your crisis time to try different calls to action, asking customers to do things that will increase their involvement. Practice getting your visitors to perform simpler activities such as likes, comments, and shares. Then deepen the involvement by signing up for discounts and newsletters, submitting content of their own, or booking a future appointment. As you practice each of the ABCs of digital business, don’t forget to consider how they all fit together. It’s easy to acquire new visitors with promises that can’t be fulfilled, or goals that you aren’t able to satisfy. Acquire the right visitors that will be satisfied, and will convert. 3) Begin the experiment/test/scale cycle A key advantage of digital entrepreneurship is the ability to experiment constantly. In each part of the ABC process, there are many new ideas to try. Get familiar with your analytics data, which for most digital entrepreneurs will be from Google Analytics. It will give you precise feedback on what works, and what doesn’t. Big businesses are already doing this, running hundreds or thousands of experiments on their customers each day. Small businesses will need to learn digital experimenting skills if they want to stay competitive. Fortunately, digital entrepreneurs have the advantage of being able to jump on new trends that are not yet large enough to interest the big players. A crisis situation is a hotbed of new search trends, new hashtags, new memes, and new discussion points to be taken advantage of. Once digital entrepreneurs find new business ideas that work for their first 100 or 1,000 visitors, it is relatively cheap and quick to scale up those ideas as trends take off. Be on the lookout for new ‘nanotrends’, and be ready to grow as those trends play out. The Future of Small Business: Supporting Entrepreneurs in the Post-Crisis Era Even before the COVID-19 crisis, small businesses and entrepreneurs were under pressure. Across most industries, markets have become more concentrated. A few large firms have been capturing greater market share, and a greater share of the profits, in the US (Covarrubias, Gutiérrez, & Philippon, 2020). New business formation has been decreasing in the US over the past four decades (Goldschlag & Tabarrok, 2018). At the ‘low-end’ of 125 entrepreneurship, however, gig economy contracting continues to grow. Over 57 million Americans reported some freelancing income in 2018 (Ozimek, 2019). How can will the small businesses survive in the longer term? A good place to start is with the competitive advantages that small businesses have, and how those advantages might be changing. We begin with the fundamental question: why do small businesses exist? What is their role in a modern economy? And will the transition to a post-crisis environment help or hurt small businesses? Why do small businesses exist? With the vast majority of US businesses being small, it might seem strange to ask why they exist. When do small businesses have an advantage over their larger competitors? An early study (Stoner, 1987) listed the most common unique advantage reported by small businesses themselves, in order of frequency: Unique skills, knowledge, or experience of employees Unique product or service Better customer service Location Low cost The most frequently reported sources of competitive advantage for small businesses are based on what they know, what they provide, and how they provide it. The good news is that in a complex, rapidly-changing economy, many new situations and customer needs will emerge in which unique knowledge and skills will be valuable. To the extent that entrepreneurs are able to translate their knowledge into unique services and/or better customer insight that are viable on a smaller scale, small businesses have the advantage. Widespread selling on digital platforms, however, will put pressure on those small businesses who simply distribute or support products made by others. Larger businesses can also use new automation and personalization technology to erode the customer service advantage of small businesses. For small businesses based on unique location, new digital modes of distribution will be a survival threat. Some of these businesses will have to transform into more of a community institution, or local charity, in order to survive. For small businesses to compete on cost, their advantage will depend more on lower labor costs than lower material, product, or capital costs. With online platforms allowing large businesses to source low-cost labor easily, this advantage will also be under threat. 126 Lesson 3. The cyber entrepreneur (Cyberpreneurship) (Cyberpreneurs institute, 2020) Cyberpreneur It is a term that combines digital or cyber world with the word entrepreneur. Cyberpreneur means an entrepreneur that utilized the digital world to start, promote, scale or further develop and innovate their businesses, services and branding to create and sustain wealth. The unique thing about Cyberpreneurs is that they are not tied to any physical location in doing their business and can primarily operate anywhere in the world where there is an internet connection. Figure 2. Cyberpreneur The Age of Cyberpreneurship The 9 to 5 work environment that started at the industrial age is slowly being disrupted. With the convergence of internet and businesses nowadays, the ability to scale your business to global reach is much easier. The barrier of entry to the market is also becoming much cheaper as cyberpreneurs can adopt the much different online business model. 127  Figure 3. Five Areas of Cyberpreneurship A Cyberpreneur can operate their business in any business model. This can be based on their strength and also the resources available to them. However, the five main areas of Cyberpreneurship mainly are: - 1. Selling Digital Information Products Selling digital information is the lowest entry barrier for any cyberpreneurs. Because of that also, it is highly competitive. It is all about producing content that can solve people’s problem and package it in a way that enables people to pay you back for that information that was provided. Figure 4. Selling Digital Information 128  The package that encapsulates the digital information can be in the form of blogs, vlogs, e-books, digital training course, videos and podcast. Cyberpreneurs can leverage other existing platforms for the distribution of their digital products or create their platform. 2. Selling Physical Products Cyberpreneurs can also sell physical products similar to traditional brick-and-mortar entrepreneurs. However, the advantage of being a cyberpreneur is that your target market can range from local to the global demand. You can be located in southeast Asia but having customers in Europe or united states and vice versa. Figure 5. Selling Physical Products The best thing also, you can choose many different options for selling physical products. If you do not want to do the manual labor work of shipping your product, you can choose to either dropship or use fulfilment centres. Being cyberpreneurs, you can leverage the availability of manufacturers such as in China, India or Vietnam to produce your very own product and brand. The market for your product can be anywhere in the world as long as you have sorted out the necessary logistic strategy and marketing that needs to be done. 3. Selling Sponsorship 129  Another advantage that a good cyberpreneur can create and sustain a thriving online community around your personal or business brand. This can in the form of social media influencer, Facebook page or YouTube channel that has a considerable following. Figure 6. Selling Sponsorship 4. Selling Consultancy and Services Entrepreneurs who have specific skills and knowledge and offers it to customers via online can also be defined as Cyberpreneurs. With the advent of the freelance platform with existing market, Cyberpreneurs nowadays do not need to open their platform to market their skills. They can immediately find freelance jobs in the existing platform such as Fiverr, Upwork and Guru. Here they can offer their services to a vast online community who will be needing their services. Example of services that can be offer range to many areas such as graphic design, website building to data entry. The better you become at offering at services, the more potential revenue you can earn. The better you become one trade of skill, the more premium you can charge as you have that specialized skill which you can offer as a consultancy to people as your customers. 5. SELLING BRANDS Being an online entrepreneur, you will have the ability to build brands and promote them across various digital platforms and social media. With the emerging digital business nowadays, 130 Cyberpreneurs will also have the option of exiting their digital business by selling the brand that they built over time. There are many platforms nowadays which offer to buy and sell websites such as Empire Flippers and Flippa. Figure 7. Selling Brands Cyberpreneurs who develop their business via a website also build their business branding over time. Once a cyberpreneur have developed loyal followers of their brand, that brand itself will have a value in which other businessman or corporate body may want to utilize and tap into. This is where the building and selling website has flourished. Being a cyberpreneur, they can have a handsome reward after selling their website that they have built for some time. However, this depends heavily on how they have created the multiple streams of income from that brand. What’s Next for Cyberpreneurs? Cyberpreneurs and Cyberpreneurship will have a long-lasting impact on the way we perceive work in the future. As the tools needed for cyberpreneurs to create and sustain their business becoming more advanced and cheaper, the more people will become cyberpreneur. By being a Cyberpreneur, not only you build wealth for yourself but at the same time create opportunities and wealth for others. 131  The next wave of Cyberpreneurs will come once the internet becomes faster and available to many parts of the globe. At this stage, more business opportunities will be created as more market is made available on the world wide web. As the emerging tools right now such as Virtual Reality and Augmented Reality becoming mainstream, the more cyberpreneurs will be created in the future Assessment Task 9 If there is a one business that you would like to put up now, what would it be? With the advent of disruptive technology, how are you going to adapt to a fast changing environment of business. Determine if it is a product or a service, how do you plan to market it? You may use this in generating good business ideas A content business about [your topic]. A community business about [your topic]. An online store selling [your product or service]. A matchmaking business connecting [service providers/group A] with [service users/group B]. An online business promoting [a local business]. Summary Digital transformation offers both intriguing challenges and new opportunities for these days’ entrepreneurs New technologies are spreading all over the world, and new industries are rapidly changing and developing Among these enabling technologies there are the artificial intelligence and machine learning, the IoT and the big data, the digital platforms, the mobile 132 applications (i.e. apps), cloud computing, blockchain, and more (as the Fintech ones, such as ICOs and crowdfunding). Their adoption and use are expected to be more and more pervasive in the next years. Digital Platforms are among the new technologies entrepreneurs can exploit. These new technologies have helped developing new business idea as new entrepreneurs, in fact, have focused their business models on exploiting these platforms’ characteristics. Digital entrepreneurship is a term that describes how entrepreneurship will change, as business and society continue to be transformed by digital technology. Digital entrepreneurship highlights changes in entrepreneurial practice, theory, and education. The recent pandemic has hit small businesses and entrepreneurs harder than any other segment of the economy. Small businesses typically have fewer resources to survive a crisis. Small businesses also typically have less experience with being entrepreneurial in the digital world, which is now one of their best options for weathering the storm. Small business should be considering a number of digital activities in this time of crisis. The standard advice includes applying for government assistance, keeping in touch with customers online, and starting e-commerce sales for existing products. These are all good moves, but the research on digital entrepreneurship suggests some additional options. Here are three additional areas of digital opportunity for small businesses and entrepreneurs. Even before the COVID-19 crisis, small businesses and entrepreneurs were under pressure. Across most industries, markets have become more concentrated. Cyberpreneur is a term that combines digital or cyber world with the word entrepreneur. Cyberpreneur means an entrepreneur that utilized the digital world to start, promote, scale or further develop and innovate their businesses, services and branding to create and sustain wealth. The next wave of Cyberpreneurs will come once the internet becomes faster and available to many parts of the globe. At this stage, more business opportunities will be created as more market is made available on the world wide web. As the emerging tools right now such as Virtual 133 Reality and Augmented Reality becoming mainstream, the more cyberpreneurs will be created in the future. See more on: https://www.youtube.com/watch?v=4NeUCz0pjIY&feature=emb_logo https://www.youtube.com/watch?v=5AwusyfeaHs References Ahmad, S., Abu Bakar, A. & Ahmad, N. (2019). Social media adoption and its impact on firm performance: the case of the UAE. International Journal of Entrepreneurial Behavior & Research, 25 (1), pp. 84-111. Andriole, S. J. (2017). Five myths about digital transformation. MIT sloan management review, 58 (3). Aydalot, P., & Keeble, D. (2018). High technology industry and innovative environments: the European experience. Routledge. Ben-Hafaïedh, C., Micozzi, A. & Pattitoni, P. (2018). Academic spin-offs’ entrepreneurial teams and performance: a subgroups approach. The Journal of Technology Transfer, 43 (3), pp. 714- 733. Broomé, P. & Ohlsson, H. (2018). Self-employment: the significance of ability, desire and opportunity. International Journal of Entrepreneurial Behavior & Research, 24 (2), pp. 538-552. Cohen, B., Amorós, J. E. & Lundyd, L. (2017). The generative potential of emerging technology to support startups and new ecosystems. Business Horizon, 60 (6), pp. 741-745. 134 Dominici G., Roblek, V., Abbate, T. & Tani, M. (2016). Click And Drive: Consumer Attitude to Product Development: Towards Future Transformations Of the Driving Experiences. Business Process Management Journal, 22 (2), pp. 420-434. Kraus, S., Palmer, C., Kailer, N., Kallinger, F. & Spitzer, J. (2019). Digital entrepreneurship. International Journal of Entrepreneurial Behavior & Research, 25 (2), pp. 353-375. Li, L., Su, F., Zhang, W. & Mao, J. Y. (2018). Digital transformation by SME entrepreneurs: A capability perspective. Information Systems Journal, 28 (6), pp. 1129-1157. Nambisan, S. (2017). Digital entrepreneurship: Toward a digital technology perspective of entrepreneurship. Entrepreneurship Theory and Practice, 41 (6), pp. 1029-1055. Oukil, M. S. (2011). A development perspective oftechnology-based entrepreneurship in the Middle East and North Africa. Annals of Innovation & Entrepreneurship, 2 (1), pp. 1-13. Santos, S., Morris, M., Caetano, A., Costa, S. & Neumeyer, X. (2019). Team entrepreneurial competence: multilevel effects on individual cognitive strategies. International Journal of Entrepreneurial Behavior & Research, 25 (6), pp. 1259-1282. Scarmozzino, E., Corvello, V. & Grimaldi, M. (2017). Entrepreneurial learning through onlinesocial networking in high-tech startups. International Journal of Entrepreneurial Behavior & Research, 23 (3), pp. 406-425. Srinivasan, A. & Venkatraman, N. (2018). Entrepreneurship in digital platforms: A network- centric view. Strategic Entrepreneurship Journal, 12 (1), pp. 54-71 Troise (2019). Entrepreneurship and Equity Crowdfunding: Does It Matter? International Journal of Business and Management, 14 (10), pp. 72-86. Alln JP. (2019) Digital Entreprenursghip Yablonsky, S. (2018). A Multidimensional Framework for Digital Platform Innovation and Management: From Business to Technological Platforms. Systems Research and Behavioral Science, 35 (4), pp. 485-501. 135 Bharadwaj, Prashanth Nagendra, and Ramesh G. Soni. 2007. “E-commerce Usage and Perception of E-commerce Issues among Small Firms: Results and Implications from an Empirical Study.” Journal of Small Business Management 45(4): 501-521. Turban, Efraim, David King, Jae K. Lee, and Dennis Viehland. 2002. Electronic Commerce: A Managerial Perspective 2002. Prentice Hall: ISBN 0, 13(975285), 4 Allen, J. P. (2019). Digital entrepreneurship. Routledge. What is a Cyberpreneur? Cyberpreneurs Institute. (2019, February 8). https://cyberpreneursinstitute.com/what-is-a-cyberpreneur/. 136  MODULE 10 THE WINNING HAND OF ENTREPRENEURSHIP: GOAL SETTING AND BUILDING A LEGACY Introduction Entrepreneurs need to dream BIG dreams—to see opportunities where others see only failures. Did you know that Benjamin Franklin was admonished to stop experimenting with electricity? It’s true! Trying to improve on the reliable and perfectly functional oil lamp was considered an absurd waste of time. And even Thomas Edison, a shrewd entrepreneur in his own right, tried to discourage his friend Henry Ford from working on his daring idea of building a motorcar. Convinced the idea was worthless, Edison advised Ford to give up this wild fancy and work for him instead. Ford, however, remained steadfast and tirelessly pursued his dream. Progress was slow. Although his first attempt produced a vehicle without a reverse gear, Ford knew he could make it happen—and, of course, he did. People like Franklin and Ford dreamed big dreams and dared to do great things, and now we all benefit from their achievements. Can you imagine a world without electric lights and automobiles? The contributions of these two entrepreneurs have been immeasurable! Particularly this module will help you to aligned your goals and dreams and helps you to craft a worthy legacy in your future business venture. Learning Outcomes 1. identify the best suited qualification in setting personal goals and engaging in business venture. 2. explain the concept of an entrepreneurial legacy and the challenges involved in crafting a worthy legacy 137 Lesson 1. The Importance, Benefits, and Value of Goal Setting (Riopel, 2020) Setting goals helps trigger new behaviors, helps guides your focus and helps you sustain that momentum in life. Goals also help align your focus and promote a sense of self-mastery. In the end, you can’t manage what you don’t measure and you can’t improve upon something that you don’t properly manage. Setting goals can help you do all of that and more. The Importance and Value of Goal Setting Up until 2001, goals were divided into three types or groups (Elliot and McGregor (2001): 1. Mastery goals 2. Performance-approach goals 3. Performance-avoidance goals A mastery goal is a goal someone sets to accomplish or master something such as “I will score higher in this event next time.” A performance-approach goal is a goal where someone tries to do better than his or her peers. This type of goal could be a goal to look better by losing 5 pounds or getting a better performance review. A performance-avoidance goal is a goal where someone tries to avoid doing worse than their peers such as a goal to avoid negative feedback. Research done by Elliot and McGregor in 2001 changed these assumptions. Until this study was published, it was assumed that mastery goals were the best and performance- approach goals were at times good, and other times bad. Performance-avoidance goals were deemed the worst, and, in fact, bad. The implied assumption, as a result of this, was that there were no bad mastery goals or mastery-avoidance goals. 138  Elliot and McGregor’s study challenged those assumptions by proving that master- avoidance goals do exist and proving that each type of goal can, in fact, be useful depending on the circumstances. Elliot and McGregor’s research utilized a 2 x 2 achievement goal framework comprised of: 1. Mastery-approach 2. Mastery-avoidance 3. Performance-approach 4. Performance-avoidance According to the research, motivation in achievement settings is complex, and achievement goals are but one of several types of operative variables to be considered. Achievement goal regulation, or the actual pursuit of the goal, implicates both the achievement goal itself as well as some other typically higher order factors such as motivationally relevant variables, according to the research done by Elliot and McGregor. Why Set Goals in Life? The truth is that some goals are achieved while others are not and it’s important to understand why. Mark Murphy the founder and CEO of LeadershipIQ.com and author of the book “Hard Goals: The Secret to Getting from Where You Are to Where You Want to Be ,” has gone through years of research in science and how the brain works and how we are wired as a human being as it pertains to goal setting. Murphy’s book “Hard Goals: The Secret to Getting from Where You Are to Where You Want to Be” combines the latest research in psychology and brain science on goal-setting as well as the law of attraction to help fine-tune the process. A HARD goal is an achieved goal, according to Murphy. Murphy tells us to put our present cost into the future and our future benefit into the present. What this really means is don’t put off until tomorrow what you could do today. We tend to value things in the present moment much more than we value things in the future. Setting goals 139 is a process that changes over time. The goals you set in your twenties will most likely be very different from the goals you set in your forties. Whatever your age doesn’t really matter in the end, as long as you continually revisit your life goals and work to update them. What are the Benefits of Goal Setting? Edward Locke and Gary Latham (1990) are leaders in goal-setting theory. According to their research, goals not only affect behavior as well as job performance, but they also help mobilize energy which leads to a higher effort overall. Higher effort leads to an increase in persistent effort. Goals help motivate us to develop strategies that will enable us to perform at the required goal level. Accomplishing the goal can either lead to satisfaction and further motivation or frustration and lower motivation if the goal is not accomplished. Goal setting can be a very powerful technique, under the right conditions according to the research. (Locke and Latham). According to Lunenburg (2011), the motivational impact of goals may, in fact, be affected by moderators such as self-efficacy and ability as well 5 Proven Ways Goal Setting is Effective Locke and Latham’s research have shown us that goal setting is indeed very effective. In the 1968 article “Toward a Theory of Task Motivation ” Locke showed us that clear goals and appropriate feedback served as a good motivator for employees (Locke, 2004). Locke’s research also revealed that working toward a goal is a major source of motivation, which, in turn, improves performance. Locke reviewed over a decade of research of laboratory and field studies on the effects of goal setting and performance. Locke found that over 90% of the time, goals that were specific and challenging, but not overly challenging, led to higher performance when compared to easy goals or goals that were too generic such as a goal to do your best. Dr. Gary Latham also studied the effects of goal setting in the workplace. Latham’s results supported Locke’s findings and showed there is indeed a link that is inseparable between goal 140 setting and workplace performance. Locke and Latham published work together in 1990 with their work “A Theory of Goal Setting & Task Performance ” stressing the importance of setting goals that were both specific and difficult. Locke and Latham also stated that there are five goal-setting principles that can help improve your chances of success. 1. Clarity: is important when it comes to goals. Setting goals that are clear and specific eliminate the confusion that occurs when a goal is set in a more generic manner. 2. Challenge: stretch your mind and cause you to think bigger. This helps you accomplish more. Each success you achieve helps you build a winning mindset. 3. Commitment: is also important. If you don’t commit to your goal with everything you have it is less likely you will achieve it. 4. Feedback: helps you know what you are doing right and how you are doing. This allows you to adjust your expectations and your plan of action going forward 5. Task Complexity: is the final factor. It’s important to set goals that are aligned with the goal’s complexity. How Can Goal Setting Improve Performance? Goal setting and task performance were studied by Locke & Latham, (1991). Goal setting theory is based upon the simplest of introspective observations, specifically, that conscious human behavior is purposeful. This behavior is regulated by one’s goals. The directedness of those goals characterizes the actions of all living organisms including things like plants. Goal-setting theory, according to the research, states that the simplest and most direct motivational explanation on why some people perform better than others is because they have different performance goals. Two attributes have been studied in relation to performance: 1. Content 2. Intensity 141  In regard to content, the two aspects that have been focused on include specificity and difficulty. Goal content can range from vague to very specific as well as difficult or not as difficult. Difficulty depends upon the relationship someone has to the task. The same task or goal can be easy for one person, and more challenging for the next, so it’s all relative. On average though the higher the absolute level is of a goal, the more difficult it is to achieve. According to research, there have been more than 400 studies that have examined the relationship of goal attributes to task performance. According to Locke & Latham, (1991), it has been consistently found that performance is a linear function of a goal’s difficulty. Given an adequate level of ability and commitment, the harder a goal, the higher the performance. What the researchers discovered was that people normally adjust their level of effort to the difficulty of the goal. As a result, they try harder for difficult goals when compared to easier goals. The principle of goal-directed action is not restricted to conscious action, according to the research. Goal-directed action is defined by three attributes, according to Lock & Latham. 1. Self-generation: refers to the source of energy integral to the organism. 2. Value-significance: refers to the idea that the actions not only make it possible but necessary to the organism’s survival. 3. Goal-causation: means the resulting action is caused by a goal. While we can see that all living organisms experience some kind of goal-related action, humans are the only organisms that possess a higher form of consciousness, at least according to what we know at this point in time. When humans take purposeful action, they set goals in order to achieve them. How Goal Setting Motivates Individuals Research tells us that goal setting is important on both an individual and a group basis. Locke and Latham have also shown us that there is an important relationship between goals and performance. Locke and Latham’s research supports the idea that the most effective performance 142 seems to be the result of goals being both specific and challenging. When goals are used to evaluate performance and linked to feedback on results, they create a sense of commitment and acceptance. The researchers also found that the motivational impact of goals may be affected by ability and self-efficacy, or one’s belief that they can achieve something. It was also found that deadlines helped improve the effectiveness of a goal and a learning goal orientation leads to higher performance when compared to a performance goal orientation. Why is Goal Setting Important for Students? Research done by Moeller, Theiler, and Wu (2012) examined the relationship between goal setting and student achievement at the classroom level. This research examined a 5-year quasi-experimental study, which looked at goal setting and student achievement in the high school Spanish language classroom. A tool known as LinguaFolio was used, and introduced into 23 high schools with a total of 1,273 students. The study portfolio focused on student goal setting, self-assessment and a collection of evidence of language achievement. Goal setting in language learning is commonly regarded as one of the strategies that encourage a student’s sense of autonomy (Moeller, Theiler and Wu, 2012). The results of the study revealed that there was a consistent increase over time in the main goal, plan of action and reflection scores of high school learners. The “Harvard Study” There have been some questions as to whether a study done at Harvard University in 1979 is actually a valid study. The Harvard MBA study, supposedly done in 1979 was thought to assess how written and planned for goals affected outcomes later in life. While some believe the study was real, others have intermingled the research with a supposed study done at Yale. In the study, the students were asked, “Have you set clear, written goals for your future and made plans to accomplish them?” Of those who were asked, only 3% of the graduates had written goals 143 and plans. 13% of the students had goals, but those goals were not in writing. 84% of students polled had no specific goals at all. Ten years later the students were supposedly interviewed once again. The findings were astonishing. The 13% of those who had goals, but not written them down, were actually earning twice as much when compared to the 84% who had no goals at all. The 3% who had written down goals were earning ten times the other 97% put together. If these results are indeed true, they are astonishing in the fact they clearly show that setting goals, even goals you don’t write down, make a big difference when it comes to success in life. Does Setting Goals Lead to Success? Dr. Gail Matthews, a clinical psychologist from Dominican University of California actually did do valid research. Matthew’s research shows that those who write down their goals and share their goals with a friend, as well as send weekly updates, were on average 33% more successful when it comes to accomplishing their stated goals compared to those who merely formulate goals. Matthews first became interested in the study of procrastination after reading an article in Fast Company Magazine about the 1953 Yale Study of Goals. The findings of that study, similar to the supposed Harvard study, inspired the teachings of many self-help gurus. However, many believe the two studies never took place at all with some even calling the studies urban legends. Matthew’s research is real, however. In her study, which involved 267 participants from various businesses and organizations, she studied how writing goals down and committing to goal-directed actions influence goal achievement in the workplace. The study was divided into 5 groups. 1. Group one was asked to think about the business-related goals they hoped to accomplish within approximately four weeks of time. The group also rated the goals on how difficult they were. 144  2. Group two was asked to take it a step further by writing their goals down as well as rating them in terms of difficulty. 3. Group three was asked to write their goals down and write some kind of action commitment for each. 4. Group four was required to do everything that group three did, as well as share those commitments with a friend. 5. Group five was asked to do all of the above, in addition to sending weekly progress updates. 149 people completed the study. At the end of the study, group one only accomplished 43% of their stated goals. Those in group four accomplished 64% of their stated goals. Those in group five had the most success, accomplishing 76% of their goals. This study clearly provides empirical evidence as to the effectiveness of three things, accountability, commitment, as well as taking the time to write your goals down. Without a goal, your chances of success are minimal at best. A study done by Statistic Brain, which analyzes New Year’s goals claims that a mere 8% of people achieve their New Year’s goals with 92% of these ending in failure. The study also proclaims that: 45% of Americans usually make goals. 17 % of Americans make goals infrequently. 38% of Americans never make goals. The Importance of Goal Setting in Business and Organizations Setting goals is vitally important for everyone, especially those in the business world. Most of us have been taught from a young age that setting goals can help us accomplish more and get better organized. Goals help motivate us and help us organize our thoughts. Throughout evolutionary psychology, however, a conscious activity like goal setting has often been downplayed. Psychoanalysis put the focus on the unconscious part of the mind, while cognitive behaviorists argue that external factors are of greater importance. 145  In 1968, Edward A. Locke formally developed something he called goal-setting theory, as an alternative to all of this. Goal-setting theory helps us understand that setting goals are a conscious process and a very effective and efficient means when it comes to increasing productivity and motivation, especially in the workplace. According to Gary P. Latham, the former President of the Canadian Psychological Association, the underlying premise of goal-setting theory is that our conscious goals affect what we achieve. Our goals are the object or the aim of our action. This viewpoint is not aligned with the traditional cognitive behaviorism, which looks at human behavior as something that is conducted by external stimuli. This view tells us that just like a mechanic works on a car, other people often work on our brains, without us even realizing it, and this, in turn, determines how we behave. Goal setting theory goes beyond this assumption, telling us that our internal cognitive functions are equally important, if not more, when determining our behavior. In order for our conscious cognition to be effective, we must direct and orient our behavior toward the world. That is the real purpose of a goal. According to Locke and Latham, there is an important relationship between goals and performance. Research supports the prediction that the most effective performance often results when goals are both specific and challenging in nature. A learning goal orientation often leads to higher performance when compared to a performance goal orientation, according to the research. Deadlines also improve the effectiveness of a goal. Goals have a pervasive influence on both employee behaviors and performance in organizations and management practice according to Locke & Latham, (2002.) Fred C. Lunenburg, a professor at Sam Houston State University, summarized these points in the International Journal of Management, Business, and Administration journal article “Goal-Setting Theory of Motivation.” (Lunenburg, 2011). Specific: Specificity tells us that in order for a goal to be successful, it must also be specific. Goals such as I will do better next time are much too vague and general to motivate us. Something 146 more specific would be to state: I will spend at least 2 hours a day this week in order to finish the report by the deadline. This goal motivates us into action and holds us accountable. Difficult but still attainable: Goals must, of course, be attainable, but they shouldn’t be too easy. Goals that are too simple may even cause us to give up. Goals should be challenging enough to motivate us without causing us undue stress. Process of Acceptance: If we are continually given goals by other people, and we don’t truly accept them, we will most likely continue to fail. Accepting a goal and owning a goal is the key to success. One way to do this on an organizational level is to bring team members together to discuss and set goals. Feedback and evaluation: When a goal is accomplished, it makes us feel good. It gives us a sense of satisfaction. If we don’t get any feedback, this sense of pleasure will quickly go away and the accomplishment may even be meaningless. In the workplace, continuous feedback helps give us a sense that our work and contributions matter. This goes beyond measuring a single goal. When goals are used for performance evaluation, they are often much more effective. Learning beyond our performance: While goals can be used as a means by which to give us feedback and evaluate our performance, the real beauty of goal setting is the fact that it helps us learn something new. When we learn something new, we develop new skills and this helps us move up in the workplace. Learning-oriented goals can also be very helpful when it comes to helping us discover life-meaning which can help increase productivity. Performance-oriented goals, on the other hand, force an employee to prove what he or she can or cannot do, which is often counterproductive. These types of goals are also less likely to produce a sense of meaning and pleasure. If we lack that sense of satisfaction, when it comes to setting and achieving a goal, we are less likely to learn and grow and explore. Group goals: Setting group goals is also vitally important for companies. Just as individuals have goals, so too must groups and teams, and even committees. Group goals help bring people together and allow them to develop and work on the same goals. This helps create a sense of community, as well as a deeper sense of meaning, and a greater feeling of belonging and satisfaction. 147 Lesson 2. Crafting a Worthy Legacy So far, we have discussed entrepreneurship and small business from a number of angles. As you contemplate such a career, we now urge you to broaden your perspective and to think about some of the values and intangibles that are part of the entrepreneurial life. Looking Back at an Entrepreneurial Career When an entrepreneur makes that final exit from the entrepreneurial stage, his or her business achievements become history. Reflecting on their lives and businesses at that point in their journeys, numerous entrepreneurs have come face to face with such questions as these: Was it a good trip? What kind of meaning does it hold for me now? Can I feel good about it? What are my disappointments? How did I make a difference? Such questions lead entrepreneurs to reassess their values, priorities, and commitments. By anticipating these questions, an entrepreneur can identify his or her most basic concerns early in the journey. Without such reflection, the entrepreneurial journey and its ending may prove disappointing. Evaluating Accomplishments Assessment of entrepreneurial performance requires establishing criteria. Obviously, no one standard can be applied. For example, a person who measures everything by the dollar sign would determine the degree of an entrepreneur’s success by the size of his or her bank account. The exiting entrepreneur will, at some point, think about achievements in terms of personal values and goals, rather than textbook criteria, popular culture, or financial rules of thumb. In all likelihood, a number of basic considerations will be relevant to the entrepreneur’s sense of satisfaction. In looking ahead to this time of looking back, one naturally thinks in terms of a legacy. A legacy consists of those things passed on or left behind. In a narrow sense, it describes material possessions bequeathed to one’s heirs. In a broader sense, it refers to everything that one leaves behind—material items, good or bad family relationships, a record of integrity or avarice, a history of exploitation or contribution. An entrepreneurial legacy includes both tangible items and intangible qualities passed on not only to heirs but also to the broader society. One can appreciate, then, the seriousness with which the entrepreneur needs to consider the kind of legacy he or she is building. 148 Winning the Wrong Game It is easy for entrepreneurs to get caught up in an activity trap, working harder and harder to keep up with the busy pace of life. Ultimately, such entrepreneurs may find their business accomplishments overshadowed by the neglect or sacrifice of something more important to them. It’s possible to score points in the wrong game or win battles in the wrong war. This type of entrepreneurial error produces a disappointing legacy, a sense that one’s professional achievements are to some extent inadequate. Consider what happens, for example, when the legitimate goal of earning money becomes a consuming passion. The CEO of a former Inc. 500 company has critiqued the entrepreneurial experience in this way: I believe that when our companies fail to satisfy our fundamental need to contribute to the community and instead exist predominantly to fill a bank account, then we lose our souls. Life is short. No one’s gravestone reads, “He made a lot of money.” Making a difference in your own life, your employees’ lives, and your customers’ lives is the real payoff Ed Bonneau revolutionized the distribution of sunglasses in the United States and eventually dominated that market with his highly successful business. While growing the firm, Bonneau purchased Pennsylvania Optical (with its patents and contracts with Wal-Mart and Kmart) and industry giant Foster Grant (with its patents and manufacturing divisions). Then, Bonneau sold the business and walked away from it all. Reflecting on the transaction, he said, “It was hard for me to figure out what to do with all this money.” From a business standpoint, his was a huge entrepreneurial success story. However, in a comment on how he’d like to be remembered, Bonneau downplayed his financial wealth: I would hope that they knew something else besides that I once ran the biggest sunglass company in the world. That’s not the number one thing that I’d want to be known for. It’s okay, but I’d much rather have that final assessment made by my kids and have them say, “He was a terrific dad.” I never wanted to sacrifice my family or my church for my business. And Bonneau’s advice to younger entrepreneurs follows a similar theme: 149  Take God and your family with you when you go into business, and keep that balance in your life. Because when you get to be 60 years old and you look back over your life, if all you have is the biggest sunglass company in the world and a pot full of money in the bank... it won’t be enough. Your life is going to be hollow, and you can’t go back and redo it Entrepreneurs typically work—indeed, often must work—long hours, especially in the beginning. Sometimes, however, the obsession with work and the long hours become too extreme. Based on interviews with repeat entrepreneurs, Ilan Mochari summarized their reports of early mistakes: “If they had it to do all over again, most of the group would have spent more time away from their first companies, hanging with the family, schmoozing up other CEOs, and pondering the long-term picture.” An excessive focus on money or work, then, can twist the entrepreneurial process. The outcome appears less satisfying and somehow less rewarding when the time for exit arrives. Crafting a Worthy Legacy In entrepreneurial terms, what constitutes a worthy legacy? One issue is the nature of the endeavor itself. A business that operates within the law, provides jobs, and serves the public provides a good foundation for a satisfying entrepreneurial experience. Within many individuals is a streak of nobility that gives them a genuine concern for the well-being of others. Their positive attitudes propel them toward endeavors of practical service to society. Bernard Rapaport, a highly successful, principled, and generous entrepreneur, has stressed the importance of the means one takes to achieve a given end. “Whatever it is you want to achieve,” he said, “how you achieve it is more important than if you achieve it.” At 90 years of age, reflecting on life and legacy, he said, “What do I want to do? I want to save the world.” Such idealism can guide an entrepreneur into many endeavors that are useful to our economic system. In fact, some entrepreneurial ventures are specifically designed to meet the particular needs of society. J. O. Stewart, a successful entrepreneur, has in his later years launched a firm whose primary objective is to provide good, low-cost housing to families who 150 cannot otherwise afford it. His motivation for this venture is personal concern for the needs of low- income families For most entrepreneurs looking back on their careers, satisfaction requires that their businesses have been constructive or positive in their impact—at the least, their effect should have been benign, causing no harm to the social order. In most cases, entrepreneurial businesses make positive contributions by providing jobs and services. A few make even greater contributions by addressing special needs in society. The criteria by which one evaluates entrepreneurship must be personal. Stephen R. Covey sugg